How to Set Up a PMO – Part 1 of 3

Awesome! Since you have landed here, it is a pretty safe guess that you have been charged with building or running a PMO for your organization. You’ve probably even got the tools and templates coming out of your ears, maybe you even know about the best practices. That will definitely get you started. But there is something missing right? More important than all of that is knowing the exact steps you must complete to help your PMO show results quickly, and ultimately grow into a change management powerhouse.

Today, and over the next 2 weeks, we will explore both the art and science of what makes PMOs a market differentiator to strategy realization.  Many of us are aware of the fundamental building blocks necessary to create a successful PMO.  The science of PMO management covers the standards and best practices, as well as, the tools that must be present at the foundation of a PMO.  What many struggle with, however, is the art of a great PMO.  This is where organizational savvy, strong talent management, and strategic change leadership come together to create something almost magical. It is the ART of PMO, something you can’t read in books but you can learn from someone that has spent 20 years developing the craft.  The art of the PMO makes the difference between your PMO being “just more overhead and red tape” and really evolving into an effective and sustainable entity in any organization.

The first step on any PMO journey is the basic building blocks that set the PMO stage for success, pointing to several of the proven tools and techniques for effective portfolio, program, and project management.  To stick with the art reference, you can’t create a masterpiece without the right canvas on which to paint. We will work through the basics and then the real fun begins in exploring the lessons learned from great leaders on the ways to drive real transformational change through an effective PMO.  This is the art of PMO performance.

Sometimes we hit the grounding running when starting our PMO and we miss a very important step, appropriately identifying your organizational appetite and needs. Here are a 2 common potholes to avoid at the start:

Pothole #1 Assuming your organization needs a PMO without identifying the business priorities.

What works: Ask questions and build trust.

Ask yourself a few fundamental questions to determine where your PMO can provide value.  What problem does your PMO solve?  Are leaders concerned about time to market?  Is it brand and industry reputation?  Is technology costing too much to implement?  These business challenges should be easily accessible to you by reviewing the mission and objectives for the organization and paying attention to what’s going on around you.

The leaders of the organization, once they trust you, will tell you what’s really going on.  If it’s a public company, do your research.  You will find someone talking about what is or isn’t working with the company from the outside, as well as the inside.  Chances are high that this is what the CEO is thinking about.  Find a way to tie what you are doing to solving those pain points and you will have a reason why your PMO needs to exist. In my flagship course, IMPACT Engine 90 Day PMO we dive deep into assessing exactly the need we are trying to fill in order to ensure this critical first step down the road to driving IMPACT is the right one.

Knowing the business challenges is critical but its still only half of the battle.  You can’t ignore the politics that are circulating at those upper levels.  Understanding what motivates those business leaders will help you secure your PMO’s position.  Those senior leaders are still human and each leader has their own personal motivators that will color how they see you as either an asset or a threat to their success.  Pay attention to the clues and figure out who you can trust to fill you in on the way business really operates at that level.  For some, it can be as superficial and simple as learning that they will help you if you make them look good.  We may not like it, but ignoring it can be detrimental to your PMO survival.

Pothole #2: Spending too little time on the people within the organization, as advocates for future success.

What Works: Draw circles instead of lines.

Take the time to get to know the organizational culture and appetite for a PMO.  Every organization has people in it that will resent what the PMO represents – more structure and oversight to what they do.  The first thing to combat that is more assessing. Identify the people in your organization and figure out who that loves you, who that hates you, and who really don’t care.

Once you have figured out who is in what category, spend some time working with people from all three categories to learn where their pain points are and both what they want from the PMO and what they fear most. This helps you to draw circles of inclusion.  Never start with a hard sell for any of these categories, this is like drawing a line in the sand and daring them to cross.  You have to start by giving them a solid and honest impression that you want to solve their challenges and make life easier for them.  If you can’t find that, you can’t be successful.  Your promoters will lose interest and your detractors will make your life miserable, all while the indifferent people go along acting like you don’t exist.  Warning:  Those indifferent people are just as dangerous as those that are detracting from your success!

