The good news is that there is now plenty of great research emerging on the context and conditions for successful PMOs; some of the lessons learned are simple and intuitive, others less so, as evidenced in this extract from Peter Taylor and Ray Mead’s Delivering Successful PMOs.
Lesson One: Get Help
As has been already discussed the reality out there in ‘PMO land’ is that there is not a plethora of wise and experienced PMO managers, directors, leaders, heads, etc., and so it is sensible for anyone who is engaged to help an organisation set up a new PMO or advise on improvements to an existing PMO to reach out for some help.
The risk to not doing so is to, at the very least, slow the return on investment of the new PMO down. With a practical framework for guidance, such as this book, and a supporting experience coach then the organisation benefits that have led to the PMO investment will be secured in an optimum time frame and with reduced risk of failure.
This book is aimed as one source of aid, inspiration and guidance, so ‘well done’ for starting the process with the right attitude.
In addition this is what the authors, and others, do for a living so professional consultancy is another way to improve your chances of success with that PMO project.
And there are communities you can connect to – on LinkedIn, through the project management bodies such as PMI and APM, etc. Do your research before jumping on too deeply.
Lesson Two: Get the Right Leader
Having the right ‘head’ of the PMO is also critical, in Leading Successful PMOs the top five attributes for a great PMO leader were explored:
The good PMO leaders must champion project management and project managers across their organisation as well as believing in the business strategy. They must communicate with conviction and negotiate fairly but strongly for the PMO and the projects. They must be enthusiastic about leading change and critically must have the strength of belief in their own uniqueness and that of the PMO they lead.
It addition it is noted in the PM-Partners: PMO Trends 2012 report:
When a PMO is expected to work across the organisation at all levels, oversee significant investments and facilitate senior decisions – it is surprising that a high number of organisations either put the wrong person in the job or don’t support them when they are in place.
Getting the right leader of the PMO is linked to lesson number one – you, and your organisation, will want to minimise the risk to PMO failure and maximise the time to ROI. As such having the right person leading that PMO is critical to its success – it is unlike any other managerial role in many ways.
Lesson Three: Measure the PMO Value
A ‘balanced’ approach to a PMO was advocated in Leading Successful PMOs with one way to achieve such a balance was to consider structuring your efforts under the ‘5 Ps’:
- P = People.
- P = Process.
- P = Promotion.
- P = Performance.
- P = Project Management Information System.
The point here being that it may be tempting just to think of the PMO as all about the process, the means to ensure that good project management is achieved through methodology and quality assurance etc. but that ignores the people side.
And it may be that your consideration is towards the project management community and your focus is drawn towards the people (projects are all about people after all) and so you direct your efforts as a PMO leader towards training and team building, etc., but this ignores the project mechanics.
You may also accept the need to build a good tracking and reporting system, supported by an investment in a project management information system, to deliver the visibility of project health and progress towards business goals.
But without the inclusion of a promotional programme it could well be the case that all of the good work you, and your team, achieve in the areas of process and people will go unnoticed and unappreciated by both your peers and the executive.
It is our belief that the best PMOs balance all of this to achieve the most effective development of capability, representation of capability and sharing of capability and achievement.
In the PWC Insights and Trends: Current Portfolio, Programme, and Project Management Practices report there are a series of Key Findings and one relates to measuring value:
Key Finding: A majority of organisations do not conduct regular evaluations of their PMO and also do not consistently measure benefits or returns from the PMO.
… using a PMO contributes to improved project performance; however, organisations currently do not consistently evaluate and measure the success or returns on investment (ROI) of the PMO … 29% of organisations never evaluate their PMO and 30% conduct evaluations on an annual basis. However, the 14% of organisations which evaluate their PMO on a monthly basis also measure their PMO for ROI (65% of the time). Those organisations that never evaluate their PMO measure their ROI only 9% of the time. Organisations can benefit from finding similar positive correlations between using a PMO and project performance, through conducting more regular evaluations of their PMO, as well as, business ROI.
