Why aren’t Project Management Offices (PMO’s) providing enough value? Any PMO must provide continuous value to remain in business – value though is a matter of perspective.
We run our businesses day to day and we change our businesses through investing in projects.
Business people who run departments and organisations are comfortable ‘enough’ with running their businesses. They’re comfortable in setting targets and working to hit them in areas such as sales targets, process KPI’s, headcount targets, cost reductions etc. They’ve been doing this for years and it’s how they’ve built up their careers. They know their KPI’s and how those KPI’s affect their hip pockets. They understand day to day relationships and organisational politics.
What they’re not particularly comfortable with is changing the business and changing the business means investing in projects.
Why would business people be uncomfortable with projects? Here’s some of my views:
- Their perception is that projects don’t have a great track record of success. Everybody remembers failed projects right?
- Sponsoring a project means taking a risk: What happens if the project isn’t successful?
- Lots of career and political capital can be tied up with sponsoring significant projects
- KPI’s on the line = hip pocket risk (failure can result in no bonus)
- Trust factor: With many organisations doing away with internal project teams, sponsors often have outside firms and contractors changing their business
- Loss of control over the future of the business
- Being a sponsor of a major project is tough. Think about what it’s like to be a sponsor of a $100M+ Transformation program in an organisation with a poor track record of project success while still running the BAU business
- Anxiety: “I know how to run my business but I don’t know project delivery”
We know that some projects will fail. More importantly, the people who invest in projects know that a reasonable percentage will fail to deliver all of what they need. Many organisations have seen that investing in a PMO (or PMO’s), is a positive way to incrementally improve Project Management to help deliver change more effectively and efficiently.
Unfortunately, some PMO’s are failing too. All too often, the root cause is a lack of Return on Investment from the PMO’s because they aren’t generating enough value. For PMO’s though, perception of value is very much in the eye of the beholder. What the PMO Manager thinks is valuable may be completely irrelevant to some or all of the stakeholders.
There’s a number of keys here for success:
- Make sure that the PMO team have are perceptive enough to understand that the PMO has different types of stakeholders who all will have different ideas of what value looks like. Such stakeholders might be Board members, CxO’s, General Managers, customer service staff, Business SME’s, IT operations, Project delivery teams etc.
- Build relationships with these stakeholders to understand the types of services that the PMO should deliver to drive value.
- Consider adopting a services model where the PMO doesn’t try and do too much but focuses on a small number of well-defined and specific services to deliver the greatest value to the business.
- Make sure that those services being delivered are completely aligned to the needs of the business at all times. There’s no point, for example focusing PMO resources on KPI reporting if the business really needs help in determining which initiatives to invest in.
- Understand that the needs of the business change over time and that the services that the PMO provides must also evolve over time. Don’t be afraid of closing down specific services in favour of more valuable ones.
- Avoid bureaucratic processes and procedures that don’t add value.
- Regularly (but subtly) communicate the value that the PMO has provided. This could be in areas such as identifying cost savings from removing scope duplication across a portfolio, measuring the value of preventing issues materialising from risks etc. etc.
- Ensure that Portfolio, Program or even Project reporting coming from the PMO is clear, concise and above all else, insightful so that the stakeholders really value it. Don’t just aggregate and regurgitate reports produced by Project Managers. Critically analyse, assess incoming content and the implications and answer the “So what?” question for the stakeholders for them.
Businesses make stepped change improvements through the delivery of successful projects. PMO’s are there to help improve the RoI of project investments. Whether you work in a PMO or invest in one, if there isn’t enough value being provided by the PMO something is wrong and the lifespan of the PMO will be limited.
Consider adopting a service driven PMO model and make sure those services are aligned to the needs of the business and evolve over time.
What do you think? I’d love to hear from you.