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  • © The Stationery Office 2013

    Case StudyMay 2013

    How to implement Management of Portfolios within 100 days

    Craig Kilford

  • © The Stationery Office 2013

    2 How to implement Management of Portfolios within 100 days

    Contents

    Introduction from the Director General 3

    1 Understanding where we were 3

    2 Understanding where we wanted to go 4

    3 Working together to get there 4

    4 Going beyond 100 days 6

    Top tips 6

    Appendices 7

    1 Portfolio management blueprint 7

    2 Portfolio delivery journey 2012–14 8

    3 Portfolio delivery unit model 9

    4 Portfolio governance model 10

    5 ONS future wall 11

    Glossary of ONS portfolio management terms 12

    About the author 13

    Acknowledgements 13

    Trade marks and statements 13

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    How to implement Management of Portfolios within 100 days 3

    Introduction from the Director GeneralAt the Office for NationalStatistics (ONS) we collect, analyse and publish importantstatistics such as population, inflation and gross domesticproduct. This information is used to inform decisions that affectyour life and the lives of everyone in the UK.

    (Video) Session 6: Betas and Costs of Equity

    In 2012, we recognized that a portfolio management approach tobusiness change was required to ensure we prioritized and investedin the changes that contribute most to our strategy.

    We were aware that some studies indicated a timescale of 12–18months to implement portfolio management. However, we decided toembark on a 100-day, high-energy approach to implementing theCabinet Office’s best-practice standard Management of Portfolios(MoP®; The Stationery Office, 2011). During the implementation wederived considerable value from enhanced executive portfolio-levelinformation, portfolio prioritization, consistent portfolioinvestment appraisals and project sequencing. All of this led to agreater understanding of the portfolio delivery landscape and theability to make more confident investment decisions with an overallincrease in collaborative working and organizational energy.

    While we can’t see into the future, we do know that thelandscape in which we are delivering complex change will continueto be fraught with real economic challenges, rapidly evolvingtechnology and an increasingly complex society. This is why it ismore important now, than ever before, to invest in the rightprojects and deliver them the right way, using the right people,every time. We believe portfolio management is critical toachieving this.

    Glen Watson, Director General Office for National Statistics

    ‘I am very pleased with the value we have experienced from usingportfolio management. It has never been more important fordepartments to make informed and confident decisions regardinginvestments in projects and programmes.’

    Jil Matheson, Permanent Secretary and National Statistician, UKStatistics Authority

    ‘I’m very impressed with the approach ONS is taking indeveloping its portfolio management strategy and processes. Iendorse the direction which is being taken, which is consistentwith the work in which MPA is engaged in developing aGovernment-wide portfolio of major projects.’

    David Pitchford, Executive Director, Cabinet Office: MajorProjects Authority

    1 Understanding where we were

    In January 2012, a key recommendation from an organizationalchange programme (sponsored by the National Statistician andDirector General) recommended the implementation of portfoliomanagement across ONS. The necessary portfolio management skillsdid not exist within ONS and interim assistance was commissioned todeliver this capability based on the Cabinet Office’s MoP.

    Value experience Prior to commencing work at ONS, a valueexperience plan was agreed with the Director General, highlightingthe value that the executive leadership would experience fromadopting a portfolio management approach.

    Portfolio definition cycle The first step focused onunderstanding the detail of the portfolio and the portfoliomanagement capability. An intense 10-day consultation periodfollowed, with more than 60 one-hour consultation meetings takingplace. Meetings were attended by the entire executive leadershipteam, the project and programme management community, and teamsfrom finance, IT and business areas.

    Portfolio capability measurement In order to understand ourcurrent portfolio management capability and set targets for thefuture, we created a bespoke portfolio capability model (seeglossary). This was created based on MoP’s keys to success and thecapability questionnaire within the Executive Guide to PortfolioManagement (The Stationery Office, 2012).