Measuring the PMO value will ensure that you are ready to articulate the true value of your PMO to the business as needed, it will also allow you to continuously improve the PMO’s performance.
Lesson Four: Lock the Value In
The ESI report from 2015, The Global State of the PMO, identified that some 72 per cent of respondents reported that the value of their PMO was questioned by key stakeholders – usually senior management – over the last 12 months.
Despite one in three PMOs being managed at the level of the C-suite, it looked like PMOs were still struggling to prove that they add (or can add) value. Even after being in place for years, PMOs are still subject to scrutiny; one in three of the PMOs which were reported in the ESI survey to have closed this year were 5 years old, or older.
So maturity is not a safety net for PMOs.
The top reason cited in the survey for disbanding a PMO was that of corporate restructuring. On the positive side this restructuring could mean consolidating PMOs into a single enterprise model. On the negative side, though, an executive decision or change in management was cited as the reason why one in four PMOs were closed down, with an associated argument that PMOs did not deliver value.
The key here is that the value of the PMO should be ‘locked-in during the delivery period and should be regularly re-assessed and continually measured by a good PMO leader.
It is critical for a PMO to achieve a level of maturity, as the PM-Partners: PMO Trends 2012 report states:
There’s a direct link between the maturity of the PMO and the value it provides. Mature PMOs are far more likely to offer real competitive advantage to a business by increasing the speed and quality of business returns.
Lesson Five: Move with the Business
The PM-Partners: PMO Trends 2012 report summarises this well:
It is generally accepted that the Project Management Office (PMO) typically defines and maintains the metrics, standards and repeatable practice for project management within an organisation and is the first step towards:
- Increasing project, programme and portfolio success
- Strategy execution and business transformation
- Increasing the speed of time-to-market
- Visibility and cost control of execution on time and on budget
Our survey results suggest that merely implementing a PMO in itself is not enough. The PMO must evolve over time with a continuous plan to mature the practices that are of the greatest value to executives. As a PMO matures and implements high value services such as portfolio management and resource management, the organisational success metrics improve, and the value of the PMO increases.
Regularly ‘take the pulse’ of your PMO and the view of that PMO by the business. If something has changed you may need to return to the business case and re-validated and/or update accordingly.
As detailed in Leading Successful PMOs you need to ask yourself and the PMO:
- Has anything significantly changed in the business that requires an adjustment by the PMO?
- What is the view, within the business, of the value of the PMO?
- Are there any key opponents to the PMO operation?
- Are the methods you have established well adopted and adhered to, and have recommended improvements been acted upon?
- Has the level of project maturity risen?
- Are project managers reporting the same issues as before?
- Has there been a change in the PMO sponsorship role(s); personnel or approach?
- Has project ‘health’ improved or stagnated?
- Is the PMO approach the right one?
- Is the PMO model the right one?
You may need to survey the PMO stakeholders to understand in more detail what it is that needs extra effort and focus. Alternatively, it may be that you just need to get together with your PMO team and revisit the PMO purpose.
Whatever the situation you must ensure that the PMO is in step with the current business needs.
Lesson Six: Connect to Strategy
For a PMO to successful in the long term it needs to be connected to the strategic activity of the organisation that it supports.
In the 2012 KPMG report Business Unusual: Managing Projects as Usual the importance of strategic connection for a project was explored:
Strategic Alignment: The success of a project ultimately depends on whether the initiative aligns with the strategic and financial goals of the organisation. It is, therefore, as important to do the right projects, as doing the projects right. 94 per cent of our respondents indicated that they have some sort of strategic IT roadmap that acts as a major input to their selection of projects. This possibly explains why organisations scored the maximum for this dimension; still a significant gap is seen between identifying the right projects, setting clear expectations and tracking benefits of the project.
Pete Swan, Director PM-Partners group, declares:
A PMO is really adding value when it can adapt to the needs of the business and is viewed as a strategic asset during executive decision making.
