think ideas conceptual design. light, tools, men, computer, experiences, clock, dollar, book, rocketManaging a portfolio of innovative projects incurs many difficulties, such as the establishment of a culture of continuous evaluation in order to validate the hypothesis, or the difficult collaboration of multidisciplinary teams with no prior experience to rely on. For those who lead the innovation strategy, the biggest challenge is to have a tool that allows distinguishing the relative importance of each project in order to prioritize its implementation.

As the ratio between innovative ideas and projects reaching the final stage is very low, it is especially important to ensure that the highest value projects are approved. It is worth noting: innovation projects are very inefficient. It is necessary to spend time and money on research until you get an idea that is really worth pursuing. But that does not mean that you do not have to control how much time and money you spend, or what activities.

That is why this type of portfolio usually follows a lean philosophy: it starts from a hypothesis or idea that must pass through successive phases of refinement and validation.

Thus, before the existence of a project in the execution phase, there is the proto-project: first the idea or hypothesis, then the MVP, which requires pivot points. When the starting hypothesis is not endorsed by actual experience, or only partially, the proto-project can be reoriented in the light of what has been learned.

As pivoting generates additional costs in the search for commercial and technical viability, innovative proposals must be constantly evaluated to consider which ones should have room to generate inefficiencies and additional costs until a sound foundation is found - and which are discarded so that the investment is sustainable.

Innovation and corporate values

Innovation projects in large corporations are usually characterized by responding to a vision that goes beyond the business, also pointing to values ​​such as Corporate Social Responsibility, environmental sustainability or the consolidation of one's own innovative culture.

For example, BBVA has an ambitious innovation strategy centered on Big Data. As the ultimate goal is to better understand the behavior of customers to provide better services, efforts are directed towards knowledge creation. With important ramifications: the key professional is no longer the traditional financier, but the data scientist, who "dominates statistics, knows how to program and also understands the business". The various initiatives that emerge from BBVA's Big Data strategy struggle for finite (though abundant) resources, which is why Marco Bressan has decided to concentrate on the centralization of information to begin with.

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On the other hand, the means that any corporation has to materialize an innovation strategy is its portfolio of projects. In order for the portfolio of projects to have sufficient bearing, portfolio management must be the explicit responsibility of a corporate unit, often the management committee itself.

In the case of General Electric (GE), verticals include aviation and transportation, but they extend to materials as diverse as software, health services and water.

A sample of the diversity in GE's innovative portfolio, pictures

A sample of the diversity in GE's innovative portfolio

Unfortunately, as innovative projects are often completely unpublished and very different from each other, it is often difficult to know which projects are to be given preferential treatment. Is it more important that the project produces a social return or contributes to the modernization of the technological infrastructure?

Given the difficulty of comparing two innovative projects and knowing which will bring greater value to the company, it is crucial to have a criteria for making complex choices objectively.

Complex decisions are often subjective

A complex choice is one in which the alternatives are weighted based on more than one quality, so that there is no optimal alternative that surpasses the rest.

For example, several factors are taken into account when choosing an internet service provider: price, quality of customer service, the speed of the line and the reputation of the company. Usually the more economical services offer lower speeds, while more established brands often offer improved after-sales services. The decision is never obvious.

Complex choices are made daily. Often, as is the case with internet providers, the final decision is usually subjective, because whoever decides does not have the necessary time or tools to decide which option gives the maximum value. This hasty dimension of the decision allows competitors to appeal to the consumers' emotions and win with arguments less related to the service itself.

However, it is obvious that whoever leads the innovation program of a corporation can not be carried away with emotion. You will have to give reasons for your decisions, rely on data and get the push and commitment of many teams, who often work in remote locations.

Complex corporate decisions:

Portfolio prioritization with AHP

Without a technique or method to compare between the different value criteria, each choice between projects is difficult, equivalent to the choice between ethical values, such as freedom and equality.

Although there are dozens of prioritization methodologies for product requirements, there are not many alternatives in the world of project management.

The most convenient method for responding to complex choices representing the alternatives between innovative projects is AHP, an acronym for Analytical Hierarchy Process.

In short, AHP is advisable because:

  • It helps build consensus around how to implement the innovative portfolio strategy
  • It is linked by definition to the criteria, values and business objectives
  • Shorten the political discussions
  • Increase the commitment with the decisions taken, since all the criteria of the corporation are represented in the right measure.

This technique allows for comparing, in a table format, the relative importance of each criterion or objective.

Business goals prioritization for "Optimist - 110% sales" Scenario. Table

The resulting table does not hierarchize in absolute terms. That is to say: it does not classify the objectives from more to less important, since that is an oversimplification. On the contrary, it allows us to attend to fundamental nuances when it comes to assessing the diversity of value propositions delivered by innovative projects.