    Organizational energy We wanted to measure organizationalenergy; however, our Civil Service People Survey had just takenplace, so the timing wasn’t right. Instead, during the consultationmeetings we measured how happy people were with ONS’s currentability to manage change. We did this by asking people to scoretheir happiness out of 10 (10 being very happy; see ‘happinessindicator’. The average happiness score in April 2012 was 4.3. InOctober we asked the same people again and the average happinessscore was 6.4, an increase of 48.8%.

    The outcome of the portfolio management capability assessmentwas represented in a spider graph. This was useful for threereasons:

    ■ It enabled us to understand where we were already doing goodthings as well as areas for improvement.

    ■ It enabled us to plot our targets for each capability area andenergize people to join in.

    ■ It became the foundation on which we built the portfoliomanagement improvement plan.

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    4 How to implement Management of Portfolios within 100 days

    2 Understanding where we wanted to go

    Vision From the outset we felt it was critical to focus onengaging people, ensuring they understood the value experiencedfrom adopting portfolio management in ONS.

    A vision statement for portfolio management in ONS was agreedas: ‘ONS successfully delivers the right projects and programmes,in the right way, with the right people, every time’. Using thisvision statement in all presentations and documents helped everyoneto understand where we were going.

    Portfolio management blueprint We found that simple, welldesigned graphics and diagrams were much more effective whendescribing the portfolio management implementation approach topeople. One such product was the portfolio management blueprintshown in Appendix 1. This represented the future portfoliomanagement, processes, collaborative working, governance andinformation flows in a picture on one side of A3.

    Portfolio plan The most successful product we created was theONS portfolio delivery journey 2012–14, shown in Appendix 2. ONSdeals with extremely complex statistical systems and during theconsultation one of the key areas of pain highlighted repeatedlywas that people didn’t understand how their project fitted withothers. So we designed a simple, eye-catching, one-page view of thewhole portfolio landscape.

    Inspired by Harry Beck’s iconic design of the London Undergroundof 1931, the ONS portfolio delivery journey 2012–14 instantlyhelped people understand the portfolio scope, delivery timescales,‘killer’ dependencies (i.e. dependencies that were criticallyimportant) and key benefits. This was well received by colleaguesat Her Majesty’s Treasury, Cabinet Office Major Projects Authorityand Cabinet Office Efficiency Reform Group because it helpedeveryone understand the ONS portfolio and plan assuranceresources.

    3 Working together to get there

    Portfolio office We used the portfolio management capabilityassessment and the blueprint to design the model and services ofthe new enterprise portfolio office – we called it a portfoliodelivery unit (PDU; see Appendix 3).

    A key focus for us during the design of the PDU was to ensurethat it provided the services that would offer maximum value toONS. This meant focusing on the right services and ensuring theskills of the PDU team could consistently deliver those services tothe highest possible quality. With that in mind we organized theskills into three main areas which included investment andinformation, people and process, and portfolio delivery.

    Welcome to the portfolio delivery unit Because the PDU was a newfunction, we put a lot of energy into helping people understand theservices and value they would experience from the team. One veryuseful tool was a PDU welcome pack. We didn’t just email it toeveryone; we wanted to create conversations so we used it duringface-to-face engagement via various groups, forums, seminars andone-to-ones. It was also very useful to help new starters get up tospeed with the processes and background.

    Quality The first thing to be instigated within the PDU was acheck to ensure that products were great, usable, clear, conciseand informative (GUCCI; see glossary). Before a product left thePDU it was checked by the team to ensure it achieved our GUCCIstandard. If it didn’t, we didn’t release it.

    Portfolio governance The PDU implementation incorporated theinitial development of the governance that was used to deliver theportfolio; see Appendix 4. This included adding portfoliomanagement responsibilities to the terms of reference of theexecutive leadership team meeting. We also set up a portfoliodelivery committee (chaired by an executive director and attendedby the chief finance officer) and a collaborative investmentappraisal process known as the business investment group (BIG). Weknew governance was critical to success, but also that it needs todelicately evolve with the portfolio capability and processimprovement. With that in mind we made sure that we continuallyreviewed the value and ensured people felt comfortable withoffering their feedback. Doing this ensured a collectiveunderstanding of the governance which led to increasinglyconsistent portfolio executive information and more confidentportfolio investment decisions.

