7 KEYS

TO PROJECT
PORTFOLIO
SUCCESS
7 Keys to Project Portfolio Success

Copyright ©2020 by International Matrix Management Institute, Inc.

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The seven keys to project portfolio success:
Key 1:  Commit to Improving the Key 5:  Engage the Project Customer
Project System and Recruit Project Liaisons
pg. 5 pg. 16

Key 2:  Use a Standard Collaborative

Project Process on all Projects Key 6:  Use a Matrix-Based
pg. 6 Accountability System
pg. 19

Key 3:  Create a Project Steering

Process Key 7:  Optimize Technical Processes
pg. 9 pg. 22

Key 4:  Align and Manage the

Organization Horizontally
pg. 12

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T here are seven keys to creating and managing a successful portfolio of projects. These keys
guide leadership in making project delivery across the organization as effective and efficient
as possible.

Project effectiveness plays a critical role in several important areas:

y Driving the organization’s ability to add new products and services
y Expanding the capacity to deliver existing products/services
y Improving organizational functioning
y Meeting regulatory, safety, and environmental requirements
y . . . and more

Project efficiency allows the organization to churn out more products and services, update
processes faster, reduce time to market, improve productivity, and lower costs.

Before we examine each key, take a minute to assess

how well your organization currently manages projects:
If your answer is “no”
or “somewhat,” focus
Ask yourself the following questions about your organization: on these keys:
1. Do all project teams across the organization follow a standard
Key 2
collaborative project start-up and planning methodology?
2. Does the project customer (or key leader) clarify the solution
Keys 2, 4 and 5
before asking a team to plan and create it?
3. Are all projects in the portfolio prioritized? Are the prioritization
critera well-documented? Do all active projects have adequate Keys 1, 2 and 3
funding?
4. Do cross-functional teams oversee the effectiveness and efficiency
Keys 3, 6 and 7
of business processes and project portfolio(s)?
5. Are Area Leaders and Resource Leaders held accountable for
the overall success of their end-to-end business processes and Keys 2, 6 and 7
projects?
6. Do repeatable projects follow mapped-out technical processes?
Key 7
Are templates available for project teams?
If you said “no” or “somewhat” to all the questions, identify your most pressing problem,
and work through the keys that will address that first.
Note: These keys don’t have to be implemented in order. In fact, many organizations find it
easier to start with Key 2. Your answers can identify how much work will be required to improve
your project system.

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 Key 1:  Commit to Improving the
Project System

The project system is a management system that creates, aligns, prioritizes, oversees, delivers,
and improves projects. Committing to improve projects requires leadership to invest time and
resources to change the system. This means creating a project team to evaluate the current
system and to improve how projects are accomplished.

Note: Completing Key 2 as a first step can improve the overall success of this project.

The current-state evaluation involves understanding the following:

y Size of the project portfolio
y How projects are selected for execution
y How projects are prioritized
y How resources are allocated to projects
y What processes are used to plan and manage projects

After completing this assessment, you will need to set long- and short-term goals for improvement,
which will guide the project team’s efforts.

Beginning Key 1: Identify who is accountable for improving the project system

Every system in the organization needs an accountable owner, and the project system is no
different. The project system owner should be a high-level executive who can drive the changes
needed in the organization. The project system owner will lead the Project Steering Council
(PSC) (Key 6).

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 Key 2:  Use a Standard
Collaborative Project
Process on All Projects

In organizations where leaders and professionals work across teams, standards provide several
benefits that increase project effectiveness and efficiency:

y Eliminate the need to relearn a new process for every project

y Ensure that best practices are used across the organization
y Keep the project team focused on solving technical issues, not reinventing project
planning and management
y Increase team productivity
y Increase Project Steering Council (PSC) productivity by having standard reporting formats
across projects

A strong collaborative project process enables the project leader to engage the full team in
working together to co-create the outcome and to reach consensus. That process starts with
creating the project plan.

The Matrix Management 2.0™ (MM 2.0™) Collaborative Project Process is a highly participative
method that enables leaders and professionals to work together without authority. The four
stages in this process prepare the Project Leader to lead the team through planning (Start-
up) and engages the full team in validating scope, determining risks and countermeasures,
mapping out the integrated technical process they will execute together, and estimating the
timeline, based on current commitments—and the priority of the project relative to others in
the portfolio (Planning). Once the plan is approved and funded, the team navigates the last two
stages, Creation and Adoption, to deliver the end solution and ensure its adoption and use in
the organization.

