HOUSTON, TX, USA 5 8 NOVEMBER 2017 #PMOSym · Leading an Enterprise Portfolio Management Office in ... • Five types of indicators to provide initiative status ‒Initiative Leader

HOUSTON, TX, USA | 5 – 8 NOVEMBER 2017

#PMOSym

PMO17BR213

Leading an Enterprise Portfolio Management Office in a Disruptive Environment: Lessons Learned at the US Postal Service

Emil Dzuray, Director Office of Strategic Planning, J Otis Smith, Manager, Strategic Management Office

United States Postal Service

Delivery EcosystemPrinters &

Mailers

E-CommerceRetailers

Logistics

SoftwareVendors

Mail ServiceProviders

Advertising

Global

2

3

Large USPS Platform Supports Ecosystem

MAIL &

PACKAGES

154B

~31,000 Post

Offices

300+ Sorting

Facilities

~8500

Processing

Systems

~204,000 Delivery

Vehicles

508,000 Career

Employees

155M Delivery

Points

REVENUENo taxpayer

funds!

$71BDelivers 48% of world’s mail

Most affordable of industrialized Posts

Most efficient of industrialized Posts

*EOFY 2016

PROMPT, RELIABLE SERVICES

TRUSTED, SECURE,RESPECTED BRAND

CONNECT & INFORM CITIZENS & COMMUNITIES

CONVENIENT, AFFORDABLE UNIVERSAL POSTAL SERVICES

HELP BUSINESSESCONNECT & GROW

USPS MISSION:

4

High Quality

Services• Priority Mail

• First Class Mail

• Standard Mail

• Scan Performance

Excellent Customer

Experience• Business Service Network

• Residential/SME Delivery

• Retail Point of Sale

• Customer Care Center

Safe & Engaged

Workforce• Illness & Injury Rate

• Employee Engagement

Score (Postal Pulse)

• Equal Employment

Opportunity

Sustain Controllable

Income• Revenue

• Controllable Income

• Deliveries per Hour

5

USPS Corporate Performance Goals–How we measure success…..

Baseline 2012 forecasts with

no strategic initiatives.

USPS establishes DRIVE ePMO

2011 – New PMG responded to worsening financial situation, instituted “Plan to Profit”• 3 yrs declining revenue (~-$19B)• Controllable costs up – above revenue• Liquidity near zero • Mail volume (down 21%)

Dire USPS Business Conditions in FY2011

Big initiatives needed to close ~$20B gap:• Radically cut costs• Grow core revenue• Build new capabilities

Enormous risks due to legislative, contractual and market uncertainties

~$20 B

6

7

Selected Strategies to Position the USPS to Thrive in

Multiple Future Scenarios

Build out capabilities that appear in all/most scenarios,

identify triggers for outlying scenarios, and be flexible!

USPS

TODAY

customer

employee

stakeholders

Customer Trends

Technology

Trends

Industry Trends

Social Trends

Legislative

& Regulatory

Global Postal

Market

Capability 1

Capability 2

Capability n

Capability 1

Capability 2

Capability n

Capability 1

Capability 2

Capability n

Capability 1

Capability 2

Capability n

Capability 1

Capability 2

Capability n

Capability 1

Capability 2

Capability n

SCENARIO 1

SCENARIO 2

SCENARIO 3

SCENARIO 4

SCENARIO 5

SCENARIO N

USPS 2030

8

What we did to optimize strategy

execution in a disruptive environment

9

Examined Lessons from Successful Strategic Execution

Used in Disruptive Environments

Clear leadership commitment

and accountability

Forward looking course corrections

and change management

Accountable Officer/Executive leads each Initiative – Chartered by ELT

Effective governance with explicit roles and processes defined up-front

Focus on delivering full economic impact on schedule

Governance methodology helped avoid pitfalls

"Best in class" change management

Transparency on what matters

Consistent monitoring and tracking through standardized, exceptions-based reporting

Roadmaps developed from bottom-up build of detail

10

Established Rigorous Strategic Execution Guiding Principles

Executive Visibility

Early Indicators of

Risk

Cross-functional IntegrationStrengthen

Internal

Talent

Rigorous Strategy

Execution

Key Elements of Rigorous Strategy Execution

Strategic Alignment

11

Rigorous Strategy Execution

12

Strategic Alignment

• Structured portfolio for shared

accountabilities

• Established a robust

governance process

• Aligned portfolio outcomes to

corporate and executive goals


Early Indicators of

Risk


Internal

Talent

Rigorous Strategy

Execution

Strategic Alignment

Portfolio Management Steering Workgroup

Large initiatives with dedicated PMOsSmaller

initiative with PM support

13

Structured the Portfolio for Shared Accountabilities Supported

by an Enterprise Project Management Office (ePMO)

