Allocating and Managing Constrained Resources
This chapter provides a variety of techniques for monitoring the resources used within your project. The emphasis is on human resources, but the principles can be applied to any project resource.
From the Trenches: John Nelson on Resources at the Portfolio Level
As an executive concerned with the well-being of an entire organization, John Nelson has to look at resource management on a portfolio level. Whereas individual project managers naturally focus on short-term resource availability for their projects, an executive's goal is ensuring that resources are available for many projects over the long term. In a recent lecture, he offered some thoughts on managing resources at the portfolio level:
Whether you're deploying capital resources, outside resources, or your own internal staffing resources, it's almost axiomatic that you will face resource constraints in living order. When considering how a particular project fits within a larger portfolio, you need to keep in mind the organization's resource elasticity, and the organization's ratio of percentage of creative personnel.
Let's start with resource elasticity. Organizations can be whipsawed by projects that are so large they consume a disproportionate amount of the organization's resources. If a project like that ends abruptly, for an unexpected reason, the organization will struggle to get project resources redeployed. To avoid this, it's a good idea to make sure no project exceeds one-third (or in some cases one-fourth) of the organization's total capacity.
Now let's consider the critical ratio of creative people to people who excel at execution. Some projects require a lot of creativity and thinking. Some just require execution. If you have a portfolio of highly creative assignments, but a resource base that's largely execution-oriented, you're going to struggle. The opposite is also true: if you have lots of execution-oriented projects with only highly creative people on staff, you might complete the project successfully, but you'll probably burn through resources faster than you want, because creative people aren't as efficient and effective at execution. It almost goes without saying, though, that you do have to have creative people in your organization. In living order, it's rare that I come across a project that doesn't involve any creative people. My rule of thumb is to have about 30% of my staff to be highly creative. This has worked well for me, although sometimes 40% or even 50% is best.
You have to keep these kinds of concerns in mind as you look at projects in portfolios, at the organizational level, to make sure that over the long term you have a reasonable chance of meeting the value proposition, meeting the customer's expectations, and maintaining the health of your organization.