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LARS KRISTIAN HANSEN 18 OCT. 2018 ASSISTANT PROFESSOR AARHUS UNIVERSITY DEPARTMENT OF MANAGEMENT 18 OCT. 2018 ASSISTANT PROFESSOR LARS KRISTIAN HANSEN AARHUS UNIVERSITY DEPARTMENT OF MANAGEMENT A VERY SHORT INTRODUCTION TO THE HISTORY OF PROJECT PORTFOLIO MANAGEMENT AND SOME RECOMMENDATIONS FOR THE FUTURE V/LARS K HANSEN
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LARS KRISTIAN HANSEN
18 OCT. 2018 ASSISTANT PROFESSORAARHUS UNIVERSITY
DEPARTMENT OF MANAGEMENT
18 OCT. 2018 ASSISTANT PROFESSOR
LARS KRISTIAN HANSEN
AARHUS UNIVERSITY
DEPARTMENT OF MANAGEMENT
A VERY SHORT INTRODUCTION TO THE HISTORY OF PROJECT
PORTFOLIO MANAGEMENT AND SOME RECOMMENDATIONS
FOR THE FUTURE
V/LARS K HANSEN
LARS KRISTIAN HANSEN
18 OCT. 2018 ASSISTANT PROFESSORAARHUS UNIVERSITY
DEPARTMENT OF MANAGEMENT
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Educations & Certification• PhD in Information Systems, Aalborg
University• M.Sc. in Social science (Cand.soc), Aalborg
University• Certified Project Manager
(PRINCE2, MS Project, IPMA)
Experience• Started at Aarhus University 1. Oct. 2017• External lector at ITU• Municipality of Copenhagen• Projectum• Økonomi- og Erhvervsministeriet
• +10 years experience in project and portfolio management
Teaching
Projects and business development
IT Projects and program management
IT projects and portfolio management
Agile portfolio management
IS Philosophy of Science and Research
Research Areas
Rethinking project portfolio
management
Agile and adaptive project portfolio
management
WHO AM I?
MINDMAPING THE PLOT
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Dynamic
capabilities –
what to do
What is project
portfolio
management?
Historical
trends
Trends in the
future?
Project portfolio management
MINDMAPING THE PLOT
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Dynamic
capabilities –
what to do
What is project
portfolio
management?
Historical
trends
Trends in the
future?
Project portfolio management
PROJECT PORTFOLIO MANAGEMENT (PPM)
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The overall organizational
ability to manage project
portfolios strategically and
holistically to support the
success of the organization
(Clegg et al., 2018)
MINDMAPING THE PLOT
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Dynamic
capabilities –
what to do
What is project
portfolio
management?
Historical
trends
Trends in the
future?
Project portfolio management
MANY YEARS AGO…
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In Shakespeare’s the Merchant from Venice:
Antonio understands that the portfolio principle
“diversifications” makes his business more robust
for temporary and local fluctuations.
“Thankfully my financial situation is
healthy. I don’t have all of my money
invested in one ship, or one part of the
world. If I don’t do well this year, I’ll still
be okay”. (Act I scene 1)
1950S: RESEARCH BEGINS
In the postwar period research begins using
mathematics to more precisely understand how
portfolios can be put together to make them
more effective, e.g. by lowering the overall risk.
A very famous figure in this regard is Markowitz
(1952), who later received the Nobel Prize for
his work.
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1950-1960S: THE POST-WAR ECONOMY BOOM
• In parallel, a more practical orientated need
for PPM arose in the post-war economy
boom. The western world’s companies asked
for principles and methods to speed up
conversion of new ideas into products, as
they were unable to keep up with marked
demand.
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THE 1970-1980S: THE ECONOMIC CRISIS
This focus changes in the seventies with the
economic crisis, this toward a focus on how
organizations exploit their existing resources.
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This inspired research to develop
models advising organizations
how they handle the, apparently
chronic, problem of organizations
having too many projects
compared to the amount of
available resources.
THE 1990S: STAGE-GATE MODELS CONCURS THE AGENDA
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The Stage-Gate model by Robert Cooper and
his collages (e.g. Cooper and Edgett, 1997).
The basic idea is that organizations have a
number of gates, where projects are required to
provide some pre-specified information before
proceeding to the next gate.
THE 1990S: STAGE-GATE MODELS CONCURS THE AGENDA
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(Cooper 1990)
2000S MATURITY MODELS BECOMES POPULAR
• However, we still need to see convincing
research results showing the desired
effect in practice
• Emerging need for IT PPM as amount and
importance of IT projects grows (Nolan and
McFarland, 2005)
• Interest for maturity models, these assuming
that organizations by adopting defined
guidelines improve organizations’ PPM success
• Maturity models undeniable popular – still in our
.
