The portfolio, programme funnel flow problem: or how do you spend a million pounds?
I wonder if this is a problem for your programme?
Many projects are proposed for the programme, but less than expected make it through the feasibility and authorisation process, so you've always insufficient projects in the programme to meet the targets you have for service/asset improvement, and the forecasted spend you made!
Consequently your programme got off to a slow start, and compromises on project selection later on, as the need for more projects intensifies.
Well here's some good news, if this is your programme challenge, you are not alone, I am citing a common programme management challenge we have found in our research work at Leeds Beckett University.
Why is this the funnel flow problem so prevalent? The short answer is that projects that represent valuable investments to the programme, those that have reliably risk free benefits, are not so readily identified. And most portfolio/programme processes we have found in our research focus on authorisation governance to filter out project proposals that might not offer sufficient benefit. Or that are too risky.
This is a good thing in the main, you don't want to be letting project proposals through that won't offer value in terms for benefit for your buck.
However, time is running out, and you'll end up doing just that, letting dubious project proposals through when the pressure is on, later in the period.
Solutions employed to improve the flow of project proposals that we have seen, include: asking the contracting partners to suggest projects; set 'spend targets', to motivate the flow (don't do that though, let me be clear, I'm not recommending this it'd be a desperate move!); perhaps you might trawl the company for suggestions from operations; bring future work forward; put pressure on the project authorising boards to 'lower the bar' (please don't though!).
What programmes don't do so well, is build a programme storage list of possible, viable value adding projects early enough. While portfolio selection governance focuses on de-selection filters, few organisation's put much if any effort into generating processes such as value management and other innovation processes to generate value adding proposals, nor do they realise that many of these will naturally not make it down the funnel through feasibility testing. Or even realise that this is a 'funnel', instead expecting a even 'flow' through the programme process pipeline.
So what is happening, why is this so common an issue?
Well common decision errors that human beings are vulnerable to, hold some of the explanation.
At the beginning we all have an optimism bias, we anticipate more readily identifying projects than we actually can. This is so common it's been studied for a while and is called the 'planning fallacy'. At Leeds Beckett we ask MSc students to partake in our millionaire exercise to demonstrate this:
Imagine you've won the lottery, you have a million pounds to spend, what would you do with it?
This is the position large programmes are in, with money to burn. Except it's not to burn, it must add value, and be an investment that represents value for money. We imagine this'd be easy, we are optimistic. You've probably just said to yourself: "I'd know what to do with it!" Have you imagined a new car? A house refurb or move, something for your mum, a holiday? But with a million pounds you can change your life, instead you (and I) are doing the obvious and easy to think of things, the low value solutions. And a car, incidentally, is not adding value to your life, it is detracting from it! Because the one you have imagined will likely cost more to run and insure than the one you have now. If you don't have one, perhaps that because you live in central London and actually don't need it, and it'd be a problem parking it!
Now, once you have done the obvious spending, and come back from that holiday, what are you going to do to use the rest of the money to change your life for the better? Tricky? But worth the thinking effort, not because you might win the lottery, but because you might find that you don't need a million quid to achieve that change you do want!
Personally in doing this exercise a lot with students, I myself have decided I don't really want a yacht, though I still want to sail. (The solution is hiring). And I put money I already had into Physio, so I can do more hiking, money I'd previously thought was an indulgence. That nagging sports injury has gone! That changed my life. Small cost, big benefits! And it's just as well, because I haven't yet won the lottery!
So what we are suggesting to cure this portfolio, programme funnel flow issue is:
That organisation's running programmes build extra capacity (about twice) into your feasibility work;
Part of the problem is identifying good benefit cases, so designing benefit criteria, and associated performance measures, will really help the business case building;
And you install supporting team innovation processes such as: requirements engineering; value management workshops; or other similar processes, such as six sigma. Processes that use facilitators. You are not going to generate good ideas under pressure so easily as you are in facilitated workshops (and if they are facilitated you can bring both your supply contractors in and your stakeholders without fear of self interest dominating);
And that you build proposals, for the shelf!
Lateral thinking can be induced, says Edward deBono, and making your organisation and programme a place where innovation is the normal pursuit is going to seriously motivate the workforce and enrich jobs.
It'll be a project type place too!
I'd be interested in your views, do you experience this problem? Will our suggested solutions work do you think?