6. How are the projects doing? The focus here should be to gain agree- ment on a clear and simple (not simplistic) measurement system and some targets, so that PMO value and effectiveness can be shown.
7. How can we move projects to completion more quickly?
8. How can we get more projects done?
9. How can we achieve Deming’s* level of predictability in project management for the three major attributes — on time, on budget and within scope?
THE “WRONG” RESULT — WHY PMO IMPLEMENTATIONS FAIL
1. The PMO did not define its value proposition.
The PMO is in business to help the organization meet its goals. Almost anything else is a waste of effort that will be realized sooner or later. For example, it may take weeks or even months to force project managers and their teams to use a methodology that the PMO is pushing. PMOs should strive to demonstrate tangible value in the first three months in terms of improving project delivery speed. The political pressure to deliver value will increase month by month. At some point, the PMO will run out of time.
In the chapters that follow, we present techniques to help the PMO achieve true value in the first 30 to 60 days of operation.
2. The PMO is not perceived as impacting project delivery abilities.
PMOs that are focused primarily as administrative score-keepers, infor- mation providers or process developers have a declining value curve (see Figure 2.2). These PMOs start out by fulfilling a critical senior manage- ment need for information. The organizational units and project managers, receiving negative press without tangible help from the PMO, resist the PMO. This resistance becomes more serious over time and is often a defen- sive reaction to the PMO. The organizational units set up defenses, such as collectively discrediting PMO data or pointing out the lack of visible help, so that the PMO cannot hurt them with the regular PMO message. The end result over time is the diminishment of the PMO mission importance. When the combined resistance of a few functional units exceeds the perceived
*W. Edwards Deming, the great quality genius of the 20th century, is discussed more extensively in Part II of this book. His statistical methods and overall philosophy provide an approach to bring predictability to any process. With Deming’s approach, a system is in control when you achieve the goals of the system more than 95% of the time.
value of the PMO, the PMO will cease to exist — it has no tangible value to prove its worth.
3. The PMO is seen as a threat — most often too authoritative.
Many established PMOs operate in this manner. There are some envi- ronments where strict adherence to authority works well. For example, busi- nesses that gain revenue through the military or government agencies are often required to follow strict project delivery guidelines such as “Earned Value” techniques.
These businesses are measured and compensated on the Earned Value metrics as a percent of available compensation for a particular project phase.
So, if the business achieved 90% of the Earned Value metrics for a project phase, it would receive 90% of the available compensation for that project phase. For some firms operating this way, their survival may depend on the cash flow and the careful tracking and progress associated with it. In cases of survival, authoritarianism works. Authoritarian PMOs operating in these environments can sustain themselves because there is a clear value proposi- tion. However, as we point out in later chapters, these PMOs are leaving a lot of fruit unpicked.
In most organizations, if the PMO becomes too intrusive, managers will come together in an informal posse and hunt down the PMO sponsors. When the PMO sponsors are finally cornered, they will be given a choice — them- selves or the PMO. The sponsors’ decision is quite easy to make when they think about how to make mortgage payments.
If your PMO has this authoritarian style, check the strength of your sponsor(s). It may not be too late to modify the PMO value proposition and begin turning the corner.
Figure 2.2 PMO Value Curve
Why PMO Implementations Fail 35 4. The PMO is too low in the management reporting structure.
PMOs that are established in this mode are usually found in the supply side of the business — normally IT. Chief Information Officers (CIOs) of- ten create PMOs to help them gain control over the project management environment. This type of PMO is sometimes established as a defensive measure against pressure from other groups. Often, they are catching the blame for projects failing to meet requested timelines and promised quality levels.
This type of PMO exists near or below “radar detection”. This means that the PMO often spends most of its time collecting data on IT project initiatives. The CIO needs the data to survive and certainly wants to im- prove project management results.
However, establishing a PMO at a low level means that the manager has to swim against the main stream political current of not just those in the market side of the business but all of the IT work force as well. How do you like those odds? You would have to be immortal to escape certain death in this PMO model. If the PMO value proposition is not sponsored correctly by the CIO, with direct links and support from the senior management team, it is likely to fail.
The PMO must be doing things that are on the executive radar screen.
In fact, relative to projects, the PMO should be providing the executives with the cockpit information necessary to ensure successful executive execution.
5. The PMO does not have buy-in from the senior functional managers.
PMOs that do not cultivate the buy-in from the senior leadership of their organization or of other organizations that are customers of the senior lead- ership are making a serious mistake.
We have witnessed many PMOs that take, as their first action, some initiative that rolls out processes, tools, or some other tactical improvement, all of which focuses on the project management community only. This ini- tiative requires diverting functional resource and project manager time away from their projects and into providing data and learning methodology and tools.
What about the senior functional managers, the project sponsors, the fiscal year strategic objectives? A PMO that takes an initiative that excludes, or does not explicitly include, the interests of senior managers across func- tional areas puts the project teams in a cross fire. The project team must now choose priorities between the PMO initiative and the project managers’
initiative. Who do you think the project teams will listen to first and last?
For example, as the PMO leader, assume that you have decided to roll out an EPM tool to help project teams become more proficient at executing their work plans and managing risk. Traditionally projects never come in
on time or on budget. You have set up training workshops on how to use the new tool and related processes. As the tool workshops roll out, word travels across the organization that the tool is very sophisticated and requires sig- nificant project team involvement in conversion activities to achieve any tool benefits.
It is the 3rd quarter in the business cycle and it is now apparent that many of the key projects will not make their original delivery date estimate.
The heat is on. The project teams are in trouble and now must make a choice.
Business unit leaders are pressing their project teams to deliver and are demanding success or else. The PMO loses every time in this scenario.
6. Project Management Overhead — the bad PMO acronym.
Teams may see PMO initiatives as unnecessary overhead. Such PMOs will fail to sustain themselves in most economic conditions. The work com- munity simply cannot see any benefit in using the PMO to help themselves.
Project teams must see something in the PMO for themselves if the PMO is to prosper. The baseline measurement must be the PMO value proposition.
7. The PMO is micromanaging — trying to control every project di- rectly.
Dr. Harold Kerzner comments, “If the project managers report to the PMO, then the PMO effectively micromanages projects and the result may be a loss of strategic direction for the firm. For strategic efforts, it may be advisable for the project managers to report to the strategic PMO on a part- time basis.
“One problem with having project managers report to a PMO is that the respective line managers will be reluctant to give up their best project man- agers to a PMO. The line managers view this as a loss of control and a reduction in authority and possibly power.
“The only time I have seen project managers report effectively to a PMO is when it was a customer-focused PMO, where the PMO focuses exclu- sively on one customer base, such as in the armed forces of a country. Re- cently I was with a strategic PMO in Mexico that is responsible for strategic decisions such as project selection, prioritization and tracking ROI. They want to see only milestone schedules and understand the danger of getting too involved in projects. However, each of their large functional areas (headed up by asset managers) has their own PMO in which the project managers are direct reports. So they have both a strategic PMO and four resource PMOs (all interconnected) at the same time.”
Our view is that project managers should have internships within the PMO to understand its purpose, functions and methods. However, the in- ternship, generally speaking, should be in performing a PMO role, not a project management role.
Why PMO Implementations Fail 37