A high functioning PMO is necessary to deliver successful programs and portfolios, however, at what point can a PMO evolve to focus on leadership and not just good governance?
There is little doubt that the PMO has struggled to retain its place in successful project delivery, as many as 50% of PMOs fail within the first two years of establishment. As an organisation working in the project landscape, time and again we see that a significant issue is an ability for the PMO to remain relevant and deliver sustained value.
One of the critical elements for continued relevance is the ability for the PMO to constantly evolve as dynamics in the business or its projects change. But what does the next evolution of the PMO look like? From Quay’s perspective, we believe the PMO needs to start focusing on leadership, not just good governance.
Testing the Perspective
It’s an opinion that we put to the test at a recent roundtable session, where we shared the real-world experiences of several PMO and ePMO managers from across a range of industries, including Government, banking, finance, telecommunications, media, building and construction.
The roundtable produced some valuable talking points and insights, such as:
The PMO is changing
There was strong recognition that the traditional approach to structuring and operating a PMO is dated and needs to do a better job of driving project accountability within the business (and at the frontline). The PMO needs to take more of a consulting approach.
Delivery Enablement with a Focus on Value
The PMO’s role should be balanced between ‘just enough admin and reporting’ and delivery enablement with greater emphasis on ‘value’, i.e.:
- Project pre-shaping: Using a consultative approach to identify the outcomes sought and agree with the appropriate stakeholders what the delivery approach should be.
- Project Environment Management: Work ahead and around projects, clearing the way for them to deliver from within.
- Capability Management: Source the appropriate capabilities to deliver and empower them to do so by giving them more accountability.
The concept of leadership came up time and again and, as a group, we coined the name Project Leadership Office (PLO) to represent the role it should play.
The PLO: Allowing Leadership to Drive
When we take the time to look at the role of a traditional PMO, we came up with a range of reasons that a PLO has considerable appeal:
Leading and Shaping
PMOs traditionally control the portfolio management for an organisation. This typically takes the form of collecting the high-level data for all of the desired initiatives, then sorting and scoring them against some criteria. The PMO then administers the approval process for the selected projects to commence assuming resource availability and working within the constraints of the business.
The limitation of this approach is that all initiatives are assessed based on the option presented (more often than not, the opinion is a pre-conceived solution), so the PMO is administering a process rather than adding value.
In many organisations, there is no pre-portfolio stress testing or leadership from the PMO to assess:
- What is the outcome of this project intended to achieve?
- Why is this important and to whom?
- Why do we think this project will achieve the outcome? And
- What other options exist to achieve the outcome?
A good example of adding value via leadership was shared during a recent Quay Collaborate roundtable, which concerned widening a conveyor belt for transporting coal from the mine to the port. A thorough business case was built, including how to minimise the downtime during the upgrade, and this was submitted into the portfolio.
This PMO showed leadership and asked the pertinent questions: what is the planned outcome (more coal to the port in the same time); why (more revenue); who benefits (stakeholders); why (wider road means it can carry more coal in less time); and lastly, what were the other options?.
Needless to say, the solution was to speed up the motor with minimal downtime and minimal cost. The PMO has created tangible value in shaping the project.
As more and more projects rely on contingent labour (i.e. contract and project-based staff), we build temporary teams to deliver projects. These teams are built based on the capabilities required and sourced (often externally), then set the task to deliver.
Which is where the challenge lies: Every organisation has its own delivery DNA, its own idiosyncrasies, unwritten rules, and ways of doing that are tacit in nature but critical to success. The organisation has yet to develop a methodology that captures this entire tacit rulebook (which might read ‘people and culture’) yet, it expects the external resources to magically deliver without it.
The experts in the room agreed unanimously that to provide ‘real’ value to the projects, one of the primary goals of a PLO is to manage the environment around the team so that they can execute. Whilst it is an abstract concept to grasp when practically put, this means looking at what might derail a project that the team might not have visibility of and clearing the path ahead of it.
This may be providing visibility of competing for project priorities, upcoming organisational challenges, or helping the project team with the organisational nuances (tacit environment). This allows the project team to focus on delivery and the PLO to focus on the environment, which will significantly increase the chance of successful outcomes.
It is worth remembering that there are two types of strategy: planned and emergent. Things will change and the team will learn, which is why some level of agility is important and managing the on-going project environment is critical.
There is a body of thought which says that to achieve great outcomes, an organisation needs to push decision making as close to the front line as possible. Put another way, this means that the more centralised control, the less likely an organisation is to achieve greatness.
If we were to shine the light on a PLO, their role is to hire fit-for-purpose capability, help shape the project, and then get out ahead of the project to clear a path, not put roadblocks in the way or add weight to slow it down. Ultimately, a successful PLO will empower the project to deliver how they feel is best but retaining accountability for delivery.
It’s Time to Evolve the PMO
Highly functioning PMOs are very necessary to deliver successful programs and portfolios of work, but the context by which they are engaged and their scope of responsibilities and powers needs a re-think. In our view, it’s time for leadership to take centre stage and for the next generation of PMOs to in fact be PLOs.
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Want to talk to us about PMO and leadership? Contact us on 02 9098 6300.