I’d like to tie those last two posts together with a couple of thoughts engendered by listening to Kent’s keynote, and by some of the conversations I shared with PMO directors at the Summit.

“Governance” is in danger of becoming a buzzword. It’s one of those ideas that many corporate leaders accept is important, and necessary, without having the time to really drill down into what that will mean for their organization’s processes.

Yet, like most profoundly important ideas, governance is pretty simple. I liked the definition Kent used in his presentation, from the IT Governance Institute:

“A set of responsibilities and practices in use by executive management with the goal of:

• Providing strategic direction
• Achieving objectives
• Managing risks
• Using resources wisely.”

When I read that list, I thought: sounds like simply what executives are supposed to do. Yet how easy it is, especially in public companies with the pressure to boost stock price; or in public agencies blown about by the winds of politics; to forget that wisely providing direction is what it’s all about. Every now and then we need a new word to buzz in the ears of management, waking them up to thier true path.

When the buzz of governance is paired with the concept of the PMO, I think we are really getting somewhere, however. The definition of governance above asks leaders to rise to the occasion. The PMO gives them a structure for doing that.

Why do I say that? –in part because I’ve read, heard and seen that, without a PMO, the portfolio management process goes astray … and without portfolio management, you don’t really have a mechanism for governance. In our 2007 book Seven Steps to Strategy Execution, Jim Pennypacker wrote:

“Each level within the organization must apply the same principles of setting objectives, providing and getting direction, and providing and evaluating performance measures. A common governance framework ensures that decisions are made the same way up and down the organization …”

True. And some entity within the organization must specialize in making these processes flow up and down the organization; must be the seat of metrics collection and analysis; must red flag what isn’t working and grease the wheels for what must work. And if that entity isn’t a PMO … then what is it?

Any alternative structures I should know about, readers, for governing the portfolio of projects that is today’s organization?

Our PMO Award winner and finalists had their day in the sun in Boston, and the brief case studies of their achievements have been posted on the CBP website, for those of you who weren’t able to be with us at the awards ceremony.

It’s an interesting thing about these case studies; this is the fourth year we have sponsored this award, and each year I’ve pulled together a story from the application materials, checked with the PMO Director, and gone straight to press with it … oh, but how things have changed in 2009!

This year each of the case studies went though more than one level of review at the PMOs’ companies - from legal to PR, and up the chain to VPs of various stripes, our humble few pages of copy were vetted, critiqued, corrected and revised. At first this just frustrated me, but then I realized: for the first time in the award’s history, the upper echelons actually care what is being said about the PMO.

And that, my friends, is progress.

Yet … weigh in here, project managers … although PMs have for decades said they wanted greater visibility in the organization and more executive involvement … now that this is a reality in many companies, I’d bet that visibility is a two-edged sword. Yes, you get the praise and maybe even the funding you deserve. But the presentation of Paul Ritchie’s quoted in yesterday’s post from Kent Crawford tells another side of the story: visibility also means being held accountable for our lapses, and scrutinized on factors we perhaps had not even thought of.

I’ll be interested to hear from those of you who find themselves visible … and nervous … as well as those who are basking in the spotlight.

I had the pleasure of delivering the keynote address at the CBP Summit this year, on the subject of PMO Governance. And, because the topic of governance always touches on areas in organizations where our assumptions rule … where things that “can’t” be questioned (but should be) take up residence … I thought I’d kick it off with a little exercise to show my audience how we can all suffer from “perceptual blindness” - the failure to see things that are right under our noses - simply because we are focused elsewhere.

I won’t go into this too much so as not to spoil the effect, but take at look at the video on this site. Tip: Notice how many times the white shirts pass the ball and see if you can detect any gender bias.

Gotcha? Well, the same thing happens in organizations. We are sure we “know” things about our processes that in fact may not be true. For example, it isn’t uncommon to hear of highly successful PMOs that are disbanded. Another speaker, Paul Ritchie of SAP (check out his Crossderry Blog in our Blogroll) addressed this in his Summit presentation. He mentioned the wake-up call he received when he realized that others did not view his “successful” PMO in the same light he did, and the self-examination he went through to address his own blind spots.

