Jul 5, 2017

PMO Webinar Attendees: You Asked, Kent Crawford Answers!

Posted by Jeannette Cabanis-Brewin | 0 Comments

"Methodology, methodology, methodology."

In our May webinar/panel discussion of The State of the PMO 2016, we had a number of questions submitted by participants that there was not enough time to answer. I caught up with Kent Crawford by phone to get his responses to some of the questions that centered around PMO implementation and processes.

Q: The best-in-class PMO's work on more projects.  What are the metrics?  What is the velocity of the projects?  What are they doing differently to produce more, faster? 

Crawford: Velocity is an agile term spun into the issue of measuring PMO success. I am hearing more and more terminology of this kind, as lean and agile thinking is picking up in PMOs. That’s all good!

As for the metrics, the research data does not drill down into this question to that level of detail. What we can deduce from the data is that successful PMOs work on more projects by breaking them down into more manageable units. This has been a hallmark of project success noted not just in our research, but in the Standish Group studies for a number of years.

Of course, there are many factors in play when it comes to succeeding at managing multiple projects – and, if you look particularly at the “Best-in-Class” PMOs in the study, you see that they report quite a few characteristics that may be contributing to their ability to juggle many initiatives successfully: the vast majority of them manage their own project managers, for example; and they are also much more likely to engage outside experts to help manage projects and programs.

Q: Our organization is international and growing at a fast pace but there is no established PMO. My own assessment is that top level management might not be knowledgeable about the huge benefits that might be derived. Is there a hybrid PMO setup where you can share expertise but remain separate units?

Crawford: Find the business unit(s) that are most interested in improving how they manage projects first. Make sure you establish a methodology that will be useable across the entire enterprise so that later you can integrate it into other business units. Develop your system to satisfy that unit but design it to be transportable to others and serve the entire enterprise. At one company we have worked with, the IT PMO, for example, became a “de facto enterprise PMO.” Although it was based in IT, other business units got wind of the success they were having and began asking for help and adopting certain processes. You can view the departmental or business unit PMO as a “pilot project” where you model the impact of project management. That is why it is key not to create your entire methodology around a specific function so that it can’t be used by anyone else.

Q: I am at the beginning stages of setting up a PMO for an Oil & Gas Project Management group and I am struggling as to which hill to climb first.  What is a recommended path when developing a PMO from scratch?

Crawford: I think we wrote a book about that! Methodology, methodology, methodology. Make individual projects successful first, then apply it to portfolios and start tracking value to the organization as a whole.

Further, you should endeavor to develop and implement methodology in two months. Otherwise it becomes an exercise in paper. So many PMOS fail because they take too long developing methodology.  Plug and play—that is one of the benefits behind calling in outside experts who already have a methodology that they can quickly customize to your organization.  If looking for outside help, make sure they are bringing a toolkit with them: they should have at least a 90% solution ready.

At another client site, we saw a negative example of this, when the company—a manufacturer in the automotive field — designed a product development methodology that they said it was for the enterprise, but since no one else in other departments recognized the terminology, it never went anywhere. The same for a global pharma company we worked with. They had 4 different methodologies … but the life cycles were so different that they were not usable across the enterprise.  When the organization wants to grow, they find they all need to speak the same language.

Q: Can you speak to the issue of Project Management Center of Excellence versus a PMO?

Crawford: When it comes to the effectiveness of a Center of Excellence (COE) model PMO, placement is everything. We are facing this at one of our clients, a utility company. They have a COE; but it is tucked away in a silo three levels down the org chart. The COE can only recommend and suggest.It has no auditing or policing capability, and zero authority on adaptation. So in the other silos they are just making it up as they go along. Looking at resource optimization across multiple departments, there’s inconsistency in the tools they are using. So, it becomes impossible to integrate and they are losing a lot of efficiency. You’ll never get there on multiproject integration with multiple tools and approaches.

If the COE is placed high enough in the organization, it can work … but it also needs authority. But then …  it’s not exactly a COE! Don’t get me wrong: creating approaches, processes and tools, making them available, educating, responding and supporting when called upon … this can be tremendously helpful. The problem is that this does got give the enterprise the consistency in approach that really solves problems.

A fully mature PMO should have the authority to evaluate project progress and change project leadership if necessary. CoEs are just a voice. Then the function leader decides when and how much to apply of it. Mentoring can be useful. But truthfully, most COEs are toothless.

Still, a lot of companies have begun that way. The best case scenario is that they realize after a while that they could be so much more effective if they gave their COE the authority to implement … thus becoming a more mainstream PMO.

Q: What´s your best advice to establish a world-class PMO in a company that has its focus on revenue over profit?

Crawford: I’m guessing that this participant works for a startup! In a company’s first five to eight years, they need to create revenue stream. Establish your objectives and tie those to key portfolio objectives that drive the business. What projects in my portfolio have the highest potential for revenue growth? What tools will improve time to market? How do we get products out there that will grow revenue? If you are struggling with what drivers to determine your portfolio, go to the C level and ask how performance is being measured.  Match your portfolio KPIs to the performance drivers that THEY are being evaluated on.

And be patient. Those things change. In one class I taught years ago, I asked a group of 50 people from all across the enterprise to rank their department’s 10 key strategic priorities (time to mark, cost benefits, etc.). All 50 ranked cost savings as #1. Why? This was an insurance company, one year after Hurricane Katrina. They said, “We are in recovery mode. Everything is under cost containment.” So things will happen that change business-driven KPIs … they do not remain static. It’s important to keep a finger on the pulse. What is motivating the leadership? For now, for this questioner,  revenue is the key. That will probably change in five years.

Q: What are the critical elements of the business case that best-in-class PMOs require?

Crawford: If you are asking about the business case for establishing a PMO, first of all, I’d make the case for an optimized portfolio that contributes to critical strategic objectives and KPIs of the organization. The second is that project delivery and performance will be improved, along with efficiency of multiproject resource optimization. And then active governance and ownership by the leadership to enable much more effective decision making on cancelling or modifying projects, or making changes to the team. Being able to track, ID, and evaluate benefits post-project.

But this question could be read another way. What are the critical elements for business cases? First, that every project HAS a business case. Business cases need to address critical organizational KPIs. Having good KPIs is important. A business case process must have sufficient rigor that each case expresses those KPIs in a measurable way.

Editor's note: Check our our PMO resources here.

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