From Traditional to Non-Traditional Projects

By Harold Kerzner, Ph.D. | Senior Executive Director for Project Management, IIL

Background

For almost four decades, companies on a worldwide basis struggled with the creation of a singular methodology that could be used to manage all their projects. The singular methodology was a necessity for senior management that was reluctant to surrender their “command and control” posture over the project management community. The methodologies were designed so that senior management could retain some degree of standardization and control from the top down through the hierarchy and that project teams would not be allowed to make decisions that were reserved for the senior levels of management. Executives, marketing and sales personnel were fearful of what power and authority project managers might obtain.

Today’s project managers do not realize the degrees of mistrust that some of us had to endure as project managers years ago. At that time, if the choice were up to executives in the contractors’ organizations, project managers would not exist, and all projects would be managed by functional management, marketing or sales personnel. But the clients and stakeholders preferred to talk directly to the project managers (rather than communications with just sales and marketing personnel) and encouraged the contractors to recognize the need for creating project management positions.

The Growth of Nontraditional Projects

Singular methodologies provided the executives with the command and control they desired but there were some risks. Executives tried to enforce the belief that the singular methodology was the solution to their project management concerns and that one-size-fits-all, which meant that every project in the company would be required to use the same, singular approach. Unfortunately, executive soon began to realize that not all projects can use the one-size-fits-all methodology. Operational or traditional projects may be able to follow a singular methodology, but strategic and other forms of nontraditional projects may have to be managed differently.

The approach that companies then undertook was to have strategic and nontraditional projects managed by functional managers that were then allowed a great deal of freedom in how they chose to manage the projects. Executives trusted functional managers more so than project managers and were not perceived as a threat to senior management.

By the turn of the century, the number of nontraditional projects was growing. More trust was being placed in the hands of the project managers and companies began recognizing that the one-size-fits-all approach needed to be modified or replaced with flexible methodologies or frameworks, such as agile or Scrum, which provided more freedom and authority to the project managers.

The Impact of the Growth in Nontraditional Projects

In some companies, the number of nontraditional projects was perhaps 200% more than traditional projects as seen in the center of Exhibit 1 below. As the need for more flexibility in project management took hold, changes began to appear in the way that some of the traditional processes were being used.

 

Exhibit 1. Changes in Our View of Project Management Processes

 

The Hexagon of Excellence

The hexagon of excellence identifies some of the changes that companies made as they began to use project management on the nontraditional projects:

  • Integrated processes: Project managers were now expected to make business-based decisions as well as the traditional technical or project-based decisions. As such, business processes were now integrated with project management processes in flexible project management approaches.
  • Culture: Project management was now recognized as processes that can and will affect the entire company rather than just specific functional areas. As such, a project management culture that supports company-wide cooperation must be developed and enforced by senior management.
  • Management Support: Management support is essential. Senior management must realize that they must actively function as project sponsors and serve on governance committees. They must also realize project governance is NOT the same as functional governance and must be willing to understand and accept new levels of authority, responsibility and decision making.
  • Training and Education: Providing training to just the project managers no longer works. If a corporate-wide project management culture is to be created, then it is possible that the entire organization may need to undergo some training.
  • Informal Project Management: Part of the training must promote informal project management practices that are predicated upon people working together and without being forced to rely upon the use of superior-subordinate relationships. Titles and levels of authority should not be critical when working on project teams.
  • Behavioral Excellence: Human resource management courses will grow. Rather than emphasize the traditional behavioral theories, the focus will be on communication, cooperation, teamwork, and trust, with trust perhaps being the most important item.

Capturing Best Practices

For decades, we relied entirely upon capturing best practices, but just those related to project management. Today, we believe that, if you are managing a project, you are managing part of a business and are expected to make business decisions as well as project decisions. Therefore, we are now capturing best practices in all parts of the business rather than in just project management. What we discover as part of our findings are now part of an information warehouse rather than just a best practices library. As seen in Exhibit 1, we are now developing a structured process by which all forms of best practices can be discovered.

Project Management Maturity Models

Typical project management maturity models, as shown in Exhibit 1 still apply, but more models are entering the marketplace. In Exhibit 1, Level 3 may be replaced with flexible methodologies rather than a singular approach. Level 4 is expected to grow significantly as companies realize that benchmarking against companies that are world class leaders in project management may give better results than just benchmarking against companies in their own industry. In Level 5, companies are demonstrating a greater willingness to implement changes in the best interest of the company rather than worrying about their own power base and authority.

Networked PMOs

Companies have recognized the need for PMOs for more than three decades. However, there were significant power struggles for which executive would maintain control of the PMO. There was a belief that “information is power” and whichever executive would control the PMO would become more powerful than his/her contemporaries.

As nontraditional projects grew, there was an apparent need for multiple PMOs. The situation becomes more complex as companies began expanding globally and recognized the need for geographically dispersed PMOs. But some executive still felt threatened by the PMO concept and opted for the creation of “master” and “subordinate” PMOs. Today, this concept seems to have diminished as companies have recognized the importance of networking their PMOs as shown in Exhibit 1.

