Faucet maker Moen Incorporated, together with Iconoculture, a leading cultural trend research firm, gathered information defining characteristics in determining consumers’ level of interest in green products (Examiner 2009). It is possible to take their results and extend them to project organizations, allowing complete project managers to assess where they and their stakeholders position themselves with regard to creating green working organizations.
Follow along to determine which shade of green you are.
Takeaways
Recognize toxic elements that detract from organizational performance.
Identify green elements that engage people and encourage them to use their innate talents.
Take the initiative to apply your talents, even when the environment is not ideal.
Engage in a relentless pursuit of leading practices—and of people who can apply them.
Regularly assess yourself and others about your attitude and aptitude to embrace “green” environments.
Recognize that some people are not yet willing to support a project environment that requires changing current practices.
Be persistent in developing improved working conditions.
The following items reflect the key elements of risk assessment. Each element can be scored from 1 to 5, with a 5 indicating a strong positive response to the statement, and a 1 indicating a strong negative response.
1. Motivation for the Project | SCORE |
1.1 There is a convincing business need for the project. |
_____ |
1.2 There are significant risks to the business if the project is unsuccessful. |
_____ |
1.3 The level of dissatisfaction with the current situation is mutually shared by employees and management. |
_____ |
1.4. Everyone feels a sense of urgency to change. |
_____ |
1.5 The extent of the impact on those affected by the project is minimal (work habits, power, security). |
_____ |
Total |
_____ |
2. Commitment to the Project |
|
2.1 There is publicly committed sponsorship for the change. |
_____ |
2.2 Resources, time, and money are committed to sustain the change. |
_____ |
2.3 The sponsor is at a high enough level in the organization to have decision-making authority. |
_____ |
2.4 Those implementing the change are considered credible by those affected by the change. |
_____ |
2.5 The sponsor clearly understands his or her responsibility, especially when there is conflict. |
_____ |
2.6 There is a guiding coalition (other leaders supporting the sponsor) to drive the project. |
_____ |
2.7 First-line managers actively support the change. |
_____ |
Total |
_____ |
3.1 There is a tight link between the vision for the project and the organization’s overall vision. |
_____ |
3.2 People can relate the vision for the change to themselves personally, in a positive way. |
_____ |
3.3 There is a well-articulated vision of the change that is commonly understood and shared by all stakeholders. |
_____ |
3.4 There is strong leadership to sustain the vision for the change. |
_____ |
3.5 The vision statement is clear, convincing, and compelling. |
_____ |
Total |
_____ |
4. Cultural Match with the Project |
|
4.1 The project aligns with the culture of the organization. |
_____ |
4.2 The implementation approach is appropriate to the organizational culture. |
_____ |
4.3 The strength of the culture is likely to reinforce the change direction. |
_____ |
4.4 Previous changes have been handled well in this organization. |
_____ |
4.5 Decision-making is timely and implemented. |
_____ |
4.6 There is a high degree of trust between managers and employees in the areas affected by the change. |
_____ |
Total |
_____ |
5. Organizational Alignment |
|
5.1 Planning cycles support project resource requirements. |
_____ |
5.2 Reward structures encourage adoption of the change by all affected. |
_____ |
5.3 Processes support the sustainability of the change. |
_____ |
5.4 Consequences are articulated and followed through. |
_____ |
5.5 Management practices and behavior support the change. |
_____ |
5.6 There is a manageable level of stress in the organization. |
_____ |
Total |
_____ |
6.1 The organization uses three-way communication. |
_____ |
6.2 Communication generally reaches and is understood at all levels. |
_____ |
6.3 The communication plan is comprehensive and timely. |
_____ |
6.4 There are different mediums for communicating in this organization. |
_____ |
6.5 The magnitude of the change is small, both vertical and horizontally. |
_____ |
Total |
_____ |
7. Transition Planning |
|
7.1 There is a transition plan in place which allows adequate time for the change. |
_____ |
7.2 The transition plan is comprehensive, covering human, process, and technical dimensions. |
_____ |
7.3 Transition measures are incorporated into the plan. |
_____ |
7.4 Potential problems and risks have been identified, and there are plans for resolving them quickly. |
_____ |
7.5 The implementation approach is aligned with the scope of the change (time frames, methods, degree of involvement). |
_____ |
Total |
_____ |
8. Skills |
|
8.1 The change agents have sound skills in implementing the change process. |
_____ |
8.2 Those affected by the change have the technical/job skills necessary to perform the new activities. |
_____ |
8.3 People understand their personal transitioning process. |
_____ |
8.4 There are suitable mentors available to assist people through the change. |
_____ |
8.5 Employees have a sense of empowerment that is appropriate to the nature of the change. |
_____ |
8.6 Teamwork is highly developed in this organization. |
_____ |
Total |
_____ |
1. Total the scores for each of the eight sections.
2. Divide the section scores by the factor identified in the scoring table below to create an adjusted score.
3. Total of adjusted scores ______
4. Multiply the total adjusted score by 2.5 to create a Risk Assessment Score ______
