Despite a growing demand for the services project management offices (PMOs) typically offer, the organizational PMO life expectancy is still about two years before the PMO is changed or is removed altogether from the host organization (Aubry & Hobbs, 2010). Research performed by Aubry et. al (2011) suggests that while many drivers are identified for causing the PMO changes, internal environmental drivers play a key role and infer a need for organizational change management practices to be applied to the process of building or modifying a PMO. Currently, only about 50% of these PMO changes include consideration of change management practices (p. 133).
This paper proposes a process to make PMO organizational modifications structured as a change management project. This includes: (1) accounting for change management considerations and processes when designing and executing the overall initiative; (2) structuring the organizational shift as a project per PMI's (Project Management Institute) project management methodologies; and (3) incorporating a mechanism in the final deliverables (the PMO and associated governance, processes, etc.) to continuously evaluate PMO performance and make adjustments on an ongoing basis as necessary.
The process described aims to support PMOs in providing more effective long-term delivery in a stakeholder-centric, continuously improving model that is determined to provide ongoing value as organizational demands change.
Introduction
The Changing PMO Environment
Today's organizations must be increasingly adaptable to shifting contextual influences as markets shift to include new variables such as global competition. PMOs are often established to provide the venue for executing changes (structured as projects and programs) to support these adaptations within the organization. The 2013 PMI Pulse of the Profession™: The Impact of PMOs on Strategy Implementation indicates that in over 70% of organizations now have PMOs, and the trend appears to still be growing (Project Management Institute, 2013b). Yet, PMOs still have a relatively short life span despite this demand and demonstrated growth. Researchers Aubry and Hobbs suggest that the shorter life spans can be related to discrepancies between the PMO functions and the host organization's requirements, particularly as the organization evolves (Aubry et al, 2011).
Differences between the environmental requirements and the pre-existing PMO functions can evidence in different ways. This may be identified as lack of recognition, non-adherence, or non-compliance to new structure, process, or mandates that are put in place with the PMO's existence. A common example is for “rogue” project managers or project management activities to take place within divisions/departments that are not aligned to PMO-required standards. Sometimes, a duplicated PMO function may emerge elsewhere in the organization as well, covering similar scope or sphere of influence as the original PMO. Projects may initiate without formal approvals or tollgate assessment, despite some form of organizational mandate to be approved before starting. Stakeholders may opt out of attending governance meetings that directly impact the PMO work or give the PMO authority. Some organizations may staff projects with vendor support if the project management competencies do not exist within their department's staff, rather than leverage pre-existing PMO staff that is available. These behaviours suggest organizational or stakeholder “buy-in” is not occurring for the PMO, and over time, the PMO can be ultimately be shut down.
In order to address the root cause of the PMO not meeting the organization's requirements, this paper proposes a structured process to execute the initial establishment or transformation of a PMO as a project, and a design to continuously assess organizational requirements, and re-shapes itself, by design. In order to account for initial challenges with the impact of the changes, the process incorporates change management strategies aligned to the PMI project management methodology phases.
Change Management Life Cycle and the Project Plan
The five change steps listed in the PMI publication Managing Change in Organizations: A Practice Guide (Project Management Institute, 2013a, p. 18) are detailed below. Each of these steps of change are then integrated into the project life cycle of establishing or modifying a PMO and project management governance. In structuring the PMO setup like a project, the effort should be designed to contain the processes and deliverables captured in Project Management Institute's A Guide to the Project Management Body of Knowledge (PMBOK® Guide), including the project schedule and planning activities (p. 141-190).
