Tag Archives: Project Portfolio Management

A Tale of Two PMOs

I recently came across a statistic that states that 50% of all Project Management Offices (PMOs) fail. It seemed high to me. But when I reflected on my own personal experience in setting up two different PMO’s I can tell you that my experience supports that statistic. One PMO was successful and one PMO was not. Of course two experiences is hardly a solid scientific sampling. None the less it has prompted me to bring you a tale of two PMOs.

The first PMO I was involved in had support from the very top. Our Executive Vice President was very much on board with the idea of the PMO. She could see that projects were floundering and she could see that each project was being managed differently and that this was leading to confusion. And so she tasked one of her directors with the creation of a project management office or PMO. In turn he brought in an expert in project management and an expert in PMO organization.  He selected some of the top project managers from the department and brought them into the PMO. Together they conducted research and went to seminars and hired the best consultants. Everything looked good.

The Vice President told all of her directors what was happening and how she expected their full support. They all enthusiastically declared that they couldn’t wait for the results. They were all very happy to know there was going to be a group of people who was going to help them run their projects more efficiently. At least that’s what they said in public. Behind the scenes the PMO team was having a different experience with those same executives. It seemed that most of those executives were too busy to meet with them to discuss plans and processes. It seemed that those executives didn’t have any resources available to meet with the members of the PMO. And when members of the PMO invited people to discussion sessions and training on project management methodology nobody showed up. When asked about their participation, every executive denied that they were refusing to participate with the PMO. They blamed schedules and resource constraints and said that the PMO was being unreasonable and so it went back-and-forth with no real progress or solution. Out of desperation the members of the PMO started working around the executives. They started going to some of the people who were running projects and who were new to running projects. They offered help. They offered mentoring and support.

By working directly with those who could benefit immediately with what they had to offer, the PMO began to experience some success. But alas it was too late. The bickering back and forth at the top level and the lack of progress lead to the dissolution of the PMO. The members of the PMO all learned an important lesson. We learned that company culture played such an important part in the success of a PMO. What we experienced was our own company culture. Our culture was nobody ever said no to something in public. Nobody said they wouldn’t do something or support something. They just did not do it. And if someone decided not to do something, nobody not even the Executive Vice President would make them do it.

Grassroots was the way in which we experienced some success. By grassroots I mean going directly to the people who are going to use what you’re creating and engaging with them and helping them and having them help create your processes and your methodology. And that leads to the tale of PMO number two.

A few years later at the same company a few of us who had worked on that first PMO found ourselves working together in another division. This division had a small PMO and they wanted it to grow. Surprisingly those of us who have participated in the first PMO were called upon to help. It was surprising because they knew our previous attempt had not been a success. We were called upon because we had the battle scars or lessons learned from the other PMO. We knew the company and we knew the culture. And use those lessons learned we did. We really socialized our PMO. We had an open house with games and suggestion boxes and of course fun food. We invited people to planning sessions, we walked around and spoke to all of the executives in informal and formal settings. We asked for their opinion, we asked for their feedback, and we did not announce or create any new policy without the involvement of the majority of the group. Was it a lot of work? You bet. Was it slower? Absolutely. But the time we spent doing this was time well spent.
It was part of the plan and part of the process. We didn’t make unrealistic deadlines for the growth of the PMO.

We created deadlines that assumed input from all concerned parties. We created drafts expecting people to come and tell us what they hated and what they loved. We assumed an attitude of “We are the PMO how can we help YOU succeed. Did we make everyone happy? Absolutely not. There were definitely some people who still did not trust us or the idea of a PMO and wanted to do things their way. Some of them came around, some did not. But in the end by working within our culture we were able to support projects and bring about positive change. And that was really the point.

If you are curious about PMOs and you are looking for ideas on how to move forward with a PMO (and also Project Portfolio Management), check out this free eBook from Keyed In Projects on Why PMOs Fail, http://www.keyedin.com/keyedinprojects/resources/ebook-why-pmos-fail

There is no reason for you to experience anything but success!

Where Did THAT Project Come From?

There you are, about to lead another project kick off meeting. You know what you and your team are supposed to accomplish, but do you know why? If you are not certain do not feel badly, because you are not alone. Too often we are assigned projects to lead without being given any background as to why this project and why this project now. This limits your ability to set the vision and inspire your team. You do not want to say, ?Because management says so.? Aren?t you management too? Of course you are. The answer is in your project portfolio management process. You want to know how projects are suggested and then selected for your organization. When you do, you will be able to explain why this project is an important project to work on right now.

How projects are selected will vary from company to company and from industry to industry. Despite this there are some common themes that should be part of a good project portfolio management or project selection process. Project ideas should go through a standardized selection process. The process should be defined in such a way that the types of efforts that your company engages in can be objectively evaluated.

Let?s start at the top. If your company has a clear mission statement and you know what you do and even why you do it. You are already ahead of the game. Now with the mission in mind, what are the one year, five year and ten years goals that your company is trying to meet? The projects selected should be geared toward meeting these goals. Of course the goal needs to be very clear. To increase the number of customers is not as good as to increase our current customer base by 15% and have at least 50% of our customer base purchase at least $50,000 worth of goods from us each year ? this is better. Now when someone makes a suggestion for a project, this suggestion should be evaluated in terms of its ability to help us increase our customer base at least 15% and have at least 50% of our customers purchase $50,000 worth of goods from us each year.

