Before The PMO Can Add Value, It Needs To Stop Taking It Away

 

Whenever I see an article that asserts the need for Project Management Offices to emphasize “adding value,” I think such statements beg the question, “value” as determined by whom? What is the nominal value generated by the typical PMO? Before I delve into what this PMO-generated “value” is, let’s take a look at what it is not. Almost all of the hits I saw when searching “What does a Project Management Office do?” included the following:

• A governance function.
• Training.
• Establishing “best practices.”
• While many of the hits described the overall soft boundary layers of definition between “project,” “program,” and “portfolio” management offices, they usually indicated some sort of “coordination” function.
• I saw a lot of mentions of changing or improving corporate culture to be more accepting of PM.
• They were also very keen on the PMO performing resource allocation.

It probably won’t surprise GTIM Nation that I find all of this to be fairly objectionable. But before I can demonstrate why all of this is not only mistaken, but may actually be harming the advancement of Project Management writ large, let me remind everyone of Hatfield’s Incontrovertible Rule of Management #3:

The 80^th percentile best managers who have access to only 20% of the information needed to obviate a given decision will be consistently out-performed by the 20^th percentile worst managers who have access to 80% of the information so needed.

Keep in mind that, when we’re discussing the kind of information streams needed by Project Managers in general, this information is distinct from what’s needed by Asset Managers, or even Strategic Managers. The source and residence of the data Asset Managers need is the general ledger, and the techniques they use consume data from that source (e.g., the grossly overused and imprecise Return on Investment). Similarly, since Strategic Managers’ proper focus is on market share, the information streams they rely on allow them to compute the value of that parameter, and evaluate the various strategies that can be used to improve it.

Not so the PMs. While the Scope Baseline is certainly integral to all other derived information within this realm, it’s the Cost and Schedule Baselines, set up to allow Earned Value and Critical Path Methodologies to function, that create the main source of the needed project insights. The implication here is that, all other things being equal, the primary purpose of the PMO is to put into the hands of the decision makers the information they need to make the best management decisions for their projects. It’s based on this definition of the value that PMOs bring to the table that I reject the previous list of what they do, to wit:

• Governance? Please. Consider a scenario where we have two PMs, “A” and “B.” PM-A takes on new technology-based projects, and consistently brings them in on-time, on-budget. However, she pretty much ignores the PMO’s prohibitions on start-to-start relationships among the activities in her schedule baseline, and doesn’t do risk management at all. PM-B works fairly basic, familiar projects, but is consistently late and over budget. He also follows the PMO’s guidance to the letter. Whom among them, do you think, would be more worried should the organization face a sudden and dramatic downturn in contract backlog?
• Training is a line management function, not a Project Management function.
• What represents a “best practice” is highly subjective. Don’t believe me? Look at all the overhead (or even Project!) budget wasted on the risk managers (no initial caps).
• The “coordination” of the projects within the Program or Portfolio, when done properly, will take into account the kinds of work the macro-organization does best, what the competition in that arena looks like, the nature of the current and anticipated proposal backlog, among others that all fall squarely into the realm of Strategic Management. And those managers can’t do their jobs properly if they don’t have access to the kinds of cost and schedule performance measurement systems that can inform them of the macro-organization’s strengths and weaknesses, again pointing to the need for the PMO to provide PM-centric information streams.
• I’ve already done a recent blog on the futility of attempting to directly change corporate culture.
• Resource allocation is another line management function. The PMs, of course, must specify their needs, but it’s up to the non-PM-centric parts of the organization to recruit, retain, or train the personnel to fill those needs.

Note that each of these functions that these sources contend are supposed to be part of the PMO consume time, energy, and budget. If what I’m pointing out is accurate (which, of course, it is), then all of that time, energy, and budget is … well, I won’t say “wasted.” “Not really germane to PM…” will suffice. And, if these efforts aren’t really germane to PM, they become value-neutral – at best. By shouldering organizational responsibilities outside of the PM discipline, they consume resources that would otherwise be used to generate the value PMOs ought to provide.

So, yeah, before we can have an intelligent discussion about how to increase the value brought by the PMO, let’s start by agreeing to not take it away.