- “Formulate the change by identifying and clarifying the need for change, assessing readiness for change, and delineating the scope of change. (Initiating Phase)
- Planning the change by defining the change approach and planning stakeholder engagement as well as transition and integration. (Planning Phase)
- Implementing the change by preparing the organization for the change, mobilizing the stakeholders, and delivering project outputs. (Executing Phase)
- Managing the change transition by transition the project outputs into business operations, measuring the adoption rate and the change outcomes and benefits, and adjusting the plan to address discrepancies. (Monitor and Control)
- Sustaining the change on an ongoing basis through communication, consultation, and representation of the stakeholders; conduct sense-making activities, and measuring benefits realization. (Monitor and Control, Initiation as needed as adjustments identified) (Project Management Institute, 2013a, p. 18)
Step 1: Identify the Change (PMI Methodology “Initiation Phase”)
The first key step to initiating a new or modified PMO will be to identify specific scope for the change project, which is the initiating phase of the effort per PMI methodology. This step should be collaborative between the project manager coordinating the effort, and the key sponsors for the effort. This step should also produce standard PMI deliverables typical with the initiating phase, including a business case for action, project charter and high level effort estimates based on analysis and conceptual approach.
Business Case for Action
John Kotter emphasizes eight accelerators in pushing organizational change to move quickly in the Harvard Business Review (2012, p. 51). He indicates that a “sense of urgency” is required to kick off a change initiative, and this sense of urgency should be focused on a single “big win” created and reinforced at the top of the organization. This big win should be captured in the business case for action. The project manager for the PMO change initiative can leverage the business case as a kick-off point to create this sense of urgency and align executive support as necessary. The business case can serve as a focal point for discussions, generating understanding to create change momentum, and ultimately link to the PMO business plan and service level agreements (SLAs) referenced in later steps.
Initial Gap Analysis: What's Working, What Isn't?
This initial phase of the effort should be built around analysis of the situation. Interviews with stakeholders, reviewing pre-existing documentation and processes, and generating a formalized readiness assessment and gap analysis will help create a specific scope associated with this change effort. The readiness assessment will review the organization's readiness for change and overall level of maturation. This author recommends conducting an assessment of both the organization and the PMO, and thus identify any key gaps between the overall organization and the PMO. It should be noted that PMOs typically function best when the maturity of the PMO is at the same level of the larger organization. If the PMO, for example, is operating at a more mature level, this can actually cause issues with alignment to business and general stakeholder satisfaction. A common demonstration of this misalignment is that the PMO can be perceived as gathering data that is not readily acted upon by the less-mature organization, thus this data gathering effort is seen as wasteful.
If the project manager is working as a consultant, this first step can be particularly important in: (1) supporting introductions to key stakeholders, and creating a venue for these stakeholders to have an initial point of contact to the project that will ultimately impact them; (2) informing the stakeholders of the high level plan to address key concerns (i.e. their concerns are being heard, will be addressed, and the stakeholders’ concerns are validated); and (3) encouraging the stakeholders passively to the direction of the change. This is often an elevator speech that the project manager may initiate during these meetings and continue through the life of the project that highlights the need for change and the vision for a better performing PMO and governance framework. This directional encouragement can subtly shift the discussion (once the stakeholders have described what isn't working) to a solutions-oriented mindset for change that will ultimately serve as the beginning of the change motivational process. This initial dialog is also helpful to orient the stakeholders around a common lexicon of terms that will be used throughout the life cycle of the project. Stakeholders may not be aligned with what they describe as a project or the role of a project sponsor, for example, and these and other items will be helpful through the change process to gain alignment around early in the process as discussions take place.
As a part of the initial analysis, the project manager should also get a sense of executive support for the overall effort. Executive support is linked with the success of change, and without the driving leadership force behind any large organizational effort, the project will face a much larger chance of failure (Project Management Institute, 2013a, p. 12).
The outcomes of the initial assessment will support the majority of the remaining initiating and planning deliverables. A high level Work Breakdown Structure will be able to be generated and the deliverables prioritized working with key stakeholders. These stakeholders can provide inputs on what changes anticipated will be business-critical, and which less impactful, which will assist in the planning and timing process.
