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PMO positioning – Is the current state good enough?

So, what do PMOs do anyway? Since PMOs have been around for years, it seems like this would be a simple question.  However, as recently as 2012 the Project Management Institute (PMI) found that there was considerable confusion among executives, managers, and even project/program managers around reporting relationships, functions and types of PMOs.  To help address the confusion, PMI initiated a study and published the results in late 2013.    Following is a link to the study:


The study identified five PMO frameworks:

  1. Organizational Unit, Business Unit, or Department PMO
  2. Project-Specific PMO
  3. Project Support/Services/Control PMO
  4. Enterprise/Organization-wide/Strategic/Corporate/Portfolio/Global PMO
  5. Center of Excellence/Center of Competency

The study identified “PMO domains of work” that included:

  • Standards, Methodologies and Processes
  • Project/Program Delivery Management
  • Portfolio Management
  • Talent Management
  • Governance and Performance Management
  • Organizational Change Management
  • Administration and Support
  • Knowledge Management
  • Strategic planning

The report goes on to analyze PMO survey results against multiple criteria, of which a couple of points are worth noting.  While the PMOs self-reported good results for the typical PM measures of goals, time and budget, they were less sanguine about their leadership in strategy formulation and project alignment with strategic objectives.

So, back to the original question, “what do PMOs do?”  This report seems to reinforce the perception that PMOs are focused on administrative and tactical outcomes but are not positioned to drive strategic business results.  Is the current state good enough?  Or does this report identify a growth opportunity for PMOs?

Is it Agile Decision-making? Or Inadequate Planning?

Even in a well run organization, it may be necessary to cancel a project in response to new information. A new competitor may have already introduced a game-changing product. Market pricing may have changed, making a new product economically infeasible. It may be necessary to reduce capital outlays to keep the business afloat. Cancelling a project under these conditions may be a great example of agile decision making. But it could also be a sign of inadequate planning.

Whenever a decision is made to cancel a project, it is worth taking some time to reflect on the project and ask a few questions:

  • What were the flaws in the original planning premises?
  • Do these flaws indicate shortcomings with access to market intelligence?
  • Was the project clearly tied to a strategic objective?
  • If the project was tied to a strategic objective, should that objective be evaluated?
  • How was the decision made to launch the project?
  • Would there have been a different outcome with a different project team?

Cancelling a project is a very painful decision and it is human nature to want to move on quickly. An agile leader must ensure that the organization first learns from the pain, and then moves on.

On time and on budget, but did the business benefit?

The project finished on time and on budget, therefore it was a success. From a project management perspective, it would appear that this is a true statement. As project managers, we are obsessed with reaching milestones. We monitor our project burn rates with greater scrutiny than our personal bank accounts. To a project manager, schedule slippage and cost overruns are signs of poor planning or sloppy management. On the other hand, it may be a sign that the project manager is thinking like a business owner.

When faced with a decision to delay a project implementation until quality concerns can be addressed, a business owner would consider the longer term impacts. A year from now, what would be the impact of a delay? What would be the impact of a flawed implementation? The proper business decision might be a brief delay.

Some projects, particularly new product launches, are inherently risky. Success criteria may not be clearly understood and the initial project approach might require a few corrections. From a project manager’s point of view, it would be preferable to undertake a thorough project planning process until all planning premises are clear and the budget estimates are solid. From a business owner’s point of view, the business benefit of being first to market might outweigh the risk of cost overruns.

The discipline of sticking to deadlines and budgets is critical to effective project management and, in most cases, the business benefits from such discipline. However, when there is a conflict between project management discipline and business benefit, the project manager must think like a business owner and promote the best interest of the business.

Don’t let a good issue go bad

Issue management is the lifeblood of project management. With effective issue management, project managers can employ their listening and negotiating skills to help the team avoid obstacles and prevent long-term problems. Ideally, issues should be resolved at the team level and escalation should be employed only when other measures prove unsuccessful.

All too frequently, project team members undermine effective issue resolution processes, and they do so with the assistance of senior management. Here’s how it works. John is assigned by Ann, his VP, to work on a project team. John observes a potential problem with the project and raises his concern to Ann. Ann is surprised about this problem, and expresses her disappointment to Tom’s boss, Frank. Frank calls Tom into his office and demands an explanation as to why he has allowed this problem to linger. Tom now needs to work with three people to resolve an issue that could have been handled quickly had it been dealt with directly. Tom also must stifle his urge to choke John.

Once the issue is resolved, Tom should use this as a “teachable moment” for his boss, Frank. He should counsel Frank that when issues are escalated in the future, he should ask the “escalator” what steps have been taken to resolve the issue at the team level with the project manager. Unless there is evidence that the issue cannot be solved with the project manager, Frank should send the escalator packing.

Why do executives allow improper issue escalation? Perhaps they do not receive enough short-term gratification by doing their own jobs. They enjoy going home at the end of the day feeling that they accomplished something by fixing another mess. Of course, they ignore the fact that they have just set the stage for future messes.