Conclusion

There is significantly more information we could have discussed related to each component in Exhibit 1 resulting from the growth of nontraditional projects. But what appears obvious is that change is happening and appears to be for the betterment of the project management community. Where project management will take us, we do not know. But what is certain is that there is a growth in the use of nontraditional projects and the accompanying project management processes.

Have a question for Dr. Kerzner? Leave your comment below.

 

About the Author
Harold Kerzner (M.S., Ph.D., Engineering, and M.B.A) is IIL’s Senior Executive Director for Project Management. He is a globally recognized expert on project management and strategic planning, and the author of many best-selling textbooks including Project Management: A Systems Approach to Planning, Scheduling, and Controlling and Project Management 2.0. Dr. Kerzner has previously taught project management and business administration at Baldwin-Wallace University, engineering at the University of Illinois and business administration at Utah State University. He obtained his industrial experience at Thiokol Corporation where he held both program management and project engineering responsibilities on a variety of NASA, Air Force, Army, Navy, and internal R&D programs.

PMBOK and PMI are registered marks of the Project Management Institute, Inc.


Capturing Project Knowledge

By: Greg Bailey

As the saying goes, “failure teaches us more than success”. But when we consider the number of projects that fail, and project managers’ struggles to capture learning as they implement projects, it seems project management may be an exception.

A 2013 survey found that 50 percent of businesses had an IT project fail during the previous year. What’s more worrying, however, is that not much changed in the following three years. A 2016 survey by the same company found that the statistics have in fact gotten worse: with 55 percent of businesses reporting they had worked on a project that had failed. While project managers are clearly working hard, there appear to be systemic problems in how common issues are being resolved across the industry.

The key differentiator is that learning from failure implies learning from our mistakes. To do that, we must identify and acknowledge challenges, obstacles and human mistakes during the project lifecycle. And to do that, we must consistently capture project knowledge. Without capturing the mistakes (as well as everything else) we encounter along the way, how can we as project management professionals learn from them?

Failure is a result of mistakes 

It is highly valuable to understand how mistakes arise, so you can then do something about them. Common issues that arise include:

  • Adding more people to a late project. When a project is behind, it’s tempting to add more people to the project to speed up completion. But filling new additions in on the situation will likely take more productivity away from existing team members than will be added by new ones.
  • Overestimating savings from new tools or methods. Productivity is rarely improved in giant leaps, no matter how many new tools or methods are adopted. It is a gradual process, yet the project aims do not reflect this.
  • Insufficient risk management. Failure to proactively assess and control the things that might go wrong with a project can cause projects to fall behind and go over budget.
  • ‘Silver-bullet syndrome’. After finding initial success, project teams latch onto a single practice or new technology and expect it to solve all their problems from there on out.
  • Switching tools mid-project. Often a result of making snap decisions, the learning curve and inevitable mistakes that accompany implementation of a new tool can void any benefits when in the middle of a project.

The power of hindsight is a wonderful thing. For many project managers, they will address any problems they encountered after the project’s completion—usually by way of a project summary. The following are the most common activities and approaches Project Management organizations use to capturing project knowledge, per the Project Management Institute (PMI)® study on Capturing the Value of Project Management through Knowledge Transfer:

  • Lessons learned/post-mortem debriefings (81%)
  • Subject matter experts (77%)
  • Copying documents to a centralized repository (72%)
  • Company Intranet (68%)

Post-project debriefings are the most common form of capturing knowledge. But the reality is, by waiting until after the dust has settled to address these problems, you risk forgetting the problems themselves or how you solved them. If project knowledge is not captured or shared, you risk ‘reinventing the wheel’ and failing to learn from (and therefore repeating) your mistakes.

Capturing project knowledge through developing a culture of continuous improvement should be the ideal goal for a project manager—where your team members will proactively decide to immediately record the lessons they’ve learned or directly mention them to you. But it will take a lot of time and dedication before this becomes a reality. So how do you get started?

Capture project knowledge at all times

  • Constant improvement

In other words don’t wait until your next project to do things differently, but act immediately and plan ahead. It requires learning lessons as you encounter them. This is difficult, especially when your focus is on the project at hand. But it can be done.

  • Documenting both the positives and negatives you and your team members experience

It is the individual responsibility of every project team member to take the opportunity to learn—documenting this as soon as possible. Project Managers and team members should participate together in sessions—both during and after projects—where these experiences are reviewed to make decisions on how to improve on future and current projects.

  • Reporting and analyzing the lessons you have learned

From your failures and your successes, are the next steps you should take to implement a culture of continuous improvement. By analyzing lessons in full, you can develop practices to improve on future projects and ensure you don’t become another failed project statistic.


Greg Bailey is Vice President WorldWide Sales at ProSymmetry, the company behind the state-of-the-art resource management tool, Tempus Resource


Senior Executives are from Somewhere; PMO Directors are from Somewhere Else!

By J. LeRoy Ward,  PMP, PgMP, PfMP, CSM, GWCPM, SCPM   |   Executive Vice President – Enterprise Solutions, IIL 

The recently released 2017 Pulse of the Profession®, Success Rates Rise: Transforming the high cost of low performance, from the Project Management Institute (PMI)® brings us promising news:

Project success rates are rising.