PMO Project Charter
According to PMI's Pulse of the Profession™ In-Depth Report: The Impact of PMOs on Strategy Implementation, “regardless of the PMO type, the alignment of the PMO to the goals of the organization is key to driving strategy implementation”. The report continues to conclude that “high-performing PMOs nurture capabilities that enable organizations to successfully implement strategy, contribute more value to their organization, and ultimately impact financial performance” (Project Management Institute, 2013b). According to Thiry, the PMO ideally structured has transparency to business strategy and operating/tactical plans from which projects are produced (2007, p. 26). In such a position, the PMO should subsequently have more insight to changing business needs, environmental/market factors, and have more access to communication channels with executives and other key influential stakeholders. Such considerations should be made when chartering the PMO, so that it is well positioned to be responsive to the changed environmental requirements. Each of the desired outlined capabilities should be included in the PMO charter. The charter hosts the vision and key objectives of the PMO organization, and should be a summarized version of the important points in order to resound with the audience in a concise and straightforward way (PM Network, July 2014, pp. 58-61).
Step 2: Planning the Change (PMI Methodology “Planning Phase”)
The second step to implementing the PMO change will be to create a plan based on all of the data gathered during the first step. In this stage, a high level schedule should be created based upon the deliverables. These deliverables (typically new processes, organizational structure, project management methodology adjustments, etc.) are thus scheduled accordingly to weight (impact to organization's business and processes), and stakeholder priority (sponsor requirements, etc.). The scheduling should also be set up with the psychology of change management in mind. Quick wins should be scheduled intermittently through the project life cycle, including at least one on the forefront of the schedule to support stakeholder buy-in to the process by showing them some results.
Stakeholder Assessment, Planning and Communications
This stage is an opportune time to make planning arrangements based upon your acquired knowledge of the stakeholders involved thus far. Getting to know the stakeholders through the initiation phase should position the project manager to conduct a stakeholder assessment, and assemble stakeholder management and communications plans. When viewing the process of building a PMO as a project, one may be inclined to define project success merely in relation to performance with respect to the usual constraints (time, resources, and quality). However, a project to create organizational change will likely not be evaluated on the performance against the constraints alone. As a change initiative, perceived performance of the effort will also be defined by stakeholders’ perceptions of the overall added value as an outcome of the project. Even if the PMO and project governance is set up according to the plan, if the PMO doesn't demonstrate value as it is defined and determined by the stakeholders, the project and PMO may be perceived as a failure (Lazar, 2012).
The potential impact of each stakeholder on the performance and outcomes of the project necessitates the early compilation and frequent review/revision of the stakeholder management plan. Key inputs include:
- Defining how each stakeholder interacts with the project and project deliverables (PMO and related governance).
- Defining interests as possible. Interests can be captured by asking the team “What does each stakeholder stand to gain and lose based upon the process of the project or the project outcomes?” In the examples of a less-organized portfolio, some projects may have initiated with fewer barriers in place, with both positive and negative benefits to the organization. These barriers can be seen as helpful by some stakeholders desiring more robust assessment measures in place prior to making resource commitments, but hindering for some stakeholders that enjoyed more latitude to execute projects quickly without a great deal of enterprise visibility. In the more extreme examples of the above, the stakeholder may have individually benefitted from these projects initiating, while the project may not have been in the best interest of the overall enterprise. When transparency is created around resource usage, these projects are among the first to lose their execution rate and expediency. This is a change for those stakeholders who previously may have been served well operating in a more silo structure, and change resistance can occur.
- Integrating stakeholder expectations into the plan as possible and appropriate. Stakeholder communication remains a key failure point for projects by project managers, reports the PMI Pulse of the Profession™ report, with 55% of project managers naming this point as the most significant (Project Management Institute, 2013d). This calls attention to ensuring the communications plan is appropriately staffed. Today's technology options can support a wide variety of communication venues in an organization, so the project manager can expect that the stakeholders may have preferences across these venues. These details will be important to familiarize yourself with early in the project to capture attention, as well as revisit on occasion through the life of the project. Changes require much more frequent communications, as the effort may include a significant modification in stakeholders’ work processes and environment. Expect these folks to naturally have anxiety in lieu of fully understanding the need for change, the vision of what will change, the timing of the change, and/or when any gaps in communication exist.
