Project management is all about doing projects in the right way. But there is a step before that: project selection, you have to choose the right projects.
The right projects are those that deliver something of value for your organization. They should align with corporate strategic goals. They should have realistic budgets and resource requirements.
It sounds easy – surely the right projects rise to the top, and everyone can see they are exactly what is required to move the business forward? Unfortunately, it’s rarely that easy in real life. There are disagreements within the leadership team. Business cases are poorly put together, so even a fantastic project idea fails to shine on paper. And a poor process can also hamper your ability to choose the right initiatives.
The Project Selection Process
Projects have to come from somewhere. Generally, they come from good ideas within the business. Whether they come from the CEO or someone on the shop floor, there should be a way of feeding good ideas into the PMO for consideration.
Then ideas need to be turned into something workable. You probably have a project proposal document for this, or a concept business case. It’s a brief statement of the problem and how a project could address the problem, concluding with the benefits and rationale: the arguments for doing the work.
However, businesses have more good ideas than they have resources. Budgets and people are finite, so you have to make decisions about what ideas to take forward and which ones aren’t going to make it this year – or perhaps ever.
The decision making process is the next step. The project should be discussed and analyzed against other good ideas, and also against projects that are currently in-flight. Then the project can be slotted into the priority list in the right place, even if that means delaying another initiative and shifting around resources.
All of this, from idea to decision, is the project selection process. It looks different in different organizations, with more or less automation and workflow. But the basic steps should be there.
What Happens When the Process Fails?
When the process fails, the wrong projects are worked on. Teams work tirelessly to deliver projects that don’t have strategic benefit, or that aren’t going to give you the best return. This is not a good use of your time, people or budget. Projects may still get completed, but you aren’t prioritizing effectively, so you aren’t getting the biggest benefit possible, or maintaining your competitive advantage.
So how can you tell if that is happening in your organization? What does a poor process look like? Here are 5 ways to tell that your PMO team should be looking at the process again.
1. Project selection criteria are unclear
The criteria for approving a project and setting its priority should be clear. Without clear, objective criteria, it’s difficult to assess whether the process is being applied fairly.
Fair criteria also help take emotion and influence out of the decision making. If you do need to leave ‘senior manager influence’ in as a criteria, at least make it transparent and give it a line on the prioritization template!
2. Projects are presented in a non-standard way
It’s hard to compare and contrast projects if you can’t compare them on an even footing. Let’s say one business case is put forward with NPV calculations. Another uses ROI. While both of these are valid financial measures, they show different things and aren’t directly comparable.
Your project proposal template should mandate the kinds of measures that are to be used, so your executive team can easily compare projects, even when the deliverables are totally different.
The template should also mandate sections for non-financial information, as this is just as important. You could include:
- Background and problem statement
- Resource estimations
- Budget estimations
- High level timeline or key milestones
- Known risks at this point
- Key assumptions and constraints.
Each project should be presented on the same template, so decision makers get used to seeing the same information. This also makes it easier for the PMO to aggregate information and show it visually. If you are trying to decide on the next project to take forward, seeing a comparison of project risk, budget and benefit on a bubble chart can drive clarity.
Good project management software tools allow you to do reports like this and help improve project selection.
3. Projects don’t have sponsors
Projects that are wanted, have sponsors. If your projects don’t have someone championing them, the chances are they are the wrong project. When no one cares whether the project succeeds or fails, and isn’t supporting the team working on it, you can be sure that it’s a waste of time and resources.
4. Projects are unevenly distributed between departments
Take a look at where your projects are being initiated from. Assuming that anyone in the business can have a good idea, you’d expect there to be a reasonable distribution of project proposals from across all segments of the business. So where are your projects mainly coming from?
Projects being unevenly distributed between departments isn’t always a sign that there is something wrong with the project selection process. For example, if this year your company strategy is giving a big push to sales, it’s likely that you’ll have more sales projects in the pipeline.
However, projects all coming from one area can also be a sign that the department shouts the loudest, and is the most influential at getting their projects on the agenda. This may mean that other, more deserving, projects are missing out.
5. Projects are never stopped
Prioritization works well when there is a clear idea of what is important. When a new project comes along, it should be analyzed in the context of the existing work. If it is more important than something else, that project should be put on hold and the new project takes its place.
Of course, you have to apply this approach carefully. It would be foolish to stop a project three weeks before the final deliverable just because a more strategic initiative came along. However, your project prioritization committee and PMO should be having conversations about what gets stopped or postponed so that priority work can take its place.
The reason for this is simple. Your resource pool is limited. If you have scarce skills or a limited budget (and don’t we all?) then you need to invest that in the best place. Sometimes that means stopping a project, even temporarily, to allow something more important to go ahead.
If projects are never stopped, it could mean that more important work is not making it to the top of the prioritization list, and that managers are afraid to have difficult conversations.