5. Mark one of the scoring ranges below to indicate the Risk Assessment Score for the project.
Overall Risk Assessment: High (20-40) _ Caution (41-70) _ Low (71-100) _
Paul O’Connor, founder and managing director of The Adept Group in Florida, influences and guides the product development and innovation efforts of clients in both consumer and industrial markets around the globe. He has conducted successful assignments, implementation initiatives, workshops, and benchmarking activities with major firms doing new product development (NPD). We share some of Paul’s writings (2011) about how to approach a major issue around project portfolio management.
Perhaps you’ve seen it before. You are sitting in a portfolio review meeting, everybody is serious, and then the charts start appearing. At first there is not a sound. Everyone is studying what the bubbles mean. Then, as each person catches on, eyes start shifting back and forth at each other. A few murmurs are heard as the thought waves get sent out. “Does the VP at the head of the table really believe these numbers?” “What was the project team smoking when they offered up that revenue amount?”
Some people may be thinking whether the management team can make decisions based on the numbers. And then they do. Management makes a decision to shift projects around, all based on crappy numbers! How did they do it? There is nothing rational here!
We have irrational numbers feeding normal irrational decision-making!
On the issue of trying to manage the portfolio with poor data quality and the actions needed to improve data quality, people express the difficulty of asking a project manager or a project team to go back and change valuations and risk numbers on their projects, just because some project management office or portfolio manager finds the numbers questionable. While we know that good portfolio management decisions require good numbers and analytical support, should the portfolio manager actually get involved in improving the quality of the decision-making? Undoubtedly, the answer is yes! But first, let me share an understanding of how the decisions get made when there is murky or uncertain data.
To do this, we need to dive into the topic of microeconomics. There are two branches of microeconomics that pull at each other in the quest to make economic sense of things. One branch supports rational, analytical thinking, while the other supports behavioral (psychology-influenced) thinking. There is much debate between the two branches as to which is more correct in interpreting the world of economic decisions. Suffice it to say, though, both clearly have demonstrated meaningful contributions.
On the rational, analytic side we see foundational building blocks such as supply vs. demand, comparative net present values, and efficient frontiers. Basically, the rational side says, “Show me the numbers, and then I will decide the best course forward.”
The behavioral side is a bit different. It turns out that when things look too complex or uncertain, our inner [TV cartoon character] Homer Simpson can take over (see Figure 6-1).
FIGURE 6-1: Irrational Thinking and Clueless Portfolio Management
A quick scan of these behavioral influences (see Figure 6-2) gives a preview of the psychological minefield. The behavioral economists argue that humans have developed these behaviors specifically to deal with complexity and uncertainty. Without these behaviors, apparently we’d be dead in the water in trying to make decisions.
FIGURE 6-2: Microeconomic Behaviors Influencing Rational Analytics
Consider typical discussions in portfolio management meetings about the risk on one project within the portfolio. A project that is very risky can skew the discussion of the entire portfolio, regardless of the projects with normal risk levels. This is because of the behavior that some economists refer to as cumulative prospect effect. Indeed, there are a number of these natural “irrational” behaviors that can influence portfolio decision-making (see Figure 6-2). Portfolio managers need to recognize these behaviors if they wish to improve their organization’s portfolio decision-making capability.
No doubt we should be striving to move from irrational to rational decision-making. The good news is that the negative effects of behavioral (irrational) economics on good decision-making go away as organizations build experience with the relevant decision types and with taming of the complexity and uncertainty of the data. In other words, experience and accumulated knowledge moves decisionmakers toward rational decision-making and away from behaviorally influenced decision-making. The diagram in Figure 6-3 says it all.
FIGURE 6-3: Advancing from Irrational to Rational Portfolio Decision-Making
The journey from irrational to rational decision-making needs to be led by those responsible for NPD portfolio management. Sure, data quality and those software systems that help drive data quality are very important. Yet experience and knowledge are also very important. Those leading the effort need to be fluent in both the rational analytics and the irrational behavior side of portfolio decisions. But they need to get experience and knowledge transferred to the decisionmakers. The economic value of moving from irrational to rational decision-making can be quite large.
Call to Action
Please consider learning directly from a workshop on the topic and not being afraid to get your hands dirty in the muck of portfolio data. As you will see, you and your organization can move from the Homer Simpson approach to the rational thinking approach to portfolio management. But first, you should understand what you are dealing with and how to lead your organization in the transition.