By Kevin Korterud
To mark the new year, I decided to make a rather ambitious resolution: envision the future of project management offices (PMOs). Specifically, what PMOs will be like in the year 2025.
In retrospect, a New Year’s resolution to exercise more or take up a new hobby might have been easier. But here goes.
In 2015, PMOs of all types face a growing number of challenges. These include larger and more complex programs, workforces spread across different locations, time zones and cultures, integration needs and a shortage of skilled technologists. All of these trends will likely intensify in the next 10 years.
While there have been significant advances in the area of program delivery with agile methods, work planning tools and other enhancements, we need to rethink the function of the PMO with regard to its readiness to deal with a constantly changing and challenging business environment.
Here’s how I think PMOs could — and should — be functioning in 2025:
1. Mega PMO. Today all sorts of PMOs are spread across an organization: enterprise, business, program and transformation PMOs. Organizationally, these PMOs are typically fragmented across multiple business functions and governance structures. In addition, each PMO can operate independently of each other.
Given the complexity and scale of contemporary programs, this scenario has inherent risk from a delivery integration and coordination standpoint. For effective and safe delivery in the future, all PMOs need to be brought into a single organization and centralized command structure responsible for the oversight of all delivery programs.
This “Mega PMO” would go beyond the strategic roles played by Enterprise PMOs (EPMOs)—like portfolio management and benefits realization—to encompass tactical and operational services as well.
The level of integration on today’s delivery programs compels a move to this new PMO operating model.
2. Mega-PMO Partitioning. We must also address the strategic, tactical and operational needs of contemporary program delivery. This can come about by structuring the PMO of the future into functions that provide services and direction at all three of these levels.
For example, portfolio management, benefits realization and strategic planning would reside in a function that is staffed with highly skilled resources. Administrative and operational activities such as work plan updates, status report production and financial tracking would be in a service center function using resources with matching skills.
3. Unified Program Managers. It’s common today to have program managers embedded in various parts of an organization. While this results in program manager specialization, it does little to harmonize program management approaches and activities.
Just as program oversight would be brought into a single organization, so should the program managers overseeing program delivery. This would ensure both existing and new program managers collaborate and execute in a coordinated manner.
In addition, the centralization of program managers would also enable the development of program managers’ skills in ways that typically wouldn’t happen while embedded in a business function.
4. A Master Control Room. In a prior article, I mentioned the need for and benefits of a program control room. The creation of a single PMO compels the need for a centralized control venue to enable effective delivery oversight.
To manage the quantity, complexity and scale of future programs, this PMO master control room would need to resemble a control room in a manufacturing environment. This would include display screens, consistent representation of status, incident resolution rooms and other enabling technologies that drive effective program delivery.
This vision of the future aligns with the trends and trajectories of delivery programs. Not unlike how manufacturing, supply chain and other core business processes moved from craft to industrialized systems, the design and operation of PMOs need to change to support the delivery programs of tomorrow.
What do you think the future will hold for PMOs? I welcome your reactions!
By Jen L. Skrabak, PMP, PfMP
As you reflect on 2014 and prepare for the New Year, consider these eight resolutions for your project portfolio in 2015.
1. Be a portfolio leader. Don’t just manage the portfolio — lead it by thinking in terms of profits and losses. In that sense, how does it compare to other portfolios or business units? What was your 2014 return on investment, and what is your 2015 estimated return? Is this within your organization’s expectations? What projects/programs were a drag and should be stopped? What projects/programs have the potential to generate the most returns and can be a calculated risk? (A calculated risk has a reasonable probability of generating a return; of course, what is “reasonable” depends on your organization’s risk appetite and threshold.) If you were an investor, would you invest in your portfolio? Asking these questions may help you decide what to do differently in 2015.
2. Accelerate the business. Ensure strategic alignment by thinking about your portfolio as dynamic and agile — an accelerator to business goals and objectives. How can you free up resources to innovate rather than just keep the lights on?
3. Sell your portfolio’s value by understanding your audience. Speak the organization’s language while remembering the 5 C’s: clear, concise, credible, creative and compelling:
Clear— Frame the discussion in terms the other party can easily relate to and understand.
Concise— Long decks and presentations will lose your audience. Think elevator speeches: If you can’t sum it up in a sentence or two, it’s probably too complicated to understand. And if it’s too complicated, then you will not have the opportunity to influence, let alone reach agreement.
Credible— Know what you’re talking about and be prepared. This means doing your homework before coming to the table.
Creative— Look beyond the obvious to find the solution.
Compelling— Always know what’s important to the other party and what will drive them to action. Tease out the underlying need instead of only the stated desire. Understand what your bottom line is, and theirs.
4. Establish a culture of innovation. Do this, and you can deliver long-term as well as quick wins.
5. Make data-driven decisions.Look at the facts to drive decisions, not emotions. Don’t get attached to pet projects.
6. Engage with the world.Go beyond stakeholder engagement at work. Don’t forget about yourself, your home and your community.
