In my last post, A Moment of Truth, we looked at a chance personal encounter - a moment of truth - that changed the lives of two people for the better. The post wasn’t about a project, or a major change. It was about how individuals react when faced with change. Sometimes, as in this case, all we need to move forward is the help and support from another person, to offer a different frame of reference for our consideration.

In this post, we’ll review the damage done when one organization didn’t pay sufficient attention to a change within a change. It’s easy to get distracted when dealing with a major project, like an acquisition. But, as we’ll see, being busy with a big change is no excuse for ignoring other significant changes that are going on concurrently. Appropriate oversight and diligence is always needed.

Thanks to A.T.P. for the details on this story.

The Situation

This bank purchased an investment organization that ran into difficulties as a result of the 2008 financial crisis. As the bank was dealing with the integration of the acquired company, they discovered that the investment organization had undertaken and were in the midst of a major upgrade to their core administrative system involving the software’s vendor and a sizeable in house team.

Central Project Management Offices (PMOs) have expanded since the 90ies from traditionally project-driven industries, such as aerospace, defense and heavy construction industries to non-project driven industries. It was mainly due to the looming recession that the benefits of using project management, such as improved efficiency and quality of delivery, were now recognized as being applicable to other industries as well.

However, the way how Central PMOs are being understood and used is significantly different from organization to organization. In mature companies, they are able to position themselves as true partners for the Executives and are generating value through delivering projects, providing a common methodology for the organization or driving project portfolio decisions or performing all of those activities. In immature markets, however, where the role and benefits of PMOs are not well understood, they find themselves caught in a strategic dilemma which negatively affects their effectiveness in performing their role.

Why is this so?

Traditionally, the power of the organization has been residing with the line functions. This organizational model has supported the division of labor and the rapid economic growth of the age of industrialization. Projects were delivered by the different departments of the line organization, with differing levels of quality and consistency.

Project management’s conventional wisdom leaves substantial opportunities to deliver business value.

The project management profession has gone through a tremendous evolution over the last three decades. Major trends, such as globalization, access to resources across the planet and the sheer complexity of projects, have pushed project managers to a level of sophistication never seen before. To adapt, project managers have developed new methodologies, standards, processes, and generally accepted best practices. While extremely important and required for success, these new norms are not sufficient to ensure projects remain relevant to the organization through their life cycle. In fact, recent studies performed by Gartner and other analysis firms are consistent in their reports that more than half of the projects do not meet expectations of the business. Why?

The answer is relatively simple. The missing ingredient in the standard project management practice is the systematic understanding and adjustment of actual value creation as the project is executed.

Why is managing the triple constraint not good enough?

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