I recently had a discussion with a colleague during which I expressed my belief that PMOs should be operated just like any other department in an organization. I was promptly informed that PMOs are different, special, and can't be operated like a business department. PMOs are not revenue generators.
I advocate that they are. The majority of PMOs are responsible in some way for the successful delivery of an organization’s projects. Most projects are growth engines, with the product of the project a revenue generator. Most projects are taken on to either increase revenue generation or reduce costs. In either case the outcome of these projects affect the economic viability of the business. Because PMOs are revenue generating entities, it is crucial that PMOs and project managers have business knowledge and acumen.
A project itself has no business value. Projects generally bring increased cost, significant use of resources and often create havoc. However businesses undertake projects because projects bring needed growth, change, improvement and other things of value to the business. Projects are undertaken in order to achieve a specific result or outcome. That outcome or project objective is what brings value to the organization. We must keep in mind that only through the successful attainment of the project objectives will any value be achieved.
Projects must be managed first and foremost to deliver value. On time, on scope, on budget are not the measures of project success. They were never meant to be. The measurement of project success is the amount of value it brings to the organization.
There is a resistance among some PMOs and project managers to accept responsibility for the value of the project. Once the project manager takes responsibility of the project he also takes on the responsibility of ensuring the project outcomes deliver as much value to the organization as possible. In order to do this, the project must be managed with the project outcomes and potential project benefits in mind at all times. All decisions made, all actions taken must be driven by the business needs and objectives of the project. Factors like time to market, competition, market changes, regulatory changes, resources and raw materials will have more influence on the successful attainment of value than will scope, time, and budget.
Do project managers need to be SMEs? No, but project managers need to understand the business, the market, and the factors that will influence the value of the project outcomes. Business acumen and knowledge are the most critical skills needed by a project manager to ensure the success of the project. It is only with this knowledge can a project manager use the processes and tools of our profession in such a manner that brings the most value from the project outcomes.
Projects do not belong to project managers. We are the stewards of the project and it is our responsibility to deliver the expected outcomes and project benefits to the project owners, the business.
Because the products of projects are frequently revenue generating, cost reducing, or in some way essential to the economic growth and viability of an organization, PMOs are revenue generating departments as much as marketing and sales and certainly much more so than IT or HR.
I just read a post on LinkedIn titled "What Leadership Was And What It Has Become" refering to an article of the same title on leadertoday.org. Although it has some good points, it espouses that business today is too complicated for one person to be a leader and advocates that the future will be that of "leadership groups" that replace leaders.
I can only say after reading the article that it misses what is the core of true leadership. Leadership is not and never will be a "group" activity. I can think of nothing more chaotic, difficult and unpredictable as war. Yet I think of Colin Powell, Norman Schwartzkopf, Dwight Eisenhower, Chester Nimitz, all great leaders and though they had others with which they worked and consulted, they lead - alone. Even the two individuals mentioned in the article, Steve Jobs and Walt Disney, never practiced "group leadership." They lead their respective organizations. There was never any doubt who lead Apple or The Walt Disney Corporation.
Here is a link to the original article: http://leadertoday.org/articles/leadershipwas.htm?utm_source=dlvr.it&utm_medium=twitter&goback=.nmp_*1_*1_*1_*1_*1_*1_*1_*1_*1.gde_1076847_member_149031343
I'd like to know what others think. Is the future of leadership a group activity?
Book Review - Mastering the Leadership Role in Project Management: Practices that Deliver Remarkable Results
(FT Press Operations Management) Pearson Education (USA). Laufer, Alexander (2012-04-23).
In this book, the author presents eight projects that demonstrate the criticality of leadership to project success. Each project manager with inputs from project team members, describes the challenges of the project and presents details on how leadership skills were crucial to solving these challenges. The projects and the solutions highlight practices of servant leadership and serve to illustrate that leadership and flexibility are far more important than blind adherence to process to the achievement of project outcomes. These project managers understood that they needed to use their leadership ability to bring these projects to fruition. Not once in this book did the author or the project managers talk about standards, best practices, or process. The focus was on problem solving and the sometimes unusual techniques of leadership put into action.
