Skip to main content

Author: Inken Lasar

The Strategic Dilemma of the Central PMO – Friend or Foe?

Written by Inken Lasar on . Posted in Articles. 5 Comments on The Strategic Dilemma of the Central PMO – Friend or Foe?

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.

In immature markets, where there is a quasi-monopoly or duopoly, varying outputs are not creating too many problems. However, where competition is strong and quality of project delivery needs to be at consistently high levels, even small mistakes will make themselves felt very quickly and lead to a huge competitive disadvantage. That is why most organizations immature markets were looking to avoid further project failures and proceeded to formalize central units to establish common standards or to otherwise enforce consistency in project delivery. Over time, many of those Central PMOs have moved forward from this basic task of providing project oversight and standardization to offering Executive decision-making support for the Corporate Project Portfolio.

However, in immature markets, where the power of the organization still resides in the line and there is no or only limited Executive support, PMOs at best have two strategic options.

EITHER PMOs become the “friends” or “servants” of the organization, by offering their expertise and manpower randomly to whichever department is most in need of support or most readily accepts external involvement. In the worst case, the PMO is degraded to a pool of resources that can be deployed at the whim of Executives’ personal preferences. This model falls short of the real task of the PMOs of providing standardization and project oversight.

OR they try to fulfill their mission of providing Executive support by providing at least basic visibility, uncovering the ‘real picture’ of project delivery and progress in the organization through project reports and project audits. This approach represents a move closer to their real task of providing visibility to the Executives but will create tension with their peers in the functional departments, with the effect that the PMO might be shut out of the information chain altogether. Without Executive support, they will be bypassed in the information chain and will not be able to perform their role any more. PMOs which are trying to avoid a healthy level of conflict with the line organization, yet want to provide visibility, might want to concentrate on information aggregation rather than quality control. Their role becomes purely secretarial, orchestrating meetings only, but not improving project delivery standards.

So, what can be done?

Move into project delivery

If there is only a very low level of Executive support, the best option could be to move slowly towards project delivery. The projects that are handled by the Central PMO will be following their own standards and thereby will have a minimum of quality and consistency attached to them. The Central PMO will be able to ‘lead by example’ and show the benefits of applying their project management methodology. Executives will see the value of the ‘delivery machinery’ and will entrust this new unit with more and more responsibility.

Educate the organization

Executive buy-in can be obtained much more easily if there is a clear understanding of the value that a PMO can provide. Trainings at Executive level as well as benchmarks with more mature organizations can help let a desire for more central project oversight and control sprout among senior staff. In addition, it is recommended to find allies in the organization, such as Finance, Internal Audit and Legal who are suffering from inconsistent project delivery and to join forces in enforcing certain minimum project management requirements.

Disband the Central PMO

However, a PMO with zero Executive buy-in will not be sustainable in the long run in the company. If that is the case, it is a strong sign that the time is not right for a Central PMO and it might be a better choice to disband it and redeploy the resources where projects are currently being delivered.

Conclusion

Market maturity, competitive intensity as well as Executive buy-in are important drivers in the strategic evolution of Central PMOs. In immature markets, with limited Executive support, PMOs should ultimately move into project delivery or will be disbanded.

Don’t forget to leave your comments below.

Project Managers are the Better Leaders!

Written by Inken Lasar on . Posted in Articles. 3 Comments on Project Managers are the Better Leaders!

We live in the era of the ‘Digital Revolution’, in which constant change has become the norm. Business models are overthrown, and the way we work is undergoing constant change. It is in these times that people turn to others for direction and guidance; and leaders, who inspire others towards a common goal, are in high demand.

Leader versus Manager

An effective leader is able to build a strong team by inspiring and motivating them to work towards a common goal. A manager, however, focuses on coordinating the efforts of individual people in order to accomplish goals and objectives. Leaders tend to create something new (transformational) whereas managers tend to co-ordinate things that already exist (transactional).

Leadership Qualities

Researchers have tried for a long time to pin down what constitutes a good leader and if these qualities are inherent or can be acquired, without a coherent conclusion.

So, what is it that makes someone look up to another person and follow him or her? People want to believe in something big, something that makes them feel their own existence is important and serves a higher goal. At the same time, they are egoistic beings and would like to see their own needs fulfilled. Captivating people therefore requires creating a strong link between the individual’s aspirations and the higher purpose referenced by the leader. The more skilled a person is at creating this link, the better he or she will be perceived as a leader. This is the art of political thinking – the capacity to skillfully influence other people towards a specific goal.

Political thinking requires strategic awareness in order to put your goal into strategic context, communications and influencing skills as well as a great deal of flexibility to constantly readjust the political strategy in case of changing circumstances. History has produced some extremely skillful leaders in terms of inspirational communications skills, such as Martin Luther King, as well as in terms of the ability to manipulate the masses, such as Hitler. The latter example shows that leadership does not necessarily always follow a good purpose – people will follow strong personalities who they think best represent their interests.

Project Managers versus Functional Managers

Both project and functional managers have to direct work efforts of a number of subordinates, however, only some of them become true inspirational leaders whereas others stay trapped in the role of a manager, simply coordinating tasks of their employees. Why is this so?

First, there are individual strengths and weaknesses as well as the willingness to learn which differs from person to person. Secondly and more importantly, the environment a person is working in is THE most important single driver for the development of leadership skills.

Project Managers of large, cross-functional projects have to face a large number of stakeholders with different, often conflicting interests which make great demands on their political thinking and alignment skills. More often than not do they have to operate in a matrix environment where project resources remain in their line function; yet are assigned to work on the specific project assignment next to their on-going responsibilities. It requires a good amount of motivational skills to mobilize those resources and to drive them to deliver without being their direct line manager.

Project work, although it follows standard processes from initiation to closure, is by nature diversified – every new project represents a unique challenge and provides more opportunities to work with different people from different cultures and different styles, putting the leadership skills to a constant test.

In a functional environment, managers have ongoing responsibility for directing the people and resources within a department to meet corporate and financial objectives. Functional departments, such as the Finance Department, require a good amount of specialist knowledge and very capable resources in that specific field. Work in the line organization entails a large amount of accountability and it can be a challenging task to pursue the line function’s objectives in case of colliding interests from opposed organizational units. However, line function activities tend to be process driven and repetitive in nature and could be regarded therefore as more ‘stable’ than the project environment.

Conclusion

While both environments necessitate capable leaders, the ever-changing project environment of large, cross-functional projects presents a number of challenges to which only real leaders can measure up to. The multitude of stakeholders puts the political skills to a test and the absence of solid reporting lines requires sound communications and influencing skills in order to successfully deliver. Project Managers therefore have a better opportunity of acquiring strong leadership skills through constant training on the job and it is not uncommon for senior and well-experienced Project Managers to change into high caliber management positions. However, in the end, leadership remains a constant journey, and requires, in addition to the optimal environment, the will for constant self-reflection and self-improvement.

Don’t forget to leave your comments below.