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Phase 1: Start-up Note: Don’t forget the
In this phase, the leader prepares for planning project before the project.
by clarifying the request, determining the
group of stakeholders needed to deliver the Project teams create and implement
solution, and identifying which stakeholders solutions. Determining the best possible
need to adopt the solution. He or she uses solution for an organization happens in
this information to recruit the project team. a structured Solution Definition phase—
consider it Phase 0. In this phase, a team
Phase 2: Planning of stakeholders uses collaborative tools
This phase is where the team determines and methods to understand the need and
what is doable. Under the guidance of requirements for the solution. Then, they
the team leader, the team works through synthesize this information to define a
collaborative tools to identify the three sides solution that will address the need.
of the triple constraint—scope, schedule,
cost—in an achievable project plan. During
this time, the team also starts working
on a plan for securing adoption among
stakeholders.

Phase 3: Creation
The team creates the end solution during this phase.

Phase 4: Adoption
Here, the team executes the adoption plan, addressing resistance factors as they arise. When
adoption is complete, the team will formally end the project, which includes evaluating the project
and team processes and compiling lessons learned.

Once a process is selected, train leaders and professionals across the organization.

~ Train executives in the overall approach of the process and their role in supporting it.

~ Train intact project teams on how to use the processes and tools.

~ Train project leaders in leading teams through the process.

~ Train project process coaches as subject matter experts to support rollout and consistent
application.

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Beginning Key 2: Define the criteria that will be used for identifying and
selecting a standard.

Defining criteria ensures that the selected process is the best fit for the organization. The table
below can help get you started on criteria to consider. When identifying criteria, make sure to
identify your must-have criteria—criteria you won’t compromise on—and prioritize and weight
nice to have criteria.

Questions Criteria to Consider

Do you want project team members to y Uses a participative approach that
1 commit to the project? includes participative tools

y Customer-focused
Do you want teams to satisfy the project y Includes quality planning and
2 customer? control as part of the method
y Results-oriented

y Scalable
Do you want to use the same method
3 across all types of projects?
y Is not technology dependent
y Has standard forms, reports

4 Do you want to minimize training time? y Easy-to-learn

Do you want clearly defined y Deliverable-focused

5 accountability? y Includes accountability tools

Have you already done process

y Team-based
6 improvement, total quality management,
y Empowers project team
Six Sigma, teams training, etc.?

Do you want certified project

7 management professionals?
y Compliant with PMBOK®

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 Key 3:  Create a Project Steering
Process

Leadership is accountable for ensuring that all projects align with the organization’s strategic
direction and that resources efficiently drive the organization towards its future. Leaders fulfill
this accountability via the Project Steering Process (PSP).

The PSP should manage the increasing demand for resources that projects require as they move
from Start-up to Planning and then to Creation and Adoption. As a result, the PSP and the Project
Process are closely tied together. See figure below.

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The PSP should weed out inappropriate projects early in the cycle, before large amounts of
resources have been committed. Initial selection (during the Portfolio Selection and Ranking
Stage) eliminates solutions that do not fit with the strategic plan and that don’t meet basic criteria
so the organization doesn’t waste time and resources on unnecessary projects. In some cases,
ideas that survive this initial selection may require additional studies to ascertain if they meet the
criteria for moving to the Start-up and Planning phases.

After project planning is complete, the project is rated and prioritized against other projects in the
portfolio, and available resources are allocated to the top projects on the list. When resources
have been fully committed, remaining projects go on a prioritized unfunded project list.

The key differences between the Selection and Ranking stage and the Portfolio Prioritization
stage are how projects are assessed.

Selection and Ranking Stage Portfolio Prioritization Questions

Questions
Does the solution help meet an unfilled How do project benefits compare to
need in the strategic plan? existing projects in the pipeline?

What is a rough estimate of time, staff What is the final estimate of time, staff
effort, and money required to do this effort, and money required to do this
project? project?

Is this project doable? How much risk is associated with this

project?

How much leadership commitment does What are the major obstacles, and how
this project have? will they be overcome?

The project steering process ensures that the full project portfolio is both aligned with the
strategic plan and optimized. Organizations that do not use a steering process often have a
suboptimized portfolio of projects that includes too many projects with overallocated resources,
projects that are delivered late and/or over budget, and projects that don’t drive the organization
toward its stated strategy.

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Beginning Key 3: Set criteria for the Portfolio Selection and Ranking Stage and
the Portfolio Prioritization Stage.

Setting criteria enables everyone across the organization to align immediately to the organization’s
strategic direction.

Once a solution is defined (and yes, criteria should be set to move ideas to the Solution Definition
phase of the project process), this set of criteria will prioritize the portfolio of proposed solutions.