7. Trust your instincts. If something doesn’t feel right, it probably isn’t. That little voice is an early indicator — listen to it. Sometimes when we forge ahead against our instincts, we find out later that it would have been better to take another course.
8. Find meaning in your portfolio. Your portfolio delivers the impossible — innovative projects and programs that have not been done before. What achievements in the past year were key to the organization, in terms of values, culture and feeding creative juices? How can you do more of that in 2015?
By Jen L. Skrabak, PMP, PfMP
A portfolio manager’s key responsibility is to sell your idea — whether it’s to incorporate innovations into the portfolio, to advocate for portfolio management processes or to champion the establishment of a portfolio. And one of the most powerful ways to sell is to have great presentation skills. The next time you have to present your portfolio strategy to executives or conduct a meeting, think about the simple acronym that can ensure SUCCESS:
I always think in terms of the outcome of my presentation or meeting first: what is the one thing you want to people to remember, do, think or feel differently as a result of your presentation.
· Now, work this core message until it’s clear and concise. As portfolio managers, we need to be experts at distilling a tremendous amount of information into the “critical few” points — think bullet points rather than paragraphs.
· Be aware that too much detail will cloud the message, cause confusion, and delay buy-in. Strip away the unnecessary elements and leave your audience with the essence.
· Don’t add jargon, industry-specific terms (i.e., technology or project management), or try to be too trendy. Spell out acronyms, and try to stay away from anything that requires a dictionary to interpret. I once had a project manager refer to a “wheelhouse,” and I had to look it up to see what it meant. For the record, it refers to “an area of expertise.” But ultimately, ask yourself: Do you want people to wonder what your message is? Or do you want them to quickly grasp it?
· Instead of just jumping into facts, keep the audience’s attention by opening and closing gaps in their knowledge. Put yourself in their shoes, and ask yourself, “What do they know, and what don’t they know?” Open with something they don’t know to grab their attention.
· Then, try to highlight a few ‘a-ha’s” and lead them to the desired outcome. Is your audience interested in the process, or just your portfolio inventory of the programs and projects? Highlight a few programs and projects with interesting facts rather than reviewing the entire list of programs and projects.
· Create curiosity, interest or concern in what you are going to tell them before you tell them. For example, you might say that it’s commonly thought that there are 100 critical projects within the portfolio, but your analysis show that it’s actually 10 critical projects. This way, you are also selling your value as a portfolio manager — anyone can come up with a list of projects, but only you can analyze and bring recommendations.
· Remove abstract language or ideas from your message, and replace them with concrete language or ideas (tied to a tangible/physical item that people can relate to).
· Use sensory language to paint a mental picture. Give an example.
· When selling a new portfolio management process, say “good portfolio management is like having a well-balanced 401k.”
Use “good statistics” — ones that aid a decision or shape an opinion and humanize your statistics by bringing them closer to people’s day-to-day experience.
Make the statistics or examples relevant by placing them into the frame of everyday life. For example: “I compare the portfolio roadmap to having a detailed guide for a trip from NY to LA so that every major stop can be accounted for.”
· Don’t rely solely on logic to sell your presentation.
· Create empathy for specific individuals affected by what you are trying to sell. Say things such as: “Given that it currently takes five people two weeks to manually put together the reports needed, my new portfolio management process will now free up three people and reduce the time to five days.”
· Show that your ideas are associated with things people already care about. Within a large company, that may be increasing efficiency, increasing shareholder value, meeting compliance and regulatory demands and increasing employee satisfaction.
· Use stories so your message relates to the audience and reflects your core message. Use specific examples, preferably yours, of why it’s worked (i.e., “When I worked at our competitor’s and implemented this portfolio management process, it resulted in an increased ROI from 50 percent to 85 percent within six months.”). Another thing that works well: A brief acknowledgement that your method is a best practice within the industry, based on your extensive research.
· Finally, don’t forget that the story should have emotional elements and draw from the other SUCCESS principles.
What are your tips for successfully presenting portfolio management to stakeholders?
Lean, Mean PMO Machine
In previous posts, we've discussed the must-haves of establishing a project management office (PMO) and the basics of a PMO implementation plan. After digging deeper into the PMO implementation plan, it's time now to discuss how to keep the PMO focused, effective and providing value.
Having a framework that allows you to model the PMO's processes and tailor them to match organizational needs can make corporate project management more valuable. This approach is based on a proven methodology named Business Model Generation, a strategic management canvas for developing new or documenting existing business models visually. We are now going to apply it to a PMO.
This is important, because many PMOs start small. Their main concerns are usually tied to monitoring and reporting project results to assist senior-level decision-making. However, as time passes, people think the PMO must absorb new features and responsibilities to remain competitive.