Executive Leadership Team

Business Unit VPs

Initiative A

(w/ PMO)

Initiative C

(w/ PMO)

Initiative B

(w/ PMO)

Other Initiatives

teams

Portfolio Management

Project Management

OSP SMO

Initiative Leads

Strategic Alignment

Standardized central ePMO

contractor

14

Focused Efforts on Overall Outcome Management,

not Project Management

Rigorous

Strategy

Execution

Rigorous Strategy Execution aims to

Whereas project management aims to

Rigorous Strategic Execution is not project management

5 Year Strategic Plan, Financial

Plan, & USPS Performance Goals

Established Portfolio Governance to Align Corporate and

Executive Goals to Portfolio Outcomes

Portfolio Objectives

Initiative Charter

Objectives

Roadmap Plans

Linked to ResultsPersonal Goals

Executive

Performance

Goals

Strategic Alignment

15

Monitor Progress

Portfolio of Strategic Initiatives


• Established routine Deep Dives

to expedite decisions

• Facilitated senior leadership

early interventions and routine

portfolio refinements


16


Early Indicators of

Risk


Internal

Talent

Rigorous Strategy

Execution

Strategic Alignment

Exhibit 7

17

Achieved Executive Visibility Through Deep Dives to

Expedite Decisions and Provide Real Operational InsightExecutive Visibility

ESTABLISHED RULES OF ENGAGEMENT

TO DRIVE HIGH VALUE DEEP DIVE DISCUSSIONS

Elements of a High Value Deep Dive Discussion

ELT champion – set agenda, tone for meeting, and focus areas

IL Presenters - Commit to transparency - Lay cards on table

Participants - Commit to high engagement discussion – high respect

SMO – Keep us on task

• Identify, capture, and track action items

• Manage presentation times – keep the discussion on track

• Present background data as required.

All – Come prepared and be present - put down your Smartphone and iPad


performance

2. Deep Dives into critical initiatives to maintain cross-

functional alignment and share learnings

Quarterly

3. Performance outcome reviews to track progress, make

adjustments, and implement interventions

Annually

4.Portfolio composition and governance refinement using a

Keep/Start/Stop process

19


Structured Deep Dive Meetings to Facilitate Visibility and

Early Interventions Across 4 Dimensions

Su Mo Tu We Th Fr Sa

1 2 3

4 5 6 7 8 9 10

11 12 13 14 15 16 17

18 19 20 21 22 23 24

25 26 27 28 29 30 31

March 2018

Deep Dive Date

Live Performance Dashboard

Each month, Initiative Leaders discuss

Assessment of projected end of year

performance

End of year forecasts for KPIs projected to

miss targets

Mitigations taken for targets projected to miss

Top 2-3 accomplishments since the last

status report

Created Live Dashboards to Facilitate Discussion of Risks

and Opportunities for Early Intervention

## – [Initiative Name] (Initiative Leader Name)

NO

20


Early Indicators of Risk

• Plans tied to performance

outcomes

• Exception based status

reporting and executive

intervention requests


21


Early Indicators of

Risk


Internal

Talent

Rigorous Strategy

Execution

Strategic Alignment

Developed a Framework for Early Indicators of Risk Using

Exception-based Reporting

• Prioritize initiatives needing immediate Senior Leadership attention

• Goal of yellow and red status is to foster discussion about initiatives at risk

• Five types of indicators to provide initiative status

‒ Initiative Leader Confidence – Are you on track to achieve EOY

performance?

‒ Risk – What is the probability & impact of potential challenges?

‒ Milestone - Is our schedule on track?

‒ Impact (Results) – Are we meeting our results?

‒ Update – Are the milestones/impacts up to date in our system of record?

• Reporting designed to cascade most urgent settings upward

• Opportunity to request assistance from Senior Leaders

G Y R

Early Indicators of

Risk

22

Cross Functional Integration

• Cross-functional accountability

• Regular communications

across the enterprise


23


Early Indicators of

Risk


Internal

Talent

Rigorous Strategy

Execution

Strategic Alignment

Cross-Functional Integration is Critical to Success

• Establish clear roadmaps for each initiative

• Link Milestones directly to performance

outcomes and stakeholders

– Identify critical activities and leading

indicators identified

– Establish intervention points and Senior

Executive decisions

• Assign cross functional accountabilities at the

milestone level

• Rigor-test stakeholder readiness and

commitments when plans are established

• Track in a single system of record (TMOS)