Once the PMO project schedule is in place based upon the vision of the PMO (as captured in the business case for action and the PMO charter) this schedule will need to be communicated per the communications requirements identified in the stakeholder management plan. The timing of communicating the schedule will most effectively be articulated to the stakeholders when enough detail is understood to support a higher confidence in the dates. Communicating the timing of the project's key deliverables too early in the planning process can negatively impact stakeholder's perceptions and PMO team member buy-in when/if delivery dates are missed. Therefore, the delivery schedule should be built with a degree of confidence and communicated as such, with any risks well understood in advance by the stakeholders as well. These risks are most effectively communicated as “if-then” statements that are well understood by the stakeholders, and in the case where a risk becomes an issue impacting delivery, expectations have already been set around what happens as an outcome of the issue.
Depending on the number of stakeholders, communications planning and execution can be a large, time-consumptive and highly planned process. The project schedule should therefore account for realistic considerations of communications effort requirements by the project manager, and all team members who are participating in and supporting the transition as well.
The size and scope of the change management project should also be relative to the changes required. A project management office cultural shift is unlikely to happen under 12 months; however, a plan to execute such a change that takes longer than 18 months may not have the sustainable force to fully execute (Crawford, 2011, p. 41). Therefore, the planning process should consider change management drivers when breaking up the work into packages that have tangible, recognizable deliverables with “wins” that can be celebrated. These “visible, significant, short-term wins” are needed to sustain the energy required of the team members driving and supporting the changes (Kotter, 2012, pp. 45-58). If the project includes multiple PMOs to be established, for example, or the project delivery timeframe exceeds 12 months, the delivery should be broken up to more short-term milestones. These milestones will allow the team and stakeholders to visibly see and celebrate progress against the final vision of the changes to be realized at the end of the project.
Step 3: Implementing the Change (PMI Methodology “Executing Phase”)
The third step in setting up the new or revised PMO is to implement the changes. This involves executing to the plan created in Step 2, with an emphasis on stakeholder engagement and communications. Typically this means delivering tangible outputs such as a PMO organizational charter, PMO organizational structure and chart, PMO critical success factors (CSFs) with annual key performance indicators (KPIs) associated with each CSF, developed or revised organizational standards around project implementation methodology, job descriptions for required new or revised roles (such as project managers, schedulers, business analysts, etc.), hired or shifted workforce, a training plan to address any competency gaps identified during the gap analysis, and execution of the training and workforce changes. Depending on the design of the PMO, this list may vary. If governance is included, for example, various organizational governance bodies, processes, and checkpoints will be rolled out as well. If an enterprise or IT portfolio list of projects is additionally included in the delivery, the initial list of projects and programs will be delivered as the first snapshot of organizational activity.
PMO Business Plan
As the PMO is structured to provide, in great part, services to the organization, it is advisable that the PMO should accordingly be viewing itself as a business, serving the stakeholders. As a business, the PMO will need to identify the services required, and sell the services by engaging the appropriate stakeholders and communicating this intent in a concise business plan. This rationale will most effectively include a description of why the change must occur. These services are then captured in a conceptual business plan that is continuously reviewed by PMO leadership and revised as needed.
Demonstrating the value of the PMO and PMO services may be a significant challenge given the potential for widely-varying interpretations of what value looks like to each stakeholder. Duggal (2013) promotes the use of SLAs with the stakeholders for each PMO service, to assist in fostering common understanding of PMO value and benefits gained. This kind of mutually agreed upon timeframe will promote clarity on PMO performance, provide metrics for improvement or other changes, and will ensure a degree of alignment of expectations between service provider (the PMO) and the user (business units and other stakeholders). These SLAs will then function as a tangible extension of the PMO Business Plan and will also be reviewed on a cyclical basis.