When you start drawing circles, the people that didn’t want you around can be pulled into the process to have their voices heard.  Keep your enemies close…and talking…to you, not leadership, about what concerns them.  You can do this by inviting them to participate in an advisory group you create to hear varied opinions.  Engage them to help you identify the problems with the PMO and then ask them what they would do to solve those challenges.  If you are building or transforming the PMO, even better!  They get to help with the transformation.  Before you know it, you have turned those detractors into what?  Active participants in helping you build a PMO powerhouse that has a full range of supporters in the organization.  There’s nothing like engaging someone in the process to help them own the future state of a PMO.

Once you have identified your organization’s appetite and needs and avoided those potholes on the road to creating and driving IMPACT, the next aspect is to look at methodologies from a portfolio level.

In my mind, there is a difference between implementation methodology and project management discipline.  They can work together quite seamlessly but aren’t the same thing.  Looking at the PMI Project Management Body of Knowledge (PMBOK®), you will see the various “Whats” that need to be considered as a project manager.  Those “Whats” are the knowledge areas and are primarily focused on the things the project manager must do, from the perspective of the project manager.

As far as the “Hows” of getting projects done, there are many different implementation methodologies you can choose from for your organization.  Implementation methodologies are focused significantly on the building part of a project, where the sausage is made if you will.  Agile, SDLC, Spiral, Waterfall, etc. all look at the roles for each of the players on the team and how they must all engage for the work to get accomplished.  Each of these implementation methodologies has strengths and gaps in ability to help you manage your projects.

As with project management discipline, look at the various implementation methodologies as options you can choose from to accomplish your priorities.  Some require more rigor and discipline in applying the components than others, but all are aimed at getting your projects completed while balancing the triple constraint.

All of that is important to understand but we are here for the portfolio level.  As PMO leaders, we need to be mindful that a key to our success is being able to build trust with our business partners.  To do this, we need to build highly reliable techniques for managing our portfolio of work so that we can deliver consistently. Doing what you say you are going to do, on a regular basis, will show your customers and business partners that they can count on you. It’s that simple.

Doing what you say you are going to do, on a regular basis, will show your customers and business partners that they can count on you.  It’s that simple.

The big piece is how, how do you maximize your available resource capacity and throughput on projects to get to a high quality and optimally delivered portfolio?  In my IMPACT Engine 90 Day PMO course we walk through that step-by-step specific to your situation. Let’s take a quick look here at a methodology that leverages the pros of a few different implementation methodologies in a way that creates hyper-productive teams and significantly increases your total portfolio success.

ACCLAIM™ is a portfolio management approach based primarily on Critical Chain Project Management, with some project-level methods borrowed from Agile and Lean.  It stands for Advanced Critical Chain Lean Agile IT Management.  This methodology takes 6 proven techniques for dramatically improving the throughput and reliability of IT Project Portfolios, and introduces a 7^th technique that allows both Agile and non-Agile projects to co-exist harmoniously within the same portfolio.  ACCLAIM is focused on addressing the three primary objectives of any IT PMO:

1. Get more done (improve throughput of project completions 8x while boosting reliability, minimizing the risk of project failure)
2. Get it done well (maximize the probability that all projects in the portfolio are completed within the original budget, schedule, and scope)
3. Use the right tool for the job (apply Agile when it makes sense, and other methods when they make sense)

Finding a methodology that works for you is highly dependent upon your environment, culture, aptitude of the staff expected to use it, and the organizational appetite for standardized process.   With that said, there are ways to maximize your entire portfolio so that your PMO becomes a trusted partner in delivering the results that the organizational leaders need.

It’s no doubt that some tools work better than others, and some even have proven success over others. The bottom line on tools is this…if you aren’t using it as it was designed and/or have chosen to customize it so that it barely looks like what you started with, you are slowly going to degrade the functionality and usefulness of this tool to the point that it will lose the ability to give you good quality information you can rely on.  All of the major tools companies out there claim to solve many of the basic project management objectives, but for the more advanced users, one tool isn’t going to be perfect for you no matter how much you customize.

