Wednesday, 25 May 2011 12:19

Executive PMOs in the Age of Turbulence

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As the business community embraces the second decade of the 21st century, it is increasingly apparent that companies must invent flexible business models and supple delivery mechanisms to ensure survival in the age of unprecedented turbulence and uncertainty.

The epoch of corporate stability ended with the onset of the global financial crisis in 2008 and was exacerbated by the complexities of wars, revolutions, and unpredictable climatic conditions—all converging to ravage our planet. Against this backdrop, many companies are either struggling to protect their market share from emerging threats or are too slow to take advantage of a myriad of new opportunities to re-invent and diversify.

If this was not bad enough for corporate businesses, the relentless drive from customers for instant gratification via the internet made it enormously difficult for companies to formulate delivery methodologies that are able to satisfy the incessant customer demand.

The erosion of corporate stability in a chaotic world demands two things. Firstly, a flexible business model that can easily be adapted to meet the forever changing needs of customers in both emerging and existing markets. Secondly, nimble but rigorous delivery mechanisms that can underpin the timely delivery of business benefits to customers.  The purpose of this article is to introduce how an executive Program Management Office (EPMO) can deliver rapidly changing business strategies in the age of turbulence and chaos.

Most business executives possess narrow—if not somewhat contorted— views about the roles of EPMOs in the realization of corporate strategies. It is not uncommon to find executives oscillating between EPMO as a reporting function or an organization responsible for the execution of corporate initiatives. This often results in a perpetual identity crisis for the EPMO and gravely hampers its ability to perform, as continuous questions are asked about its existence.

 In some cases—after lengthy trial and error periods, and protracted debates— a compromise is brokered between the executives and the EPMO is eventually given the responsibility for reporting and delivery. However, this is a temporary fix and overlooks the fact that structural weaknesses prevalent at the birth of the EPMO combined with discombobulated executive support cannot be over compensated for at a later stage in the EPMO’s life. In most cases the damage is severe and the EPMO is relegated to the dustbin of corporate history.

The key to running and managing successful EPMOs is to make sure that all the executives are fully on board and participating actively—both in word and deed— during the longevity of the EPMO. It is not enough for the EPMO to represent the interests of the most dominant executives or the interests of a small clique. But the EPMO must ensure that all executives believe in the EPMO and its mission. This often means that EPMOs have to offer services that are not in the conventional realm of executive PMOs.  Subsequently, the demarcation between projects and operations vehemently defended by chief project officers quickly evaporates. For instance a CEO of a company may want to exploit the EPMO’s cross-functional credentials to commission a special task force to analyze operational inefficiencies or lead an outsourcing initiative.

Furthermore, the rapidly changing business climate requires the EPMO to be more flexible and inclusive of executive interests. EPMOs that embody narrow mandates not only struggle to accommodate the flurry of changes to corporate initiatives but struggle to maintain broad base executive support. For instance commercial executives under pressure to meet targets may lose their patience for EPMO’s constant depiction of red flags—a nuisance to most executives— and press the EPMO to play a greater role in delivery.  The EPMO—as it often happens— can hide behind a CEO disclaimer that its role is restricted to executive reports and delivery responsibility lies with the verticals. Such insinuations do not shield the EPMO from the wrath of commercial executives; rather they temper future cooperation from the vertical until it becomes nominal.

EPMO’s must strive to adapt to the needs of the executives and may consider the competencies listed below as an ideal starting point. The list is not exhaustive, but it serves to emphasize the diverse nature of services the EPMO can offer.

1.       Corporate Project Road Map

The EPMO should be recognized as the official custodian of the corporate project road map. The road map is produced each year to track project and programs that the business units have committed to deliver.  This necessitates the EPMO to establish a formal process that collates the list of initiatives from the various business units, validate these against strategic guidelines, ensures that initiatives are aligned across the different departments, and verifies that the initiatives have allocated budgets. Thereafter, the initiatives are categorized under corporate themes (or strategic themes as some prefer to call) as projects and programs. The corporate project road map derived from such a process is subsequently locked and subject to change control procedures. Special provisions are made for unplanned initiatives, which are handled under exception rules. 
Once the EPMO has a frozen corporate project road map, commencement of project tracking and periodic executive reporting can take place.

2.       Portfolio Management

The EPMO should shoulder the responsibility of managing the portfolio of projects on behalf the executives. Depending upon executive guidance the portfolio can be founded on the entire corporate project road map or a mere selection of most important projects and programs. Usually executives prefer the EPMO to manage a set of programs that are structured in an unambiguous manner. This may include classifying the projects and programs under ubiquitous strategic themes together with business drivers—such as revenue generation, operational efficiency, regulatory, customer experience, market diversification etc—to prioritize and drive implementation. Often a set criterion is employed to promote or demote projects to and from the portfolio. This can be based on a combination of factors such as capital expense, head count, duration, and technical complexity. 
Beyond portfolio definition, the performance of the portfolio is conducted periodically under the auspices of the EPMO through intelligent updates with the executive team. 