~ Brainstorm criteria for moving projects into the Start-up and Planning phases. Consider
criteria that help leadership decide if it is worth spending the organization’s resources on
planning the project. Focus on opportunity and feasibility of adopting the solution once
it is built rather than the costs because, at this point in the selection process, you don’t
know how much it will cost (since cost is determined in the Planning stage).

~ Brainstorm criteria for moving projects to the Creation phase and prioritizing them.
Consider criteria about resource availability, technical feasibility and capability, timing,
and the return on investment.

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 Key 4:  Align and Manage the
Organization Horizontally

Let’s talk about this concept of horizontal management. The nature of processes and projects—
and the project portfolio itself—is cross-functional. Resources from across the organization need
to deliver outputs within the context of an end-to-end process, as well as work on projects
together without vertical, authority-based relationships. And, at a portfolio level, every project
will impact resources from across the organization and other projects. See figure below.

Working across the organization, without authority-based relationships, requires a shift from
managing vertically, within functions—a root cause of organizational silos—to managing across
the organization, using a horizontal approach.

This horizontal approach brings together key stakeholders from across the organization, who
work in non-authority-based teams (e.g., steering teams, project teams, business process teams,
etc.) to ensure that end-to-end business processes and projects work effectively and efficiently.
For processes, horizontal management minimizes gaps between sub-processes. For the portfolio
of projects, a horizontal approach ensures that an organization’s projects and related resources
align to a common set of prioritized goals.

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Horizontal management in the project system includes a Project Steering Team, which decides
which projects are added to a portfolio and how they are prioritized (Key 3), and project teams,
which execute projects, using a standard collaborative process (Key 2). These project teams
must be supported by all leaders, regardless of what area they fall under or whom they report
to (Key 6).

The table below describes the differences between a vertical approach to management and a
horizontal approach.

Vertically Managed Portfolio Horizontally Managed Portfolio

Project decisions (what solutions to build, Project decisions are made by a Steering
projects to start and plan) are made within Team made up of key stakeholders across
the function by the leaders of that team. the organization.

Alignment is to the vertical function and that Alignment for everyone, across the
function’s endeavors for the individuals that organization, is to the prioritized portfolio of
report into that function. projects.

Primary relationship: boss and direct report Primary relationship: customer and supplier

Functions optimize themselves, resulting in Optimization starts with the organization,

a sub-optimized organization. followed by business processes and then
projects; functions are sub-optimized as
needed.

Empowerment at the senior management Empowerment at every level throughout the

level organization

Management focuses on improving Focus of improvement is on the team and

individual performance. individuals.

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Organizations need to follow two concurrent Organizations follow three types of
paths to adopt a horizontal approach to processes, and understanding how they
management. relate to each other can begin shifting
how everyone views the organization.
The first begins with creating high-level maps ~ The Operating Process is the
of the business processes through which the main process that produces
organization delivers products and services to products and services for the
“paying” customers. Mapping these processes external, “paying” customer.
provides a visual of the business based on “what ~ Support Processes are those in
you do,” making it possible to define the Steering which the end customer is the
Teams that will manage each process end-to- operating process or another
end. The mapping process is not intended to support process.
reorganize functions or reporting relationships, ~ Broad Spectrum Support
which exist in the vertical dimension. Processes serve large segments
of the organization, such as
Each end-to-end business process has an operating and support processes,
owner. The process owner leads the steering or personnel across the
team, which includes the key resource leaders organization.
involved in that process. See figure below.

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The second path to horizontal alignment and management involves setting up project
portfolios for the organization and the Steering Teams that will be accountable for them. As
a starting point, the major sub-processes can form the basis for segmenting projects, major
strategic goals, and initiatives. The key here is to recognize that each organization is unique,
and there isn’t a universal solution for defining portfolios.

Beginning Key 4: Define the potential project portfolios that a Steering Team
would manage.

In assessing your project system, consider the organization’s strategic goals for the next year.
Do you have growth goals, effectiveness and efficiency goals, safety and regulatory compliance
goals that require projects to achieve? If so, consider using those categories as portfolios, and
segment all the current work accordingly. Then, identify the stakeholders involved in allocating
resources to those areas, and think about how to structure teams to govern each portfolio. This
is one suggestion for starting, and if it doesn’t work for your organization, an organizational
design team can help determine how best to structure the business horizontally to align and
focus everyone on the most important project priorities.

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 Key 5:  Engage the Project Customer
and Recruit Project Liaisons

Engage the Project Customer

This key starts with the project customer. Many organizations operate under the “customer is
king” premise. In such situations, project customers typically demand solutions that project
teams must figure out how to deliver. For a successful project portfolio, customer involvement
and accountability are critical to creating and adopting the end solution.

