The PMO must play an active role in the implementation of the organization’s strategic plan, both short and long term. If not the PMO, then this mammoth work is often delegated as part-time assignments to senior managers or their direct reports. The result is that the work rarely gets done, or takes many, many years.
However, there is a significant obstacle preventing the PMO from un- dertaking such an initiative today. Based on our current knowledge of PMO staff, most PMO teams must first undergo some intensive training in strate- gic planning.
We have witnessed a huge difference between teams that have such training and teams that do not. We do not know of a better process than the first four days of the 4 × 4 to complete such training. Fortunately, Goldratt has done an outstanding job of creating the series of eight modules and making them available as valuable knowledge without demanding a pro- hibitive investment. There are no prerequisites to viewing the satellite se- ries, although the series is well supplemented by some 20 books by various authors on the subjects covered in the series.
The alternative to such a series would be to purchase and read a collec- tion of books in each area of the supply chain. The problem with this ap- proach is that it is more time-consuming and may also cost just as much.
Also, the books would not integrate into an approach to strategic planning that would make sense.
The stages of moving an organization from good to great can be orches- trated using the 4 × 4 approach. The PMO team would ensure that the se- quence of change would proceed using the following general approach:
1. Put the holistic measurements and understanding of the systems in place to drive holistic behavior. Implicit in this step is eliminating conflicting and erroneous measurements throughout the organiza- tion. Take away the demotivators.
Securing the Future 151 2. Make the systems stable (especially operations, project management,
and distribution)
3. Create a compelling marketing offer to drive the constraint inside the organization, and to create a 2-year competitive advantage 4. Create multiple segmentations (preferably 15 to 20) to increase sta-
bility, ensuring that the same people resources are used, as much as possible, in different segments and in new markets
5. Identify the factor that will provide an improvement of several times over the competition, and make it the basis of a 10-year competitive advantage. Identify the project plans in all functional areas, and the sequence to implement such a factor.
This role for the PMO is not something that comes naturally. However, if an organization wants to derive value from a PMO, it must recognize that the PMO must focus on organization strategies, and move quickly away from a focus on trivialities.
SUMMARY
Moving an organization from being good to being number one in its indus- try requires more than a compelling marketing offer. The organization must identify the factors that will drive it to become the best in the world. Usu- ally, it is only necessary to find one such factor, but this implies a mammoth change to the organization. Within the one factor, the team seeks an im- provement of several hundred percent.
This usually requires extensive change throughout an organization, with many projects that must be perfectly coordinated across functional areas to achieve the end goal. Such an effort usually requires a multi-year project and a great deal of stamina from the executive team.
Therefore, before commencing such an effort, the senior management team must ensure that it has implemented strategies to make its internal systems stable and to have tried at least one compelling marketing offer to build the confidence of employees in all areas. Further, the PMO must also be stable and able to achieve project management goals (on time, on bud- get, and within scope) more than 95% of the time.
The PMO is the logical choice for coordinating such an effort. Provided they are educated in strategic planning, the PMO team will have the 30,000- foot view of the organization’s projects — a necessary condition to make such an effort successful.
QUESTIONS
10.1 Pick an industry and describe one factor that could be improved by several hundred percent. Describe the changes required in- side the company. Describe why such an improvement would provide a long-term competitive advantage.
10.2 What are some examples of factors that might impact retail book selling?
10.3 Why would the senior management team want to have the PMO controlling the implementation of such a strategy?
10.4 What negative effects might happen if an organization were to pursue the 10-year advantage before implementing a compel- ling marketing offer? Before stabilizing its systems?
10.5 True or False: The strategy to focus on one factor to provide a 10-year advantage is almost the same as the compelling market- ing offer.
10.6 Suppose that an organization has identified a factor that will give it the 10-year advantage. Also assume that the organization has some senior management team members who are A-type personalities and not strong team players. The CEO has decided to replace those senior managers. What should be done first — replace the senior managers or move forward with the projects to gain the 10-year advantage?
10.7 Why aren’t PMOs typically involved in this kind of major stra- tegic planning work today?