Cross-functional Integration

Outcome Target

Critical Milestones

Initiative Charters

Roadmaps

INITIATIVE LEAD

ROADMAP OWNER

Critical MilestonesCritical MilestonesCritical Milestones

Stakeholder (s)Date

Status/Forecast

ENCOURAGED REGULAR COMMUNICATIONS AT

ALL LEVELS OF THE PORTFOLIO

25

Routine initiative steering committee meetings led by Senior

Leadership Sponsors and Executive leaders

Weekly SMO meetings with Initiative Leads and Roadmap Teams

Monthly “one-on-one” Initiative Lead meetings with CEO to

discuss program health and key issues

Quarterly Roadmap Owner and Stakeholder engagement

sessions (Path Ahead meetings)

Cross-functional Integration

Strengthen Internal Talent

• Acquire and develop in-

house resources to fill

talent gaps

• Promulgate best practices

using consistent

standards

• Celebrate Success!


26


Early Indicators of

Risk


Internal

Talent

Rigorous Strategy

Execution

Strategic Alignment

Strengthened and Developed In-house Resources

to Fill Talent Gaps

27

FTE

Definition & Planning

Execution | Performance / Monitoring Close

Contractor

Resources USPS Resources

primary driver of

PMO activities

Re-deploy USPS

Resources

Time

USPS

Resources

Contractor Resources

USPS PM Talent

Development Investments:

• PM Basics Training

• PMI Certifications for SMEs

• Agile training for specialized

functions

• PM skills in emerging leader

curriculum

• Tools & “how-to” guides to

support USPS processes at

all levels

• Central ePMO function for

coaching and training

27

Strengthen

Internal

Talent

ePMO Support Over a Project Lifecycle

CELEBRATED SUCCESS TO

MAINTAIN ENGAGEMENT

28

Strengthen

Internal

Talent

• Reviewed major accomplishments each quarter with senior

executives and initiative leader

• Hosted portfolio-wide end of year celebrations

29

What results did we see?

30

• Executed 62 initiatives, 439 roadmaps containing ~14,500 outcome milestones

• Achieved ~$15 billion cost savings and revenue gains of ~$6 billion

• ~73% of the ePMO-managed objectives achieved their target on time

• Conducted >108 regular in-depth “Deep Dive” reviews

• Created PM training and trained over 450 staff and all new leaders on basic project

management skills

• Increased employee qualifications with over 420 PMI certified PMPs

• Maintained overall leadership confidence from 2012 to 2016 for governance

processes

• Averaged 82% of all respondents agreeing “USPS has a clear set of goals and a strategy to achieve them.”

• Averaged 84% of all respondents agreeing “I have been well informed of the DRIVE processes and my role.”

Portfolio Strategy Execution Results - FY12-FY16

31

Impact on our Business

Baseline 2012 forecasts with no strategic initiatives.

USPS establishes DRIVE ePMO

~$20 B

USPS still requires legislative and regulatory changes to ensure long term financial stability

32

Lessons Learned

Top Lessons Learned from Rigorous Strategy Execution (I)

33

Start from the top – Senior leaders drive culture and communicate importance of

sticking to the process and the plan

Create a sense of urgency around why and define a tangible vision for the future

Build/maintain leadership structure to sponsor/guide culture change and

initiatives

Charter an ePMO to govern execution and change processes

Host routine, cross-functional “Deep Dives” into initiative execution

Develop enterprise-wide systems to enable transparency, mitigate risks, and

rigorously track project results

Top Lessons Learned from Rigorous Strategy Execution (II)

34

Teams struggle with “being red” - praise leaders who accurately communicate

their status

Link plan milestones to tangible results to show meaningful progress

Robustly engage leaders, employees, customers & stakeholders

Develop and support internal talent to build future capacity to manage complex

change efforts

Celebrate accomplishments big and small - don’t just focus on gaps

Be disciplined - but flexible

Communicate, communicate, communicate - especially the “why”

35

Closing Thoughts

Our lessons identified 5 elements of ePMO success through


Call to Action for you:

• Acknowledge how far you have come

• Commit to go further - continuous improvement!

• Try new things...and be willing to fail learn quickly!

Food for thought:

Acknowledge how far you have come…

1950-2013

36

…Strive to go further…

2014 37

…Be willing to try new things.

38

39

Rigorous Strategy Execution is key to delivering

results in disruptive environments

Emil J. Dzuray

Director, Strategic PlanningUS Postal Service

[email protected]

J Otis Smith

Manager, Strategic Management OfficeUS Postal Service

[email protected]

For more information -

Documents

HOUSTON, TX, USA 5 8 NOVEMBER 2017 #PMOSym · Leading an Enterprise Portfolio Management Office in ... • Five types of indicators to provide initiative status ‒Initiative Leader