A well-run Project Management Office has the power to bring structure, focus, and speed to enterprise-wide change initiatives and process improvements. Building an effective PMO that adds value starts with staffing the PMO with talented, organizationally savvy personnel who know how to get things done. Equally important is establishing clarity and alignment on the PMO’s responsibilities to avoid ambiguity and functional power plays: Will the PMO be a passive organization, gathering data and undertaking reporting activities so the executive team has a view into company initiatives and performance? If yes, what information will be collected and how? Or, will the PMO be of the more active stripe, establishing processes and acting as a direct resource for project management activities? Once the PMO’s responsibilities are established and accepted by the organization, it’s time for the PMO to show its value by ensuring projects are completed and benefits realized.
If your executive team has setting up a Project Management Office in its sights or your PMO is already operational, here are five key insights that will help this team deliver value to your organization:
1. Establish Candid Reporting and Manage Projects Aggressively: Every PMO handles reporting project progress, often using green, amber and red symbols like traffic lights, to show whether projects are on-track, behind schedule, or seriously off track. It’s not unusual for the tracking dashboard to show lots of green with the occasional amber. If you see this, it should raise questions and perhaps concerns. No project portfolio is on track all the time, so if reporting indicates it is, this usually means one of two things: The PMO is trying to make things look better than they really are to avoid dealing with blowback from senior leadership, or the project teams have incorporated huge safety buffers into their timelines to ensure they won’t miss deadlines. If everything is always on track, encourage your PMO and project leaders to get more aggressive and make sure senior leadership doesn’t overreact to candid reporting when schedules don’t live up to expectations.
2. Sidestep Resource Bottlenecks: One of the most common reasons why projects fall behind schedule is because they are stuck waiting for resources, such as subject matter experts, functional capabilities, contracted resources, and the attention of decision-makers. An enterprise PMO is in the unique position to foresee and sidestep these resource bottlenecks, therefore every PMO should be looking 6-12 months out, analyzing resource requirements and forcing timely adjustments to resource levels so projects stay on track.
3. Proactively Manage Risk: Project teams are frequently asked to describe risks that may affect the project’s timing, cost, quality, or value creation; however, they often fail to adequately assess the magnitude of the different risks, or to identify the leading indicators for a risk event or the strategies to mitigate the most important risks. A strong PMO makes sure these additional steps are taken and will actively monitor the leading indicators, giving the organization a head start on proactively managing risks.
4. Drive Cross-Functional Issue Resolution with Pace: Large projects almost always cut across an organization’s many functions, and when lower-level functional representatives can’t agree upon a common solution to an issue it can cause the project to slow down significantly. The standard issue resolution process of escalating within the functional silos takes too long, which is why a strong PMO must identify issues quickly and accelerate any necessary escalation. In simple terms, they move with pace to get the right people together talking about the right issues and solutions.
5. Measure and Deliver Stakeholder Satisfaction: While PMOs are set up to drive speed, alignment, and cross-functional activity, they can easily become a part of the bureaucracy. Well-managed PMOs establish KPIs to measure how well they deliver value and regularly touch base with stakeholders–those executives who are providing oversight and the teams running the projects–to help ensure the PMO is doing a good job. Think of it as a customer satisfaction survey based on the KPIs and stakeholders’ points of view.
While implementing a cross-functional overlay to a strong functional organization can be challenging, investing in an enterprise PMO that embraces these insights and delivers high levels of value is one of the best investments that an organization can make.
Alex Nesbitt is a Senior Advisor at HighPoint Associates, a strategy consulting firm headquartered in El Segundo, CA. Alex has 30+ years of management consulting experience and a strong track record of partnering with CEOs to tackle issues related to strategy, organization, senior team management, operational effectiveness, and performance improvement.