Well, as they say at the races, Ils sont partis! … the gates are open and the horses are away: the PMO of the Year Award competition is off to a running start. Already I am getting questions from prospective applicants, and from some of last year’s applicants who are ready to try again. One fellow asked me if I could tell him where his organization stood in the rankings, which isn’t really an answerable question, since we didn’t sort or rank below the top six or so who formed the pool from which we chose the winner and finalists. (This is by way of saying, please don’t write and ask me this question!)

What I could do, and what was interesting, was to glance at the evaluation form that had come back from the judge. His PMO had scored high in almost every area; but the area where the judge had reservations was whether or not the PMO had business impact on the organization as a whole.

And, there it is in a nutshell: whether your PMO is a winner or a loser (and I am not just talking about the award here) all hinges on business value and/or perceived organizational impact.

I say perceived because I think that many PMO directors still have not realized that there’s a large component of marketing communications, not only in establishing a PMO, but in institutionalizing it. I’ve written before that PMOs are vulnerable to their own success: once the systems for executing strategy through well-run projects are in place, it’s tempting to think you can rest on your laurels. But, no such luck. When project and program management is working well, it’s invisible: nothing bad happens. And the PMO becomes, apparently, a line item of overhead.

So, the perennial question PMO directors have to answer is: What have you done for me lately?

Implementing a measurement program within the PMO that tracks the benefits provided can provide those answers, but only if it’s wisely designed. Too often, PMO leadership self-measures by metrics I can only call navel-gazing: numbers of people trained in PM, schedule compliance, numbers of project completed, and the like. They forget that a key piece of their role is as liaison with the executive level, and their metrics need to measure things that the executive level cares about.

So, you trained 100 people and they got their PMPs. So what? Aaron Coffman at American Power Conversion (a 2006 award finalist, mentioned in my last post) matched PMP achievement with dollars earned or saved due to projects being delivered on time. Bingo!

It’s not always about money, of course. The 2007 winner, Norton Healthcare, succeeded in large part because the PMO made sensitivity to the needs and concerns of clinical staff paramount. “How will this impact hospital staff?” was a central question involved in selecting and prioritizing the portfolio. Consequently, they have been able to pull off massive capital building and technology projects without ticking off the doctors who run the place … in fact, making themselves indispensable.

So, helping the executive level to perceive the value of the PMO is an exercise in walking a mile in non-project management shoes. What are the drivers of value in your organization? Answering that question is a good place to start.

Join us for more along this same line at our Webinar, Unlocking the Value of Your PMO, next Thursday, March 11. “See” you there.

Since today kicks off the 2010 PMO of the Year Award application period (see the contest information, and download application materials here), and since I’ve been writing a series about roles in the PMO, it seems a good time to review the previous winners of the award, and see what they have in common with regard to people management.

One thing that’s immediately apparent is the quality of PMO leadership. It’s been my privilege to meet almost all the PMO directors of the winners and finalists for the past four years (the leader of the Australian Securities Exchange PMO, a 2009 finalist, has been just about the only one who couldn’t make it). While this may be a very subjective assessment, it’s striking that, in retrospect, they were all charming and personable people … “attractive” not necessarily in the sense of appearance , but in the sense that you wanted to spend more time talking with them, and that their enthusiasm for their work was contagious. At the same time, it was obvious that they were the kind of leaders who constantly say: “I couldn’t have done it without (my team, the project managers, my executive leadership, my spouse).”

Several years ago, Dr. Frank Toney noted that humility was a characteristic of the best leaders; the PMO of the Year award-winning PMO Directors seem to bear this out.

It’s worth noting, as well, that winning PMOs have primarily been staffed PMOs: they follow the trend identified in the research of centralizing project management roles in an organizational home within the PMO. And they have been intimately involved in helping their staffs succeed: providing training and other career development opportunities. Some of the top PMOs even have staked their success on developing their human capital; the case of American Power Conversion, a 2006 finalist, comes to mind: they meticulously baselined their project outcomes by whether the leading PM was PMI-certified or not, and then followed the trend of results as they pushed to certify all the project managers under their umbrella. The results were astounding: take a look at the graph of PMP-led projects vs. non-PMP-led at the link above.

All this makes sense, of course because, in the end. a PMO is just people. Trained and qualified people led by a director they have trust in … are winners every time.

This just in: Our partner in presenting the PMO of the Year award this year is the PMO SIG of PMI. They’ve got a new blog all about PMOs: check it out here.