As the report states: “For the first time in five years, more projects are meeting original goals and business intent and being completed within budget.” It goes on to say that the amount of “wasted” dollars per billion spent on projects has declined twenty percent from a year ago. This is certainly good news for all those organizations who have made the significant investment in improving overall project management maturity, and should serve as an inspiration for others that progress can be made with serious commitment to excellence.

But buried in the appendix, where PMI® breaks out the responses by various categories of respondents, there’s another story that’s of great interest—and that is the different perceptions held by Senior Executives and PMO Directors on their organization’s success in performing certain critical activities.

Following is the survey question and the responses from the two groups. (Note: I’ve combined the Excellent and Good scores for the Senior Executives and PMO Directors for their responses to each question.)

How would you rate your organization’s success in performing the following activities over the last three years?

Senior Execs
Excellent/Good
PMO Directors
Excellent/Good
Formulating strategy appropriate for changing market conditions

90%

56%

Prioritizing and funding the appropriate initiatives/projects

83%

54%

Feeding lessons from successful strategy implementation back into strategy formulation

77%

51%

Successfully executing initiatives/projects in order to deliver strategic results

82%

34%

Feeding lessons from failed strategy implementation back into strategy formulation

66%

31%

Clearly, the view from the top (that is, from the Senior Executive’s “perch”) is that the organization is a lot more successful at these activities than viewed from the PMO Director’s level. While there are significant differences of opinion in each area, I’d like to focus on the issue of Successfully executing initiatives/projects in order to deliver strategic results (82% vs 34%).

It’s as if these groups don’t even work in the same organization! Or, maybe even on the same planet.

Certainly, there are objective measures, when used, that can definitely confirm whether a project has been successfully executed and value has been delivered. To be sure, organizations are going far beyond the triple constraint of time, cost, and scope to measure success, but surely we should be able to tell whether a project has been successful or not. But there’s a 48-point difference in opinion on that score. I don’t know about you but that’s a “head scratcher” to me.

But, the differences in perception in the other answers are also a bit hard to decipher.

The key question is why? Why do we have such a marked difference in perception between Senior Executives and PMO Directors?

Are PMO Directors congenitally negative? Are Senior Executives hopelessly optimistic?

Do PMO Directors, who are close to where the “rubber meets the road,” see things that Executives just don’t, don’t want to, or just can’t see?

Do Senior Executives, by virtue of the fact they are accountable for darn near everything in the organization, give such high scores because it’s a direct reflection on their management capability?

To be sure, there is no single answer that can explain the stark differences between these two groups, and I bet each person who reads this blog will have their own, very valid, ideas about why this is the case.

What I do know, is that such disparate views indicate the yawning gap, the huge disconnect, between Senior Executives and PMO Directors. And the only way I know of to close this gap is relentless communication between the two. At the very least, PMO Directors and their Senior Executive counterparts should—in fact, must—agree on project success criteria.

After all, PMI’s Pulse says project success rates are climbing, but how can they climb in any organization where there is such a disagreement over what success really means?

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J. LeRoy Ward
is a highly respected consultant and adviser to Global Fortune 500 Corporations and government agencies in the areas of project, program and portfolio management. With more than 38 years of government and private sector experience, LeRoy specializes in working with senior executives to understand their role in project and program sponsorship, governance, portfolio management and the strategic execution of projects and programs.

 

Pulse of the Profession, Project Management Institute, and PMI are marks of the Project Management Institute, Inc.


5 Resolutions PMO Directors Should Make for 2017

By J. LeRoy Ward, PMP, PgMP, PfMP, CSM, GWCPM, SCPM   |   Executive Vice President – Enterprise Solutions, IIL 

Many people hate resolutions, and in fact, “resolve” not to make them. But resolutions can help give us a direction for the coming year; at the very least, they can make us think about what we want to accomplish.

So, with that in mind, here are five areas that PMO Directors should think hard about for 2017.

  1. Establish, and keep everyone focused on, key project performance metrics

Project Management Offices (PMOs) exist largely to improve project performance in an organization.  So, their worth, or value, is directly tied to how well projects get done. And the only way to know if performance is improving year over year is get the right metrics in place and monitor them constantly.  It’s not the quantity of metrics you use, it’s their quality. Sure, you may be using time, cost and scope, but there are certainly others that can tell the real story of improvement. If you can nail these, you stand a good chance of surviving in a world where the PMO mortality rate is quite high.

  1. Beat the “business value” drum loudly and often by zeroing in on benefits realization.

Projects matter. That’s why organizations spend precious time and money doing them. And they do them for the ultimate benefits they are (or should be) designed to deliver. What good is implementing a new CRM system if the sales people don’t use it? It’s not the deliverable that counts; it’s the end result. As you are reviewing project proposals and overseeing execution of critical projects, keep your eye on what the outcome of the project should be—not what deliverables are produced. Keep asking questions regarding outcomes, and your project managers, and others, will get the message. When you deliver benefits, you deliver value.

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  1. Keep an eye on how politics can up-end your portfolio and be ready for change.

