PMI’s Standard for Portfolio Management

March 7, 2013

The publication of the third edition of PMIs Standard for Portfolio Management represents a significant step forward in linking the performance of project and programs to the achievement of the organisations vision, mission and strategy.

One of the key additions is the introduction of the ‘Portfolio Strategic Management’ process group. The standard’s fundamental proposition is that efficient portfolio management is integral to the implementation of the organization’s overall strategic plan. While project and program management focus on doing the work right, the purpose of portfolio management is to ensure the organisation is investing its limited resources in doing the right work.

As with any portfolio the optimum return is achieved through an appropriate diversification of risk. Short term, low risk, low return projects will not build the organisation of the future, investments to maintain and expand current capabilities need to be off-set by some future focused, high risk high reward projects to develop new capabilities, products or services. The challenge is developing a balanced portfolio that maximises stakeholder value overall, and this needs a practical strategic plan as the basis for developing the portfolio strategy.

The challenge facing most organisations is developing systems to efficiently link innovation, strategy, portfolio management, project execution, organisational change management and the realisation of value. Any weak point in this ‘value chain’ will reduce the return on its investment in projects and programs achieved by the organisation. Establishing systems to achieve this linkage is a key management challenge, ensuring they are in place is a key governance responsibility. We have posted on this topic several times:

Linking Innovation to Value

The failure of strategic planning

Who Manages Benefits?

Benefits and Value (White Paper)

The updated Standard for Portfolio Management provides an authoritative resource to assist organisations in the overall development of an effective value delivery capability.

One of the elements we really like if that PMI have separated the management of the portfolio (effectively investment decisions and oversight) from the need for organisations to manage their project delivery capability. The ‘enterprise project management’ system that develops and nurtures project delivery capability (see: PCD White Paper) should be quite separate from the portfolio investment decision making process. There is a fundamental conflict of interest created if the same management body is responsible for decisions to ‘kill’ projects that are no longer viable whilst at the same time supporting and nurturing the project team to help them remain viable. PMI have not fallen into this trap!!

Stocks of the PMI Standard for Portfolio Management Third Edition are available world-wide. Australian readers can buy from:

For other PMI standards see:

PMBOK #5 standardises its approach to planning

February 17, 2013

The PMBOK® Guide has always been designed for large projects, and assumes intelligent project teams will scale back the processes appropriately for smaller projects. The 5th Edition keeps this focus and introduces a standard process to ‘plan the planning’ at the start of each knowledge area. This concept has been embedded in earlier editions of the PMBOK, it’s made explicit in the 5th Edition.

Why plan the planning?

As a starting point, on larger projects there will be a significant team of experts involved in developing various aspects of the project plan, on $ multi-billion project frequently more than 100 people so their work needs planning and controlling the same as any other aspect of the project. With a budget of several $ millions and the success of the rest of the project dependent on the quality of the project planning this is important work.

But planning the planning and developing an effective strategy for the accomplishment of the project’s objectives is critically important on every project. If you simply do what you’ve always done there is very little likelihood of improvement. Spend a little time overtly thinking about what needs to be done to first develop the best project plan and then to manage the project effectively can pay huge dividends.

The overriding consideration in developing the plan is Juran’s quality principle of ‘fit for purpose’ you need a plan that is useful and usable that has been developed for the lowest expenditure of time and effort.


To facilitate this, the PMBOK now has process to ‘plan the management’ of: Scope, Time, Cost, Quality, HR, Communication, Risk, Procurement and Stakeholders. These planning processes develop outputs that are integrated within the overall project management plan and describe how each of the specialist areas will be managed. The management plans include the policies, procedures and documentation required for the planning, developing, managing and controlling of each discipline.