For example, in the case of an innovative portfolio one could compare the importance of the following objectives:

  • Improving innovative culture
  • Increase market share in digital services
  • Modernize the technological infrastructure

Let us now imagine that the management committee of a corporation devotes a meeting to compare these objectives and discuss which is more important for the strategy comparing them in pairs. The conclusion would be something like the following table:

Table, innovative culture, digital services, modernization

Although matrices can be done by hand or in Excel, it is convenient to have software that allows calculation and is integrated with the project management itself, such as ITM Platform.

Thus, not only is there a system that helps to perform the analysis, but its results are registered and connected with the evaluation of the projects themselves.

By linking each project to the objectives and criteria it supports, ITM Platform indicates which projects contribute the most value and should start sooner.

Of course, the work of evaluating the proposals will remain a difficult art, as well as the elaboration of innovative proposals, with all the market prospecting exercises, identification of tendencies and uncertainty for the future.

But there is a basis in the management of the information that must be demandable. The facilitated prioritization that we have explained in this article has the great advantage of generating consensus and supporting informed, renegotiable and easy to communicate decisions.

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phone, balance, dollar, credit card, calculator, manifying glass

Many technology initiatives designed to bring about change within organizations do not work properly when you compare the performance obtained with the performance expected.

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In most cases, this failure occurs because, despite new project management systems having been implemented, it has not been possible to truly change the operational fabric of the company.

 

The premise mistakenly assumes "our team will use new methods, new technologies, processes and work systems, as they are designed or told to use them."

The reality is very different, the fact that the corporate structures decide to adopt a new methodology of work does not mean that they are implemented automatically in the practical terrain of each day. In order for the application to be carried out correctly, there must be a teaching process and control systems that guarantee this.

Without this, the result is that despite acting according to the new methodologies, in the background they are still acting according to the old systems, using the new methodologies as a patch to save appearances. In this way, duplications are generated that not only do not increase productivity, but can even reduce it.

In addition, in these situations where the users of the new tool are not used to defining exactly the linkage between talent and technology, it is usual to allow for the practice known as IT shadowing. When an employee or team faces a challenge in their work for which there is no technological solution, they will seek solutions in the market and will try to adopt them spontaneously. In large organizations, this leads to a clear erosion in workflows and a lack of visibility over the corporate technology portfolio.

Therefore, when evaluating the results obtained by the company after the application of the new working methodologies, it is possible that the results originally expected will not be obtained. However, it is not necessarily because the new technologies or working methods are not efficient, but that they have not been properly implemented. Often this implies a lack of attention to the specific needs of employees; to their ways of using technology; and a lack of interest in identifying the causes of friction.

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Organizational change management: the missing piece of the puzzle

Organizational change management is the missing piece that allows for change management to be properly implemented in a company. It is responsible for managing the changes in the structure of a company, both at the role distribution level and in the most cultural and personal aspect, to successfully implement a new working methodology.

Expressed in another way, organizational change management takes care of the more personal and human facet of change, which is usually implemented in a practical way through internal projects.

With all of this, it aims to focus on what has been proven to be the main cause of failure in the implementation of new methodologies. These are not technological problems or software failures, but the human factor: motivation, expectations, alignment between the needs of the organization and needs of daily performance, training, and so on.

However, at present most of the companies that intend to implement change in their work routines continue to focus their attention on other aspects and assuming some myths such as those set out below.

Myth 1: The more technology, the better

Undoubtedly, technology has revolutionized our lives, as well as the world of business. However, more technological sophistication does not necessarily imply greater productivity or efficiency at work.

Properly implemented, new technologies can make an infinite number of resources available to workers that allow them to be more productive, both in person and remotely. It also improves communication and coordination of working groups.

However, if they are not implemented properly it can lead to a decrease in productivity. Constantly checking e-mail and other communication systems, both business and private (such as social networks), make you lose concentration, interrupt tasks and artificially lengthen working times.

On the other hand, technological changes require a period of adaptation and learning in which productivity will inevitably be less, temporarily, as workers learn to use the new tools at their disposal. The more sophisticated the new technology is to be implemented, the greater the learning curve and therefore the adaptation period will last longer and more resources are needed for teaching.

Therefore, the aim is not to seek technological development at all costs, but to do so at a pace and in a way that is acceptable to the workers and maximizes their productivity.

Myth 2: Change management is based only on good communication and practice

Of course, good communication is essential for the successful implementation of change. In general, good communication is essential for the smooth functioning of any facet of the company.

In the same way, acquiring training, practice, rehearsing ... are essential aspects that help to improve in the execution of any job or task.

However, change management is somewhat more complex and requires the interaction of other strategic and tactical factors if you want to achieve the desired success.

For example, it is convenient to transform employees into internal customers and consider what the factors are that will lead them to buy the technology that is offered to them. From there, you can perform classic market research techniques, such as surveys, focus groups, or usability studies.