2000S MATURITY MODELS BECOMES POPULAR
(Jeffery and Leliveld, 2004)
2010S: ADAPTABILITY AND UNCERTAINTY
• Entering a global innovation economy
• Research agenda shift towards organizations'
ability to change and adapt
• Agility becomes the buzzword, but how do we
expand agility from project level to the portfolio
level?
• Scaled agile frameworks such as SAFe, seem to
be adopted by many organizations these days
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2010S: SCALING AGILE
Builds on Leffingwell (2007; 2010)
MINDMAPING THE PLOT
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Dynamic
capabilities –
what to do
What is project
portfolio
management?
Historical
trends
Trends in the
future?
Project portfolio management
1950s 1960s 1970s 1980s 1990s 2000s 2010s 2020s
Economic
optimism
Economic
crisis
Innovation
economy
Information
technology
revolution
Improve
though put Exploit exciting
resources
Deal with
new
technology
Deal with
deep
uncertainty
Macro
economic
trends
Focus of
PPM research
WHAT DID WE LEARN BY TAKING A HISTORICAL PERSPECTIVE ON PPM?
• In the past, organizations tend to have more
centralized, hierarchical and static structures.
• In such more static environment it makes sense to
diversify the portfolio to reduce the risk of external
and local influences.
191
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• More organizations experiences of deep
uncertainty were constant organizational
transformation is necessary (Teece at at.,
2016)
MINDMAPING THE PLOT
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Dynamic
capabilities –
what to do
What is project
portfolio
management?
Historical
trends
Trends in the
future?
Project portfolio management
ADVICE FROM RECENT RESEARCH
Organizations in an innovation economy
should develop so-called dynamic capabilities
(Killen and Hunt, 2010).
This enable organizations to adjust faster to
new types of work and to collaborate in
networks across organizations, functions and
geographical locations
Such capabilities have costs, but will properly
be key for future organizations’ survival
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HOW TO BUILD DYNAMIC CAPABILITIES
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Sensing
Seizing
Transforming
Teece et al (2016)
SENSING
What is it?:
Identification of opportunities for development,
co-development and use of new technology
What tool can be used?
Real option, scenario planning, generative
hypotheses about the future (abduction)
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Teece et al (2016)
SEIZING
What is it?
Mobilization of the “right amount” of resources to
address needs and opportunities and capture
value from doing so
What tools can be used?
No vertical integration,
self-organizing (network),
sourcing, open innovation,
remove slack 24
Teece et al (2016)
TRANSFORMING
What is it?
Continued renewal or shifting by build-measure-
learn
What tools can be used?
Build->measure->learn.
MVP (minimum viable product).
Difficult in large companies
and airline industry..[..]
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Teece et al (2016)
MINDMAPING THE PLOT
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Dynamic
capabilities –
what to do
What is project
portfolio
management?
Historical
trends
Trends in the
future?
Project portfolio management
QUESTIONS AND COMMENTS?
REFERENCES
CLEGG, S., KILLEN, C. P., BIESENTHAL, C. & SANKARAN, S. 2018. Practices, projects and portfolios:
Current research trends and new directions. International Journal of Project Management, 36, 762-
772.
COOPER, R. G. & EDGETT, S. J. 1997. Portfolio management in new product development: Lessons
from the leaders--I. Research Technology Management, 40, 16.
HANSEN, L. K. & HANSEN, A.-S. 2018. En meget kort introduktion til Projekt
porteføljeledelsens historie og nogle perspektiver for fremtidens organisationer (in press).
Dansk Projektledelse, 4.
JEFFERY, M. & LELIVELD, I. 2004. Best practices in IT portfolio management. MIT Sloan Management Review, 45, 41.
KILLEN, C. P. & HUNT, R. A. 2010. Dynamic capability through project portfolio management in
service and manufacturing industries. International Journal of Managing Projects in Business, 3,
157-169.
MARKOWITZ, H. M. 1952. Portfolio selection. The journal of finance, 7, 77-91.
NOLAN, R. & MCFARLAN, F. W. 2005. Information technology and the board of directors. Harvard business review, 83, 96.
SCHOPER, Y.-G., WALD, A., INGASON, H. T. & FRIDGEIRSSON, T. V. 2018. Projectification in Western
economies: A comparative study of Germany, Norway and Iceland. International Journal of Project Management, 36, 71-82.
TEECE, D., PETERAF, M. & LEIH, S. 2016. Dynamic capabilities and organizational agility: Risk,
uncertainty, and strategy in the innovation economy. California Management Review, 58, 13-3528
THE END
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LARS KRISTIAN HANSEN
18 OCT. 2018 ASSISTANT PROFESSORAARHUS UNIVERSITY
DEPARTMENT OF MANAGEMENT
AARHUS UNIVERSITY
DEPARTMENT OF MANAGEMENT