Less well developed are two key aspects that can contribute significantly to project success:

  • Within the ‘PMBOK’ there is a real need to coordinate and integrate different aspects of the planning. Decisions in one area frequently impose constraints on other disciplines and managing these constraints across multiple sub-teams is vital if the objective of a coordinated and integrated project plan is to be achieved. The project core team need to set parameters for the specialists to work within, possibly at a ‘planning kick-off meeting’ and then manage issues as they arise.
  • On a more general level, and applicable to projects of all sizes, there is a need to formulate the project delivery strategy before any realistic planning is possible. Answering the question ‘what’s the best way to achieve our objectives?’ frames the project planning and later the delivery. In software development choosing ‘agile’ over ‘waterfall’ as the delivery strategy changes everything else (for more on managing Agile see: Thoughts on Agile). The project objective of functioning software can be achieved either way, which strategy is best depends on the specific circumstances of the project (See our earlier post on project delivery strategy)

Certainly asking the team to think about what is needed to optimally plan, develop and deliver each knowledge area, will contribute to project success. Maybe the 6th Edition will take the integration of these processes forward.

See our other posts on the PMBOK® Guide 5th Edition.

To buy a copy in Australia see:

PMBOK #5 Boosts Stakeholder Management

January 16, 2013

PMI_PMBOK5The publication of the PMBOK® Guide 5th Edition is a major boost for stakeholder management. The introduction of Chapter 13, Project Stakeholder Management as a distinct knowledge area raises the importance of engaging stakeholders to the same level as all other PM ‘knowledge areas’. Ideally the new section would have been placed next to the closely aligned process of communication management but this is not to be – the PMBOK is expanded by adding new chapters to the end.

The four processes follow the familiar PMBOK pattern with a few differences. They are:

  • 13.1 Identify Stakeholders – identifying everyone affected by the work or its outcomes.
  • 13.2 Plan Stakeholder Management – deciding how you will engage with the stakeholders.
  • 13.3 Manage Stakeholder Engagement – communicating with stakeholders and fostering appropriate stakeholder engagement
  • 13.4 Control Stakeholder Engagement – monitoring the overall relationships and adjusting your strategies and plans as needed.

The 5 stages of our Stakeholder Circle’ methodology are embedded within these processes; the key steps in theStakeholder Circle’ are:

  1. Identify – the primary purpose of 13.1 with very similar objectives.
  2. Prioritize – This is mentioned in 13.1 (Identification) without any real assistance on an effective approach to this important task. The PMBOK recognises most projects are going to be resource constrained and should focus its engagement activities on the important stakeholders but that’s all – options to calculate a meaningful prioritisation is missing. See more on prioritisation.
  3. Visualize – This is also included in 13.1 (Identification) based on a simple 2 x 2 matrix. A number of options are listed including power/interest, power/influence, and the influence/impact grids. The Salience model developed by Mitchell, Agle, and Wood 1997 is also mentioned without attribution.In reality to properly understand your stakeholders you need to understand significantly more than two simple aspects of a relationship. The Stakeholder Circle’ diagram was adapted from the Salience model to help teams really appreciate who matters and why. This will be the subject of another post in a couple of day’s time.
  4. Engage – the primary purpose of 13.2 (Plan engagement) and 13.3 (Implementing the communication plan). Separating planning and implementation is a good idea. The planning process uses an engagement matrix similar to the tool built into the Stakeholder Circle’ – However, whilst the PMBOK looks at the attitude of each stakeholder (both current and desired) it omits the key consideration of how receptive the stakeholder is likely to be to project communication. If the stakeholder does not want to communicate with you the challenge of changing his/her attitude is a whole lot harder and the missing priority level lets you know how important this is.
  5. Monitor and Review – whilst this is the focus of 13.4, the assumption of review and adjustment is a statusing process. Our experience suggests the dynamic nature of a stakeholder community requires the whole cycle starting with the identification of new and changed stakeholders to be repeated at regular intervals of 3 or 6 months (or at major phase changes).


As mentioned at the beginning, the introduction of a separate knowledge area for stakeholder management is a huge advance and should contribute to improving the successful delivery of projects – PMI are to be congratulated on taking this step!

