What’s Twenty Percent Of A PMO Good For?

 

In last week’s blog I cited Hatfield’s Rule Of Management #3, which states:

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.

For GTIM Nation citizens who recognize that rule as a derivative of the Pareto Principal, go to the head of the class. I now want to introduce another PM-esque derivative of the Pareto Principal, this one sitting at #29 of the aforementioned Rules Of Management:

29. 80% of the value of a Project Management Office (PMO) is derived from 20% of the information it generates.

Does this sound outrageous? Indefensible? Consider the following: let’s postulate PMO (A) and PMO (N). PMO (A) sets its technical agenda so as to include the following:

• A robust risk management (no initial caps) system, including a risk register (nic) documenting the results of a thorough risk analysis (nic), with an ongoing re-evaluation of risk events, their estimated cost and schedule impacts, and additional risk event scenarios going forward.
• A fully-staffed communications group, who seek out all potential stakeholders, and employ the mechanisms to ensure that their “input” or “feedback” is properly incorporated into the formulation and execution of the Projects’ technical approach and, in some cases, reflected back to the macro-organization in such a way as to actually influence its business model.
• A strong Quality Management sub-team, providing Ishikawa Diagrams of each and every decision point that affects the Projects’ technical approach to resolving the scope, as well as Six Sigma analysis of the accompanying processes or any out-of-threshold variances encountered along the way.

Now let’s take a look at the setup of PMO (N). It includes:

• A robust Scope Baseline capture, including a valid Work Breakdown Structure, with Control Accounts and Work Packages sufficiently detailed to not only serve as the basis for deriving the Cost and Schedule Baselines, but also as a usable defense in the event of a conflict with any subcontractors (or even customers) over performance.
• A basic Earned Value Management System, one that allows for reliable cost performance measurement and accompanying accurate capacity for calculating at-completion cost and duration.
• And, since PMO (N) does this for all of the Projects in the portfolio, it can roll-up its information streams to indicate overall portfolio performance,

…and that’s it.

All other things being equal, I would argue that the organization served by PMO (N) would wayyyyy outperform the organization saddled with PMO (A). Just on its face PMO (N)’s information streams are more valuable than (A)’s, and, in my opinion, it’s not close.

Then we have the nature of the information streams of PMO (A). Consider what the risk managers (nic) alone would need to perform their “analysis.” It includes hours of time with the Work Package / Control Account Managers, asking them (or some other Subject Matter Expert) about the alternative outcomes of the selected Project’s execution strategy, their impact and estimated odds of occurrence, over multiple alternative outcomes. Also consider what happens at the end of such analysis: other than contributing data to the estimate of a potential contingency budget, it’s little more than a list of things that might go wrong, tripped out in Gaussian Curve jargon.

Then we have our friends, the Communications Managers. Don’t get me wrong – as long as these advocates structure a usable communications plan that aids in the Public Affairs aspect of Projects, particularly high-profile ones, I’m completely good with this function. It’s just that some of these experts, in my experience, often start pushing this business about “engaging all stakeholders.” The complete population of “stakeholders” will invariably contain people who are against your Project coming in on-time, on-budget, or even its existence. Giving these stakeholders unearned influence in the setting of the technical approach, appropriation of resources, and the manner or tempo of the work being executed is counter-productive in the best of circumstances. PMs who not only pursue this strategy but actually pay Team members (or even outside consultants) to do so would be well-served to re-examine their nominal approach to performing actual Project Management.

Next let’s look at the resources and time needed for Quality Management experts to perform their analysis and generate their specifically-tailored information streams. Useful for an ex-post-facto analysis of something that went wrong? Absolutely. But unless your Project provides a good or service for which any error could have massive, destructive outcomes, you might want to think twice before funding their budget.

And here’s the kicker: PMO (N) is, in all probability, going to cost less than PMO (A). Maybe not an exact Pareto Principle split of 80/20, but close enough to answer the question in the title. What can 20% of a PMO get you? Turns out, quite a lot, if it’s the right 20%.