Dr. Laufer ends the book by describing nine practices of leadership and illustrates how the project managers used them in their projects. The practices Dr. Laufer describes are:
The eight projects included in this book provide real examples of the nine leadership practices Dr. Laufer describes as essential to project leadership. These projects show how by applying the these practices, the project managers were able to deliver successful project outcomes on eight very challenging projects.
Why do so many organizations see PMOs as somehow different than Marketing, Finance, HR, Engineering or Production? Are they not ALL part of the business? Do we see Marketing or Engineering departments functioning as somehow not part of the business? In way too many organizations, a wall exists between the PMO and the rest of the business. I can't count how many times I've heard something like this "Oh that's project management stuff not part of the business." It's all one business isn't it?
I believe that we in the project management profession have contributed significantly to this view because we set ourselves apart from the business. Instead of focusing on business results and bringing value to the bottom line of the business, our focus, like a laser is on scope, budget, schedule, risk, etc. Yes, these are important tools and activities but they by themselves do not bring value to the business. We can manage and control these to nth degree, but if the project does not deliver any business value, it's a failed project. Projects are part of the business and must deliver value to the business. We also need to emphasize on project outcomes over process.
Is it possible to change this? Yes, it is and here is how.
1. Change our own perceptions. Those of us in the PMO world need to change our own thinking. We need to understand we are much more than technical project management. We must embrace and practice servant leadership. Our focus must shift to the needs of the business. The PMO’s purpose is to ensure the success of its constituents.
2. Know the business. The PMO and its staff must know what the business of the business is and we need to understand how the business conducts its business. We have to know and understand the mission, the strategy of the business, the goals, and the objectives of the business in order to ensure the mission, strategy, and objectives of the PMO align with those of the business.
3. Align with the business. Align the mission, vision, and objectives of the PMO with those of the business.
4. Forget a PMO Charter. Do any of the other departments in the business have a charter? Does Marketing, Finance, Engineering, HR, or IT have a charter? Not likely. So why do make ourselves different? It only serves to further separate the PMO from the business.
5. Create a strategic plan. Create a strategic plan instead of a charter for the PMO. Update it annually and make sure it is aligned with the strategic plan of the business.
6. Assist the business in strategy development. Participate in the business strategic planning events. Become a partner with the business and work to contribute to the success of the business.
It is time for project management and PMOs to evolve beyond the limited focus on processes, people and tools. We need to be leaders and problem solvers, be outwardly focused and take our place as an integral PART of the business. Project management is a way of doing business, not something apart from the business.
I have been watching a long thread on another site. A question was asked, “What are the top areas a PMO can add value?” I have been both amazed and disheartened at the myriad of answers to this question. So many of the answers concentrated on the technical workings of a PMO – do this process, use these tools, ensure governance and compliance, build the level of maturity, manage the portfolio – on and on – ad nauseam.
How about this? The business decides what is most valuable. For one business it may be portfolio management, for another it may be resource management, yet another, ensuring the right projects are undertaken. It could even be ensuring the delivery of successful projects.
Just as in the marketplace, the customer always determines the value of goods and services. It is a very myopic view to think that the PMO will determine what is valuable to the business. We cannot say that there is any one or two or three top values a PMO can deliver.
As I said earlier, without knowing the needs of the business, a PMO will not deliver value to that business. Each business will have different needs and it is the PMO that meets the needs of that particular business that will provide the most value to that business. So the answer to this question is "it depends." It depends on each individual business.
The PMO needs to be supportive of the objectives of the business. For example, if the business objective is to be the first in a market with new products, then the PMO's greatest value-add will be to actively support the business in this objective.
I strongly believe PMOs need to reject the old view of governance and compliance and focusing on being a partner with the business, providing leadership and services that will ensure the successful attainment of the business objectives. Then, and only then, will the PMO truly add value to the business.
It's all about the constituents of the PMO and their needs. It’s all about the business.