What Does The CEO Want From The PMO?

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.

The Top 5 Reasons PMOs Fail

There are many reasons a PMO either thrives or fails, but the most common reasons for failure are often not process or technology issues, but rather related to “people issues” in an organization. Ultimately, a PMO’s success rests in the hands of its team members, spanning across all levels of the org chart – it can’t fall solely on a PMO director or within a single isolated department.

 Here are the top five reasons we see PMOs fail:

  • Executive stakeholders that are not fully committed to the PMO. It’s a familiar story: The executive team realizes there’s a problem with projects not executing properly, contending for too few resources, or just not delivering results. So they authorize a PMO, and hope it solves the problem. But come time to attend steering committee meetings and make hard decisions, they send lower-level functionaries and don’t give them decision-making authority. Then, when projects are once again performing poorly due to resource contention and prioritization conflicts, they blame the PMO and disband it.
  • PMO leaders that don’t know how to adapt. What worked in one company most likely won’t work in another, despite similarities on paper. If a PMO leader isn’t adaptable and tries a “cookie cutter” approach based on experience from a prior job, then a PMO will likely fail. A better approach is to understand the unique drivers and pain points for the organization, the various personalities and motivations of key stakeholders, and whether the culture of the organization supports the ability to develop a plan with achievable goals.
  • The PMO becomes a project manager’s worst enemy. In many ways a PMO director has to be part cheerleader, part salesperson and part coach, making sure that the PMO’s mission/charter is well articulated and all stakeholders buy into it. However, if a PMO becomes part auditor and part methodology police, forcing adoption of ill-fitting methodologies or gathering unnecessary information, it will become a hindrance to project managers and rejected by an organization. 
  • No strategic vision. Focusing on tactical, day-to-day execution is fine, but PMO directors and teams need to not lose sight of the bigger, strategic picture. If a PMO leader can’t grasp and articulate the business challenges faced by senior executives, and help facilitate organizational change and alignment to meet those challenges, they will become less relevant in an organization.
  • Lack of a metric-based approach. Unless a PMO leader has an analytical mindset and is comfortable with metrics, a PMO won’t be successful.  For example, when it comes to deciding how many of the top projects can actually be done, discussion too often turns to pure guess work. Without a metrics-based understanding of resource capacity, it is impossible to match demand with the actual supply of human resources.

Let us know what you think and if you have others that you’d include in your top 5!

Collaborating In Real-Time

We all feel the pressure of “Do more with less.” Run lean. Increase quality. Move faster. These are not just management-speak, they are reality. The macroeconomic climate of the past few years has mandated we find new ways to increase efficiency or be left behind.

Successful teams are finding new ways to use their tools to meet these pressures.  By defining a single source of truththat is available anywhere, anytime you can begin collaborating in real-time for leaner execution.  How does this work? Let’s take it piece by piece.

Single source of truth. The first step is to ensure stakeholders understand which systems are the systems of record for a given type of information.  Your financial data goes in your financial system.  Your project planning and execution belongs in your PPM system.  HR information in its system.  Integrate them for the big picture view but define a single system for each function.  Constantly reinforce with all stakeholders the need to keep the systems current in real-time.  Putting off your updates to the system will keep your organization from finding that next 10% in your business.  Wondering if the data is reliable will restrict your ability to be nimble.

Available anywhere anytime. Make sure your systems are available wherever and whenever your stakeholders are working.  Productivity is now pushing us round the clock and round the globe and our systems need to support that. If yours don’t, you need to look at new systems. SaaS and cloud technologies are making it clear this is the new norm.  Removing any friction in accessing your systems will ensure the single source of truth remains reliable and accurate.

Collaboration in real-time. Change how you work together (with another individual, an executive steering committee, etc).  Always open up your management tools and use them in meetings.  As we all have increasingly distributed teams this is key to keeping everyone engaged and aligned.  Guide the discussions based on the data in your system of truth.  This keeps the discussion focused, generates buy-in (“we all saw it in the meeting”), removes ambiguity and creates accountability.  Capture decisions and changes in your systems as the meeting is happening.  If your systems make it too cumbersome to edit information quickly consider new tools or push vendors for better user interfaces.

By defining a single source of truth, ensuring your systems are available anywhere anytime, and collaborating in real-time, you will help your teams do more with less.