Not every project is about growth. Your company has a portfolio of projects. That portfolio consists of projects which help meet different objectives. Just like a good financial portfolio which is tuned in order to perform based on the needs of a specific investor, your organization?s project portfolio should be created so that it provides the maximum performance. Of course there will be projects which must be executed in order to meet regulatory requirements or to upgrade operations or to be more competitive and even to strengthen your brand.

Project ideas do not just come from the top. Everyone can make suggestions. In fact someone who is brand new to your company could have some fresh ideas. They could also suggest efforts that are not quite right. When you have a project selection process which allows everyone to make suggestions and those suggestions are reviewed by the right people, you really get the benefit different perspectives.

With the proper process in place the most appropriate projects will be selected and if each project has a priority, then everyone knows, why this project and why this project now.

Linking Business Strategy to Project Strategy

Business strategy is determined at the corporate level in a “deliberate” (i.e. planned) or “emergent” (i.e. reactive) response to the external business environment. The success of strategy is purely determined on how well it is executed. Projects serve as the vehicle to implement and execute the corporate strategy. Some firms are project-based organizations and recognize revenue by delivering on contractual projects. However, other firms may perform projects internally as a means to grow the company. In some cases, both situations may exist. Regardless of whether or not projects are internal or external, the alignment of the corporate initiatives with the project components is critical to the long-term position of the company.

The project manager is responsible for the scope, schedule, and budget (triple constraints) at the project level. A project is characterized in section 1.2.1 on page (5) of the Project Management Body of Knowledge (PMBOK Guide) third edition as a progressively elaborated temporary endeavor undertaken to create a unique product, service, or result. The purpose of corporate strategy is to sustain the business whereas the purpose of projects is to deliver objectives and then terminate. In section 1.6 of the PMBOK on page (16) the authors depict the project management context as follows:

“Project management exists in a broader context that includes program management, portfolio management and project management office. Frequently, there is a hierarchy of strategic plan, portfolio, program, project and subproject, in which a program consisting of several associated projects will contribute to the achievement of a strategic plan.”

The important take away from this extraction is the recognition of a hierarchy linking strategy to projects. Below is an illustration of the hierarchical linkage.

Figure 01

Projects are the vehicle used to execute strategic initiatives prompted by the “deliberate” or “emergent” efforts of the organization in an attempt to align the organizational components to the external environmental domains for sustainability. The organization may utilize programs as a means of grouping projects managed and controlled in a similar fashion as a means to achieve efficiencies and effectiveness of resources. On a more grandeur scale, programs and projects that are organized together to execute and deliver on strategic objectives is known as a portfolio. Portfolio management aligns projects and programs with operative goals and objectives which are known as the organizational strategy. Below is a simple illustration of the conceptual relationships previously presented.

Figure 02

Over the next couple of months, I will be conducting a series of five literature reviews. As the contextual analysis unfolds, the first review by Morris and Jamieson expands on the topic of moving strategy from the corporate level to the project level, which leads into the next review by Milosevic and Srivannaboon about a theoretical framework for alignment between these two levels. It is the third review by Johnson who analyzes the topic of drawing the gap closer between projects and strategy. In the fourth review, Breakthrough Performance Management produced an article about tying performance metrics to business strategy. The final review by Webber and Torti is at the individual level of the project manager doubling as client account executives. The compilations of articles critiqued and analyzed were selected to invoke a cognitive exploration of the events, conditions, or interrelationships between corporate strategy and project strategy.

If you want to read the full articles, see the references below for details.

References

Breakthrough Performance Management: Tying Performance Metrics To Business Strategy. (2005, January). Business Credit, Retrieved October 12, 2008, from EBSCO MegaFILE database.

Johnson, L. (2004, June). Close the gap between projects and strategy. Harvard Management Update, 9(6), 3-5. Retrieved October 12, 2008, from EBSCO MegaFILE database.

Milosevic, D., & Srivannaboon, S. (2006, August). A theoretical framework for aligning project management with business strategy. Project Management Journal, 37(3), 98-110. Retrieved October 12, 2008, from EBSCO MegaFILE database.

Morris, P., & Jamieson, A. (2005, December). Moving from corporate strategy to project strategy. Project Management Journal, 36(4), 5-18. Retrieved October 12, 2008, from EBSCO MegaFILE database.

Project Management Institute (PMI). (2004). A guide to the project management body of knowledge (PMBOK Guide) (3rd ed.). Philadelphia, Pennsylvania: PMI

Webber, S., & Torti, M. (2004, February). Project managers doubling as client account executives. Academy of Management Executive, 18(1), 60-71. Retrieved October 12, 2008, from EBSCO MegaFILE database.

A Primavera P6? endeavor

Currently I am (1800) lines deep into a five year schedule using the MS Project 2003 platform.? If anybody has used MS Project before, you know the mysterious and often problematic features that are there to help.? Some of you can empathize with these adages, “You’re only one click away from disaster, so save often” or “Jesus saves and so should you”.

Well my prayers have been answered; I recently obtained Primavera P6TM and have the Administrator responsibilities.? You can imagine my excitement when I first logged into the Web interface feature.? We will initiate 101 & 102 training the first couple of weeks in October of 2008 and get PDUs to boot.? Developing and implementing a project portfolio management tool takes time and careful planning.? In the weeks following the training courses, I will be working with the other project stakeholders to create the Enterprise Project Structure (EPS), Organizational Breakdown Structure (OBS), and import the existing Work Breakdown Structure (WBS) from the old MS Project file.? There is a lot of work to do, but the results will be worth the while.

(To be continued)

See what has project professionals excited about Primavera P6.

Primavera 6 Testimonials Video

Primavera P6 Testimonials Video