A PMO can operate at three levels of ‘Strategic’ maturity within an organisation, the first being the custodian of strategic intentions through the ownership of the projects themselves, each of which should in some way relate directly or indirectly to a strategic intention of the organisation.
This can be considered as ‘Strategy Management’ whereby the PMO acts as the governing and advisory body to the executive by:
- Validating that all projects that are initiated fit one or more strategic initiative;
- Tracking the current and valid alignment between projects and strategies;
- Making recommendations for ‘stalls’ and ‘kills’ for projects that no longer align with current business strategic thinking.
The second is ‘Strategy Delivery’ where the PMO translates the key strategic objectives into new projects to add to the existing portfolio (and perhaps to remove some from the portfolio if such objectives have changed). This ‘Strategy Delivery’ is supported by the ‘Strategy Management’ capability.
It may be that the PMO also takes some direct ownership for the execution of large and complex programmes (or projects) that are specifically critical to a key strategic initiative, such a relocation activity for example.
The final is ‘Strategy Creation’, this refers to having a role in helping organisations decide on which strategic options to pursue (and then to translate them in to projects – Strategy Delivery- and to manage their success – Strategy Management).
This is a rare situation that a PMO has reached this position of trust and influence inside an organisation but it is the potential future for the enterprise PMO that is successfully delivered and embedded with the right sponsorship within such an organisation.
In fact as observed in the PM-Partners: PMO Trends 2012 report most PMOs don’t even really ‘get off the ground’ when it comes to any of the three levels of strategic interaction or involvement:
The PMO trend is unmistakable, with over 90% of organisations surveyed having an active PMO. Over 96% have standard project management practices or methodologies, whilst only 47% have project portfolio management practices and methodologies. This is further reinforced by the fact that only 34% of PMOs are providing supply and demand planning, highlighting that there is significantly more focus on doing projects right than doing the right projects against a tough economic climate where the right investment decisions become more important than ever.
Lesson Seven: Size Matters
It was interesting attending a PMO symposium and lecturing at a local university that the same question was raised in the space of a week – and that question was ‘Is there a minimum size for a PMO?’
Thinking across the range of small-to-medium-sized companies then the answer has to be a resounding ‘yes’, partly because if you ‘do’ projects then a PMO is generally a good idea (what we mean by a PMO can mean many things to many organisations of course and we have to take that in to account). But also because if you only ‘do’ a few projects then when one comes along that demands significant investment from an organisation then the cost of failure is greater accordingly. A much larger organisation with a large project portfolio and equally large project community will be able to absorb and manage such a demanding project far more easily (and with reduced impact of failure).
So how small are we talking?
How about ‘one’?
Can the sole project manager also be the whole PMO? Well, not really in truth – a sole project manager can’t act like PMOs of many people since they can’t act objectively with regards to their own project performance, they can’t spend time investing in self-development and in method improvements and so on.
So not ‘one’ then.
Can a PMO be implemented in a small company that has limited resources, a small team of project managers only – perhaps two or three?
Well, perhaps not a ‘PMO’ as such but certainly a virtual equivalent with shared responsibility of some of the basic PMO functions that could be allocated to the remaining project resources – perhaps one person could focus on the training of project managers, another on method enhancements, and another on community aspects, etc. In this way a lot of PMO duties could be delivered to a reasonably high level.
Yes, I think a PMO can be applicable to all scales of project business but it might not be a permanent, dedicated unit of course, but more of a ‘part time PMO’.
The biggest risk to such a PMO is the ability to offer the objective insight and support to all project managers, and the business. The smaller the team then the harder it may be to do this in a constructive, non-emotional, positive way – not everyone has the skill to do this and with a close team of peers it isn’t always easy to do (or easy to receive at times).
Lesson Eight: You Do Not Have Infinite Capacity
The PMO is, if not here to stay, at least here for the foreseeable future, and more and more executives are supporting PMOs within their organisations.
