Yesterday I listened in on my CEO Kent Crawford’s webcast on “Unlocking the Value of the PMO” I was struck by the theme of the questions being asked by the participants. “What if you don’t have the authority to implement resource management policies?” “How do you get the executive level to pay attention to the need for portfolio management?” and so on.

Granted, webinar participants are a self-selected group, and the title would draw those who are seeking (or struggling) to communicate more clearly what a PMO offers to the organization. But, listening to their questions, I shared some of their frustration. Nevertheless, one quick audience poll that Kent took offered a glimpse into their problems: nearly two-thirds of the listeners were not measuring performance.

[Pause while I let that sink in.]

Thus the title of this blog post. If you aren’t measuring benefits … you have nothing to say to the C-level of your organization except “Trust me, this is working” - an unlikely strategy. I’m repeating myself here (see my previous post) but being able to assign either a dollar value, or an important organizational goal achievement (which isn’t always money), to the activities of the PMO is absolutely critical. Kent pointed out that there are four subjects that are relevant to the C-level’s information needs:

1. Governance - How does the PMO make the organization run more smoothly and predictably?

2. Portfolio Management - How does the PMO help us work on the right projects, all the time?

3. Resource Management - How does the PMO help us put the right people on the right projects, and optimize the value of our human capital?

4. Performance Measurement - How is this making us money, or moving us towards important strategic goals?

A PMO director who can’t answer at least one of those questions with facts is in deep trouble these days.

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.

I’m writing this in Paris.

(Okay, you are right, I should not be working.) But an experience today made me want to post here: Two elderly ladies sat down next to me on a park bench in the garden behind Notre Dame, and one remarked that she had seen on television the night before a story about a center for curing children of “Internet intoxication.”

What is wrong with kids today? she said (I’m paraphrasing, and in English, obviously).

Her companion was more thoughtful. Don’t you think they use the Internet because they don’t have the things we had as children? she asked gently, and went on to list those things: the outdoors, safety in the streets, intact families, towns or neighborhoods where everyone knew each other.

I didn’t want to butt in so I didn’t say she was right; but that the Internet can also provide community - an adjunct to community, anyway - if it is properly used. My experiences interacting with my children and friends on Facebook provide one example. In one stroke today I said hello to everyone and told them a little about my trip: what a luxury! and how welcome to those at home.

Not that I approve of children sitting in front of the computer 10 hours a day, of course. But for adults at work, who are going to be in front of a computer 8 hours a day anyway, the social media can add a dimension of closeness and camaraderie that are often missing from offices and companies today. For project managers, an online “community of practice” can be a virtual “PMI Chapter” of learning and advancement. The problem is, few companies utilize these advantages.

In our July Insights newsletter, I listed several links about the pros and cons of telecommuting. One of them - focusing on the cons - was from the CEO of a small company who fretted about Instant Messaging replacing the water cooler. Personally, I think Facebook makes a great water cooler. And my fret is that managers use the difference of connecting virtually with distributed teams as an automatic excuse for failing at it.

The French have a saying: The more things change, the more they remain the same. Every innovation in management or technology has been resisted at first. Virtual teaming and all its tools is just the latest opportunity/problem. Isn’t it time we made excellence in dealing with others virtually one of the pillars of managing projects?

Just curious: how many people reading this ONLY work with people who are co-located with them?

September already! Yesterday I saw my first scarlet maple leaf, artistically arranged on top of a daisy, as if to graphically depict the change of seasons. The university and the high school are back in business in my little town (you can’t miss the traffic on Main St. … or the young, invincible drivers).

And, speaking of education, I’m digging deeper into the data we amassed earlier this year in our Value of Project Management study (and missing Jim Pennypacker’s astute touch at crunching statistics!) and I keep finding more and more interesting facts, particularly about PM training. (If you’ve already downloaded the Research Summary, come back in a couple weeks and redownload it: I’ll be adding additional observations soon).

The study paid special attention to the value of PM training, asking companies to list the ways they provide training (using internal resources, hiring training firms, through colleges and universities, online, etc.) and how much they spend on it. The stunning fact that surfaced when I began to compare results for the top-performing companies with the low performers (these terms and how we arrive at them are explained in the methodology description in the summary) I found that the top performers spend three times as much on project management training as do the companies at the bottom of the heap.

Back to school, anyone?

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?

… but I seem to be facing the New Year - and the news cycle - with a sense of unreasonable optimism. Partly this is because I’ve been paging through all my favorite business and projects news sources deciding what to put in our blogroll (check it out in the right-hand column!) There are some really smart people writing about what’s just ahead for projects in the current economic situation, and they can’t all be wrong. The guardedly expressed good news falls under three general headings:

1. “Project Management Eats Economic Downturn for Breakfast.”

2.  “Innovation Eats Recession for Breakfast.”

3. “Green/Alternative Economy Fixes Breakfast for the Planet. Chai, Anyone?”

There’s also, of course, a healthy serving of gloom and doom. Most of it, though, reminds me of something my father once said. Born in 1911, he was one of the last of the hot-type typographers - a craft with tools and methods pretty much unchanged for 400 years. When the little specialty shop where he plied his antique trade finally closed, and he had to learn computer typesetting (in his sixties), he hated it. But, as a game survivor of two World Wars and the Great Depression, he told me philosophically, “when the automobile came along, the wheelwrights and harness makers had to learn something new or go out of business. That’s life.”

Indeed. That said, life can be pretty rough on us when we refuse to recognize which of our self-defeating behaviors need changing. It’s tempting to believe that, because “business as usual” allowed us to have several decades of world-beating economic success, that the way we do business is the right way … the only way.

Project management has been somewhat of a corporate underdog for most of its history. One of the themes that I often heard among attendees at PMI conferences or our own Benchmarking Forums was, “We can’t get the C-level to listen to us!” That’s been changing in the last five years, as more and more companies implement PMOs at the enterprise level, and apply project portfolio management discipline as a tool for strategic execution. That’s why the present global economic situation - what Steve Forbes recently termed “a perfect storm” of conditions affecting nearly all sectors of the economy in nearly every nation - offers those skilled in practicing the discipline and mindset of “managing by projects” a unique opportunity. Project leaders are poised to have the ear of executives, thanks to their tireless trudge up from the trenches - but also are still somewhat “outsiders,” with views just different enough to offer the kind of systemic change companies need. It’s a shame that we had to reach near-collapse before the wisdom of project leaders could get a full hearing at the highest levels of business but - as one wise man said - “that’s life.”

… well, besides our own that is–is Paul Ritchie’s/SAP’s Crossderry blog, especially the PM Quote of the Day feature. Worth starting your day with a cuppa joe and some words of wisdom. Paul’s wide-ranging net finds relevance to our work days in sources from Esther Dyson to Sappho. Kudos, Paul …