Structuring the PMO to Continuously Adapt
The ongoing performance of the organizational changes implemented in the PMO project should be easily identifiable and assessed for any issues. A way to assess the performance of each deliverable will be key in the ongoing sustainability of the PMO, so a way to obtain useful performance data for each deliverable, and some form of cyclical review process, should be rolled out for each.
A proposed model for each deliverable in Step 2 is:
- Deliverable (e.g. enterprise project portfolio, chartered project review board)
- Defined way to continuously assess and improve deliverable (e.g. annual review cycle assessing project review board SLAs, performance against SLAs, and project metrics quality)
- Specific data, and process to gather the data, in order to review regularly (e.g. metrics on project approvals turnaround time, project performance data points gathered weekly and reported by the project manager, lessons learned required for all projects greater than 80 effort hours, etc.)
During this executing phase it is important that the project manager continuously reference and set expectations with the stakeholders around the vision established in Step 1. In this deployment phase of the effort that stakeholders may potentially experience a great deal of disillusionment or disengagement from the initiative and change momentum may be threatened, particularly if there are any surprises. The project manager will be transitioning various new or revised PMO functions to operational leads for ownership, but the actual transferral process should be a part of an ongoing and long-term collaboration between the project and operational leads and clearly understood by all necessary stakeholders well in advance. Step 4 is structured to address common change management challenges that will arise during this the handoffs and other transitional activities taking place during the life of the project.
Step 4: Manage the Change Transition (PMI Methodology “Monitor and Control Phase”)
The fourth step of the change initiative is to monitor and adjust the plan as needed as the transition occurs. This step incorporates the project manager, sponsorship and team proactively anticipating stakeholder reactions to the discomforts of change and reaching out to each stakeholder per the communications plan identified in the planning process. Any delivery adjustments required relative to leadership changes, organizational shifts or delivery issues identified will need to be watched for, captured, planned and adjusted as necessary to keep the change momentum. The overall adoption of the change will be a critical monitoring point and a regular discussion checkpoint with the project team. Team members may find themselves struggling with some changes as well, so it will be key for the project manager to stay attuned to the team's progression.
Continuing to Assess and Engage Stakeholders
This author's experience is that consideration and management of stakeholders is a make-or-break function to building and maintaining an optimal PMO. This can be especially true in organizations with strong consensus-based cultures; stakeholders will exercise a great deal of resistance if their perspective is that the PMO project approach is not aligned with organizational cultural practices, for example. When performing the gap analysis of functionality and needs not currently met by the organization, a highly consensus-based organization may expect to be involved and often proactively addressed by the project team. This culture will also likely feel more comfortable in conclusions around PMO and governance design if they have been reached in a group forum, and stakeholders with whom they regard as internal subject matter experts (SMEs) approve of the go-forward design and implementation plan.
Individualistic cultures will provide resistance to change that has not been fully vetted by trusted internal SMEs, as well. All organizations to varying degrees have expectations of being involved, and this author's experience is that the more key stakeholders are involved (and earlier in the process), the fewer speed bumps will exist through the project. This should also result in more buy-in and organizational support for the change is affected. When stakeholders participate in the solution, the ownership of the solution transitions more seamlessly to operational states.
An opportunity exists as part of the change process in ensuring that adoption of a proactive, solutions-oriented mindset is cultivated alongside the new PMO standards and processes. This is accomplished by design (creating a formalized review and improvement cycle) and, perhaps more importantly, providing a safe venue for stakeholders to articulate new requirements and describe what isn't working. The communication enhancements possible through implementing a new feedback loop may provide opportunity to structure the feedback in a proactive, solutions-oriented way. Encouraging stakeholders to move beyond raising issues, and to additionally suggest tangible solutions with a recommendation, can over time positively impact the larger sphere of influence surrounding the PMO and its governance bodies. When stakeholders are reinforced over time to restructure issues into possible solutions continuously, the modified mindset can have performance impacts on a more enterprise-wide, global scale. This shift may be dramatic from the pre-existing approaches to feedback and will take time, patience, and long-term planning to implement for results.