Square Peg in a Round Hole

The biggest pothole I see here is that sometimes companies try to make the tool fit the process, instead of the process fit the tool.  This doesn’t apply just to project/portfolio management software, as many of you realize.  People will take that bright and shiny tool out of the box and transform it into something that they swear they needed in order to get any value from the tool.

Then, time goes by, and you’ve put so many customizations on top of the tool that it is barely recognizable as that off the shelf product you purchased many years prior.  The vendor will be telling you that you can get so many of those customized features in their newer version of the software.  You are finding that you need to put fix on top of fix to get the software to work the way you had hoped three changes ago.  The executives in your organization don’t see the real business value in the tool (where are their fancy dashboards with reliable data?), so you are having a hard time convincing them to invest another hefty sum of money in upgrading or replacing the tool.  Any of this sound familiar?

Here’s how you can get it right…

Start with the best future in mind, not your current state by asking these questions:

• What is it that you are hoping to produce as an ultimate outcome of using this tool?
• Is your focus resource management?
• Is it cost management?
• Is it fancy dashboards that the executives can use?

The key here is to figure out what matters to you, as the owner of the tool, and also to your stakeholders.  It is in your best interest (and your PMOs) to take the time to figure out what each of your stakeholder groups needs in order to feel a part of the process and to make sure that they are getting real, tangible value from the tool.  Otherwise, you will have a disaster on your hands when you implement something (customized or not) that doesn’t meet stakeholder needs. No one will use it, or if forced, they will find the path of least resistance, which equals the least amount of valuable information.

Clean Paper Perspective

Once you have gathered requirements from stakeholders (Software Development 101, right?), you also need to take the clean sheet of paper perspective for your processes.  Put aside what your tools or processes do for you today and think about what you ultimately want to deliver.  Once you’ve done that, you may realize that your current business processes don’t actually fit where you are headed with your new set of requirements.  That’s OK.  Change can be your friend here.

You have 2 choices, either scrap all of your old processes in favor of your new ones or take advantage of this opportunity to align new business requirements with some of the lean and six sigma strategies for process improvement applied to your existing processes.  Either way, you are still only looking at requirements and the processes.  The tool doesn’t yet come into the picture.  There is a reason for this.  If you engage with vendors before you’ve done your homework, you will have them all “helping” you define your business processes in a way that suits their tool, specifically.

Start Shopping

Upon reaching agreement on the business requirements and business process, it’s time to start looking at your tool options.  Vendors will fall all over themselves to help you with your project management software needs.  There are the primary companies that create the software and then there are third party implementers that will implement the software of your choosing.  Your best bet is to do your research here and look at what other companies of your size are using.  This is easy enough.

Research is your friend here, Google searches and actual conversations with people will get you all the information you need.  There will be many war stories from companies that have implemented the software packages or web-based/Saas model tools.  Some will be great, but more will not be so great.  Some people will claim that a certain tool is amazing and others will say that that same tool is horrible.  Neither of them is right and both of them are right.  It’s all about the experience that they had in implementing and using the tool in their organization, how much they customized the tool, and what they were looking for as outcomes.  My experience has been that those that didn’t follow the suggestions in this article will have the worst experiences to share with you.

Throughout this process, you must keep the people engaged in defining the requirements and get real agreement to engage in the use of the tool once it is implemented.  The primary reason that a project management tool is put into place is to help in managing and leveraging the project data to make decisions.  Those reports that you and your executives want will only be as good as the data put into the tool by the project resources.  Bad data in equals bad data out.  Do not underestimate the time and effort required to educate, train, and build structure around the users of this tool and how they interact with this tool.  This user management process will be an ongoing communication and training effort that must be planned for when considering implementing project management software.

Good Over Perfect

No tool will be perfect.  Pick the one that most closely aligns with your already defined objectives and key business processes.  My advice…use the 80/20 Rule.  Expect the tool to meet 80% of your needs through no customization (even if this means modifying your processes to meet the tool instead of the other way around) and then look to make modest customizations or find mechanisms outside of the tool to meet your last 20%.  Any more than that and you will be paying for it for years to come!

Be sure and come back next week, when we dive into the people part of the PMO with the Talent Profile and Change Leadership.