When developing a governance structure - for the PMO or an entire organization - it’s critical to have a clear view of organizational structures, politics, and status. Devising the rules that govern what’s in and what’s out of a portfolio of project investments can’t be based of false assumptions about value, markets, resources, or strategies. That’s why some of the top research firms - Gartner, for example - have recommended bringing in outside voices to address similar organizational change issues. When assessing the organizational playbook, it helps to have a little perspective on the game.

Eavesdropping on the attendees at the CBP Summit here in sunny Cambridge, Mass yielded the following gems:

“Project management is like a ‘black art’ to the executives … no one understands how it works. They kind of want it but are scared of it at the same time.”

“This merger is a little different, because they are keeping the team intact…”

“I worked in the space program, but never built a rocket; worked in the computer industry but never designed a chip … project management is transferable. It’s like Jack Welch said: he never made a lightbulb at GE but he was a great CEO.”

“If I were naming PMI today, I think I’d name it something different. The People Management Institute. The Process Management Institute. The Performance Management Institute. The focus on the project makes us blind to the larger issues.”

“We’re looking for predictable outcomes … instead of the ‘project black hole’.”

“My company is back in the 80s. How do you fast-forward through project management into strategic management-by-projects?”

… It’s exciting - but also daunting - to hear the recipients of the PMO of the Year awards describe what they’ve done - and the speed with which some of the improvements were implemented. Stay tuned for some brief interviews with the Award winner and the finalists later today and tomorrow.

Meanwhile, if you have an answer for that last question: we are all ears.

The Center for Business Practices’ Strategy & Projects Summit is in full swing this morning, here in Cambridge Mass … I’m blogging with a view of the Charles River, which is a nice change. And, speaking of change: the Massachusetts Biotechnology Council’s here with us, listening to my CEO Kent Crawford do his presentation on the PMO - material drawn from our books on the topic.

I say, speaking of change, because last year at the Summit I chatted with a young man who worked for a Cambridge-based biotech firm and he had a familiar-sounding tale to tell: tasked with implementing portfolio management, he struggled to get his execs–doctors and scientists by training–to buy in to the process. As I recall, he said that they felt project management was both less of a rigorous “science” than they were used to dealing with, and more of a standardized approach than they liked to submit to–as people who were used to thinking of “academic freedom” in their approach to daily work.

What a difference a year makes!

Looking at the Mass Biotech website, we find not just our Ultimate PMO seminar being offered (and it is at capacity) but a meeting of the organization’s Project Management committee coming up within the month, addressing how biotech companies can implement sustainable practices. Here’s a quote:

Inherent in the concept of sustainability is the minimization of waste and reducing the use of natural resources to better match the rate at which they are replenished.

There’s a nice resonance between this balancing of resource use with resource availability … and the very same kind of resource balancing that PM practitioners are used to managing in terms of human resources. This may well be yet another area where the tenets of project management prove to be portable across industries, across sectors … and even across the divide of a changing global economy and climate.

Debbie’s comment regarding improved employee morale being an ancillary benefit of project management brings to mind a discussion I had with a client CIO last year who had been wondering about measuring the benefits of the project management and portfolio
management methodologies he had introduced into his organization. Naturally he was thinking about “hard numbers” such as projects completed on time and in budget.

This CIO had not yet thought about measuring the human benefits he was achieving: the sense of satisfaction the staff would receive from knowing they were working on projects that were important to the company, the sense of accomplishment associated with achievement of commitments they had made, the feeling of belonging to a team with a common objective. As someone who had been doing project-based work for the past 30 years, I knew that working with a good PM, reasonably applying PMBOK® Guide-aligned
processes, was a much more positive experience than working with a “shoot from the hip” PM.

When I shared my experiences with this CIO and we discussed measuring these indirect benefits, he realized that yes, perhaps there was something there to be surveyed and considered. And, no surprise, the results of his HR survey were aligned with Jeannette’s comments (in her post Agility Happens!) regarding employee satisfaction improvements.

Project management, when practiced right (just enough project management process, as indicated by the risk profile of the project) definitely has a positive impact on employee morale and turnover rates.

I’ve been gratified to see so many people engaging around the topic of metrics. Yet, I know from experience that when you start advocating for a measurement program, there are always a few skeptics who view it as just more process and overhead. That’s why I wanted to share today some links to brief case studies we’ve done with a few of our consulting clients.