Overall, in this change-intense project the project manager should expect that stakeholders require extensive consideration, examination and preparation. The time required for a PMO organizational change initiative should be expected to be significant, with much of the project manager time to be spent on stakeholder management and communications. Change management specialists frequently compare and adapt the original stages of grief model developed by Elisabeth Kubler-Ross in the 1960s to the organizational reaction to change, as displayed below in Exhibit 1 (University of Exeter, 2014). Given the complexities in emotional responses to change, the project team should be prepared to deal with each of the responses and strategize approaches as needed.
Exhibit 1 – The Emotional Change Curve
Step 5: Sustaining the Change (PMI Methodology “Monitor and Control” and “Initiation” Phases as needed as adjustments are identified)
Throughout the change initiative, John Kotter indicates that it is beneficial for the team to be populated with folks empowered to remove barriers, and that “visible, significant short-term wins” should be celebrated to reward the energy and dedication and continuously build buy-in to the cause for change. Mr. Kotter adds that the team should continuously learn, never stop declaring wins and feeding the change, and ensure the change is fully integrated into the culture (Harvard Business Review, 2012, pp.54-56).
Considering that business environments change, and therefore business capabilities and requirements may change, the business model and support requirements for the PMO may also change as well. The PMO is, after all, a support organization, facilitating the changes and outputs desired by the businesses themselves. This warrants a perspective of continuous improvement and adaptation in many PMO models, instead of a static organization with presumed long-standing processes. Practitioners describe this as a continuous life cycle and incorporate a cyclic review of organizational requirements on which to baseline any new necessary modifications or changes to the structure, and governance processes connecting the PMO to the rest of the organization (Lazar, 2011; Duggal, 2013). By continuously leveraging the data created by the new processes, conducting regular assessments on PMO performance, and making adjustments as needed, the PMO transitions to an adaptive support unit.
It will be critical to set stakeholder expectations early, that this organization is expected to flux over time. These expectations should achieve two goals: (1) to decrease concerns over present-state structure and encourage stakeholders to actively engage the PMO in creating improvements to better suit their needs, and (2) set the premise with PMO team members that all changes are intended to continue to modify; therefore, a mindset of continuous improvement will be a valued asset and encouraged within the culture that is being cultivated within the new PMO.
The PMO will benefit from populating its ranks with individuals comfortable with and investing in continuous improvement, and likewise will suffer in promoting change if staffed with team members less flexible or less motivated to change for better results. Creating this internal PMO culture of adaptability is included by John Kotter as key to sustainable and quicker change. The team supporting the organizational shift should be willing (volunteers) and able (capable of clearing boundaries as necessary) in order to sustain the energy required for large-scale change. This energy will ultimately hard-wire into a formalized culture, so consideration in team composition will also be critical to sustainability of the movement (2012, pp. 45-58).
And, as the organization becomes better at implementing change, the organization becomes better overall at delivering new projects, reports the 2012 Pulse of the Profession™ In-Depth Report: Organizational Agility. More change-adept organizations report 117% increased likelihood of successful delivery of new projects (PMI, 2012) than organizations that are less adept at change. So as the organization's ability to adapt increases, it may also enjoy more effective performance overall.
Conclusion
Researchers have recognised the importance of considering change management in the design and execution of a PMO implementation project (Aubry & Hobbs, 2010). Merging project management methodology and change management steps combines the structure of a project, with the energy and execution of a change management initiative. By paying extra attention to how stakeholders perceive PMO value, and conducting a cyclic assessment process to continuously identify what can be improved, the PMO's overall success in meeting stakeholders’ needs becomes more attainable.