Project Management Offices, and those with an enterprise flavor (or e-PMOs), tend to think they’re all about project portfolio management and project execution and performance. But these topics can sometimes be lost on a CEO as they don’t innately sound like they relate to the company’s vision, strategy, or performance. Thus, when cost-cutting time comes, the PMO looks like one more piece of G&A bureaucracy ripe for the chopping block.
What does a CEO really look for? To a CEO, the company is driving toward a vision – hopefully a compelling vision to the marketplace; a good example is Google’s “Organizing the World’s Information.” That vision translates into strategies to implement and further the vision. Those strategies require changes to be made in the corporation to either implement the strategy or to course-correct. The CEO is more than willing to invest in these changes to help drive the company forward.
Projects, of course, are the main vehicles used to implement change. They aren’t just isolated business cases proposed as pet projects by department heads – they should actually be creating the changes required to drive the company into the future. So, what PMO directors really want to show the CEO is how the PMO helps orchestrate and execute these changes.
First, the PMO needs to ensure that all changes connect to strategic goals and investment priorities. Each change should carry an investment classification – Run, Grow, Transform is a popular model. I like Strategic, Improvement, and Run. It provides a quick justification for the change – we need this change to keep the business running, make it more efficient, or to further corporate strategy. For strategic projects it is important they align with the stated corporate strategies. If not, is it really furthering the vision of the company?
Key PMO Value: Making sure the right changes (projects) are selected
On the orchestration side, the PMO’s involvement with portfolio planning is critical. There are two basic modes: the Annual Operating Plan (AOP) and the funneled intake process. Often, both are employed. The AOP usually emanates from the executive team as a set of strategies and initiatives with proposed funding amounts attached. The PMO’s job is to make sure these initiatives get fleshed out, planned, funded, and finally executed. They are an invaluable resource to the CEO in making sure business plans become reality.
The intake model is more typical and involved, sorting through numerous requests for changes and deciding which to pursue. Here again the PMO is valuable as the facilitator of the process, providing objective information on the alignment and relative value of each request to enable steering committees or executives to make sound business-focused investment decisions.
Either way, if the CEO sees the PMO as effectively aiding the planning of organizational changes they will be in good stead.
Best Practices for Success: Effective Reporting, Performance Metrics
When reporting on execution progress, don’t just group a project list under investment classes or strategies. Do you really think the CEO has time to wade through all that data? There are better ways of reporting progress more suited to the executive suite.
First – they are interested in how much has been invested and the returns from those investments. To highlight the investment side, pie charts dividing the budgets by investment class, strategy, and business unit work really well. Returns are trickier as not all changes result in direct dollars to the bottom line. Some are measured in market share, customer satisfaction, or other non-financial metrics. The key is creating a benefits scoring model that rationalizes the various stats into benefit units. Then report the expected benefit points out per portfolio and follow up – if you can! – with the actual results post-change.
Next up on the CEO’s list – how are the investments faring? Now we’re talking standard project performance metrics, but grouped up to the portfolio level. Budget pie charts of project health (Red, Yellow, Green) work well for a high level view. If they want more info on critical projects the single-page or 4-square status report serves the purpose.
One question frequently asked by the C-Suite is when will these changes hit the organization? The best tool I’ve seen is the project landing map. This usually has a Gantt bar for the life of the project and milestone markers for only the go-live events. It’s a graphical timeline of change impacts across the enterprise.
If you want to put this all together in a nice neat package for corporate execs the portfolio deck does the trick. I’ve seen this used at Fortune 500 and even Fortune 100 companies at the CEO level to great effect. This is a published (often pdf) document that starts high level but has more detail in the body for reference if needed. A common format would be:
- Investment Pie Charts
- Project Landing Map
- Portfolio list (not project list) showing budget, actual, variance totals along with average health and average schedule variance.
- Program list (largest and/or most important programs/projects only) grouped by strategic portfolio with standard health, financial, and schedule status indicators
- 4-square project status reports for all projects listed above
So to give the CEO what they want, think like a CEO instead of a project or portfolio manager. When you’re running a company, you want to know you’ve made the right investments in strategic change and that those investments are paying off.