Projects are the primary implementation vehicle of the corporate strategy. Insights into the progress, roadblocks and speed bumps of those projects is the critical role your Project Management Office (PMO) needs to perform flawlessly. The PMO tracks corporate strategy and ensures the project portfolio contains the right projects and resources to ensure the expected return on the strategy. Properly performing PMOs should be identifying and alerting the executive team of projects drive further investments and alerting the executive team to need of projects that require reprioritization, additional support, postponement, scaling back, or even cancellation to deliver the strategy.
Here’s the problem. PMOs often underperform—badly.
Batting .500 in baseball is all-star performance, but a PMO performing at 50%—or even 62% (see Figure 1)—is a dismal commentary on the current state of project outcomes. If your supply chain performed at this rate, there would be serial pink slips. The Project Management Institute’s recent survey estimates $122 million wasted for every $1 billion invested (12%). Worse still is spending money this poorly on the wrong projects. Ouch.
Think of it this way. Your team is climbing a mountain and you’ve underestimate the food and water needed. No one sounds a warning. Half of the team doesn’t make it and is strewn along the the trail. Those that summit see that a competitor has already summited the correct mountain–right next door. You are left with a delayed strategy that is relying on an exhausted, famished, and demoralized team.
Figure 1: Project Management Institute, 8th Annual Project Management Survey, 2016
PMOs have been around for a solid 20 years, and it is still often the weakest strategy link beleaguered in scope creep, which eats up valuable time, intellectual capital, motivation and budget dollars.
What Your PMO Should Be Doing for You
PMOs must understand available resources in terms of budget, talent (skill and capacity), and leadership (ability to drive change, build organization capability in the right areas in the right sequence).
Governance of, and transparent and appropriate visibility into, programs and projects is key to optimizing your organization’s performance. The PMO must communicate with the leadership team to make game-time decisions on priorities, asset investment allocations and strategic shifts.
The PMO should be flawlessly executing on the following:
- Verify, through a cross-functional intake process, that the projects be approved for execution are the correct projects, in the proper sequence, to effectively implement the corporate strategy.
- Organize programs in a way that creates synergy, coherence, and coordination between projects.
- Determine if individual project managers have the tools, skills, and resources needed for success. This includes all necessary governance processes and metrics to evaluate the health of the entire portfolio.
A Poor-Performing PMO Means Your Strategy Fails
A strategy without execution is a waste of time. PMOs, by definition, should be a high-performing, critical capability to effectivity and efficiently execute on the right things, in the right sequence at the right cost. Full stop.