Are your measures strategic? Are you measuring the right things to make sure your organization is strategically successful? Top-down versus bottoms up tracking.
2. Introduction
President & Relevant Certifications &
CEO, SMART Industry Engagement
Management • PMP
Consulting, LLC • SDI® Facilitator
PMI Involvement • Master’s Certificate in
PM, GWU
• PfM for the PM 2005
• Performance Measure
• Standard for PfM 3rd
Blueprint with Stacey Barr
Edition
• September 2011
o Balanced Scorecard
Strategic Execution with
Kaplan and Norton
o Relationship Awareness
Conference
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3. Agenda
Strategy discussion Defining measures
Performance versus Designing reports
progress Report analysis
Management • Tracking and
disciplines recommendations
From the top Tips
Cause and effect References
o Strategy mapping
o Results mapping
o Gantt chart
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4. Strategy
Strategy is about achieving change or
maintaining excellence
• Where are we now?
• Where do we want to go?
• How are we going to get there?
Strategy stretches the organization
• Far enough for productive tension
• Not so far to cause it to snap
Strategy comes from the top
• It is the framework within which we
make operational decisions
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5. Performance vs Progress
Performance focuses on meeting objectives
• Strategic
• Top down view
• Used by Executive Leadership and Portfolio
Managers to assess and manage strategy execution
Progress focuses on hitting milestones
(schedule, cost, scope)
• Tactical
• Bottom up view
• Used by Program and Project Managers to explain
performance variances to Portfolio Managers and
Executive Leadership
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6. Focus by Management Discipline
Management Management Focus
Layer
Executive Give us the overall Organizational
Leadership direction to achieve the Performance
mission and vision
Portfolio Ensures we do the best Portfolio
Management combination of work to Performance to
meet the mission and meet objectives
achieve the vision
Program Ensures we do the work Program
Management most efficiently to deliver Performance to
benefits in a coordinated deliver benefits
fashion
Project Ensures we do the work Project Progress
Management right - on schedule, within to meet
budget and scope milestones
The related management disciplines of Portfolio, Program and Project are also known as P3M3
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7. Portfolios
A portfolio is a collection of projects or programs and other work grouped together
to facilitate effective management to meet strategic business objectives.
(PMBOK® Guide – Fourth Edition)
The components of a portfolio are quantifiable; that is, they can be
measured, ranked, and prioritized. A portfolio is a true measure of an
organization’s intent, direction, and progress
Portfolio management (PfM) is the coordinated management of portfolio
components to achieve specific organizational objectives. (PMI® Standard for
Portfolio Management – Second Edition)
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8. Programs and Projects
A program is a group of related projects managed in a coordinated way to obtain
benefits and control not available from managing them individually
Program management (PgM) is the centralized coordinated management of a
program to achieve the program’s strategic objectives and benefits. It involves
aligning multiple projects to achieve the program goals and allows for
optimized or integrated cost, schedule, and effort (PMI® Standard for Program
Management – Second Edition)
A project is temporary endeavor
undertaken to create a unique
product, service or result
Project Management (PM) is the
application of knowledge, skills, tools
and techniques to project activities to
meet the project requirements
(PMBOK® Guide – Fourth Edition)
JS, (45)
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9. From the top
What do we need to achieve?
• Goals Objectives
What do we need to Start, Stop or Change to
achieve our objectives?
