Project portfolio managers often talk about the challenges they face when managing large project portfolios. One big challenge is to clearly understand the entire portfolio. Project managers are increasingly using different methodologies to manage their projects, with different vocabularies. This makes it hard to compare the sizes and progress of different projects. And that can complicate resource management.
How much money is being spent on projects not even done under the auspices of the project portfolio director? I frequently meet with people who share with me the different tricks that managers play to avoid working with the portfolio management department.
It’s hard to compare three projects when one is being done in Waterfall with careful scoping, one is using Kanban or Scrum, with almost no scoping, and one is being done in Excel, where no staff time is being tracked. Then, multiply that situation by 10 or 100 or a 1000.
While I can’t solve all of those problems in one blog, I do believe that moving from tracking activity durations to activity complexity would solve a lot of problems. This can be done, regardless of the methodology you are using.
Currently, traditional project managers spend a lot of time estimating activity durations. (The activity duration is how long each activity will take.) Sometimes, there is historical precedent on which to base those estimates. The estimates can range from highly reliable to reasonable estimates. Other times, there is really no way to estimate how long they will take, with any reliability. And, even when there is historical precedent, creative activities can vary considerably. One week, writing this blog will be easy, and I can whip it out in a few hours. Other weeks, I’ll struggle for days.
Project estimating is a hot topic with strong feelings on both sides of the argument. Does it make sense to spend time creating detailed duration estimates in order to create a project schedule when the world around you is changing by the day? My answer is no. But that doesn’t mean that we aren’t managing the project to ensure that the work is getting done in an acceptable fashion.
In this week’s blog, I discuss an idea called Activity Complexity – four benefits that it offers and a four-step approach to using it effectively.
The Four Benefits of Tracking Activity Complexity
Efficiency – Tracking activity complexity, rather than duration, takes far less time than tracking durations.
Metrics – Measuring activity complexity across a portfolio offers metrics on the amount of work completed in a specific time period, amount of work needed in the future, and the amount of work by resource. There are many permutations and combinations of possible metrics that can improve executive decision-making.
Balance – Understanding the size of each project, relative to each other, allows the portfolio director to better balance the portfolio.
Outcomes – We need to understand the value that will be generated by all of our projects and the complexity, a measure of size, of all of our projects. This allows better decisions about when to cancel a project, what the proper priorities should be, and how to juggle resources.
Before I go too far, let’s make sure we are all on the same page about what an activity is. For purposes of this blog, an activity is defined as the essential work package (or a block of work) needed to accomplish your scope. I use the word tasks for the many little things that you still need to do. If you are unfamiliar with how to break a project down into activities, you can read more about that here.
What is Activity Complexity?
Think of complexity, just as it sounds. How hard or complex is this activity? Let’s keep it simple and give everyone about 5 or 6 choices, instead of an unlimited number of choices. We need to know if an activity is a one day, three day, one week, two week, one month, or multi-year activity. So, let’s try to make these distinctions so that we can compare activities across a portfolio of projects. It won’t be perfect. Nothing is.
When we understand the complexity of all of the activities across all of our projects, we can better understand the amount of work that has been done in any time period, and the amount of work that is still needed. This is particularly valuable when assessing resource availability or re-evaluating the business case for a project in progress.
Estimating activity complexity is completely separate from estimating costs, and the comparison data between activity complexity and actual costs might provide some interesting insights on profitability – by resource and project.
Most experts agree that the more you know about an activity and the smaller the activity is, the more reliable the estimate. For example, we can probably estimate how long it will take to book a hotel reservation in Duluth, Minnesota more accurately than we can estimate how long it will take to plan a eight-week USA marketing tour for a book author. One argument is that we should break the project down into the smallest activities, to yield better estimates.
But does spending time on that kind of detailed estimating become a waste of time when you decide that it’s time to pivot? We need to be able to properly capitalize on change when an opportunity arises. I argue that we need to engage in the activities that generate the highest value. I just don’t see the value of a detailed schedule in a world of rapid change.
Yet, I see real value in having a breakdown of each essential activity, scoped so that it can be accomplished in one or two time blocks, with an estimate of the complexity. (Time blocks are set periods of time during which the team commits to work on a defined amount of activities.)
We can determine the aggregate complexity of work planned for the next time block. We can view the aggregate complexity of work done in prior periods and compare them with other teams of equal size. And, we can look at the aggregate complexity of uncompleted work by resource. The options are far-reaching.
Four Steps for Using Activity Complexity Effectively
Step 1 – Decide on the scale you are going to use. Keep it simple, and keep it numeric.
Even if you decide to use a t-shirt sizing approach (i.e, S, M, L, XL, XXL, XXXL) assign numeric values to those so that you can sum the complexity numbers.
Step 2 – Decide on how you will do the estimating.
Who will do the estimating? Does the team need to agree? Is the person doing the work going to make the decision alone? I recommend coming up with a plan of guidance and then, letting teams adjust. As you begin to track the data, you may find that some strategies work better than others. The goal is to find a strategy that yields the best data.
We also need a policy on whether estimates should be changed as the project gets underway. The answer depends on what we plan to do with our data. Obviously, as we get into a project, we learn more that will inform our estimates.
Step 3 – Decide on the metrics you want to track, and what you plan to do with the data.
Don’t just track data for the sake of tracking data. And, I don’t recommend that you use the metrics as a sledgehammer to beat up people. I think there can be useful data that can inform resource management decisions. And, there can be motivating data – if used well.
Importantly, if you are not tracking employee hours on projects, you cannot meaningfully compare those projects against projects where you do track employee hours.
Step 4 – Communicate effectively and monitor the level of commitment.
This may sound like the easiest of the steps, but it’s not. Change management is never easy. Think about how you can make the metrics that you are tracking work for your people, instead of against them. If the teams have something to gain, they are more likely to buy into cooperating.
Focusing less on schedules and more on delivering value doesn’t mean we have to do away with valuable metrics that improve decision-making. And, by tracking activity complexity, we can develop better project portfolio data on which to base executive decisions.
Interested in this idea? I’d love to hear from you. Schedule a call or connect with me on LinkedIn.