Alas, I am old enough to remember when there was some confusion about programs, portfolios, and multi-project management, a fog which has at least partly cleared thanks to the Project Management Institute’s continuing work on standardizing the terminology and developing standards for the various roles related to “management by projects” (or the organizational elevation of project management). However, it is interesting to see the welter of definitions for a program that are out there, for example in the PM Glossary compiled by Max Wideman. One gets the impression that a program is whatever an individual company says it is; and the program manager role description is a moving target. When we developed the role descriptions in our book, we looked at hundreds of actual job descriptions. Here’s part of what we included on the Program Manager:

Role Overview

In large organizations with many project managers, project managers may be awarded “grades” based on their span of control. This position manages complex, strategic projects that span organizational boundaries, so Program Managers should have experience managing multiple high-risk projects, including projects involving external vendors and multiple business areas. This grade is a logical training ground for Manager of Project Managers, Manager of Project Support, Strategic Project Office Director, and CPO positions for the program manager with business acumen. When groups of related projects are organized into programs, this position may manage multiple project managers whose projects provide specific deliverables; all which must be collectively managed to provide the desired programmatic results.

Whew. As I read that I am reminded of the Cat in the Hat, who boasted he could “fan with my tail while I hop on a ball/ and that is not all! …” But seriously, as we have seen the PMO grow in stature and span of influence, those with program management skills have increasingly been in demand. They have the skills, honed in the coordination of many conflicting priorities, issues, and personalities, to assist a PMO Director in pursuing multiple objectives, each with its project or fleet of projects. It’s a natural training ground for the Portfolio Manager … and may even be the Portfolio Manager in all but name.

Here’s a great article about the Program Manager role by one of our PMO of the Year judges.

And, speaking of the PMO of the Year; check back here on March 2 for an announcement of this year’s application process, and links to the contest materials.

In 2003, when I began researching PMO roles for our books, Optimizing Human Capital and Project Management Roles and Responsibilities, I proposed adding a role called “Manager of Project Managers” to our list, and was met with some skepticism, and rightly so. At that time, there was little evidence that project personnel were being managed and supervised within project offices: the matrix organization ruled.

Nevertheless, because we hoped that the book would be prescriptive - a force for change - rather than merely descriptive of present circumstances, this role (along with others that were rare at that time) was included. Whether it was because we correctly fingered the pulse of the industry … or because companies took our advice … by 2007 when we did our State of the PMO research, the majority of enterprise-level PMOs were actively managing a stable of project managers, plus a wide array of specialist positions, within the PMO.

What do I mean by “managing”? - well, pretty much everything that HR used to do: hiring, training, performance reviews, mentoring, and providing oversight. In addition, the PMO Resource Manager (the most common take on this title among our clients today) also stays close to the Project Portfolio Management process, assisting the PMO Director and/or Portfolio Manager in allocating and levelling resources to optimize the organization’s strategic portfolio.

Does your organization have a PMO Resource Manager? Share insights about the role with us, and we’ll be sure to include them in the next edition of our Roles & Responsibilities book.

Next week in our review of PMO roles: The Program Manager.

Seven years ago, when we began the research behind our book Optimizing Human Capital with a Strategic Project Office, we had numerous discussions about the roles we proposed within the strategic, enterprise PMO. Have you ever met a Chief Project Officer? someone asked skeptically. Does the role of Project Portfolio Manager even exist? Is there really such a thing as a PMO Resource Manager or HR Liaison?

At the time, although all those role descriptions were based on real instances, their existence was admittedly marginal. Yet, by the time the book came out two years later, people at PM conferences were presenting us with business cards inscribed with those very titles, and some even more daring. (Vice President for Strategic Program Management? PMO Methodology Guru?) And, by 2007, a CPO was winning one of PMI’s highest honors (see the “Person of the Year” writeup here).

Today, the vision of the enterprise, strategic PMO has become a reality, and this structure continues to morph. What’s next? Forrester has termed it the Next-Generation PMO; we’ve gone so far as to call it the Strategy Execution Office. Either way, the array of specialized and executive positions in the PMO is going to continue to proliferate. From 2005, when we proposed the roles and responsibilities in the PMO as an appendix to the Optimizing Human Capital book, to 2008 when we published the State of the PMO research, an astounding growth in the numbers and descriptions of roles managed within the PMO had taken place - over 600% growth in some roles such as Relationship Manager!

So, for my next series of blogs, I’m going to focus on key roles in the PMO. Next up: the Resource Manager. Meanwhile: what’s the most interesting title you’ve come across in project management recently?

Around here, we believe in baselining … otherwise, you can’t tell if you are making any progress. The start of a new year seems an appropriate time to look around at the business environment, as well as our internal organizational environment, and make a few resolutions based on a clear-eyed view of present circumstances.

Looking up economic data for a project I’m working on, I came across Moody’s Business Confidence Index. Wow! Love that steep and continuing climb: it bodes well for ventures of all sorts and sizes. Yet even the most confident of the business leaders surveyed were not rushing out to make large investments in inventory or facilities; instead, their immediate plans primarily focused on process improvement.

This is an approach that makes sense to anyone that has ever managed anything, including a home or a garden. During the last recession, when homeowners quit spending money on vacations and new cars, a new word - cocooning - entered the lexicon. Instead of running off to Aruba, they put in a patio, added a little fountain, put up bird feeders … and discovered the beauty of their existing assets and resources. A recent column in the New York Times (Doing More, Spending Less) indicates that the same trend is resurfacing now.