Becoming both a quitter and a winner

Agile organizations must be prepared to adapt quickly to changes in the market. To pursue a new opportunity, they must be willing to re-deploy scarce resources by abandoning a product, service or activity that already exists. The decision to abandon is painful and is typically delayed far too long, thus depriving the new opportunity of resources.

In his book, Management Challenges for the 21st Century, the late Peter Drucker proposed that abandonment decisions must be practiced systematically. Drucker described an outsourcing firm that scheduled abandonment meetings on the first Monday of every month. At each these meetings, all levels of management complete a comprehensive review of one aspect of the business and identify what should be changed or abandoned. Twice a year, all levels of management must report on the actions taken as a result of these meetings.

Without a formal review process, unnecessary work and unprofitable business will drain resources and impede progress. If you periodically review your operations, you will find projects that should be canceled, services that are no longer profitable, and reports that no one reads. Such work should be identified and eliminated. Your competitive edge could very well result from the work you don’t do.

Life in the fast lane

You see them on the freeway, driving in the left lane, 5 feet behind the next car, staring at their cell phones and eating breakfast.  Their driving style limits their ability respond to changes in road conditions or to react to the actions of other drivers. They take an excessive amount of risk in order to save a couple of minutes. There is a good chance that, if they make it to the office safely, their driving style will carry over into their work.

Excessive speed is standard operating procedure in business today.  Staff levels have been cut but workloads have not, leaving no resources to maneuver around obstacles and pursue new opportunities.  There is an excess of activity and a shortage of results. As the Eagles (the band, not the football team) would say, life in the fast last will “surely make you lose your mind.”  Is it time to back off the throttle? Following are a few thoughts how to slow down and still improve performance.

  • Challenge the thinking behind deadlines. Is there a business need for to hit this particular date? Or is the date merely a means to create a sense of urgency?
  • Adjust your project portfolio to make sure it is complete and matches your capacity. It is common for people to work on projects that have not yet been identified, approved and prioritized. Even if they are working on approved projects, the sequence of those projects may result in bottlenecks while awaiting the availability of key subject matter experts. Try to stagger project start dates to minimize the risk of colliding priorities.
  • End a project and declare victory. When employing an agile project approach, business value is delivered incrementally according to priorities set by the business owner. After a point, the incremental business value for a given project may be lower than that of a competing project. You do not need to complete every deliverable on the backlog list. Take a look at the entire portfolio of projects and identify those that can be considered complete, then close them out and free up the resources for other work.

Belts and Suspenders

Have you ever seen a fellow wearing both a belt and suspenders? Not only is this a Class B felony among the fashion police, but it is redundant. Either one is sufficient to hold up a pair of pants. While this is a rare fashion faux pas, the thinking behind it is quite common in business processes.

Consider business processes that require multiple management sign-offs. How often do these sign offs result in catching an error that would have otherwise been missed? If the answer is “never,” then the sign-off steps are worse than wearing belts and suspenders. The step is not only redundant, it adds multiple days of lag time in the process. A lean, nimble organization should not tolerate a design faux pas such as this.

Real World Project Risks

If you are responsible for planning a project, you will need to perform a risk assessment. You will need to identify and make plans to mitigate those events that will impact your project’s schedule, cost and quality. Instead of starting with the blank sheet of paper, begin your risk assessment with some of these common events.

A New Sheriff Comes to Town

It may come from a merger. It may be the result of a management shakeup or even a promotion. Whatever the reason, there is a high probability that the sponsor of your project will move on within the next 12-24 months. Whoever replaces your sponsor will challenge every major decision made by your sponsor, including your project. If you are lucky, your project will be canceled. If not, you will be ordered to meet your project objectives with fewer resources. The mitigation for this risk is to break your project down into smaller phases. If you wait more than six to nine months for your first implementation, you are taking on considerable risk.

The vendor does not deliver

This risk is so common that it is almost a certainty. Having worked on both sides (vendor and buyer), it is easy to understand how this happens. The vendor is in the business of selling services, and sometimes they overachieve. The vendor may have the capacity to handle, for instance, two new customers. But they sell three – and you are number three. At the same time, the buyer finds it necessary to “get tough” with the vendor. During contract negotiations, your management will extract commitments for unrealistic deadlines and low prices. The vendor will agree to the terms then put their least experienced resources on the project (the best resources go to the customers who pay full price). The best mitigation is to encourage the buyer’s contract negotiator to leave his machismo out of the negotiations and focus on the success of the project. If that does not work, look for opportunities to build in a significant risk buffer in your project. You will need it.

The “solution” does not work

Perhaps your project will rely on a “state of the art” programming language, an advanced database management system, or a new project management methodology. If so, your project will become a “learning experience,” and it will be a very expensive education. This risk must be mitigated by starting out small and then expanding. Begin with a proof of concept, and then scale up from there.

The primary subject matter expert (fill in the name) does not start on time

Even in very large companies, there are relatively few true subject matter experts – people who know the both the business and the systems. These people are incredibly busy and they are already working on multiple projects. Your subject matter expert may be working on a project that will finish late and thus delay your project. To mitigate this risk, minimize your reliance on this person and try to schedule around her availability. Avoid relying solely on her manager to determine when she will be available. Have an off-the-record conversation to determine when she will really be available.

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