Brexit and Trump. These two dynamics alone will inevitably cause most organizations to review and reassess how they’re going to do business in the coming years. And that reassessment will result in portfolio reviews with current projects being terminated and new ones created, and quickly. PMO Directors need to be ready for abrupt change: change in direction, change in leadership, and change in project mixes. Will possible financial deregulation cause the need for additional projects? Of course. Will Brexit’s trade and immigration impacts have companies scrambling to change their practices? You bet.

  1. Be the “center of innovation” in projects.

Innovation: it’s an overused and jaded term but it’s never been more important to organizations today. Business models in many industries are quickly fading into irrelevance, and organizations are struggling to survive in light of massive global and technological change. General Electric now bills itself as the leader of a digital industrial transformation with an outpost in Silicon Valley to tap into that rich technological ecosystem. Digital transformation is everywhere. Where’s the innovation in your projects? As PMO Director, search and advocate for those projects that don’t just “keep the lights on,” but illuminate new ways of doing things and that create new products that customers will clamor for.

  1. “Lead the Charge” in Agile

 The Agile “bandwagon” is one you may (and probably should) jump on, and fast. Agile is not a fad. It’s here to stay. It’s evolving from an IT-focused approach to getting work done to one used to build cars, jet fighters, and influence clients through more effective marketing approaches. In other words, it is a way of getting work done that can be applied wherever projects exist. PMO Directors need to lead the charge in Agile.  Help your organization understand its potential, hire the right coaches to work on the right projects, have people trained, decide on the right metrics and get down to business. Standing by while others take the lead diminishes your role in the organization. There’s no faster way to value—for you, your PMO, and the company—than making Agile a part of how work gets done.

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LeRoy Ward

J. LeRoy Ward is a highly respected consultant and adviser to Global Fortune 500 Corporations and government agencies in the areas of project, program and portfolio management. With more than 38 years of government and private sector experience, LeRoy specializes in working with senior executives to understand their role in project and program sponsorship, governance, portfolio management and the strategic execution of projects and programs.


Want to Boost Your Scrum Projects’ Success Rate by 50%? Run Them Through a PMO

By J. LeRoy Ward, PMP, PgMP, PfMP, CSM, GWCPM, SCPM   |   Executive Vice President – Enterprise Solutions, IIL

Catch LeRoy’s presentation, “Agile: The One Bandwagon You May Want to Jump On!,” at the virtual Agile and Scrum conference on May 4th.

The 2015 State of Scrum Report (the most recent) released by the Scrum Alliance has several interesting, if not head-scratching, findings. Here are two that really stopped me dead in my tracks.

First, the report stated that “the overall success rate of projects delivered using Scrum is 62%.”  

This floored me. Why? Given all the hype and hoopla about Scrum and all of its intended benefits, I would have assumed that this number would be quite a bit higher. Heck, 62% isn’t much better, if it’s better at all, than projects completed with more traditional methods.  Why go through some wrenching organizational change, the change that Scrum often means for large traditional IT shops, when, in the end, the result is the same?

But it was the second finding that got my attention, and fast.

The report also disclosed, based on the respondents answers, that “Scrum projects run through a project management office (PMO) have a 93% success rate.”  

That’s a 50% improvement over Scrum projects not run through a PMO. A 50% improvement in almost any measure is simply astounding. Hey, look at it this way, if your boss called you into his office and gave you a 50% raise that would get your attention wouldn’t it? You bet.

Unfortunately, the survey offers little if any insight as to why running Scrum projects through a PMO results in such a performance boost. Apparently, they didn’t have any follow-up questions such as “Why does the PMO matter so much?” Or, what’s the ONE THING a PMO does that really makes a difference when implementing Agile?” Too bad. That’s a lost opportunity to help organizations understand what services a PMO provides that can lead to such gains. Maybe the Scrum Alliance will add those additional, clarifying questions, in their next survey. I hope so.

Let me offer a few plausible reasons why a PMO can help improve Scrum project success.

To do so, I reviewed the results of a number of “State of PMO” and “State of Agile” reports for some answers. In one report, when respondents were asked “Why is Agile difficult to implement?” the answers included:

  • Changing the culture
  • Changing from traditional methods
  • Right leadership to drive change
  • Upskilling teams
  • Understanding Agile’s value
  • Motivating teams to use Agile

Perhaps running Scrum projects through PMOs who were catalysts in changing the culture, who helped folks change from traditional waterfall to Scrum with concrete suggestions, who had the type of bold leadership required, and who made sure all the folks involved in Scrum projects were trained, and not just the Scrum masters, were reasons for greater success.

Other findings in these various surveys reveal that not many PMOs are taking the “bull by horns,” or any other sensitive place (like the tail!), to help with a transition to Agile methods. For example, when asked “How are PMOs supporting Agile?” only 4 in 10 said they were providing Agile training, and only a third claimed they were helping with a new methodology, approach or new reporting processes. Twelve percent didn’t even know how the PMO was helping. That’s not a significant level of engagement.

Hundreds, if not thousands, of organizations have bought into the promise of Agile, yet by all accounts an overwhelming majority are struggling to implement it.

The PMO has a huge role to play, and when done well, working in conjunction with a committed Senior Management team who invests in Agile training and change management practices, the results can be astounding.