On an organizational level, if we “do more, spend less” that translates to process improvement. And what process is most likely to yield organizational performance improvement? A decade of research carried out under the auspices of PM Solutions tells us that, across the board, improvements in project management processes also correlate to improvements in an array of organizational performance metrics, from the financial bottom line to the qualitative bottom line of customer and employee satisfaction.

No matter where you turn your gaze in the organizational household - aligning the portfolio with strategic vision, improving the portfolio management process, training staff in project management, implementing processes to turn around (or turn off) troubled projects, or improving resource management - you will see an area that, tweaked and polished, results in money saved, morale boosted, or customer confidence improved.

In Italy, it’s traditional to clean out closets and cupboards on the first of a new year, and get rid of all the unused stuff that’s weighing you down - Arrividerci to all that junk! Let’s not forget that the very word “economy” comes from the Greek for “household.” January 2010 seems the ideal moment to take a good look around you (that is, assess and baseline) at how your household is running. Then start cleaning those organizational closets! Tucked behind the inefficiencies and outdated assumptions, you may just find a forgotten treasure.

[For some thoughts on how the PMO can be instrumental in this improvement, see our new Solutions Brief: "Recession? Bah, Humbug!"]

Continuing to crunch through the raw data from our Value of Project Management statistics, a coincidence struck me: across the board, the top-performing companies are training more intensively, and doing more training in non-technical subjects, than are the companies whose performance data falls in the lowest quartile in the study.

This jives with Frank Toney’s observation, in one of the first books we published, that as a project manager moves up the ladder organizationally, he or she relies less on technical skills and more and more heavily on facilitative and business skills. (The very skills our PM College’s new mastery-level “people skills” courses are designed to instill.)

It also reflects the reality, uncovered in our State of the PMO research, that PMOs are moving up the organization to the enterprise level, by the hundreds, and taking on new and expanded roles as they gain esteem and responsibility. One of those roles involves the professional development of project managers and other project resources. The top performers in the Value study do the majority of their training on site, providing project management development that dovetails with their industry, organizational culture, and business objectives … and which focuses on advanced topics rather than on the nuts and bolts.

Here’s a prediction: in our next round of research, we’ll see even more enterprise-level PMOs, and even more PMO-based professional development. After all, who knows better than the PMO staff how to train project resources?

Just as I completed my last post, a colleague sent me an article with the very timely title “Nobody Ever Gets Credit for Fixing Things that Never Happen” - which was my argument for why PMOs often succeed themselves out of business.

The article, from 2001, focuses on quality management initiatives, but it isn’t hard to read between the lines and see how project management initiatives are subject to the same forces. That process improvements often improve themselves out of existence, leaving the organization less well off than hoped, the authors term “the improvement paradox.”

And yet, when the authors note that the failure of organizations to profit over time from process improvements isn’t traceable to just one factor, but to “the interaction of tools, equipment, workers and managers,” the project management cheerleader in me can’t help but note that the integration of all these factors would be simpler in a company with a solid PM culture … the kind of culture you build through having a mature enterprise PMO in place.

Okay, now for the news: You may have noticed that the link to our PMO research report no longer goes to the CBP bookstore. That’s because my sidekick of nearly 15 years, Jim Pennypacker, has gone off to start his own publishing firm and all the Center for Business Practices content has been moved under the PM Solutions flag. Our books are still available through Amazon.com; research summaries are posted here. Please reset your bookmarks for our research content to these urls, and join me in wishing all the best to Jim in his new venture.

I wish this were not true, but ever since 2002 when we began facilitating project management benchmarking groups, I have been meeting PMO directors who brought project management to the attention to senior management, created PMOs or Centers of Excellence, drove PM improvements across organizations, improved project and portfolio performance … and wound up unemployed.

Of course, the present economic climate puts every area of the organization under the microscope, but it does seem that PMOs are more susceptible to the ax than many other functions. My theory about this is that great project (or program) management is like great editing: invisible. When the management of projects, programs, or portfolios goes smoothly …. nothing dramatic happens. Things get done, decisions get made, money gets made, schedules are met. No problem. No bloopers, no typos.

“Hey,” says the CEO. “Everything is going so well. What do we need this PMO for? It’s overhead.”

The latest cover story in PM Network magazine focuses on just this issue: the crucial requirement for PMOs to show value, and show it often, in order to simply maintain their place in the organization. (The Accident Fund PMO, by the way, has been a finalist and a winner of our PMO of the Year Award in previous years, under the previous director Norm Buckwalter–something that isn’t mentioned in the article).

Often, PMOs succumb to a disease that is affecting all areas of organizations: the short-term CEO syndrome. Research by executive search firm Drake Beam Morin notes that when CEO tenure drops, businesses focus on achieving quick and short-term results. Since (as our 2008 study The State of the PMO revealed), it’s only mature PMOs that bring business benefits, it’s easy to see how short-term thinking can doom PMOs. Unfortunately, this only harms organizations in the long run.

Have a PMO success-to-sadness story? I’m all ears.

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?