However, unlike most other areas of the PMBOK, the processes outlined in this 5th Edition are likely to be less than adequate for major projects. As soon as there are more than 20 or 30 stakeholders to assess and manage, the tools described in this version will be shown to be inadequate and more sophisticated methodologies will be needed.

Stocks of the PMBOK® Guide 5th Edition are now in the shops:

For other posts on the new PMBOK 5th Edition see:


November 13, 2012

The recently released Sixth edition of the APM-BoK consists of four major sections: context, people, delivery and interfaces. Typical ‘hard’ project management processes such as scope, schedule, cost, resource, risk, integration and quality comes in the section focused on delivery. This is after the section concerned with people and interpersonal skills and the first area featured in the APM-BOK under the people area is communication. The APM-BoK recognises that communication is fundamental to the project management environment, and makes a very powerful statement: “None of the tools and techniques described in this body of knowledge will work without effective communication”.

To an extent the PMBOK is playing ‘catch-up’ with other key standards including the Association of Project Management (UK) Body of Knowledge (APM-BoK) 6th Edition and ISO 21500. The good news is all three standards now see identifying the important stakeholders in and around a project or program and then communicating effectively with each stakeholder as the fundamental driver of success.

The recently released Sixth edition of the APM-BoK consists of four major sections: context, people, delivery and interfaces. Typical ‘hard’ project management processes such as scope, schedule, cost, resource, risk, integration and quality comes in the section focused on delivery. This is after the section concerned with people and interpersonal skills and the first area featured in the APM-BOK under the people area is communication. The APM-BoK recognises that communication is fundamental to the project management environment, and makes a very powerful statement: “None of the tools and techniques described in this body of knowledge will work without effective communication”.

The PMBOK® Guide 5th Edition has followed PMI’s standard practice of retaining existing chapters and adding new sections at the back so the positional prominence in the APM-BoK is not possible. However understanding the changes between the 4th and 5th Editions and comparing these to ISO 21500 does show the extent of the increased focus in the PMBOK on communication and the stakeholders you communicate with.


This is a new section in the PMBOK® Guide 5th Edition (Chapter 13). It is based on two processes moved from the communication section of the 4th edition and has been expanded.

Identify stakeholders is a beefed up version of the same process in the 4th Edition, focused on understanding who the project’s stakeholders are.

Plan Stakeholder Management is a new process that describes how the stakeholder community will be are analysed, the current and desired levels of engagement defined and the interrelationships between stakeholders identified. It highlights the fact that levels of engagement may change over time.

Manage stakeholders remains basically the same as in the 4th Edition and is similarly defined in ISO 21500.

Control Stakeholder Management is a new process that ensures new stakeholders are identified, current stakeholders are reassessed and stakeholders no longer involved in the project are removed from the communication plan. The process requires the on-going monitoring of changes in stakeholder relationships the effectiveness of the engagement strategy, and when required, the adaption of the stakeholder management strategy to deal with the changed circumstances.

As with ISO 21500, the early parts of the PMBOK discussing the management or projects in organisations also has a strong emphasis on stakeholders (Chapters 1, 2 and 3).


This section of the PMBOK® Guide 5th Edition has been consolidated and expanded and is very similar to ISO 21500 in its effect.

Plan Communications remains basically unchanged, the key input is the stakeholder analysis.

Manage Communications is a new process that amalgamate the 4th Edition processes of Distribute Information and Report Performance, and in doing so removes a lot of unnecessary confusion. This new process goes beyond the distribution of relevant information and seeks to ensure that the information being communicated to project stakeholders has been received and understood, and also provides opportunities for stakeholders to make further information requests. ISO 21500 has an interesting additional function (not in the PMBOK) which is the management of the distribution of information from stakeholders to the project in order to provide inputs to other processes such as risk management.