A 50% improvement in project success should have every Senior Executive working with his or her PMO manager to see if they can realize those types of gains. Sitting around bellyaching about poor project performance when opportunities to improve are staring us all in the face should prompt action, and FAST.

More insights await at the virtual Agile and Scrum conference, going live on May 4th. 5 keynotes and 20 sessions to choose from, plus networking and PDUs/SEU®s.

Ready to improve your project success rates? IIL can help. Request a free consultation today.

[trx_infobox style=”regular” closeable=”no” icon=”inherit”]LeRoy Ward

About the Author

J. LeRoy Ward is a highly respected consultant and adviser to Global Fortune 500 Corporations and government agencies in the areas of project, program and portfolio management. With more than 38 years of government and private sector experience, LeRoy specializes in working with senior executives to understand their role in project and program sponsorship, governance, portfolio management and the strategic execution of projects and programs. [/trx_infobox]


What's In a Name?

By Alan Ferguson   |   Approved Trainer for PRINCE2®, MSP®, M_o_R®, MoP®, P3O®, Change Management™, Managing Benefits™, AgilePM™, APM IC & APMP

In a portfolio, programme or project office we do much more than provide administrative support.

But how can we describe our work in a compelling and accurate way?

When I first came across an “office” (See? I’m already having problems describing who we are and what we do) it was called a Project Support Office – PSO. A colleague of mine had been drafted in to set it up at the same time as I arrived in the organization and frankly neither of us knew very much about project management. Mind you, that was the 1980s and I don’t think anybody really knew much about project management then. He ended up with a couple of admin assistants working for him.

If I recall correctly one was, frankly, not very helpful. The other was best described as a velvet hammer. Her job was to make sure us project managers did a weekly progress report. Of course we were all far too busy and important to do that. But she would arrive in my office at the same time every week and it didn’t matter what else I was doing, by the time she left she had the information to type up a progress report.

Things have moved on enormously since then and the range of names of offices has grown exponentially: PPSO, PMO, EPMO, even Change Delivery Office. I’ve seen them all.

I’ve been heavily involved with a publication called P3O – portfolio, programme and project offices. I’ll use the title of this guidance manual to help us think about naming and describing what we do.

What does “P” stand for?

When I meet someone from a PMO, I ask them what the “P” stands for. That often tell me that it stands for, say, project and programme. My response is: “Well isn’t that two ‘P’s?” There is our first hurdle. We have to understand the difference between a portfolio, programme and project, as defined in the organization, and take a view on which if any of those change delivery practices we are supporting.

“M”. Really?

OK, we do a lot more than support – that’s agreed. But are we really managing? Surely if the project manager manages the project, what does the project management office manage? In some circumstances the PMO is genuinely a decision-making body. That’s a very centralized model. In other circumstances there is a balance of power between the PMO and project managers. However, at times the PMO is suffering from “grade inflation”. It’s really a support office but it calls itself a management office.

I don’t mind if the organization is using a centralized or a decentralized model; there are pros and cons to both. Although I do think there needs to be clarity about who does what.

What do I do? I Office!

Most job titles link to a verb. Going back to my old friend the project manager, he or she manages. A portfolio director…well, directs. Someone who works in an office….offices? Oh, we don’t have a verb for what we do in our office.

Here’s my elevator pitch.

It would be wrong of me to share these problems with you if I didn’t have a solution. The elevator pitch I’ve come up with is:

 “My team and I enable and restrain change.”

 

How do you describe your work?

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Alan Ferguson is a consultant and trainer in Agile Project Management, PRINCE2, MSP, P30, M_o_R, MoP and Project, Programme and Portfolio Management with hands on knowledge of managing in governmental, IT and engineering fields as well as extensive experience in training, consulting and coaching.


Ways That a PMO Can Fail

By Deborah A. Dell, PMP – Director, IBM Project Management Center of Excellence and Harold Kerzner, Ph.D. – Senior Executive Director for Project Management, IIL 

Deciding to implement a Project Management Office (PMO) is easy. Being able to implement the decision, however, may be difficult because of all of the roadblocks that could exist. As companies recognize the need for project management, the need for the centralization of project management knowledge becomes apparent. Unfortunately, companies tend to focus on the good things that can happen without fully understanding the roadblocks that can impede successful implementation.

Simply stated, “Be careful what you wish for.”

UNCLEAR MISSION STATEMENT

There must be a valid reason why a company wants to establish a PMO. All too often, the PMO is established to either appease project managers or in the belief that the company must follow an example set by their competition. This is the result of a lack of vision on the benefits of a PMO.

Regardless of the reason, there must be a clearly understandable mission statement signed off by one or more senior managers. An unclear mission statement encourages failure. People may not understand the role of the PMO. Likewise, PMO members may not understand their own roles and responsibilities and end up working on activities that may have no direct relationship to corporate objectives. All of this can result in a lack of direction. For example, the PMO members may assign themselves work on projects that are self-serving rather than supporting the overall business. Or, they may commit vast resources for the support of a single project and disregard other projects that may have a greater need for their services or can provide a much greater value to the business.

