It seems that PMOs are getting the same treatment.
According to a research by ESI, 72% of PMOs are being called into question, mostly by senior management. Putting the most negative spin on this, it means that nearly ¾ of PMOs are simply not seen to be delivering the goods…
Also, highlighting the research from *PMI Pulse of the profession trends, the global performance of the industry has remained flat since 2012, there really hasn't been much improvement.
So, what does all this mean? let’s unpack a little.
Why PMOs Fail?
With a staggering 25% of PMOs shut down after one year, 50% after two years and 75% after 3 years. This data has been taken from PMI Global Congress 2013 but it is still relevant even today. There are many reasons why PMOs fail but in this blog I'm going to focus on top three.
Top Three Reasons
The following are the top three reasons that PMOs are being questioned.
1) In 44% of cases, senior managers and other executives simply don’t perceive value from the PMO. This could be because the PMO isn’t delivering the right value to the organization or it could be because the value is not being presented well.
2) In 41% of cases, there was a perceived lack in maturity in projects / programs. Again, this could be a real problem or a perceptual one.
3) In 32% of cases, it’s the old chestnut… lack of executive sponsorship.
How to Tackle the Perception Problem?
In the rest of this blog, I’m going to look at the perception problem. Let’s assume that you, like the Romans in The Life of Brian, ARE adding value. In that case, we need to focus on how to make sure that value is visible.
Generally, execs hate any initiative that has poorly defined goals and that has no clear way to measure success… and if they don’t hear about an initiative, they kind of assume it’s not really adding value. These are normal human reactions, so be aware of them and act accordingly.
Understand expectations of your executives: It’s important to have clear goals for the PMO, goals that reflect what execs want to see from you. These goals naturally come out of a good planning process (see next point), but relatively few PMOs take the time to consult with execs and to document the results.
Engage in activities that add value for execs: Executives are busy. You might be doing an amazing job of training and supporting PMs at a tactical level, but the execs never see that work. On the other hand, picking the right projects in the first place is a very visible activity and PMOs should make sure they are supporting that prioritization and selection process. This will not only eliminate the waste from “doing poorly aligned projects” but will also show that you are actively adding value at the strategic level. Of course, I’m not suggesting the PMO should make portfolio selection decisions, but you can add value to the process.
Measure your progress: This is kind of obvious, but if you don’t measure it, you can’t manage it… and you can’t blow your trumpet when you get it right. Good measurement will also support your drive to greater program/project maturity (showing where you need to focus) and it gives you a platform to quantify the value the PMO has delivered.
If you focus on these items, you’ll improve the perception of the PMO very quickly.
Project Prioritization Improves PMO Value
Okay, I’m biased. This is the area that I focus on and it’s the topic about which I usually speak with PMOs and CIOs. But picking the right portfolio in the first place is of vital importance if you want to deliver value to the organization.
I see relatively few organizations that have a robust process for prioritizing and selecting the portfolio. Oddly, most organizations think that they DO have a good process for selecting projects.
It typically looks like: “put the execs in a room and let them fight it out…” This leads to unfocused portfolios that have poor executive sponsorship and which deliver marginal value to the organization.
And if the project portfolio delivers marginal value, it’s hard to see how the PMO can deliver value.
Putting in place a more formal system to capture corporate priorities and to align the portfolio with those priorities means you immediately deliver more value. More importantly (from the perspective of this particular blog’s starting point), you’re seen to deliver value up-front (in the prioritization process itself) and the selected projects (and the PMO itself) will enjoy better executive sponsorship. This is exactly what happened for Energinet, the national power grid operator in Denmark and you can read about it in this case study.
Oh, and improving your portfolio will also move you on up that maturity curve.
Did we just address all three main reasons PMOs are called into question with one shot?
Seems those Romans weren’t so bad after all!
If you’d like to learn more about how to prioritize projects like a pro, this blog is a great place to start: How to Prioritize Projects. Also, we’ve created this Ultimate Guide to Project Prioritization and Selection for you.