Demystify the Underlying Role of PMO

Every project is like an uphill battle where waste, failure, and loss occur. What’s important is to learn from those painful experiences to build organizational capabilities. It takes courage to admit mistakes before moving on to learn from them, a process that heavily depends on the organizational culture. Renowned entrepreneur Richard Branson said, “Don’t be embarrassed by your failures, learn from them and start again.”

The project management office (PMO) plays a substantial role in supporting the organizations’ projects and increasing their success rates. While the role of the PMO becomes more eminent during the organizational scaling up, the whole entrepreneurial organization will act as the PMO during start-up.

Although the PMO concept has spread widely, it’s not yet well defined, i.e. it swings from the role of conventional project department to the basis of predefined structured frameworks

One thing beyond dispute is that the PMO is vital to govern and streamline efforts toward building successful projects and realize the intended benefits to the organization. The PMO is therefore supposed to help the organization attain its intended benefits of creating value through new products and services. The PMO has six prominent roles in organization’s value creation activities:

  1. Leader:

The PMO’s main role is to lead the allotted resources for a project in a way that assures the interests of the business and the shareholders. Usually, the project is implemented by a task force team (the agent) which is sometimes augmented by third parties in order to achieve the business owner’s objectives (the principal’s). The agent and principal’s goals are not always identical. While the project team conceives that meeting the time schedule and the budget is its ultimate goal and covets the credibility of participating in such a project, the business owner is looking beyond the project completion, i.e. realizing the outcomes accompanied with sustainable benefits. The PMO must balance this relationship and cascade corporate governance into project governance to govern this association.

2. Interpreter:

 Senior management is often busy drawing the overall strategy, monitoring the market conditions, deciding on the market positioning, defining the competitive advantage, interacting with investors, negotiating with customers, monitoring financial and operational performance, and planning for growth. The latter is vital for business sustainability through which the projects realize.

Once the growth project has been initiated, it will exhaust a great deal of the firm’s resources, and many technical and operational activities will take place to create the project with intensive expenditures in a short term. The workload during the project planning and execution phases is overwhelming since the management occupied with other pressing matters might overlook many signs and important information. The PMO here plays the role of interpreter by filtering the information and putting it in a business context rather than into rigid boilerplate reports, thus enabling senior management to steer the business and make informed decisions.

3. Stop-loss:

The PMO is not just accelerating projects, but also decelerates and ceases projects. The business case that gave the green light to a project has been built on many assumptions that could dramatically change in volatile markets. We should keep in mind that to authorize project is to authorize a probable value creation. These assumptions should be monitored and vetted continuously to ensure the business case is still valid. The PMO should not only be conceived as the project’s guardian, but also as a representative of the firm to assure the intended benefits to the whole business context. This requires courage to decelerate or terminate the project when necessary.

In previous research from the authors of the book “Doing Agile Right: Transformation without Chaos” former Amazon executive Jason Goldberger, Amazon founder Jeff Bezos purposefully encourages executives to make decisions reversible, which ensures that the company won’t have to observe bad consequences for long. This is an example of promoting courage within the organization to retreat from pursuing a project when probabilistic beliefs or actual conditions have changed.

4. Integrator:

When the organization has multiple simultaneous projects, the role of the PMO is to optimize resource use such as cash flow and human resources allocation and to maximize opportunity capture by leveraging better negotiation positions with vendors or lenders.

The head of PMO should not become immersed in the daily routine of firefighting while letting go of bigger opportunities. The effective PMO builds and engages other internal functions such as finance, procurement, and human resources to identify opportunities for leveraging the company position or improving overall project management performance. The key phrase here is “speak out.” The head of PMO must communicate with other functions while delivering thoughts and insights and remaining open to hearing different perspectives.

5. Knowledge crucible:

 To understand the significance of the project phase, imagine a large manufacturing plant where the project team will expend 10 to 20 million man-hours within two years while the operation phase will expend a similar number of man-hours in 15 to 20 years. The effort exerted in this short period will yield major opportunities in building organizational knowledge. What is usually documented in the project, either in the form of drawings or in the records of lessons learned, represents the tip of an iceberg of knowledge whereas the bulk of tacit knowledge is within the project team. The one sole way to hold this tacit knowledge is to retain those project team members, although this can only work for a certain period before they plan to leave or retire. To guarantee effective knowledge capture, the PMO should engage young employees, assign planned job rotations, and promote a culture of knowledge sharing. This leads us to the most important method for maintaining the momentum of PMO growth.

6. Capability builder:

 An effective PMO reflects proper planning, staffing, training, mentoring, and delegating. Senior project managers should invest their valuable time in guiding and mentoring their successors. A successful project manager once told me that is when he delegates to someone during the leave period, he gives them all the position’s privileges, from using the office and car to exercising full authority on his behalf.