With all of the complex challenges that 2020 threw at businesses worldwide, adopting a SMART goal framework for setting strategic and project goals is the simplest way to address change and maintain portfolio alignment.
Change is a constant – a reality that the effects of the past year have forced us all to accept. Regardless of industry or company size, the last year complicated operations for virtually all businesses. While some companies experienced growth, many companies experienced disruption across their portfolios including turnover at executive and manager levels and the success of the new leaders and their teams will require taking a simple approach to addressing change in enterprise portfolios.
Top challenges impacting enterprise portfolios
In the past year I’ve seen two notable things impact enterprise portfolios:
- Companies either had to quickly spend more or spend less, which meant that PMOs either had to ramp up a whole bunch of projects or had to ramp down a whole bunch of projects.
- Some of the pains we’re experiencing now are the result of how projects were handled in the last year — and the considerable churn in the people that are managing those portfolios.
Leadership turnover is adding friction to unprecedented change
We're also seeing a lot of organizations hire new leadership from CIOs to portfolio managers, filling the gap of turnover and churn from the past year. As a result, we’ve seen an increase in consulting work to get these new leaders and managers up to speed on assessing portfolio management capabilities. Many of the challenges we’re helping them through are around the transformational effects of the past year on their portfolios. The portfolio managers who stepped into new roles had to address those challenges by:
- Implementing effective change management and enterprise awareness in strategic portfolio management
- Incorporating a simple goal setting framework to improve processes and alignment
It's important to look at that meta-process and ask: How am I changing what I'm doing to be prepared for the next thing that's coming? Not just how I’m managing the portfolio but also what I'm working on currently. You need to be thinking about how to become better at what you're doing.
The Enterprise Portfolio Management (EPM) journey
Many people are starting to understand that projects have impacts — and those impacts go beyond just resources, time, and costs. Your company may have numerous other applications, multiple markets, organization stakeholders, technologies, and many other things that are impacted by the work that you're doing. And all of those things come together to build a complex mesh of impacts and relationships.
I think it's going to be important for companies and portfolio managers to understand this — and start providing people with the tools to understand where they sit and how they impact other parts of the business. This will be instrumental in making better decisions. Also, projects don’t happen in a silo and rarely have singular impact on one business unit or market. Many business units and markets are impacted by single projects so it's important to have the capabilities to look at those impacts and make better decisions about the right time to do things. It's critical to support strategies and understand how what you're doing affects those strategies.
Increasing clarity with a SMART goal framework
Connecting strategy with delivery and execution is a tall order, it’s important that you start small and simple. You can’t boil the ocean. I am a proponent of the SMART goal framework, which is about establishing Specific, Measurable, Achievable, Realistic, and Timely (SMART) goals. Rather than having something very general that you work towards, it's about setting more specific objectives. You build roadmaps for the specific things you're going to do and make sure those things are measurable — in essence, making those things achievable, realistic, and time-bound.
Setting SMART goals is more than just cutting a bunch of projects out of your portfolio, simple doesn’t always mean small in number. As a result of the challenges in 2020, portfolio managers need to be able to quickly identify specific things that need to be cut, and the impact of those decisions. They need to be able to answer: What is the most important thing for us to be working on right now.
Identifying projects that need to be moved or reprioritized relies on ensuring that specific goals are measurable, achievable, realistic, and timely. Without that you won’t have the assurance that your decisions will lead to the intended outcome. It's also necessary for everyone involved to develop enterprise awareness — a general understanding of each goal's impact across the entire organization. This enterprise awareness will be vital in not only making goals realistic and achievable, but in helping the organization collaborate and stay aligned to its goals.
SMART goals can solve complex problems
While sitting in a demonstration the other day, I pondered all the enterprise architects that I've met — and all the things they do that are related to organizational complexity. I thought about how complex an organization is and how the interrelationships across its people and resources need to be captured so that leaders can make the best decisions.
Enterprise architects seem to be like the Spinal Tap drummer — they're always changing, and they're never there for very long. This is mostly because they are making enterprise architecture in a way that is too complex. For them, it should not be about trying to gather all the data to make the best solution: it should really be about having enterprise awareness and collecting enough data to make well-informed decisions. Instead of needing to have everything in place, it's more about using SMART goals to have enough there so that you can make informed decisions that drive progress. It's the step-by-step guide to how you solve complex problems. It's not about having the answer to everything at first, but rather having the answer to the most important things — and then taking it one step at a time from there, measuring as you go.
There's never a wrong time to try to keep things simple
In 2020, we witnessed a lot of changes; some companies experienced cutbacks, while others hired a lot of new people due to increased growth. This means a lot of people are going to be changing roles and changing goals. When people are changing roles, one of the worst things they can do is bite off more than they can chew.
Following a turbulent 2020, we're going to see a lot of organizational change, and keeping things simple is how people and companies are going to be successful. They're going to take small steps; they're going to take a lot of small steps. While it may not apply in every industry or role, in general adding complexity is the quickest route to failure.
4 Keys to establishing SMART goals
While the practice of creating SMART goals is well documented – I have some suggestions for enterprise portfolio managers to keep in mind when applying this framework to their businesses.
Initiate training and stay current
I think adequate training and awareness of the SMART framework are a critical part of project and portfolio teams being focused, prepared, and primed for success. I've probably been trained on setting SMART goals two or three times. Still, I've found that it can be easy to forget about it when you get in the heat of a battle. Who needs to understand the SMART framework? The link between SMART goals and higher organizational goals is crucial at all levels. There might be seven or eight higher-level organizational goals, and for every SMART goal, there needs to be a story that you can tell on how the goal is tied to an organizational goal and strategy.
Keep pace with organizational change
Suppose you're not regularly taking part in SMART training or having discussions about it, and you’re driving organizational change. In that case, you're at risk of falling back to old bad habits — and you'll likely fall into the mindset of just creating lists instead of following those tenets. If 2020 taught us anything, it's that changes are constant. Continuous change management practices ensure that your company's processes are aligned.
Increase awareness and build momentum
Creating SMART goals becomes a circular reference. At one of my previous companies, we started to measure how many SMART goals people were putting together. Once we began to measure goals and make things simple, we wanted to ensure everyone had a SMART goal as part of the current quarter and next quarter's goals. One quickly became two, then three, and four — and it grew from there.
Incorporate SMART into agility efforts
Many people will take the SMART framework and use it in their agility measures, for their stories, sprints, and all the things they're doing in terms of moving to agility. One aspect that can make agility difficult for people to manage is if stories or sprints are complex — this is why having SMART goals as part of your agility efforts is essential.
Take portfolio management one-step-at-a-time
In terms of portfolio management, I continue to see a reliance on building things from the bottom up. Taking something and breaking it down into tasks — especially with a bottom-up mindset of delivery at the focus – tends to be based on the mindset that ‘this is what we’ve always done.’ A top-down approach, on the other hand, often requires a leap of faith where you need to take that first step and continue to do small things that get you across each gap. It's kind of like in Indiana Jones and the Last Crusade when he comes to a cliff and the gap to the other side is too far to jump across. He decides he has to take the leap of faith; he takes one step off the cliff and finds that there's something underneath him, he just couldn’t see it at first. This leads to the next step and eventually his path to the other side. It’s this mindset that helps to build a stronger portfolio team. You sometimes have to create your path as you go and keeping it simple will help you have faith that the steps you are taking are the right ones.
Remember, simple is the key to becoming SMART
The biggest element of adopting SMART goals is the simplicity it brings to your teams' work. Keeping things simple helps you to focus on what a SMART mindset brings — like helping everyone understand and have a common language for how they're moving the business forward.