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Traditionally, project management organisations (PMOs) are perceived as something between a totally tactical execution arm and an overhead cost that doesn’t deliver much. Unfortunately, this perception is a common mistake among senior leaders and leads to misalignment in the organisation, which ultimately affects strategy execution.
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If this is your current situation, you’re not alone. According to a recent study by The Economist Intelligence Unit, only 56% of strategic initiatives are successful, and only 9% of the firms surveyed rated themselves as excellent on successful execution. Meanwhile, PMI’s Pulse of the Profession reports that 88% of executives agreed on the importance of strategy. However, a lack of alignment between projects and organisational strategy was said to lead to failure 44% of the time.
Changing the CIO’s perspective of a PMO will alter its purpose, function, effectiveness and alignment within the organisation. Tactically focused PMOs can lack the ability to bring about change, which is the sole purpose of any project or programme.
To be successful, CIOs need to leverage the PMO as a strategic entity that is required to execute strategy and project-based work. The most effective PMOs spend most of their time and resources on relationships and minimal time on tasks. To achieve this, CIOs need to design and organise the programmes and structure better so that the PMO can be a strategic supporter rather than a tactical mechanic.
How the PMO fits into the organisation will make a difference in strategy execution and alignment, and this begins with aligning structure and culture.
Consider how the organisation’s culture influences the PMO. For example, in what ways does the PMO’s culture differ from that of the organisation? Is your PMO empowered to be strategic or tactical, or a combination of both? Does the PMO’s culture engage the types of working relationships the strategy requires for successful execution? Are you helping your project management leaders to zoom in and out so they can make strategic as well as tactical decisions?
A strategic perspective of the PMO requires the CIO to drive alignment – a top-down function – toward the PMO level. Build a solid foundation by gauging the level of understanding among your PMO director and project managers on the team about the organisation’s strategy. Just because the strategy has been communicated doesn’t always mean it is understood.
This means more than just reciting the company’s mission and vision. Can the project managers state the company strategy in their own words? Can they define the role they play in executing the strategy? If not, a review of the strategy is required to establish understanding at all levels of your PMO.
It is critical for structure, culture and strategy to be fully aligned and that the PMO supports these areas so that it can deliver the expected results. Having the appropriate framework in place exposes areas of alignment and misalignment throughout your organisation.
Match your framework against the work that is being done. Review all projects with the PMO director and determine whether the projects align with strategy. If they don’t, ask why.
PMO as a central player
Now assess the PMO itself and how it is defined in your organisation. Don’t let the traditional norms of the PMO function trap you into recognising the strategic potential of a PMO.
A common mistake made by organisations is to bolt the PMO onto the existing structure so that it does not fully integrate into how the business operates. Make the PMO a central player in the execution of strategy and alignment. Empower your PMO with resources and political clout so it is positioned to make smart decisions.
Changing the perception of your PMO and taking a strategic approach will accelerate time to market, increase the velocity of the organisation and transform the way you and your organisation think, lead, execute and succeed.
Tim Wasserman is chief learning officer for TwentyEighty Strategy Execution and programme director for the Stanford Advanced Project Management (SAPM) programme.