Alignment
• Cascade down
• Link up
The Strategy Pyramid from Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response
World by David La Piana
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10. Cause and Effect
Cause and Effect relationships
• Direct correlation between completing a work effort
and gaining a benefit or meeting an objective
Cause
• Initiatives (Annual, Business, Corporate Plans)
• Portfolios, Programs, Projects, Operational Activities
Effect
• Goals, Objectives, Benefits
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11. Results Mapping
Success
Stacey Barr Corporate
• Performance Measure Capability
Process
Blueprint
Activity
• Define the results that
spell success and
depict them showing
cause and effect
relationships Results Mapping
StaceyBarr.com
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12. Results Mapping
Focuses on the
results of each area
Lines indicate key
relationships
• Companion
• Cause and effect
• Lead-Lag Results Mapping
StaceyBarr.com
• Conflict
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13. Strategy Mapping
Mission/Vision
Balanced Scorecard (BSC) is an industry best
Process Financial Customer
practice approach to manage strategic Objective
performance and is used for strategic planning
First detailed in a series of articles and books Objective
by Drs. Kaplan and Norton
Objective
Balances the Financial perspective with
• Customer
• Internal processes Objective
Internal
• Learning and growth
Objective
Requires us to develop objectives, metrics,
collect data and analyze the organization
& Growth
Learning
relative to each of these perspectives Objective
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14. Strategy Mapping
Mission/Vision
A strategy map assigns
Process Financial Customer
strategic objectives to each Placement of Objective
BSC perspective and defines Customer &
relationships between efforts Financial
perspectives Objective
• Reflects complete set of key
reflect working
objectives to achieve the with Government
vision Organizations Objective
• Defines cause and effect
relationships between
Objective
objectives
Internal
• Action plans, performance
measures and other detailed Objective
plans are developed and
& Growth
executed to support the
Learning
strategy map
Objective
The balanced scorecard framework is recognized by the General Accountability Office
(GAO) and used by the Department of Defense and other government agencies
15. Objective Gantt Chart
Excerpt from PMI’s Project Management Journal, December 2010: Measuring Portfolio Strategic Performance Using Key
Performance Indicators by Hynuk Sanchez and Benoît Robert
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16. Defining Performance Measures
Mission/Vision
Process Financial Customer
Objective
Objective
Objective Measure Target Initiative
Objective Key
Statement of How success The level of programs, pro
what must be in achieving performance jects, activitie
Objective
achieved and the strategy or rate of s required to
Internal
what’s critical will be improvement achieve
to its success determined needed objectives
Objective
& Growth
Learning
Objective
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17. Defining Performance Measures
Focus on objectives using Example
the measure and target
Objective: Develop and
deploy timely IT solutions
(from IT department)
Measure: By 30 SEP 2011
complete 50% of projects
within 20% of their first
approved date and cost
baseline
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18. Defining Performance Measures
Measurement worksheet
• Assigns ownership and responsibility
• Defines data at lowest levels
o Key terms
o Calculations
o Assumptions
• Sets data collection and reporting dates
• Key communication tool
o Output becomes part of Strategic Communications
Plan
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19. Performance Measure Worksheet
Measure Status Is this measure fully operational, in use but needs updating or is it
new? If it is fully operational or in use, please note the name by
which the measure is currently identified today.
Definition of Key What terms need clarification to remove ambiguity from the
Terms measure or target?
Counts, Example
How will the measure or target will be calculated? Be as specific as
Calculations or possible. Objective: Develop and
Formulas deploy timely IT
solutions (from IT
Indicator Criteria Define ranges for Red, Orange, Yellow and Green.
department)
Baseline Status Is the measure baseline fully established, in progress, not yet started
or is a baseline not applicable to this measure? Please By 30 SEP
Measure: add any
2011 complete 50% of
relevant detail. If in progress, or not yet started, what needs to be
done to establish the baseline? projects within 20% of
Assumptions their first approved date
What assumptions are being made about the measure, the data,
and cost baseline
processes, etc.?
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20. Measure Worksheet
Data Sources From where will the Owner get the data – may be an electronic data
store, data call, survey results, etc.
Data Collection What processes, procedures and tools will the Owner use to gather
Procedure the data from the source(s) and get the collected data to the
Reporting Branch?
Data Collection How often will the data collection procedure be followed?
Frequency Example
Report Frequency How often will the Report Branch brief the C level executive?and
Objective: Develop
Report Format What format (run chart, list, pie chart, etc.,) willtimely IT
deploy be used?
Report Forum solutions (from IT
In what forum with the performance reports be briefed?
department)
Report Location Where will the Perform Reports be stored?
First Data Due Date On what date will the first data be provided to the Reports Branch?
First Data Collection What period will the data of the first report cover? By 30 SEP
Measure:
2011 complete 50% of
Period
projects within 20% of
First Reporting Date On what date will the Performance Report first beapproved date
their first briefed?