The PM Solutions State of the PMO 2012 reported that:
Most companies have a PMO (87%). Of the few that don’t, 40% are looking to implement one within a year’ which is great news for all of us champions of the PMO.
The ESI Global State of the PMO 2012 report stated:
The Project or Programme Management Office (PMO) has moved up the ranks in most organisations as more than just a warehouse of methodology, tools, and process. In an effort to impact business performance through training, methodology and project guidance, many PMOs seek to support project, programme and portfolio management in a more focused, strategic manner. Regardless of its particular position in a given organisation, the PMO is prevalent in virtually every industry and many governmental organisations.
So this is all good news. The PM Solutions report also stated ‘The greater the capability of the PMO, the greater the value the PMO contributes to the firm’, which can also be considered good news.
Good news with a ‘but’. There is a strong argument for a ‘green’ PMO to try and get as involved as possible inside the organisation but there are dangers in taking on too much. The PMO is well respected these days for the most part but there is also the risk that it is seen as a solution for everything that is not ‘operational’ and that it can deal with anything even loosely associated to project work.
For example, there are other pressure points inside the same organisations that now advocate PMOs such as the weakness that many experience in the area of executive sponsorship. The PMO can have a role here to act as a temporary sponsor, as well as a role of developing sponsorship capability internally. But that is extra work.
As another example many projects and programmes suffer from a lack of focus and resource in the area of Organisational Change Management. One large PMO ran a number of Health Checks in the most significant projects and a common issue found was in the area of OCM, with recognition of the importance and value of good OCM but with an equal lack of investment in this key area. The question then was is this a potential role for the PMO, associated as it is with projects and project success, or was this just a distraction too far?
In some businesses there is a renewed focus on good ‘technical’ capability to support project-based activity and the bringing together of these technical consultants in to one community. Some even refer to this community as a Technical Project Office (TMO), so should this TMO be linked with the PMO or should it come under the management of the PMO and be another skillset resource? Should the PMO remain ‘pure’ project management or spread itself across a wider community?
These are big and potentially distracting challenges within organisations, ones that a good PMO leader will be aware of and will have a voice to contribute to, but who will also have a mind to concentrate on the key PMO work that still needs to be done.
When your PMO is well established then consider these other matters but for now be wary of making your PMO a bottomless resource for anything and everything that the business pushes in your direction.
Lesson Nine: Make Things Better
Marissa Mayer, the new CEO of Yahoo, tasked with rescuing this once mighty company, has done many things in her first few months in charge including the creation of ‘PB&J’.
A play on the ‘peanut butter and jelly’, much loved in the US, she’s cut away ribbons of red tape and instituted an internal online service called ‘PB&J’ which actually stands for ‘Process, Bureaucracy, and Jams’. This service allows employees to complain about organisational blockages and excessive overheads that slow action and decision-making.
It is critical that a successful PMO should be a ‘balanced’ PMO and this includes getting the balance right between people and process. Both are critical to project success and both come under the remit of the PMO.
But it is the responsibility of the PMO to ‘make life better’ for the people -the project managers, so that they can effectively and efficiently do their jobs – and for the business, so that the projects are seen to be under control and delivering benefits.
As you will have seen one of the critical tasks in setting up, or improving, a PMO is to review the method or framework that the organisation uses to guide their project managers. And in many cases it is often a need to add in quality reviews and some control points or stages to improve this control. But it is always a concern that anything added should add proportional value – quality assurance should deliver quality (and not be a burdensome universally hated overhead that delivers no real benefit to anyone).
One way to do this is to think carefully when you design such a process. The other is to make sure that you have a ‘PB&J’ in place for the PMO team to let you know when you have got it wrong.
Extracted from Delivering Successful PMOs, Peter Taylor and Ray Mead, 2015, Gower Publishing, Farnham. Visit www.gpmfirst.com for the complete text of this book, the companion volume Leading Successful PMOs and to leave your advice on or questions about PMOs and their management.
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