    Portfolio investments The BIG team is a virtual team of expertswithin ONS who provide a support and scrutiny mechanism of newbusiness case investments. The name BIG was appropriate, because itwas memorable and focused people’s minds on investment.

    Portfolio information One of the most recognizable enhancementsfrom the executive perspective was the complete change in approachto executive information. Historically, large Word documents hadbeen used. We scrapped this method and implemented a totally newstyle

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    How to implement Management of Portfolios within 100 days 5

    of executive portfolio information. This included less projectdata and more portfolio information which enabled key decisions tobe made.

    Executive information The executive leadership team waspresented with the first monthly executive portfolio informationpack within the first 30 days. This incorporated ‘portfolio zooms’,a new concept that provided executive leaders with an enhancedfocus on specific aspects of the portfolio. This instantly addedvalue because it focused on critical information, enhancedconfidence and clearly defined the decisions required fromexecutive leadership.

    Collaborative processes A key enabler for enhancingexecutive-level information so quickly was the change we applied tothe monthly project highlight reporting process. The existinghighlight report template was weak and required too much effort onthe part of project managers. The PDU worked with all projectmanagers and the IT directorate’s programme management office(whose role it was to coordinate all IT aspects of projects) toredesign the format, thus ensuring higher-quality information wasprovided in less time.

    Reporting cycles Because of the faster pace of portfoliodelivery, a fortnightly reporting cycle was implemented acrossevery project and sequenced with the existing reporting cycle ofthe IT programme management office. A ‘handshake’ document wasagreed between the PDU and the IT programme management office whichformed the agreed ways of working between the two teams. Suchcollaborative working enabled information flows to be synchronizedand played a key part in bringing teams closer together. This wascritical to boosting the quality and timeliness of portfolioinformation to the executive leadership team and ONS board.

    Strategic contribution The PDU reviewed the benefits from everyproject and assessed the strategic contribution to the objectivesin the ONS business plan. A weighted scoring technique was used andthis formed a critical part of the information that was used duringthe portfolio and business-as-usual prioritization process. It wasimportant that the PDU resource was assigned to this work on anongoing basis, because unravelling the complexities at the sametime as developing benefits management capability was crucial.

    Collaborative teams Throughout the portfolio prioritizationprocess, collaborative working and strong relationships between thePDU and the finance team were key to success. When information waspresented to the executive leadership team valuable investmentconversations took place and this enabled decisions regardinginvestment, efficiencies, risk and the return on investment to bemade confidently.

    Actively managing benefits Benefits management was a main areafor development. One of the key products from the business casereview was the development of a portfolio-level benefitstrajectory. We diagrammatically represented the extent to whichvarious stakeholders realize benefits from ONS. While it was veryuseful as an initial indicator, it had many caveats in the firstinstance because of its sheer complexity, which meant more work wasneeded to qualify and assure the benefits.

    Benefits eligibility The benefits eligibility guidance wascreated in line with APMG International’s Managing Benefits. Itprovided people with a consistent approach to managing benefits,including the definitions of various types of benefits and theinvestment approaches needed for different categories of projects.For example, value-for-money projects used cost-benefit analysiswhereas mandated projects used cost-effectiveness analysis as theprimary investment appraisal technique. This was critical to ONSbecause around 90% of all change within ONS is either mandated orhelps other organizations make more informed decisions.

    Creativity A central philosophy in everything we did wascreativity. We invested a lot of time in the design of the PDUproducts because we knew they would help people appreciate thevalue of enterprise portfolio management. Therefore, the needs ofthe recipient and wider audience were a key design consideration ofevery PDU product.