Mission statements must be future oriented rather than focusing on the here-and-now. Typical goals for mission statements can include:

  • Continuous improvements to the project management processes: Without continuous improvement, the organization can become complacent and miss opportunities.
  • Opportunity identification: The PMO must help the organization achieve its strategic goals. Without opportunity identification, the organization worries about today rather than tomorrow.
  • Change management champions: Opportunity identification and continuous improvement most frequently require organizational change. Unless the PMO has the necessary skills to take the leadership role in organizational change, the change may never occur and the PMO fails to achieve its mission.

FAILING TO FOCUS ON THE IMPACT TO THE BUSINESS

The mission statement for the PMO should be to serve the overall business needs, not merely the needs of selected projects. Therefore, the PMO must be willing to make decisions that are in the best interest of both the business and the projects, all aligned with business strategy and business objectives. While it is true that some PMOs are more operational than strategic, the alignment of business decisions with business strategy must still exist.

The PMO is expected to add business value to the company. If the company cannot recognize the business value created by the PMO then the PMO has failed and will most likely be disbanded.

FAILING TO GAIN IMPLEMENTATION SUPPORT

Deciding to implement a PMO is a lot easier than gaining support during implementation. There are several activities that can be assigned to a PMO. A partial list of activities might include:

  •           Strategic planning for project management
  •           Benchmarking internally and externally
  •           Cost reduction and continuous improvements efforts
  •           Mentorship for new project managers
  •           Capturing lessons learned and best practices
  •           Maintaining a problem-solving hotline
  •           Creating templates
  •           Assisting Human Resources (HR) in developing a project management career path
  •           Supporting education and training for project management
  •           Assisting projects with disaster recovery plans
  •           Assessing risks
  •           Supporting customer relations management activities
  •           Supporting executives during portfolio selection and management
  •           Capacity planning efforts
  •           Maintaining a Project Management Information Systems (PMIS)
  •           Guardian of project management intellectual property

The order in which these activities are implemented is important. For example, if the first activity assigned to the PMO is to support strategic planning activities, even if just related to project management, some executives may feel threatened by the existence of the PMO with the belief that the PMO will now be responsible for some of their efforts. The result may induce a lack of support for the PMO. It is therefore essential that PMO activities be assigned in the correct order such that support will be forthcoming. Also, trying to do too much too soon can lead to PMO failure.

DETERMINING PMO HEADCOUNT

It is very easy to over-staff a PMO. Several years ago, a company determined the need to implement project management and created a project management methodology. The company was losing contracts to their competitors and the need to become good at project management in the shortest amount of time was essential.

The company created a PMO with a staff of more than 50 people. The majority of the people were transferred from business units to the PMO. The business unit managers eventually filled all of the vacated slots.

Three years later, the company had created a project management methodology and believed that they were now competitive in the marketplace. The PMO was treated as a cost center where the salaries of the employees in the PMO were part of the overhead structure of the company. Unfortunately, after economic conditions in the marketplace became poor, executives began looking for ways to reduce costs, beginning of course with the overhead structure of the company. The decision was made to reduce headcount in the PMO to less than 15 people. Unfortunately, there were no positions available in the company where these employees could be reassigned and they were eventually terminated. People began believing that an assignment to the PMO was not a career path opportunity and the support for the PMO diminished.

While we tend to focus on over-staffing a PMO, there is also the risk of understaffing the PMO. If the PMO is assigned more work than it can handle, then the effectiveness of the PMO will be the subject of discussion and the PMO may be eventually dissolved. This will most certainly occur if the PMO is unable to provide the value that is expected from it.

THE FAILURE OF SUCCESS

Several years ago, an auto supplier in Detroit established a PMO with a mission statement that included the creation of a world class methodology for automotive products. The PMO accomplished their task and the number of project successes grew. The PMO eventually became complacent and began focusing on getting people to use the methodology. Three years later, senior management began asking what continuous improvement efforts took place over the past three years. Much to their surprise, no improvements had taken place.

The organization had become complacent. The PMO lost their vision of the future and had spent three years worrying heavily about the present. When significant successes occur, it is a natural tendency to avoid “rocking the boat” and continue doing exactly what they had done in the past.

When a PMO becomes stagnant, executives wonder why the PMO still exists. Most PMOs are overhead rather than direct labor and, as such, are seen as opportunities for cost reduction. When the PMO becomes stagnant, people may believe it has accomplished its mission and should be shut down.

FAILING TO USE INTELLECTUAL PROPERTY CORRECTLY

Project management intellectual property consists of proper understanding of the organizational process assets, the capturing and further use of best practices, an understanding of information stored in the knowledge repository systems for project management, and taking advantage of project management educational opportunities.  This intellectual property is designed to improve one’s project management skills by learning from what others have done.

There are two, and only two, ways by which an individual can become good at project management: you can learn from your own mistakes or learn from the mistakes of others from the intellectual property provided to you. Learning from your own mistakes can be a tedious and costly process. The organization may be willing to allow some projects to fail, either partially or totally, in order for learning to take place. That’s somewhat unfortunate, but this was a way of life in the early years of project management, well before the existence of PMOs. Project management knowledge is intellectual property that firms must use effectively.

The creation of a project management methodology, accompanied by forms, guidelines, templates and checklists, has the benefit of providing standardization and repeatability but does not necessarily provide project management education. Rather, it simply provides a roadmap. Educational opportunities must be provided to the workers.

