Achieving Value through PMO Innovation: Is Your PMO Helping or Hindering Your Success?

July 24, 2012 | Author: PM Hut | Filed under: Project Management Office

Achieving Value through PMO Innovation: Is Your PMO Helping or Hindering Your Success?
By Systems Evolution, Inc.

In recent history, you or someone in your organization fought the challenging battle to implement a Project Management Office (PMO). The goals were clear. In order for the organization to meet strategic objectives, projects had to be governed in a more consistent and quantifiable manner. Today however, you are hearing discussions that the PMO may be the source of several problems it was established to solve. Project managers have indicated the PMO is “too restrictive,” and people are finding “creative means” to bypass the methodology.

Although senior leadership might be aware and openly questioning whether the large investment in resources is realizing the promised benefits, determining whether a program can or should be fixed is one of the toughest questions managers face. What worked yesterday may be inappropriate or counterproductive today. This article will explore how to objectively evaluate your PMO’s effectiveness, apply standard alternatives to your current PMO structure, and use creative tactics to strategically deploy a new PMO model.

Evaluate the Effectiveness of Your PMO

Your instincts tell you something is not right and you want to objectively evaluate the PMO’s performance to assess whether it has lost its effectiveness. While no one metric will provide an absolute answer, the symptoms below indicate a change may be necessary.

  • Projects are taking longer to implement and budgets are increasing, yet the scope of projects remains relatively unchanged.

  • Business units have developed their own criteria for determining when projects are run through the PMO (and many projects are run outside of the PMO).

  • There is minimal stakeholder participation in steering committee meetings and gate reviews.

  • Gate reviews are perceived as a “formality” and projects pass through without significant discussion.

  • ROI (Return on Investment) and TCO (Total Cost of Ownership) metrics are no longer key factors in project approval and prioritization.

  • The organization has grown in size and/or has undergone restructuring since the launch of the PMO, but the PMO has not been reevaluated.

Any one of these indicators may suggest that it is time to rethink the health of your PMO. Interestingly, companies often find the rigor introduced by disciplined processes, which made the PMO implementation successful, may begin to hinder its effectiveness as the organization matures. A PMO is not different from any other part of an organization and must also evolve to successfully and continually drive value. If the symptoms identified above sound familiar, revisiting your PMO is definitely in order.

Consider the Alternatives

Once the major issues impeding the PMO’s effectiveness are identified, you may find it tempting to take immediate action. Before any direct action is taken, it is helpful to take a step back and analyze the gathered feedback. Chances are you will find that adjusting the existing structure or adopting a new structure may address many of the problems hindering success.
No secret formula exists for successfully reorganizing a PMO. The closer your PMO represents the company’s corporate culture, the better it will be in attaining its stated goals. In this article, we will consider four primary PMO models to address the issues found during your evaluation (Please refer to the table below to learn about key characteristics of each of the models described).

  1. Repository / Starter Model:

    It is very likely that you already have this model in place at a minimum. If you are seeing a pattern of inconsistent or non-uniform use of project management methodology, framework, standards, and practices, pay close attention to this model to assess if it will be a good place to start.

  2. Support / De-Centralized Model:

    If the majority of the symptoms are around the lack of inadequate project management skills, issue tracking and resolution, project schedule, performance, and reporting, this model may be a good fit to address those concerns.

  3. Control / Centralized Model:

    If most of the indicators are pointing to a lack of direct project supervision and control, redundancy, low enterprise-wide risk identification and mitigation, or misalignment between projects undertaken and overall strategy, then corrective steps may be taken by implementing a centralized and cohesive PMO.

  4. Hybrid / Federated Model:

    If none of the above models meet the needs of your organization, the evaluation may call for a centralized PMO to establish common standards, methods, practices, and overall strategy through the use of a blended model. It may be that your evaluation identified overly conformist and unresponsive processes as major hurdles. The feedback may also lean towards adopting more business-unit specific goals. In these scenarios, a hybrid model will work best.

Decide and Deliver

PMO Models Comparison

Figure 1: Comparison of PMO Models

After detailed analysis of these PMO models, you may decide the PMO must undergo a slight realignment to achieve operational effectiveness. If your analysis proves that a more substantial change is necessary, you may decide to tackle a larger transformation of the existing structure, processes, and people. Regardless of whether the PMO realignment requires a minor or extensive change, Systems Evolution, Inc. (SEI) consultants have experienced several tactics that may be leveraged to mitigate risk and ensure a more robust framework for success.

  • Tactic 1 – Develop the Vision:

    Transformational change requires a leap of faith for an organization, and therefore, the role of leadership has always played a significant factor in success in the long-term performance. Leaders hold a special place in the life and culture of any company and their view and approach sets the tone for the organization as a whole. During the initial phase of the PMO transformation, it is critical that leadership is visibly involved. There are many different methods for defining and disseminating a vision throughout the organization. The primary goal of this tactic is to ensure the problem is clearly defined (why do we need to modify the PMO structure?), to ensure the objective is understood (how will the PMO structure change?), and to ensure the future benefits are outlined (how will this PMO change make the company more operationally effective?). Once defined, this vision needs to be communicated across the organization in a rational and balanced way.