    Executive engagement A good example of a creative approach wasthe first presentation to the ONS board (attended by the nationalstatistician/permanent secretary, executive and non-executivedirectors). We didn’t want to write a regular report aboutportfolio management; we wanted something experiential that wouldprompt useful debates. Ahead of the meeting, the PDU came up withthe top 10 questions that the ONS board would want answers to, suchas ‘What is the portfolio return on investment?’. Based on thosequestions we created large A1 prints that graphically answeredthose questions based on the information we had at that time. Thesewere presented at the meeting in the style of an art exhibitionwhich helped people engage and gave them a glimpse of theinformation they would get moving forward.

    PPM skills The development of project and programme skills was apriority for ONS. During the first 100 days, the PDU took stepstowards developing a cadre of professionally recognized project andprogramme experts within ONS. Role profiles for project andprogramme managers were updated to include competencies

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    6 How to implement Management of Portfolios within 100 days

    from the Association of Project Management (APM) and these wereincorporated into the plans for a project and programme managementdevelopment centre.

    Portfolio delivery community The PDU was aware that a lot ofskills, experience and passion existed within the team of projectmanagers, programme managers, business analysts and projectmanagement offices. We felt that this wasn’t being tapped intoeffectively so a monthly portfolio delivery team meeting was set upto provide a forum, where all project managers could communicate,discuss challenges and share experiences.

    4 Going beyond 100 daysMore value Towards the end of the first100 days, the ONS board was presented with a value experience planfor the next six months. This committed the PDU to delivering thevalue as defined in that plan. This was communicated to theportfolio delivery team and helped people to understand the nextstep in the portfolio development journey.

    Better with benefits The draft benefits eligibility guidance wascreated within 100 days, and in November 2012 we ran a full-dayworkshop for 60 people creating initial benefits maps for allprojects. This was very challenging to organize; however, it wasincredibly well received and we managed to accomplish at least fourmonths’ work in one day. Our next steps are to fully embed the newbenefits management framework and benefits eligibility guidancewithin the portfolio.

    Develop people Within the first 100 days plans were created torun a development centre for project and programme managers withinthe portfolio. It would have been ideal to deliver the developmentcentre within the first 100 days; however, we needed to embed thePDU first and understand the project and programme managementcommunity. The development centre will be extended to includeproject management office and business analyst skills in the nearfuture. Continually investing in people and developing long andexciting careers in ONS is key to successful delivery. As part ofthe vision for portfolio management in ONS, the PDU is responsiblefor assigning and reassigning all PPM resources within theportfolio.

    Life cycles and staged fundingWe planned to start implementing anew business change lifecycle to add more rigour around stagedfunding for projects. However, due to the amount of effort appliedto the portfolio prioritization and balancing, this was rescheduledto start within the next 100 days.

    Manage resources Project planning standards were implementedduring the first 100 days in partnership with the IT programmemanagement office and formed the basis on which we would build ourresource management capability. This work took place in parallelwith a wider piece of work assessing ONS’s overall portfoliodelivery resource requirements.

    Painting a picture of the ONS future As part of the developmentof the new ONS strategy, we came up with the concept of the ONSfuture wall (see Appendix 5), a 10-metre space for people to paintor draw how they saw themselves and ONS changing over the next 15years. The Director General opened the future wall by providing asummary of what he saw as the big things in the future. From thatpoint on we found the ONS future wall to be incredibly popularbecause it created an inclusive platform for people to contributeto the future direction of the organization’s strategy andportfolio delivery journey.

    Top tipsTo summarize this Case Study, here are eight top tips(in no particular order) which are the things we found criticallyimportant when implementing portfolio management within 100days:

    1. One team Don’t focus on communication; focus oncollaboration, conversation and community.

    2. Everything must add value Work with people to define thevalue that they will experience from portfolio management. Scheduleit carefully and fully commit to delivering that value forthem.

    3. Energize people Executive-level buy-in does help, but thereal magic happens when it is used to harness the energy of peopleacross the entire organization.