Control Communications is a new process that identifies and resolves communications issues, and ensures communication needs are satisfied. The outputs are accurate and timely information (resolved communications issues) and change requests, primarily to the communication plan.


Communication is the means by which information or instructions are exchanged! Communication is the underpinning skill needed to gather the information needed to make project decisions and to disseminate the results from all of the traditional ‘hard skills’ including cost, time, scope, quality and risk management. Good communication makes these processes effective, whereas poor communication leads to misunderstood requirements, unclear goals, the alienation of stakeholders, ineffective plans and many other factors leading to failure

The common theme across all three standards is that communicating the right information to the right stakeholders in the right way (and remembering communication is a two-way process) is fundamental to success. The basic requirement is to deal effectively and fairly with people, their needs, expectations, wants, preferences and ultimately their values – projects are done by people for people and the only way to influence people is through effective communication.

Project communication skills include expectation management, building trust, gaining user acceptance, stakeholder and relationship management, influencing, negotiation, conflict resolution, delegation, and escalation.

What’s really pleasing to me is how similar these ‘standard’ requirements are to the ideas embedded in my Stakeholder Circle® methodology, books, blogs, White Papers and tools. I have no idea how much influence my writings have had on the various standards development teams but it is pleasing to see a very common set of ‘best practices’ emerging around the world. Now all we need is the management will to implement the processes to improve project and program outcomes.

PMBOK 5th Edition some key changes #1

October 20, 2012

We are starting work on the updates to our training courses needed for next year and rather like most of the enhancements in the 5th Edition (due for publication on 31st December). Over the next few months we will be posting a number of commentaries on the changes and improvements. This post looks at some of the key changes.

The new PMBOK® guide now has 47 processes (up from 42) and a new Knowledge Area:

Four planning processes have been added: Plan Scope Management (back from the 3rd Edition), Plan Schedule Management, Plan Cost Management, and Plan Stakeholder Management. This change provides clearer guidance for the concept that each major Knowledge Area has a need for the project team to actively think through and plan how aspects from the related processes are planned and managed, and that each of the subsidiary plans are integrated through the overall project management plan, which is the major planning document for guiding further project planning and execution.

The addition of a new knowledge area called ‘Stakeholder Management’ making 10 Knowledge areas is great news!! In keeping with the evolution of thinking regarding stakeholder management within projects, this new Knowledge Area has been added addressing Project Stakeholder Management. Information on stakeholder identification and managing stakeholder expectations was moved from Project Communications Management to this new Knowledge Area to expand upon and increase the focus on the importance of appropriately engaging project stakeholders in the key decisions and activities associated with the project. New processes were added for Plan Stakeholders Management and Control Stakeholders Engagement. We will be discussing this important initiative in later posts.

Data flows and knowledge management concepts have been enhanced:

The PMBOK® Guide now conforms to the DIKW (data, information, knowledge, wisdom) model used in the field of Knowledge Management. Information/Data is segregated into three phases:

Work Performance Data. The raw observations and measurements identified during the performance of the project work, such as measuring the percent of work physically completed.

Work Performance Information. The results from the analysis of the performance data, integrated across areas such as the implementation status of change requests, or forecasts to complete.

Work Performance Reports. The physical or electronic representation of work performance information compiled in project documents, intended to generate decisions, actions, or awareness.

Understanding the information in the reports and making wise decisions are functions of the competence of the individual manager reading the report and are therefore beyond the scope of a process (for more on effective communication see:

Annex A1 – The Standard for Project Management of a Project created.

This new annex has been designed to serve as a standalone document. This positions the Standard for Project Management away from the main body of the PMBOK® Guide material allowing the evolution of the Body of Knowledge material to be separated from the actual Standard for Project Management. Chapter 3 remains as the bridge between Sections 1 and 2 and the Knowledge Area sections and introduces the project management processes and Process Groups as in the previous editions of the PMBOK® Guide.

More next time.