There are several ways that project management learning can take place: college/university coursework, onsite specialized training, knowledge transfer and certification programs. Effective PMOs are actively involved in onsite specialized training, knowledge transfer and certification programs. The PMO must make sure that the course content and possibly the examples provided by the instructors are applicable to the company and/or industry. Otherwise, the workers may respond that “the information was nice to know but doesn’t apply to us.” Some companies have certification boards which must approve all certification program to guarantee a good fit with the firm’s educational goals.

Most companies are willing to provide their workforce with educational opportunities. In project management, it is the responsibility of the PMO to make sure that the correct project management education is provided so there are benefits for both the firm and the workers.

FAILING TO COLLECT INTELLECTUAL PROPERTY

Knowledge transfer comes from the collection of lessons learned and best practices. It can be discovered from both successes and failures. The PMO is the company’s guardian of project management intellectual property and must make sure that the information is both gathered and correctly disseminated to the workforce. Even though there may be best practice owners assigned throughout the company, as well as subject matter experts to evaluate whether something is a best practice, someone from the PMO must accept the leadership role for the collection and disposition of the intellectual property.

When best practices are not managed correctly, people end up learning from their own mistakes rather than from the mistakes of others. Mistakes are often repeated, not only by individuals within the same division, but also by individuals in sister divisions. The failure of the PMO to collect intellectual property can significantly impede or even prevent continuous improvement efforts from occurring.

FORCING ORGANIZATIONAL CHANGE

The capturing of best practices and lessons learned often leads to organizational change. The PMO functions as the leader for that change. Not all changes are necessary and some changes that are necessary may be delayed until sometime in the future. Forcing unnecessary organizational change or dealing with a culture that tends to resist change can cause the PMO to fail.

NOT UNDERSTANDING CULTURE AND NEEDS

People tend to dislike changes to their comfort zone. In such cases, it is not uncommon for people to bad-mouth the PMO and recommend it be dissolved. Before recommending any type of change, the PMO must understand the culture and the needs of the individuals. Most people seem to understand the need for change, but it is the how and when that people are concerned about.

In one company, the PMO implemented changes to the project management methodology that resulted in several decisions that were normally made by some of the blue collar workers to now be made by the leadership of the projects. The PMO was unaware that having the authority to make at least some decisions, no matter how small, could be seen as an opportunity for some blue collar workers to advance. Removing this opportunity from the blue collar workforce resulted in a lack of support for the PMO.

In another company, the PMO was asked to create a monetary award system for people working on project teams. The PMO put the system into action without considering the potential impact on the blue collar wage and salary administration program. Some blue collar workers assigned to project teams eventually earned more money than their colleagues that were at a higher pay grade because of project bonuses. Now, blue collar workers were fighting to work on project teams rather than performing their routine non-project work requirements.

MAKING THE PMO A PROFIT CENTER

Several years ago, a company with a well-established PMO had a mission statement that focused heavily upon the future. All of the project managers were assigned to business units but reported on a “dotted line” basis to the PMO for the sharing of intellectual property and continuous improvement efforts. The head of each business unit had overall responsibility for profit and loss (P&L) for the business unit and this P&L responsibility was subsequently handed down to each of the project managers. Business units were treated as profit centers but the PMO was regarded as a cost center.

The company then hired in a new president who decided that all of the project managers had to be centralized and with “solid line reporting” to the PMO. The project managers were still required to maintain P&L responsibility for each project. This act converted the PMO from a cost center to a profit center. The PMO now focused on the profitability of projects.

The results were devastating. Long term continuous improvement efforts were avoided in favor of short term efforts to increase profitability. Project management education was viewed as an unnecessary expense. The PMO had lost its identity. While rank has its privileges, and the president can restructure any way he/she desires, making the PMO a profit center resulted in the failure of the PMO.

FOCUSING ON THE PROFITABILITY OF A SINGLE PROJECT

While it is a fact that most PMOs do not have the responsibility for P&L, they are still expected to support all projects equally for the maximization of corporate profitability. The PMO can fail if it overemphasizes the profitability and support for one project at the expense of all of the other projects. This often occurs when a project “cries for help.” PMO employees may also shirk some of their other duties to support just one project. Supporting a project in trouble is certainly the right thing to do, but restraints should be imposed on the amount and level of support provided.

IMPROPER STAFFING OF THE PMO

There are not very many courses in the marketplace designed to train people in how to work in a PMO. People are expected to bring with them the necessary skills when assigned to a PMO. Some people believe that the three most important skills are: process skills, communication skills and project management skills. Too often people accept temporary assignments to a PMO or are permanently assigned to a PMO without fully understanding the roles and responsibilities of the PMO. Sometimes, the executives that support the existence of the PMO provide ill-defined requirements for roles and responsibilities resulting in the wrong people being assigned to the PMO.

Project managers are quite adept at speaking in project management lingo. This is acceptable when managing a project and interfacing with project personnel, but when assigned to a PMO, you must be able to communicate with everyone and not all of the people you communicate with will have your understanding of project management lingo.