3.       Project Methodology, Standards and Tools

Successful monitoring of the corporate project road map and efficiently managing the portfolio demands a robust but flexible project methodology. This necessitates that the ownership of the project methodology falls within the ambit of the EPMO. The EMPO must specify an end-to-end (e2e) project methodology, standards and tools for the company, and ensure that PMOs operating in the various business units embrace this whole heartedly. Failure to comply will spawn inconsistency in the project data and affect the consolidation of risks and issues. Additionally the EPMO must delineate its relationship with the distributed PMOs and serve as a standard bearer for project management.  Obviously the degree of EPMO’s involvement with other departments will hinge on the maturity of the organization and the acceptance of project culture.

4.       Program Delivery

Many EPMO’s eschew delivery of projects and programs for a variety of reasons—all of which overtime become irksome to executives. This does not need to be the case. On the contrary, the EPMO should volunteer to deliver flagship projects and programs—where possible the EPMO must make this an indelible part of its charter. E2e projects that are exceptionally cross-functional and score high on the portfolio chart are obvious candidates for the EPMO to execute. This will enable the EPMO to win over skeptical executives and build up a reservoir of executive support which can be adroitly utilized to address challenging initiatives.

5.       Build, Operate and Transfer (BOT) PMOs

Planning, delivering and reporting of initiatives is a function performed by many executives as part of their daily routine. Where initiatives resemble project work and the work load becomes unsustainable to manage, executives usually delegate senior management with the task of establishing business unit PMOs. They often undertake such an endeavor with poor preparation and in isolation of the EPMO. Worse still external consultants are deployed to build the PMO. This sometimes results in a PMO that is not fit for purpose and develops into a painful impediment to cross functional collaboration.
EPMOs can greatly enhance their credibility in the eyes of the executives by offering a BOT model for PMOs to business units. Furthermore, this allows the EPMO to ensure that the project management culture for the organization is not tainted and is uniformly applied across the organization.

6.       Task Force Initiatives

Occasionally the EPMO is asked to perform tasks that fall outside the mainstay of EPMO’s competencies. For instance the CEO may ask the EPMO to take the lead in setting up an operational unit in another country or prepare a report for board members. Besides the CEO, other executives summon the EPMO to undertake peculiar requests. For instance, the chief commercial officer may request the EPMO to carry out a vendor assessment of all the departments under commercial. Hence, the EPMO must equip itself with the right skills and tools to meet such requests. By doing so, the EPMO will be perceived by the executive team to adding value—over and above what is required.

Other competencies like running executive meetings, quality assurance, change management, e2e business process architecture can be accredited to EPMO’s core competencies. Nevertheless, this to some extent depends on the maturity of the organization, industry focus and executive preference.

In the corporate hierarchy the EPMO is sits directly below the CXOs and the executive sponsorship is not singular but pluralistic. The collective sponsorship is there to buttress executive support for the EPMO to perform its duties and more importantly to be taken seriously by the rest of the organization. Accountability is not limited to a single executive, but encompasses all of the CXOs. Subsequently, each CXO’s balanced score card is amended to include the EPMO’s performance. Therefore composite performance metrics are carefully calibrated to reflect executive interests and thereafter are activated to measure EPMO’s success.

It is incumbent upon the EPMO to unequivocally state its roles and responsibilities, and to ensure that interfaces and communication channels with other business units are well defined to minimize ambiguity. This also extends to exception handling.  The dimensioning of the EPMO and its skill level is determined by the executive mandate and the corporate project road map. The EPMO is staffed by a core team which consists of highly qualified individuals supplemented by vendor placements—this can be drawn on to expand or contract head count to meet executive demand. Again prudency must be observed at all times in the EPMO’s engagement with vendors. Vendor commitments must be managed through stringent SLAs.

The EPMO should strive to offer its core competencies in the form services, which are formally contracted to executives. This has two advantages. Firstly, it promotes service culture within the EPMO, imbues staff members to work in the best interest of the EPMO, and dispenses with personal relationships with executives. Second, it encourages EPMO staff to treat executives as customers and not as VIP employees. If applicable—unanimity amongst the executive team is paramount—EPMO services should be monetized. This will coerce executives to be circumspect about their engagement with the EPMO, curtail executive abuse of EPMO services and spur EPMO staff to deliver value.

Last but not least, the EPMO’s function should be regularly reviewed by executives, EPMO staff and line managers. Where applicable, services of an outside agency can be used to provide unbiased assessment of EPMO’s performance. The data garnered can be used to redefine EPMO’s services, close EPMO’s operational gaps, and improve executive experience.

Establishing the right EPMO to meet the demands of business is no easy task, especially in the current climate of uncertainty and instability.  The ideas espoused in this article are not intended to be a panacea for EPMOs that are struggling, instead the ideas are intended to stimulate debate on the direction EPMOs should take when executing executive strategies.

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Abid Mustafa is a seasoned professional with 18 years' experience in the IT and Telecommunications industry, specializing in enhancing corporate performance through the establishment and operation of executive PMOs and delivering tangible benefits through the management of complex transformation programmes and projects. His experience has been gained in industries as varied as utilities, telecoms, financial services, transport, and education, working for several blue chip companies such as Centrica, London Underground, British Telecom, Oracle, Enron, Logica, and Wateen. Currently he is working as a director of corporate programmes for a leading teleco operator in the MENA region.

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