Managing Project Managers Within and Outside the PMO

The Who and Where of PMOs

A few weeks ago, one of the members of our PMO of the Year Group on LinkedIn asked a question that sparked a lively discussion with numerous group members chiming in.

I thought I’d recap the back-and-forth and add some of my own thoughts.

It all started here:

“I am interested in hearing the consensus on whether Project Managers should sit under the PMO umbrella or the business unit/stakerholder for which they are project accountable.”

The 10 or so responses ran the gamut from the PMO to the business unit and back again, with many folks on the fence, saying, “It depends.” Here's a collection of quotes:

• There are different kinds of PMOs. The PMO can be governing, coaching, or simply administrative. You would only consider having PMs assigned to a governing PMO. The business model also comes into play. Are your projects under a cost center or a profit center? Is Project work key to generating Revenue like in a service or consulting business model, or are your projects internal? 
• It depends on the maturity of the PMO. In a mature PMO that shares operational and financial targets with the business units and stakeholders, it is beneficial to maintain CPMs under the PMO umbrella. This will ensure focus on their PM competencies development and alignment on PM processes and project governance across the projects of the entire organization. At the same time, PMOs have visibility of the full portfolio and, therefore, can maintain accountability for the full portfolio management.
  [If ] PMs do not sit in the PMO, the PMO acts only as an excellence center...with limited power to influence that the project management procedures and PM competence development plans are followed.
• My organization chose to have the best of both worlds—a blend of PMs who report to the PMO and PMs who report to their functional areas. This allows us to have some level of subject matter expertise in the functional areas but also have cross-functional project management capabilities coming from the PMO. The key to our hybrid model is that all project management is governed by the PMO.

Wow! This is just the kind of discussion we were hoping for when we created the groups in LinkedIn!  Let me just weigh in with my own thoughts on the proper “care and feeding” of project managers:

Professional PMs need a “home” where their performance is compared against their peers.

You know, we’ve seen it time and time again—when project managers are scattered throughout the company, neither they nor their projects get the attention they deserve. Project wins get lost in the day-to-day, and nobody really notices how good the PMs are. For their own career growth... and for the company’s sake, the PMO is the right place.

PMOs must measure professional PM competency (traits, experience, and performance) in a consistent way—not just knowledge.

We’re pushing companies more and more to track the business value that project managers bring and to see project management as a core business skill. It's not just about certifications (though those are important). It’s about knowing who to hire, develop, and promote within the PMO.  

Compliance with organizational process and methodology should be “de rigueur”

Compliance should be "de rigeur" for the top project and program managers and the “gold standard” for the remaining organizational PMs. Our recent research on Project Portfolio Management showed that getting compliance with standard processes is still a headache for many organizations. But that's how culture change starts.

Project manager career progression must be centrally managed

Career progression should include consistent training and experiential development. This is another key to getting the organization standardized around methodologies, and it helps to improve the intellectual capital of the enterprise.

Central Data Integration is Critical

Centralized data in the PMO lets PMs create accurate and timely reports for executives. You just can’t do that when PMs are spread out. And that messes with portfolio management, too. There’s a reason more and more companies are putting portfolio management in the PMO. (Check out that PPM research link above.)

Professional PMs need managers who understand Project Management

Professional PMs need to be managed by people who know how to manage full-time project managers. Part-time PMs and PMs managed by business unit managers don't deliver as well. We saw a huge jump in project success when one of our big clients put qualified project managers on key projects.

Research shows PMs are Reporting to PMOs

Research trends are clearly showing organizations understand these issues and are dramatically moving toward PMs reporting to the PMOs. As our editor-in-chief at PM Solutions, Jeannette Cabanis-Brewin, remarked in the LinkedIn discussion,

"Surely if there were not business benefits to be gained from having PMs report to the PMO, we would not have seen the steady increase in the numbers of firms organized in this way that we have seen over the past decade. For example, in 2006 about 44% of PMOs reported being responsible for "managing project managers." In 2012, this number hovered at around 60% (higher in midsize companies). I think companies have experimented with this structure, and seen the value of it. ”

FAQs

How is a PMO different from a project manager?

Think of it this way: a project manager is focused on the success of a specific project, while a PMO is focused on the success of all projects across the organization. The PMO sets the standards, provides resources, and ensures projects align with the company’s overall strategy. Basically, the PMO is the umbrella, and the project manager is working under it.

What are the key benefits of managing project managers within a PMO?

You get consistent standards, better career development for PMs, and a clear view of all projects. It also makes it easier to track the value that PMs bring to the business. Plus, it is much easier to standardize data collection and reporting.

When might it make sense for a project manager to report to a business unit instead of the PMO?

If the projects are very specialized and require deep knowledge of a particular business area, or if the PMO is very new and not yet mature, it might make sense to have PMs report to the business unit. Also, when the project work is the primary revenue-generating activity of the business unit.

What are some best practices for managing project managers effectively?

Focus on consistent measurement of skills, provide ongoing training, and ensure clear career paths. And make sure they’re managed by people who truly understand project management.

What is the best way of managing project managers?

The best way to manage project managers depends heavily on the maturity of the PMO and the company culture. That said, having a strong PMO with clear standards and skilled PMO leadership is the best way to ensure project success.