You see, one of the things we promise in each and every client proposal is that we will care enough about their success to measure the impact of the work we do. So it’s exciting to see that promise making a difference. For example, a targeted mentoring program established at Merchants Insurance Group resulted, among other value-adds, in one program realizing 758% revenue growth in the first two months of introduction. In another case, helping a manufacturing company to complete a new factory on schedule helped the company to begin realizing profits seven months ahead of schedule. Not only that, but 400 new jobs were created by the project.

With job creation as a primary focus of the American Recovery and Reinvestment Act, it seems to me that the need for project discipline, and smart performance tracking, has never been greater. Not only the public agencies who are now receiving the funds, but the contractors and vendors who carry out the work are being called on to plan realistically, execute efficiently, and show by the numbers that they’ve succeeded.

… how’s that for a bumper sticker? All kidding aside, my friend and colleague Karen White pinged me the other day to tell me to visit the CEO’s blog on the PMI website (it’s in our blogroll - check it out). As the author of the 2008 CBP book Agile Project Management, Karen was excited to see that the top echelon of PMI was beginning to “get” the transformative possibilities of agile methods. Says Karen: “IT IS HAPPENING!” - and she’s not the type to play fast and loose with exclamation points. Among other things, PMI CEO Balestero quoted an Agile guru as saying that the real impact of Agile methods was:

...driving such values as respect for everyone’s opinion and contribution to the project team, consistent and shared vigilance to risk, and more. He felt that it was developed not only to develop software faster and more effectively, but to provide a new culture of work, and new leadership values and principles.”

This is what excited Karen, and it hits me where I live, too. After years of writing from the fringe of project management (both fringes, actually–the one that says project management is a transformational tool for organizational change; and the one that says project management helps people feel engagement in work and enjoy their worklives more fully) - it’s gratifying that the inner circle of the profession can sense the important change that’s coming over the discipline.

Yes, project management is about control - about restoring order to the chaos. But it’s more than that; that’s  why it has been able to energize and compel so many people for so long. Newbies to the profession often remark on how passionate people can get about PM. CBP research has shown that merely implementing a basic methodology serves to improve employee morale.

Where order meets agility, work becomes exciting and things start to pop. The rapid spread of agile project management is just the firestarter our economy needs.

You may be aware that Google recently acquired Feedburner, the service we have used to maintain the Strategy & Projects blog mailing list and posting alerts. The transition has been rocky for us, and we have lost the ability to update our account information in Feedburner. (That’s why the alert you received about this post told you it was written by Jim Pennypacker.) Google has known about the issue (which affects many Feedburner accounts, not just ours) since Jan. 25 and hasn’t responded with a workaround yet. So, our only recourse is to create a new account. This means that we will lose our present subscriber database.

Sorry for the inconvenience; it’s yet another example of the pandemic of poor customer service (and, I might add, bad project management) that plagues business in our times. I’ve lost a lot of the respect I once had for Google through this debacle.

We’ve selected the 2009 PMO of the Year from a field of nearly 40 applicants that included state and federal agencies, major nonprofit organizations, and an impressive field of Fortune 1000 companies. In the end, the top ten differed in the rankings by mere tenths of a percentage point. and only five could be selected:

Rockwell Automation’s Software Program Management Office is the 2009 PMO of the Year. Founded in 2004, the PMO, within the Architecture and Software Group, ramped up rapidly, assured certification (multiple certifications in many cases) of all PMO staff, and deployed an agile methodology that has allowed them to deliver major releases on time and under cost for the first time in the organization’s history. Bravo to the Rockwell PMO Staff and its director, James C. Brown!

The four finalists who will also be honored at the awards ceremony in Boston on May 19 are:

Alcatel-Lucent’s Global Program Management Office

Australian Securities Exchange (ASX) Project Management Office

Cisco Services Office of Strategy and Planning

Regence Blue Cross-Blue Shield Enterprise Program Management Office.

Detailed information about the winner and all finalists will be posted on our website, www.cbponline.com, within the week. At the CBP Strategy & Projects Summit, which kicks off with the Awards reception on May 19, representatives of Rockwell Automation will present the facts that make their organization a winner, and representatives of the finalists will be on hand as well to field questions and share expertise. We hope to see you there.