Customer involvement ensures the solution is created to

address the business need and is adopted into the business.

By engaging the customer, the project team can gain a better understanding of their needs,
so they can create a solution that solves the problem or captures the opportunity. Customer
involvement ensures the solution is created to address the business need and is adopted into
the business. When customers participate on the project team, they are held accountable for
project success alongside the entire team, which sets the stage for partnership relationships that
don’t rely on authority or organizational position to get things done.

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Recruit Project Liaisons
In traditional project systems, the project sponsor role engages a senior leader and secures
resources for the project. The intent of the role is to ensure project success through the active
involvement of a senior leader with influence across the organization. In reality, however, such
involvement typically ends once projects receive approval and funding. These leaders are rarely
available to provide support when needed, and they participate in broad reviews late in the
process, rather than conducting ongoing reviews that keep the project moving. Sometimes,
project sponsors even step in to control the project over the project leader. Such actions often
arise from a lack of understanding and training about the role, as well as a lack of buy-in and
commitment to the need for the role since project leaders often seek support from their respective
bosses, rather than the project sponsor.

Project leaders always have support from their direct resource leader, but the projects they are
working on typically fall under project portfolios, aligned with strategic goals that their resource
leader may not be involved with. To position the project and its leader for success, the project
leader needs a way to engage with the steering team accountable for the portfolio in which
that project sits. The project liaison role offers a way to connect one steering team member
to a project leader. The project liaison ensures that the project customer is involved to clarify
the solution, supports the leader through the Planning, Creation, and Adoption phases of the
Planning Process (Key 2), and navigates the project through the Project Steering Process (Key 3).

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Beginning Key 5: Include project customers on all your project teams.

Unless you’re starting up your organization, you probably have a long list of active projects, as
well as a pipeline of projects waiting to get started.

~ Begin with projects that are struggling with planning or execution. Is the customer on the
team? If not, add a customer representative to the team. If the customer is included, are
they being held accountable (Key 6) for the end solution, along with the project leader
and team? Are they partnering with the team to define needs and requirements, and are
they working to keep the project moving? Are they aligned with and following the same
set of priorities as the project team (Key 5)? If not, address those issues by tackling the
other keys.

~ Next, for projects that haven’t started yet, set the standard during team formation of
including customers as a regular team member. Regular team members participate in
planning and team meetings. They produce deliverables, and they are held accountable
as a team member, for both individual and team results.

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 Key 6:  Use a Matrix-Based
Accountability System

A matrix-based accountability system supports a horizontal approach to management (Key

4). Many organizations don’t realize that the accountability system they have in place actually
supports a vertical approach to management. Because the typical accountability system is aimed
at creating functional alignment, it is often a main cause of silos.

A matrix-based accountability system reinforces optimization of the entire organization and

encourages proactive, preventive behavior among leaders, instead of fire-fighting and reaction.
The table below outlines the differences between these two types of accountability systems.

Vertical-Based Accountability Matrix-Based Accountability

Accountability covers one type of goals/ Accountability covers three types of goals/
outcome only: individual. outcomes: organizational, team, and
individual.

Accountability is assigned, typically by the Accountability is negotiated and committed

vertical leader. to by the individual accepting it.

Accountability is based on conditions, such Accountability is unconditional. Once you

as authority or being the primary decision commit, you do not avoid accountability.
maker.

Reactive; accountability is examined after Proactive; accountability is defined before

the fact. work begins.

Typically blame-based, focusing on what Focused on organizational learning from

went wrong and resulting in fear and finger- positive and negative consequences, based
pointing on achieving or not achieving the results
that were committed to

The matrix accountability system clearly defines accountability in a way that aligns everyone to
deliver what is most important to the organization—optimizing the whole versus the parts.

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The graphic below demonstrates how matrix-based accountability positions projects for success,
starting with the team. Project C is led by professional B2 and comprised of team members from
resource areas A, B and D. Matrix Accountability enters the project in three ways:

1. Team leaders have individual accountability.

y B2, as team leader, is the only one who has individual accountability for the team
outcome. They commit to lead the team to plan the project, and to negotiate an
achievable plan based on team consensus. They ensure the solution is created and
adopted.

2. Team members have team accountability and individual accountability.

y A1, B1 and D1, as team members, are all part of the project team and they have team
accountability for the team outcome (shared by every team member) and individual
accountability for any interim deliverables in the project.