UNAWARE OF THE EXISTENCE OF THE PMO

It is very hard for people to support a PMO if they are unaware of its existence. This is particularly true of divisions that are remotely located away from the organization that houses the PMO. Even if the existence of it is known, there can still be a lack of support if the people do not understand why the PMO was created and what the responsibilities are for the PMO.

Some companies that are multinational firms may have multiple PMOs worldwide. In such a case, one PMO is considered as the “master” that has the responsibility of networking together all of the other PMOs. Care must be taken that each PMO understands their own responsibilities. For example, the master PMO may be responsible for continuous improvements to the methodology whereas the regional PMOs may be responsible for implementation of the changes.

Because the PMO is the guardian of project management intellectual property, some executives may feel threatened by PMOs that are directly under the control of other executives. Information is perceived as power and sharing information with PMOs that are not under your control could make other executives more powerful than you. Sometimes this can be resolved by having more than one PMO in the same business unit. There can be a separate PMO for IT activities and at the same time a corporate PMO for other activities. This can be effective if both PMOs work together, but more often than not they compete with one another resulting in the failure of one or both PMOs.

FAILING TO UNDERSTAND THE COST OF PAPERWORK

Project managers seem to understand the cost of paperwork while managing projects. But when assigned to a PMO, they often fall into the trap of believing that the PMO should be a paper generating machine. The result can be an overwhelming increase in paperwork requirements for project teams to the point where PMO failure is inevitable.

The PMO should strive for paperless project management. As an example, some PMOs have converted their entire project management methodology to an intranet version which is entirely paperless. The entire methodology, together with the accompanying forms, guidelines, templates and checklists are on the company website rather than on paper. Project performance reporting can be done using a dashboard reporting system.

FAILING TO UNDERSTAND RESOURCE CAPACITY PLANNING

Most executives today do not know how much additional work they can undertake without overburdening the existing labor force. The PMO has the responsibility to provide this information to executives so that they can effectively establish a portfolio of projects based upon the availability of the necessary resources. Resource capacity planning could very well be the most important reason why executives support the existence of a PMO.

FAILING TO UNDERSTAND THAT ONE SIZE DOESN’T FIT ALL

In a utopian environment, we would be able to create a single methodology or set of processes that could be applied to each and every project. In reality, this may be difficult to do because of the differences between projects. Forcing an organization to use improper processes can lead to a dislike for the PMO.

FAILING TO UNDERSTAND THAT PROCESSES COME BEFORE TOOLS

Several years ago, before a particular company created a PMO, the company spent $600,000 for a licensing agreement for a certain project management software package. Later on, a PMO was established and given the charter to create a project management methodology for the company. It quickly became apparent that the software package that was selected was not a good fit for the methodology that was created.

Processes must come before tools. There are numerous software tools in the marketplace and many of the tools can even be customized to satisfy the needs of a specific project management methodology. When the wrong tools are purchased, blame seems to be placed directly upon the shoulders of the PMO regardless where the decision was actually made to purchase the package.

INCONSISTENT USE OF THE PROCESSES

An automotive industry supplier had three business units housed under one roof. Each business unit had their own way of managing projects. Problems occurred when some of the projects required that all of the divisions work together. Coordination of efforts became quite difficult for the project managers.

The president of the company established a PMO with the charter to create a methodology that could be used on a company-wide basis. All three divisions supported the idea and assigned divisional resources to assist the PMO. One of the three divisions already had a methodology that the PMO believed could be used as a starting point. Eventually, a company-wide methodology was created and was heavily based upon the information from one of the divisions.

When the final product was released and project teams were asked to use the new methodology, two of the three divisions argued against its use claiming that “it wasn’t invented here.” The PMO audited selected projects in all three divisions and found an inconsistent use of the processes; everyone was now blaming the PMO. Eventually, the president stepped in and mandated that the methodology and accompanying processes be used in all three divisions. Had the president not stepped in, it is entirely possible that the PMO may have been dissolved.

FAILING TO ESTABLISH PMO METRICS

PMOs are overhead rather than direct labor charges against various projects. As such, when economic conditions deteriorate, overhead activities are one of the first items to be looked at for possible cost reduction opportunities. This puts the PMO in danger of being dismantled.

PMOs must establish metrics that can show how the PMO adds value to the company and contributes to the company’s bottom line. Typical metrics that the PMO might consider include:

  •           Percent of projects using/following the project management processes
  •           Ratio of the number of project managers to total project staff
  •           Better trained project managers
  •           Higher project success rates
  •           Improvements in customer satisfaction ratings
  •           Year over year throughput; doing more work each year with the same or fewer resources
  •           More efficient utilization of organizational resources
  •           The amount of decrease in the percent of projects at risk or in trouble
  •           Headcount per project (staffing tolerance for projects)
  •           Finding ways to get faster closure
  •           Amount of reduction in the number of scope changes per project

CONCLUSION AND RECOMMENDATION

The need for PMOs is quite apparent. But unless we fully understand the downside risks, the implementation process may not go as smoothly as we like. If the PMO does their job effectively, they will recommend changes for the better. People often tend to resist changes to their work habits. The PMO must address risk management issues for all decisions in order to prevent a PMO failure.