You may have come across the acronym ‘FOBO’. It stands for ‘Fear Of Better Options’ and refers to a consumer trend where people are reluctant to make a decision or to commit to doing or buying something, due to a fear that something better may appear, if only they delay long enough.
How to Make Difficult Portfolio Management Decisions
I’ve certainly done it, and I suspect that you may have as well. Phones, clothes, events – so much choice, so little time.
The irony is that, faced with so many choices, we have a tendency not to make any decision at all. We’re not sure how to discriminate between one choice and another. As a consequence, we don’t do or buy anything, and thus we don’t get the benefit of any of the possible options.
FOBO in the Business World
The parallels with business are clear.
Systems are dynamic and environments change rapidly. Planning cycles have become shorter. What you want today, you probably won’t want next month, because your needs or expectations have altered. We’re encouraged to be agile in our approach and flexible in attitude, but that doesn’t mean that you shouldn’t make the best decision that you can based on facts as they are right now.
This is the reality of life and we may not be comfortable with it.
Repeatedly challenging decisions can be wearing, and may undermine those people that have made them. Continually having to justify your decision, that you made on good information at the point it was made, can become time-consuming and unproductive for organizations.
So, delaying the decision may be a very seductive proposition for managers – “What if there’s something better that we could do, what if there’s a better portfolio, what if there’s a unicorn just around the next rainbow, carrying a bag of gold and wearing a garland of four-leafed clovers…?”
So, how do we approach this within a Project Portfolio Management (PPM) framework?
Let’s be pragmatic about this, as it’s tempting to go down a highly esoteric, perhaps academic, route to project prioritization. In practice, most of us do not have that many metrics against which initiatives will be measured. Risk, NPV, alignment, cashflow, market development – all good ones. How many do you really need for your organization? If you develop a straightforward framework for assessment, scoring and prioritization that is clear to users, then they’re far more likely to use it.
Keep it simple.
Yes, we can argue whether it’s medium or low risk, but honestly…? One point in one metric is not going to be the deciding factor in achieving a good portfolio – we’re looking for an objective framework against which we make a management decision. Oh, yes, and if you can’t measure it, then it’s not a benefit. Be visual – pictures speak louder than words. It’s much easier to spot a project that’s past its deadline by six months by seeing the two Gantt bars, than from a column of dates.
Long-term strategy, short-term tactics. What are the benefits, when are they going to be realized, what’s the confidence level? Avoid elongated timelines. Avoid projects that ‘contribute a little to multiple goals’ (that is code for fudging a decision, because no one wants to say ‘No’). Don’t be seduced by sunk cost. The fact that you’ve worked on it for three years isn’t a good reason to keep working on it – if it’s never going to deliver, then stop it!
Manage the boundaries.
Your decisions will focus around the work that doesn’t get done, not the work that does. There are ‘no-brainers’ in the portfolio – legislative, infrastructure, Business as Usual (BAU). Don’t discuss them to death, put them as Must Have’s. Spend your time on the work that is discretionary – the focus will be on those projects that fall just outside the chosen portfolio, so be as clear as you can be on those borderline projects.
You don’t know the future, you’re guessing. Model your alternatives. ‘If this happens, then that would be the option. If that happens, then this would be the option.’ Present a limited number of alternatives to your decision-makers, based on the best information you have, so they can make informed decisions.
Document, report and retain.
Record the decisions. Take a clear ‘snapshot’ of the portfolio and the metrics behind it, balanced against the resources that you have to deliver it. Things will change, decisions will be wrong – good, that’s life. Make sure the stakeholders have ready access to the reports, so they can understand what’s happening. Retain your snapshots, so you can revisit, compare and see what’s changed – then you can learn for the future. It also helps spot the serial offenders – those champions that promised the benefits again and again, but never actually delivered them.
To be able to model possible futures and, as an organization, to be able to live within the parameters of those futures, means you can manage without having to constantly agonize over whether you’ve made the ‘perfect’ decision. Whatever the actual outcome, you’ve allowed for the uncertainty and you have a mitigating response in place to deal with the consequences. Within project portfolio management, you need an approach and tools that are flexible and simple enough to model your options, to produce a limited number of practical alternatives. You probably won’t make the perfect decision, but it should mean that you’ll be able to make better, informed choices that will avoid a disastrous route. You’re neither spending forever on getting to the ‘right answer’ nor delaying your decision because that darn unicorn may just be around the next bend.
Unsurprisingly, Meisterplan supports all of this, because we developed it to help manage this process. Try it, we think that you’ll like it.
The biggest value that Meisterplan gives us is the ability to communicate across the enterprise what’s being worked on. It adds transparency as to why things are stacked ranked, and it holds people accountable to decisions that were made. This has resulted in more projects being completed on time, and more projects being aligned to a strategy, because they were accurately prioritized.