It is essential that all these techniques be applied early in the process, so that the information collected serves to structure a profile with functional requirements about what type of technological support is needed. If the focus group is based on an already established tool, it can be used to determine why there are adoption problems - but a very high opportunity cost would be generated that could have been avoided by using the same feedback to choose the type of tool Optimal for users.

Myth 3: Change management specialists will be able to make the change themselves

Change management specialists are crucial in achieving this. After all, they have a broad understanding of the techniques and systems that allow change management to be carried out efficiently. However, in order for a company to successfully implement new working methodologies, it is necessary that there be a willingness to change on the part of all levels of the company itself.

Company managers can not rely on soliciting the services of a change management specialist and then disengaging themselves. In order for the change to be implemented efficiently, it is necessary to involve all the company's personnel, starting with the managers and addressing all the workers.

Myth 4: The tool is intuitive, so you learn on your own

Even the simplest program has many levels of complexity. Think of a text editor, with all the advanced options for setting paragraph styles and titles, indexing or even creating macros. To truly empower the user, it is necessary to go beyond the most immediate functionality, teach what solutions exist in the software and provide documentation to be able to navigate those solutions independently.

That is why many companies, including ITM Platform, are obliged to hire an advisory and initial training service to ensure that the new tool will not be shunned during implementation.

Although they have a higher initial cost, implementation training services vastly increase the ROI of corporate software. Of course, measuring the ROI of these actions is, in itself, very costly. However, specialized agencies such as the American Association for Learning Development have shown in repeated studies that investing in talent training is one of the most successful business results.

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clock, paperwork, suitcaseFor a project-based organization, setting up a PMO is equivalent to parenthood. It’s just not enough to wake up early to go to work, eat your sandwiches diligently in front of your screen and be a loyal friend. From the moment you embark on this new ship, it’s a whole new level at which you will need to keep ahead of events, create new habits, and be always ready to respond to an emergency. For me, the key to start the process with the right foot forward is to know yourself as well as you can.

Organizations can use the wisdom of self-knowledge in smart ways. Let’s have a look at factors that are helpful indicators of maturity.

 

Know thy maturity, they say

The degree of maturity of an organization is strongly correlated to the complexity of the PMO model that it is likely to implement

According to a study published by Forrester and PMI in 2011, there a number of features and characteristics that provide insight into the maturity of a company.

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Possible signs of low maturity:

  • Lack of clear strategy. Projects are not always properly aligned with the objectives of the organization.

  • Lack of quantitative evaluation. In this scenario it's impossible to obtain clear indicators of the state of each project, identify the causes of any problems and search for areas of improvement. In addition, measures should be taken to improve the efficiency of the company.

  • Ideas, projects and business areas are not prioritized.

Companies that have a medium level maturity may show the following characteristics:

  • Ability to prioritize projects.

  • Some degree of alignment between projects and the overall objectives of the company.

  • Metrics to quantify the results of high level projects.

  • Resources are planned prior to implementing a project.

A company with a high degree of maturity has the following features:

  • Integration of the company’s work and tasks in projects and programs.

  • All work is goal oriented. Each task or project is working towards the general objectives of the company.

  • Standardized measures for the results of each project are performed. This way you can monitor both the progress and status of each project and the impact that the various risks and corrective measures may pose to each of them.

  • There are effective systems in place to allow quick and flexible communication among team members in the various tasks and projects.

  • Work systems can incorporate agile and classic methodologies that help maximize efforts.

  • Projects conform to international standards, ensuring quality and allows smooth implementation in all locations the company is present.

  • Software options combine Specific and advanced solutions with simple and direct tools so that workers can optimize the use of their time and be more productive.

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Implementing a PMO

1. Justification and initiation. Once company executives are aware of the benefits, your organization might be in a good place to start setting up a PMO.

A PMO can contribute clear objectives and compliance metrics, identify possible deviations and define corrective measures. Decide how much your PMO will take up, build your information streams and draw up a goal-driven plan.

2. Planning. What are some of the steps needed to implement the new project management policy?

  • Seamless communication with the board of directors and with customers to establish the scope, objectives of the company and therefore decide the projects to be undertaken. These communication channels should be structured and maintained throughout project implementation.

  • Choose an organization system for the company, project management methodologies and a governance model.

  • Recruit your project management staff. Your crew may combine specific project management training with an open mind that allows continuous training throughout the project to meet the needs which may arise during work.

3. Execution. Measurement and monitoring frameworks are an important component of project implementation that can easily benefit from the centralized functions and the homogenization of a PMO. Project managers position will be strongly supported with the enhanced communication between all organization stakeholders.

At ITM Platform we can help in the process of creating your PMO. With our platform, user onboarding and technological deployment are seamless: our customers start using our solution in as little as one week. You will be able to focus on what really matters: defining the internal procedures that allow you to improve your performance.

If you want to know more about how we can help, request a demo of ITM Platform or request our implementation service, which provides tailored training adapted your company’s needs.

 

Juan Delgado
Blogger ITM Platform
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