Understanding the change portfolio

It used to be that most of the questions I was asked about change related to individual change initiatives. Typical questions were of the form: how could they be made less risky? How can we ensure the change is adopted and the expected return on investment is achieved?

But as organisations have become more adept with change management and the pace and volume of change has increased the focus has shifted to questions about the whole change portfolio. At their heart is the question: how can we understand this change portfolio?

I think this reflects both maturity in change management, and the increasing reality of change for most organisations. With mature change management comes the ability to step back from the individual initiative, safe in the knowledge that your change capabilities will support it to a successful outcome. Instead, the focus shifts to looking across the portfolio – is it optimised and will initiatives clash? With the modern reality of change, many organisations have a bigger volume of change, but also delivered in smaller chunks via Agile portfolios. In this situation, the change manager is less concerned with what happens in an individual sprint, but more where is the overall direction from all those ongoing sprints taking us? Welcome to the realm of change portfolio management.  

This is an area Issoria has been interested in for a long while. We recently ran a round table with enterprise change leaders which generated some great insights on Change Management Portfolio. It’s fair to say that thinking in this area is developing fast, and it is worth keeping engaged in these conversations and developments if you want to stay at the forefront of developments. I’ll outline what I see as the current state of thinking.  

What do we need to understand and why?

The drive for change portfolio management (CPM), comes from a series of issues that many organisations face. These relate to the cumulative impact and flow of change across the organisation. Typical issues include:

• How do we track the flow of benefits realisation, both during change initiatives and after the change implementation is completed?  
  
  

• How do we know what the cumulative impact of change is across the organisation? Without this we cannot determine if we have optimised our change portfolio – perhaps there are areas of the business where we are undertaking too much change, and perhaps some where we could do more.  
  
  
• Related to this – where are we saturated with change? Is there anywhere we risk staff exhaustion or operational disruption because we are doing too much change?
  
  
• Having invested in skilled change managers and having built a CMO, how do we know that they are focused on the right things? There are always more change initiatives that we could do, than we can do, how do we ensure we have focused our valuable change resources on the most important?
  
  
• How do we ensure that our portfolio of change initiatives is truly aligned to our strategy, especially in a world in which that strategy is continuously evolving? It can be hard to see the overall direction when you look at a complex portfolio and be sure that if you add up all the individual parts it will really result in the outcomes you wanted.  
  
  

I am sure that you could add to this list with some specific questions of your own, as each organisation has a unique change portfolio and a unique set of challenges in delivering it. But these represent the most common areas I see in organisations starting to grapple with the challenges of change portfolio management.  

It is worth starting by thinking through what your questions are that you are seeking to answer with change portfolio management – and not only which questions but also their priority. I tend to see this changing as an organisation matures. For instance, at the early stages of CPM organisations are often most closely focused on issues related to the effective utilisation of scarce change resources, whereas more mature organisations are more interested in alignment between the change portfolio and the desired strategy for the business.  

The challenge

The challenge with answering the sorts of questions described in the previous section start from both ends of the solution. At one end is your desired output – to answer these questions what sort of reports, insights or analysis do you require? This is worth thinking through very carefully before embarking on CPM. I have seen many weeks of work wasted producing an analysis that does not answer the questions in a helpful way.  

The other end of the answer is your available inputs - the data you have to start building some sort of analysis. You need to understand what data is available about your change initiatives and how good is the quality.

This may get you thinking about all sorts of clever and complicated data you can collect. In reality, if you have used some simple, standard change management tools then there will be data available to consolidate to start doing some very useful portfolio analysis. There are several critical elements to this:

1. The change impact assessment

This should allow you to see by function or capability stream, (depending on your operating model), the change impacts across time. By consolidating up, you can see the overall volume of change by component of your organisation.

2. The change readiness assessment

This should enable you to see by function or capability stream how ready that part of your organisation is for change. By consolidating up you can then see across the organisation how ready you are to achieve your benefits.  

3. The benefits realisation plan

This should enable you to see by initiative, and by milestone in that initiative, which KPIs and benefits will be changed when. By consolidating up, this should start to provide you with a picture across the organisation of alignment with your strategic direction.  

4. Change plans by initiatives

Each change initiative should have a change plan – that is a plan of the change related activities that will be undertaken based on an assessment of the change impact and change readiness. By consolidating these plans, you can see the overall workload for your change team and work out if they are focusing in the right areas.  

5. Change risk assessments

Each change initiative should have a risk log. From a change portfolio perspective, we have some peripheral interest in delivery risks, but primarily we are interested in the business risks associated with implementing a project. As with all the other data sources, these can be consolidated to show cumulative change risk across the portfolio.  

6. Initiative delivery timelines

From your PMO you should be able to map what initiatives are achieving which milestones by which dates. You are not interested in all the internal project milestones, but only those that are relevant to change. Again, by consolidating up across the organisation you can get a context for overall change portfolio.  

Now this is one of those classic bits of advice that sounds theoretically simple, but which everyone soon finds is quite hard in practice. The reason that it is hard is either because the five basic elements which I suggest you consolidate up from are not done, or they are done inconsistently.  

“... to be able to consolidate change impact assessments across the organisation, those impact assessments must be done in a consistent way.”

For instance, to be able to consolidate change impact assessments across the organisation, those impact assessments must be done in a consistent way. As an example, they must use the same operating model and assign impacts to the same components of the organisation. If this is not done, you cannot easily consolidate them. From the perspective of a change manager working within an individual initiative this is not that important, but from the perspective of change portfolio management it is critical. (A good analogy is with the ability of a PMO to consolidate plans from various projects – this only works if those plans have been developed on a similar basis). Hence standards must be enforced if this is to be possible.  

Even if the standards are the same, data quality remains a big issue. What might seem reasonable assumptions, short cuts and rules of thumb to apply when one is collecting detailed data on a small part of a change initiative, may cause problems when data is rolled up at a portfolio level. This is why we always encourage change managers to take data collection seriously, even if at the change initiative level some rougher measure might seem to be sufficient.  

In summary

Change portfolio management is an area of increasing interest and development. It is an evolving discipline which will no doubt continue to develop, and it is worth anyone interested in it to keep themselves up to speed on its development. Change portfolio management seeks to provide information and guidance to help govern and direct the entire change portfolio – looking at areas such as alignment with strategy and consolidated risks and bottlenecks.

Effective change portfolio management starts by understanding what it is that your organisation wants to know, and what data is required to achieve this. Then you need to put in place the mechanisms to capture this information at an individual change initiative level. Much of this information can come from standard change management tools – as long as they are consistently and properly used.

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