(lightly redacted for clarity)
Pipeline management is not Portfolio management
When I meet with a company, it typically follows a common format.
The first thing I'll do is I'll sit down, I'll talk to an engineering team, or I'll talk to their PMO. And they'll start walking me through what they normally do. [We] usually start off [with] something like, "This is how we do our Stage-Gate process. This is how we do gate meetings. These are some of our standards around how we do scheduling." From there, a lot of times, we'll get into discussions of what do they do with Kanban and Agile. We'll expand on that, we'll start talking about financial management, cost management within the programs, forecasting revenues from their new products.
All of this is going really well. About half the time we get into discussions about resource management and how they're looking at where people are gonna be working.
So far so good.
Then at some point we start talking about portfolio management. I'll say, "Well what do you guys do around that?" And they'll bring up a report like this, and they'll say, "Oh we got things like this and it shows us all the projects we're working on, shows us some of the primary KPIs, what project health looks like. We've got a really good idea of what we're working on."
"We have forecasts on our financials, we can break down our financials by business units, product lines. We can look at what our revenue looks like over the years, not only just revenue but also what our incremental revenue and margin contribution is."
"We can analyze our resource bottlenecks, and we can identify where we're gonna have problems, not have enough resources in order to get our projects done. And we can take actions accordingly.
I say, "Cool."
But that's not portfolio management. That's pipeline reporting. That is not telling me how you're going to achieve your objectives. That's just telling me what you're doing right now on the projects you're currently funding."
How a roadmap differs from a classic map
The best analogy I have is those reports are like a map like this.
"You are here."
It's important information. I like to know that I'm in Pittsburgh. It's cool to know that there is Point State Park right across the street, I can go to catch some fresh air.
I was really intrigued by the idea that a few miles North of here there's something called "Randyland". I don't know what it is, but it sounds pretty fun. Next to that is the Mattress Factory Museum. And the fact there is even a museum for mattresses is interesting. It's cool. I need to know this.
But if I have to be in Philadelphia in the morning for a meeting, [it] doesn't do me much good. Doesn't tell me how I'm gonna get to where I wanna go. In fact, it doesn't even tell me which of the 13 bridges that are on this map I should take to even start my trip. And for a guy from Colorado, I'm amazed that there are 13 bridges on one map. I'm not sure we have 13 bridges in the state of Colorado.
But for me to get to Philadelphia, I need a different view. I need a roadmap.
It's pictorial. It's clear. It tells me how I can get from here to Philadelphia. It tells me I can take a direct route. There's some construction along the route, I'm okay with that, it's still the fastest way to get there. On the other hand, if I feel like crab cakes on the way, I can do a little detour, go down to Baltimore, grab some dinner, and then go to Philadelphia. It all works. And if I don't like to drive, I can fly.
I have something here that I can clearly communicate to everybody how I'm going to get from where I am right now to where I wanna go. That's the power of a roadmap.
Before I go any further, there are lots of really good reasons why you should have roadmaps as part of your PPM toolkit. I've got 12 minutes to talk, the only thing I can do is cover one topic and that is how roadmaps can facilitate communication and getting alignment around your plan.
So how do we get there?
5 steps to start managing your portfolio
Five simple steps. You guys are all doing them.
1) Find out why you need to do something, because doing nothing is always an option, maybe not the best one but it's always out there.
2) Set a goal.
3) Build a coalition.
This morning, a speaker talked about "a coalition of the willing." I made the comment to somebody, "I'm so tired of talking about cross-functional teams that I started talking about coalitions instead." For some reason we're still not fully doing it, but we all know that we should be.
4) Get a realistic view of what needs to be done.
And then 5) Prepare to act and react as you learn more.
So how do we do it?
The “classic” way to map your strategic environment
Well we all kinda start off the same way. We have a meeting internally, we start talking about our core competencies, we start talking about what our assets are. We talk about what our strategic direction is. We pile on top of that some consumer insights or customer requirements. From there, we start looking at what we're doing in research and development, what new technologies are coming out that we can leverage. We talk to our partners, what do they need from us, what can they give us? What's happening in legal and regulatory affairs that are going to affect our product line? What's happening in our distribution channels? What's happening in manufacturing?
We take all that together, we start formulating a plan and we finally figure out where that Blue Ocean is that we're all gonna sail to, where profits are high and competition is low.
We've made it to the promised land.
And we take all that information and we put it in this.
We all have 'em. Nobody understands them. We're all afraid to change it: you change one cell and there's so many macros and links in there that it looks like a pile of dominoes falling down across the desk. But that's what we have.
Let's talk about doing it a different way.
How strategic roadmaps facilitate communication and alignment
Why do anything? Map your value streams, map your strategic arenas, your target customers. Understand what's going on there over the next several years. Get a view.
And in this view here – I know the font is small and I apologize for that – I can tell that there's some newer value stream that offers me the most opportunity. I can see that the market is growing, I can see that I don't have a lot of competitors moving in. And I can see that I can actually make money in it. So that's where I'm gonna focus my efforts.
Once we've done the analysis and we've decided that's the stream we wanna be on, let me get with my product teams. Let me ask them, "How can you help? How can you help us being successful in this arena?"
They start drawing pictures like this.
Each business unit, the Security Appliances group, the Infrastructure Management group, the Router group, they're all saying, "These are the things that we can do over time to help you achieve that goal."
Now that I have these two pictures, now I can bring my teams together. We can sit around the campfire, we can look at these pictures, we can discuss what it is that we're going to do, why we're gonna do it.
And because people can actually comprehend what I'm showing them, they can add to it. They can say, "Hey, did you think about this ISO regulation that's kicking in at 2022?" No I didn't, let's put it on the roadmap. "Have you considered what the impact of 5G is gonna be on our plan?" No, let's roll it in.
By the time we get done with that campfire discussion, we have alignment. We have a tool that people clearly understand what it is we're gonna do, why we're gonna do it, and when it has to be done by.
After that everybody goes home and they start working on their own roadmaps. And they start coming back to me and then the top line there in the blue, I can see what's HR's responsibility. HR comes back and says, "Well we're gonna have to hire some different types of people. We're gonna have to get some training plans in place, that's gonna equip us to having the right people."
Platform development comes back, they start saying, "These are the platforms we can develop." Manufacturing, Packaging come back and they say, "These are the things that we can do to help us respect our sustainability responsibilities to the community.
Everything's laid out.
Strategic roadmaps are actionable
By the way, at this point, I have a strategic plan that can be understood by a CEO, by a Director of Engineering, by a Director of Marketing, by a Janitor, by a Data Entry Clerk, by a Project Manager. Anybody can look at this picture and tell me what it is we're gonna do. Anybody can look at the picture that we started with and tell me why we're gonna do it. I now have a communication tool that I can use to effectively manage my strategy.
Now that I know that much, I can drill it down to the last level. What are the products I'm gonna create? What are the milestones I'm going to have to respect? What are the enablers I'm going to have to have in place before I can create the products? And I have a clear view of what I'm gonna do.
When something happens, when I have a disruptive event, I can come back to this picture and I can say, "OK, what moves, what has to change, what has to be adapted?" And I can do it in a way that we all understand.
So what's the takeaway? We can't forget the details, we need 'em, we're running a business. So we do have to know how much money we're gonna make, we have to know how much money we're gonna spend, we have to know all of that information.
But while you're working on the details, don't forget the big picture. And that's the power of strategic roadmapping in terms of collaboration, communication, and getting alignment across your teams.
I'm out of time and I'm out of slides. Thank you.