    4. Develop people Nothing will be delivered if you don’t havethe right people. Create an exciting portfolio delivery environmentthat continually invests in people.

    5. Measure portfolio capability Take time to understand exactlywhere you need to improve and where you are already doing goodthings. Both are equally important.

    6. Focus minds Use an executive portfolio dashboard. Provideyour executives with ‘portfolio zooms’ for decision and assurance.No-one likes to read huge, word-based portfolio status reports.

    7. Be creative Always look for more creative, interesting andengaging ways to present information; prompt the rightconversations and get your message across.

    8. ‘Good enough’ is not good enough If a portfolio managementproduct does not meet the GUCCI criteria, don’t use it.

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    How to implement Management of Portfolios within 100 days 7

    Appendix 1 Portfolio management blueprint

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    8 How to implement Management of Portfolios within 100 days

    Appendix 2 Portfolio delivery journey 2012–14

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    How to implement Management of Portfolios within 100 days 9

    Appendix 3 Portfolio delivery unit model

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    10 How to implement Management of Portfolios within 100 days

    Appendix 4 Portfolio governance model

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    How to implement Management of Portfolios within 100 days 11

    Appendix 5 ONS future wall

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    12 How to implement Management of Portfolios within 100 days

    Glossary of ONS portfolio management terms

    business investment group (BIG) An ONS virtual team of expertswho provide support and scrutiny during the development andapproval of business cases.

    great, usable, clear, concise, informative (GUCCI) An informalquality standard used by the ONS portfolio delivery unit to checkportfolio management products before they are sent tocustomers.

    happiness indicator A subjective measurement out of 10 (10 beingvery happy) that is asked of individuals at a specific point intime. The happiness indicator can be used before and after theimplementation of portfolio management. Happiness indicators can beused to inform the stakeholder and conversation plan.

    organizational energy The extent to which an organization hasmobilize the full available effort of its people in pursuit of itsgoals.

    portfolio capability model A bespoke model that enablesorganizations to measure their portfolio management capabilityagainst the Cabinet Office’s best-practice standard, Management ofPortfolios.

    portfolio delivery journey 2012–14 An eye-catching portfolioplan that represents the key aspects of the portfolio includingscope, delivery timescale, dependencies, external factors, keybenefits and decisions.

    portfolio delivery unit welcome pack A PowerPoint presentationthat helps the reader understand the structure of the portfoliodelivery unit, team roles, services and value experience.

    portfolio management blueprint A diagrammatic representationenabling people to see what the portfolio management organizationwill look like upon realization of its vision. The portfoliomanagement blueprint includes the team working structures,portfolio management processes, governance, mechanisms and keyrelationships.

    portfolio management value experience plan A one-page overviewenabling targeted stakeholders to gain a clear understanding of thevalue they would experience by adopting portfolio management.

    portfolio management vision A definition of a future state towhich the team will work together to achieve.

    portfolio zoom Integrated as part of the executive portfolioreporting. There are two types: a zoom for decision and a zoom forassurance. Both types provide an enhanced focus on a specificaspect of a project or the portfolio, enabling executivedecision-making.

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    How to implement Management of Portfolios within 100 days 13

    About the authorCraig Kilford worked with the Office forNational Statistics as Interim Deputy Director of PortfolioManagement. As one of the world’s leading portfolio managementsubject matter experts he is a regular motivational conferencespeaker, co-author of the Cabinet Office’s Management of Portfoliosand author of Think P3O. Craig blogs regularly atwww.MrPortfolioManagement.com where additional information aboutthis case study is available. Connect with Craig on Twitter at@MrPortfolio

    AcknowledgementsThe achievements highlighted in this case studywere made possible by the collective efforts of the people at theONS. Thanks to the ONS board, the executive leadership team andeveryone in the portfolio delivery team. Special thanks to the PDUteam (Sue Mulcahy, Pat Heymann, Jenna Culley, David Harris,Calistha Bechtel, Claire Hughes and Carol Bowen) for theirdedication, energy and humour.

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