3. All leaders share organizational accountability.

y Resource leaders of Areas A, B, C and D share organizational accountability for the

success of the project because it is part of the project portfolio. As leaders, each of them
has an organizational accountability to work together and ensure the project happens.
Because Area C doesn’t have any immediate involvement in the project, this leader’s
accountability may not involve allocating resources, but it does require aligning to the
project as a priority. (In other words, this leader cannot pursue lower priorities at the
expense of Project C.)

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Beginning Key 6: Define Individual and Team Accountability for Projects.

Changing an organization’s accountability system is a big endeavor, one that will not happen
overnight. Projects are one part of the business generally accepted as cross-functional, and they
have a clear outcome to which accountability can be attached. For each active project, have
teams document accountability in this manner:

~ The project leader has individual accountability for the success of the project.

~ Team members share team accountability for the success of the project.

~ Team members have individual accountability for creating the interim deliverables of the
project, either through their own efforts or the efforts of other sub-teams or areas.

This accountability is defined as the team goes through the collaborative planning process, and
it can be documented on a Team Accountability Chart.

To make this process work, the leadership team needs to review the teams’ plans and understand
what they are willing to commit to. Too often, leaders put unreasonable constraints on projects,
which doom them to failure from the start. Leaders have organizational accountability to position
projects for success.

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 Key 7:  Optimize Technical
Processes

A technical process is a business process that creates the end solution of a project. This process
is different from the collaborative project process, which is used to plan and manage the creation
and adoption of the solution. The table below summarizes the key aspects of these two distinct
processes.

Technical Process Project Process

Produces the technical deliverables of the Produces the plan for executing the
project technical process and creating the end
solution

The steps followed during the creation The steps are used to plan and manage the
phase of the project creation and adoption of project solutions

Each type of project follows a specific A standard method is used to start and plan
technical process: software development, the project, to manage the creation and
product launch, process improvement, adoption of the solution, and to close the
training development, organizational design, project.
etc.

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Projects can be classified into three levels, based upon the frequency the technical process is
performed.

~ Level 1 projects have never been done before, and no technical process template (map
or flowchart) exists. These types of projects are highly risky since the steps to create the
deliverables are unknown. Level 1 projects are also highly inefficient since working out
the steps inevitably requires extensive rework.

~ Level 2 projects have a basic template for the technical process, based on past project
experience and historical data. These project types can be inefficient, depending on how
new the template is and the level of training the team has in its execution.

~ Level 3 projects have a documented technical process template that has been
optimized. The risk for these projects is much lower because the steps for creating the
end solution are known, and the team is familiar with the work.

Beginning Key 7: Map the technical processes of repeatable projects.

Projects often operate at Level 1, even if done repeatedly, because the technical process has
not been mapped or archived for use by subsequent teams. The easiest way to map a technical
process is to begin with the Technical Process Map tool of the Collaborative Project Process (Key
2). This tool guides a team through mapping both the sequence of deliverables and resulting
customer-supplier relationships.

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Measuring Your Maturity and Introducing the Keys
Measuring Organizational Maturity

The seven keys will not only improve the results of your project portfolio, but they will also set
you on the path to creating an aligned, proactive, and collaborative culture. One way to assess
where you are and what you need to do is to assess how the organization is currently operating.
The Matrix Management 2.0™ Matrix Maturity Model helps leaders identify potential root causes
of operational challenges related to projects, business processes, and cross-functional delivery.
In addition, the model provides a framework for improvement.

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Introducing the Seven Keys

Every organization is different, and understanding how the seven keys can work for your
organization and building buy-in among leaders can happen in multiple ways.

~ If senior leadership is ready to commit (Key 1) to changing at the organizational level,

a structured working session offers the most effective starting point. During the
engagement, our expert facilitator introduces the keys, and your team immediately starts
assessing and applying them to your organization. As a virtual offering, this process
happens over time, with leadership defining their level of commitment, which key they
want to address first, and then working under the guidance of a facilitator.

~ If senior leadership wants to improve at the project level, start with Key 2. Select a
collaborative project process, and train the organization on using the chosen standard.
Virtual training can provide project leaders with a robust set of tools and teach them
how to guide a team through the tools, either virtually or in person. Training coaches
who become experts in the process improves implementation and usage across the
organization as they guide new teams through the process.

If you’re ready to get started, or if you need some advice on where to start, reach out, and we
will connect you to an expert who can answer your questions.

Additional Resources

To learn more about the two dimensions of an organization—the horizontal, where business
processes and projects reside, and the vertical, where resources are allocated and technical
standards managed—check out the following resources:

~ Matrix Management Reinvented Book 1 – The New Game in Town

~ Matrix Management 2.0™ Quick Guide

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