Middle Managers in Program and Project Portfolio Management

Project Management Institute

MIDDLE MANAGERS IN PROGRAM AND PROJECT PORTFOLIO MANAGEMENT

Practices, Roles and Responsibilities

Tomas Blomquist, PhD

Ralf Müller, DBA

ISBN: 1-930699-57-3

© 2006 Project Management Institute, Inc. All rights reserved.

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Table of Contents

Acknowledgements

Executive Summary

Introduction and Background

Literature Review

Methodology and Analysis

Managerial Implications: What Middle Managers in Successful Organizations Do

Theoretical Implications and Conclusions

Chapter 1: Introduction and Background

Program and Portfolio Management as a Subset of Corporate Governance

Governance and Transaction Cost Economics

Research Questions

Objectives

Scope and Underlying Assumptions of this Study

Management Process

Milestones and Deliverables

Supporting Organizations

Report Structure

Chapter 2: Literature Review

Project Portfolios and their Management

Portfolio Definitions and Selection Techniques

Planning and Managing Project Portfolios

Competencies for Portfolio Management

Programs and the Management of Programs

Program Management as an Entity for Organizational Structure

Program Management Processes and Life Cycles

Competencies for Program Management

Project Types and Program/Portfolio Management

Environmental Complexity

Chapter 3: Methodology and Analysis

The Qualitative Study

Qualitative Data Analysis Results

The Quantitative Study

Sample Demographics

Quantitative Data Analysis Results

Results Triangulation

Chapter 4: Managerial Implications: What Middle Managers in Successful Organizations Do

Organizing for Program and Portfolio Management

Managers Activities in Program and Portfolio Management

Middle Managers Roles in Program and Portfolio Management

Portfolio Management Related Roles Prior to Project Execution

Business Planning

Project Selection

Resource Planning

Resource Procurement

Project and Program Plan Review

Program Management Related Roles Prior to Project Execution

Identification of Business Opportunities

Synergy Identification

Resource Planning and Selection

Program and Portfolio Management Related Roles during Project Execution

Identification of Bad Projects

Participation in Steering Groups

Prioritization of Projects

Coordination of Projects

Collection and Aggregation of Reports

Initiation of Reviews

Handling of Issues

Coaching of Project Managers

Improvement of Processes

Summary of Managerial Implications

Chapter 5: Theoretical Implications and Conclusions

Theoretical Implications

Suggestions for Further Research

A Final Word

References

Appendix A: Interview Instrument

Appendix B: Questionnaire Instrument

Appendix C: Summary Tables

Questionnaire Variable Descriptions

Performance Differences by Governance Structure

Performance Differences in Projects, Programs and Portfolios by Governance Structure

Summary of Research Questions, Hypotheses and Results

Appendix D: Author Contact Information

List of Tables:

Table 1: Study Milestones and Deliverables

Table 2: Industry, Company, Country, and Role of Interviewees

Table 3: Framework of Program and Portfolio Management Roles of Middle Managers

Table 4: Quantitative Study Demographics: Age

Table 5: Quantitative Study Demographics: Years of Business Experience

Table 6: Quantitative Study Demographics: Years in Current Position

Table 7: Quantitative Study Demographics: Geographic Dispersion

Table 8: Quantitative Study Demographics: Industries

Table 9: Correlations between Independent and Dependent Variables

Table 10: Canonical Correlation Models

Table 11: Mapping Study Results against Elonen & Artto (2003) Results

Table 12: Managers’ Time Spent on Different Tasks (1=never to 5=full time)

Table 13: Differences between High and Low Performing Organizations

Table 14: Perspectives of Project, Program, and Portfolio Managers

Table 15: Organizational Perspective for Project, Program, and Portfolio Management

Table 16: ANOVA of Differences in Success by Governance Type

Table 17: Scheffe Test on Differences in Success by Governance Type

Table 18: Summary of Research Questions, Hypotheses, and Results

List of Figures:

Figure 1: Governance of Project Management in Context

Figure 2: BCG Market Growth / Relative Share Matrix

Figure 3: Project Portfolio Selection Process (Archer & Ghasemzadeh, 1999)

Figure 4: Goals—Methods Matrix (Turner & Cochrane, 1993)

Figure 5: High Level Research Model

Figure 6: Detailed Research Model

Figure 7: Canonical Correlation Model (all responses)

Figure 8: Canonical Correlation Model (low performing organizations only)

Figure 9: Organizational Performance in Different Governance Structures

Figure 10: Final Model

Figure 11: Broker—Stewart Model for Program and Portfolio Manager (after Turner & Keegan, 2001)

Figure 12: Perspectives towards an Organization

Figure 13: Project, Program, and Portfolio Performance in Different Governance Structures

Acknowledgements

This study was initiated by the Project Management Institute (PMI) as one of its activities to foster the advancement of project, program, and portfolio management. The authors are deeply indebted to PMI for their support and guidance throughout the study.

We should give particular mention to Dr. Harry Stefanou from the PMI Project Management Research Program and to Prof. Dragan Milosevic for their guidance, as well as Wanda Curlee and Shelley Gaddie from the Project Management Research Member Advisory Group (RMAG) for their valuable contributions. We are especially grateful to our Research Coordinator, Eva Goldman, for her continuous support during the entire life cycle of the study.

Further support was provided by the Research Institute of Umeå School of Business and Economics, Umeå University, Umeå, Sweden. Through additional funding and provision of the school’s facilities and technology, we were able to finish the study in the timeframe set in the beginning and reach our quality objectives. Special thanks are extended to Prof. Anders Söderholm, Prof. Maria Bengtsson, Prof. Kurt Brännäs and Associate Prof. Nils Wåhlin from Umeå University for their support of the study.

During our presentation of the study results to the research community, we received a number of helpful recommendations and hints. We also thank attendees of the PMI Research Conference 2004 in London, UK, for their helpful comments on the subject.

An empirical study like this would not have been possible without the voluntary help of practitioners, who devote their time and knowledge to the advancement of the profession. We thank, in particular, the interviewees and questionnaire respondents for taking the time and effort to share their knowledge with us, as well as those who provided further comments and descriptions of their program and portfolio management practices.

Many more than we can mention here have helped us behind the scenes, including our families and friends. We could not have done this study without their help.

Executive Summary

What are middle managers’ roles and responsibilities in program and project portfolio management? What are the best practices of successful companies today? These questions are of increasing interest for organizations operating with limited resources and ambitious performance objectives. More and more organizations use projects as the building blocks for their business in order to deliver unique products or services to their