But growing a PMO in size doesn't necessarily mean we're improving project governance and corporate results. Maturity is the key to success. And a lean PMO is much better than a large bureaucratic PMO. Take a look at The Project Management Office in Sync with Strategy to see examples of this in practice.
Setting up a lean PMO is easier than keeping it lean. If you followed the steps mentioned in previous posts, you already have a strong PMO implementation plan with all the basics. Don't be tempted to add new functions to your PMO unless they are strictly necessary to the value you want to provide.
The most important characteristic of a lean PMO is that it is customer-centered. So, the first step is to identify your customers. Then, you have to uncover their needs to define the PMO's value proposition.
In my organization, for example, we can spot five customer groups that our PMO wants to serve:
Once you know your customer groups, the next step is to identify their needs. These audience needs could look something like this:
Once we understand our stakeholders and their needs, we can develop a value proposition, which we will discuss in the next post.
Meanwhile, I invite you to review the following business model canvas and consider how this could be used to build a lean PMO:
Courtesy of Alexander Osterwalder and Yves Pigneur
For instance, does the PMO have revenue streams? If not, can we think of something better to substitute instead? What about channels and customer relationship -- do these apply to PMOs? Can a PMO develop alliances? Find out in my next post.
For more on planning a PMO, read PMI's Pulse of the Profession®: PMO Frameworks, which was developed by PMPs and provides information o five types of PMOs.
Digging Deeper into a PMO Implementation Plan
In my last post, we discussed the five basics of a PMO implementation plan. Here, I'll delve deeper into those five:
1. Current State Assessment
When assessing the current state, it might be helpful to hire an external consultancy, as internal initiatives may lose momentum along the way. The people internal to an organization might not be able to ask the right questions or they might even resist due to a fear of change. An external consultancy can assist in overcoming political issues by adopting a structured approach. Usually, consultants force or drive change because that's what they are hired to do. In the end, a good diagnosis will point out issues and opportunities for improvement.
2. Future State Vision
Based on the assessment, it is possible to design a future state vision, describing how projects, programs and portfolios should be managed in order to fulfill organizational needs. That's because when the current state is clearly understood, it is easy to compare to benchmarks. Consequently, the organization can realize what is missing or what is done but could be improved. Ultimately, the future state vision details exactly what the organization wants to become.
3. Gap Analysis
The next step is to carry out a gap analysis by comparing the current state to the future vision. This analysis has to focus on three factors:
A successful gap analysis clearly identifies what is missing or what could be improved, prioritizing which features, processes and structure the PMO should have, according to effectiveness (cost x benefit), desirability (sponsorship; what the company want to implement) and feasibility (what is realistic and what is possible to do). We have to select and prioritize based on cultural and organizational feasibility, not only based on resources available.
For example, imagine an organization wants to implement enterprise project management (EPM) software. There are plenty of options in the market. Some have fancy features and are more expensive. It might be desirable to have top-notch software, so we won't have to substitute or upgrade it for years. However, it is effective to choose software that offers the simplest solution and satisfies future state needs. Finally, it might be feasible to start with familiar software to overcome people's resistance and rejection to the PMO implementation.
In this particular case, project professionals might desire the best EPM in the world (desirability) -- but the company could do well with a free version or simpler software (effectiveness). Finally, considering that people unfamiliar with project management practices will have to use the software, it might make sense to get something familiar or similar to other software they already use (feasibility).
4. Implementation Strategy
After the gap analysis, introduce stakeholder requirements to define the implementation strategy. I recommend thinking of the PMO like a new business unit or a small new company. The PMO should have its own mission, vision and goals. We have to identify who are its stakeholders and customers, so we can define its value proposition and its services. Personally, I use the Business Model Generation canvas to do that.
The implementation strategy defines the approach to implement a PMO, major expected results and the overall framework, considering organizational strategy and corporate project management governance. Consequently, the PMO business model must support and enhance strategic alignment by selecting, prioritizing and managing portfolios of projects that sustain and boost organizational strategy.
5. Implementation Plan
Finally, the implementation plan is the detailed project management plan for implementing the PMO. While the implementation strategy is the approach chosen to implement the PMO, the implementation plan puts that strategy into action.
We start by defining its scope and work breakdown structure. Then we create a schedule of tasks to deliver the project scope. Resource needs are identified and a budget is set. Other subsidiary plans are created to manage integration, scope, time, cost, quality, communications, human resources, risks, procurement and stakeholders.
The implementation plan should be as detailed as you need. I want to emphasize the importance of defining a business model for your PMO, allowing for performance measurement and improvement after the implementation.
In my next post, I'll provide a framework for sustaining and improving your PMO, once it is set up and running. Do you have any tips or examples of PMO implementation plans?
For more on PMOs, check out the PMI® Thought Leadership Series: Strategic Initiative Management - The PMO Imperative.