  • Tactic 2 – Design with the Organization in Mind:

    Determining what strategies should be leveraged during the PMO transformation requires a corporate level perspective. The purpose of this tactic is to bring to light a complete view of the organization. Strategies for implementation are not one-size-fits-all, and should be tailored where appropriate. If your company has a decentralized structure, the strategies to implement a PMO transformation will differ. If your company has gone through numerous acquisitions, there may be a need to offload inactive or unproductive processes and structures in order to reduce operational redundancy. Regardless of the specific PMO structure selected, all parties involved in the transformation should consider the core values of the organization, and adopt strategies that will serve to drive value through operational effectiveness.

  • Tactic 3 – Don’t Mistake Objectives for a Strategy:

    Good strategy works by focusing resources and energy on pivotal objectives that will lead to a cascade of desired outcomes. Failure to focus is the most common symptom of an ineffective implementation plan. A rational approach to implementing a PMO transformation will focus strategies and energy on key areas that significantly contribute to achieving the stated goals. Keep “first things” first. All implementations will encounter roadblocks and challenges. It is important to look for opportunities that are achievable given project and organizational constraints. By focusing effort on achievable results, the implementation will gain momentum, create positive feedback, and engender goodwill. This publicity will help enable change throughout the organization. If the company is large and the implementation timelines stretch for a year or multiple years, be diligent about focusing on what needs to be done and avoid being sidetracked by non-strategic initiatives.

  • Tactic 4 – Leverage the Creative Energy of Teams:

    There are a number of reasons why creative ideas fail to become innovative strategies. Sometimes it is because the idea, which seems brilliant in concept, is flawed in application. A straightforward approach to evaluate strategies can be achieved through various vision games that help committees and teams understand both the problem and the resolution. These games help stimulate ideas and evaluate their impacts. When approached as a collaborative session between key stakeholders, this exercise proves to be an effective tool to identify the risks and rewards. The end goal of these sessions is clarity and agreement on a particular tactical approach to implementation. Below is a list of books that outline creative methods for channeling the ideas of a team:

    • Innovation Games: Creating Breakthrough Products Through Collaborative Play
    • Rapid Problem Solving with Post-It Notes
    • Visual Meetings: How Graphics, Sticky Notes and Idea Mapping Can Transform Group Productivity
  • Tactic 5 – Develop Channels for Feedback:

    During and after the implementation phase of the PMO transformation, time and attention should be dedicated to collecting and gauging effectiveness. The approaches range from standard formal meetings with key PMO executives applying scorecards that measure effectiveness, to more informal social media related channels. One challenge created by opening up feedback to a more consistent process is the risk of diminishing quality in the inputs. In order to mitigate the risk of lower quality, a framework of rewards may be established to encourage thoughtful and reflective feedback. The primary benefit of establishing channels for feedback is an increased potential for operational effectiveness. New ideas and insights may be leveraged to drive PMO innovation.

  • Tactic 6 – Lead by Example:

    One of the most important moments in American history is a relatively unknown exchange between George Washington and his troops. Historians have stated that this short exchange was the turning point in the Revolutionary War. After months of cold, brutal weather, and very little pay, troops fighting in the Revolutionary War began to wonder if all the hardship was worth it. A meeting was held on March 15, 1783 in a spacious hall in northern Virginia. In the initial hours of this meeting, George Washington was not present. At some point during the discussion about the war and the lack of pay, George Washington entered the room. To his surprise, unlike other times in his career, he was not greeted with general excitement. He was greeted with resentment, embarrassment, and in some cases anger. After the troops unleashed a tongue lashing on George Washington, he did what very few in his position have done. He calmly listened, showed restraint, and quietly responded to their specific questions.

Once the troops had finished listing their grievances, George Washington gently stated, “Gentlemen, you will permit me to put on my spectacles for I have not only grown gray but almost blind in the service of my country.” This simple statement achieved what his rhetoric and arguments could not. George Washington showed that he was one of them. The troops were instantly emotional and they looked upon their great general with love and admiration.

Although the challenge of leading a PMO transformation is not as complicated nor as risky as leading troops through years of battle, the analogy of George Washington sheds light on good leadership. Every organization that undertakes the challenge to transform the existing PMO structure will require significant contributions from employees across the company. An important step to ensure that the organization is firing on all cylinders is to lead by example.

Wrapping it All Up

As an organization evolves, it must recognize the PMO will require changes and re-assessment to ensure its effectiveness and alignment with the goals of the company. There are many factors that indicate a change may be necessary to a corporate PMO. Rather than ignoring the need, they should be addressed to ensure the success of the office. The changes may include adjustments to existing structures and processes, or evaluating other alternatives. By evaluating your PMO’s performance against objective criteria, you will identify the areas with improvement opportunities. Listen to the organization’s feedback and separate the symptomatic complaints from those that point to a cause. Engage in both targeted and holistic reviews of the PMO structure, processes, and people, reassessing against industry best-practices and periodically reexamining the previously deemed suboptimal aspects. Once you have identified and prioritized your goals, work with senior management to disseminate the vision and utilize the suggested creative tactics to ensure your PMO remains as an example of effective governance.

Systems Evolution, Inc. (SEI) is a boutique business and technology consulting firm focused on delivering superior value to local clients in Atlanta, Boston, Cincinnati, Dallas, and Phoenix. We provide the agility, consistency and personal attention of a local partner while providing the reach and knowledge assets of a national organization. SEI provides highly valued business and technology services tailored to individual client opportunities. We support critical client needs in the areas of:

  • Project Planning and Execution
  • Technology Planning and Deployment
  • Business Process Optimization
  • Enterprise Information Management

SEI evolves as technology and business evolve, remaining on the forefront of information technology and business management. For more information on the collective value of SEI, visit our website at www.sysev.com.

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