Change Management When will this measure be reviewed again to ensure it is sustainable
and cost baseline
and remains valid for the goal?
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21. Performance Reports
Focus on Objectives
• Are we meeting the objective target?
• Allow program and project managers to
focus on initiatives. Use their progress
data, along with other information to explain
performance variations
Chart and graph development
• Keep it simple Respond don’t react to
• Minimum “data bite” requirements data.
o Target and points over time
o Context or trend data
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22. Performance as Aggregate
Bottoms up
focus
Example from PMI® Standard for Portfolio
Management – Second Edition
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23. Performance by Objectives
Top down
focus
Includes
objective,
measure,
target and
performance
summary
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25. Explaining Performance
Use progress charts
and reports to explain
performance variations
– only as needed
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26. Performance Reporting Tips
Start reporting objective performance right away – don’t
wait for supporting initiatives or projects to start
• Practice data collection
• Keep performance visible
• Acts as catalyst to start strategic initiatives
• May see changes in performance without starting initiatives
Use top down performance reporting to stay strategically
focused
• Use bottom up reporting to help explain variances in strategic
performance
Hold formal performance review meetings
Ensure each level of management is clear on their
performance reporting role and responsibility
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27. Performance Reporting Tips
Use performance reporting as part
of your communications plan
Provide training on chart
development and reading
Keep charts simple
Document and communicate what
defines your red, orange, yellow,
green performance indicators
• Be consistent
Once enough data is collected add
control charts to graphs
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28. References
Strategic Planning
• Balanced Scorecard
o Kaplan and Norton
o Palladium Group
o Balanced Scorecard Institute
• Bascom “Dit” Talley
o Instructor and Coordinator, Intelligence Analysis Program, JHU
o President at Corporate and Government Consulting
Strategic Planning
Leadership
Performance Measurement
• StaceyBarr.com
o Performance Measurement Specialist
o Performance Measurement Blueprint
o Key Performance Indictor Library
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29. References
Leadership & P3M3
• Personal Strengths Publishing
o Strength Deployment Inventory® (SDI)
o Strategic Intelligence
• Project Management Institute (PMI)
• Project Smart
Chart and Graph Development
• Steve Souza, Liquilight.com
Discover Your Data
• Stephen Few
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30. Questions?
SMART Management Consulting, LLC offers
training, workshops and consulting in all
aspects of
• Leadership
• Strategic Planning
• Sustainability as Strategy
• Portfolio, Program and Project
Management (P3M3)
Strength
Performance Portfolio
Emotional Balanced
Delegating and
Conflict Deployment
Strategy Execution
Intelligence building
Team Prioritization and
Management
ManagementCoaching
Scorecard ®
Inventory
Ranking
Jenine@SMARTManagementConsultingLLC.com
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Once a strategy is defined and goals or objectives have been identified, answering the question what do we need to do to achieve these ends requires Cause and Effect thinking
Learning and Growth perspective includes employee training and corporate cultural attitudes related to both individual and corporate improvement. With rapid technological change, it is necessary for workers to be in a continuous learning mode. Measures should be defined for managers to focus training funds where they can help the most. Learning and growth constitute the essential foundation for success of any knowledge-worker organization.Learning is more than formalized training. It also includes mentors, knowledge sharing and management as well as ease of communication among workers that allows them to get help when needed. The Internal Operations (Business Process) PerspectiveThe Internal Operations perspective refers to internal business processes. Measures for this perspective allow the managers to know how well their business is running, and whether its products and services conform to customer requirements. These measures have to be carefully designed by those who know these processes most intimately; all missions are unique, therefore, these measures must be developed by individuals from within the organization.The Financial PerspectiveTimely and accurate funding data will always be a priority to ensure the organization is fiscally responsible. Financial measures should include planned versus actual spending as well as risk and cost-benefit data.The Customer PerspectiveRecent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction in any business. These are leading indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of future decline, even though the current financial picture may look good.In developing measure for satisfaction, customers should be analyzed in terms of kinds of customers and the kinds of processes for which we are providing a product or service to those customer groups.
Goal Owner Signature & DateSignifies understanding of their role and their agreement to supply timely, accurate and relevant data as detailed in this worksheet.