Introducing… the CPO
THE CHIEF EXECUTIVE OFFICER (CEO) title came about to distinguish between names like President, Managing Director and Chairman, and to make it clear who is ultimately to make things happen in the company. Likewise, the titles Chief Operating Officer (COO), Chief Financial Officer (CFO, and Chief Information Officer (CIO) evolved to meet the same type of need: establish a central focus for each activity where responsibility was previously ambiguous or not sufficiently targeted.
Why not a CPO, a Chief Project Officer, someone to provide focus for the company's project endeavors? After all, overarching responsibility for projects in most organizations is fuzzy at best. Here are some reasons that justify high-level attention to projects:
Corporate success hinges on close alignment between strategic business planning and project execution.
More managerial energy is expended in organizations on projects than in maintaining ongoing operations.
An organization's success depends on new projects, as opposed to excessive concentration on “business as usual”—which means certain failure.
The time-to-market crunch that assails all companies demands that projects be completed on time, within budget, and to the required quality standards.
Quantum leaps in bottom-line effectiveness can be made by increasing the organization's emphasis on project management.
Enterprise-oriented companies need a politically savvy, project wise, system literate executive facilitator to do the caring and nurturing of projects throughout the organization.
So there are lots of reasons that point to creating a Chief Project Officer function. Both external and internal factors exert pressure on the organization to meet its goals through managing strategic projects. The question remains, however, as to how it should be done.
What would CPOs do? How would they operate? What would their responsibilities be? The questions are numerous. And the sweeping response is obviously, “It depends!”
It depends on the degree of maturity of the organization with respect to project management (methodologies, experience, and support already in place), the size and complexity of the projects, the conviction of upper management with regard to using an enterprise approach to managing, and the nature of the organization—whether it's project-driven like engineering companies or simply uses project management as a means to launch an end product.
The CPO job makes sense in special circumstances: in organizations that are global, enterprise-oriented, multidisciplined, and that require timely delivery of multiple complex projects. Under that premise, a CPO would be responsible for the care and nurturing of the organization's portfolio of projects, from the business-decision stage to final implementation. This includes:
Involvement in the business decisions that result in new projects
Strategic project planning
Setting priorities and negotiating resources for projects
Oversight of strategic project implementation
Oversight of an enterprise-wide project management system
Development of project management awareness and capability throughout the organization
Periodic project review, including decision to discontinue projects
Top-level stakeholder management, facilitation and mentoring.
Since the CPO concept is a new twist, these functions are either not being done in most organizations or are being handled in a different way. Here's how the project management function is normally dealt with.
Traditional Ways of Doing Things. The Fortune 500 Project Management Benchmarking Forum, an ad hoc group coordinated by Frank Toney Ph.D., of the University of Arizona (602/488-4198) that meets four times a year to compare notes on project management practices, recently focused on the traditional ways of dealing with projects within an organization. Here are the forms that this group, which included representatives from Alcoa, Dow Chemical, Sprint, Fedex, Morgan Stanley Northrup Grumman, Northwestern Mutual Life, IBM, EDS, Citibank, American Airlines, Allied Signal, Kelly Services and Philip Morris, identified as conventional ways for supporting and managing projects. These approaches were also discussed in detail in the August 1997 Up & Down the Organization column, “O Give Me A Home…,” under essentially the same titles. Here's a capsule view of the classic concepts:
PSO–Project Support Office. A PSO, sometimes called simply “project office” is designed to support the project manager. It may assist one particular project or provide services to several projects simultaneously, furnishing support, tools and services for planning, scheduling, scope changes and cost.
PMCOE–Project Management Center of Excellence. The PMCOE is the gathering point for expertise, but does not assume responsibility for project results. It plays a largely missionary role: getting out the word, transforming believers into practitioners and converting non-believers.
PMO–Program Management Office. The PMO, also known as the Project Management Program Office, “manages the project managers” and is ultimately accountable for project results. By nature, it incorporates the functions of the PMCOE and in some cases of the PSO as well.
Companies also manage projects using the “autonomous project office.” In this case, the project team receives authority from the company and is basically expected to fend for itself. The project manager is supposed to complete the project, using the expertise of the project team, with little or no support from the company.
Not all organizations need the project management functions as described. And even if they have the need, they may organize the functions in different ways, under different titles. For instance, the PMCOE and PSO functions may blend together. Warren Marquis and Lou Rivera from Citibank, who participated in the Fortune 500 Project Management Benchmarking Forum in September 1997, are part of a group that provides such a combination of services. As mentioned, the PMO may incorporate all of the traditional functions.
How Does the CPO Fit In? How might a CPO function work into an organization? Here are two examples where a CPO could add value to a company's strategic targets.
A worldwide company provides services and products, involving thousands of complex projects, where the PMCOE exists on a global basis and numerous PSOs operate based on geographic criteria. In this setting the CPO oversees the PMCOE and works through a Council of Executives to implement enterprise-wide planning and control systems which would concentrate on the “project side” of the corporation as opposed to operations.
A traditionally functional organization needs to shift from functional management to an enterprise approach in order to speed up its information technology and new product development projects. In this case the CPO sets up new channels of communication through a matrix-based Program Management Office, including the project support function which is available to project managers in various areas. The CPO would also establish a virtual PMCOE which would involve professionals allocated to various projects.
There's Gotta Be Another Way. While the CPO concept is an option, it's not for all companies. It doesn't make sense for an organization to swing to something drastically different until both the situation and the times are right. All organizations don't need CPOs.
That being the case, how else could the functions be handled? If organizations have survived and prospered for years without CPOs, obviously there are other ways of dealing with strategic project management issues. Who else within the organization can take on the functions earmarked for the CPO?
The COO. The Chief Operating Officer could well divide time between process-related activities and projects. Although operations (keeping things running) and projects (doing new things) theoretically require different mindsets, a capable COO with experience in project work could merge the two functions.
The VP-Planning. The Vice President of Planning also might extend his or her mandate and take on the oversight of project implementation and enterprise tracking, as well as the up-front strategic side of projects. Once again, the VP would have to be well-versed in the art and science of managing projects.
The Program Management Office. The Head of the PMO can also take on the CPO'S function, provided that resource allocation, supervision and tracking of projects is sufficiently delegated to the project managers and the PMO is placed high enough in the corporate order of things.
The Executive Team. If the executive team is sufficiently conversant in strategic project management, then the CPO's duties can be distributed among the members.
So, alternative approaches abound for dealing with the issues outlined for the CPO. If there is cultural resistance to establishing such a position, then the alternatives should be looked at closely (nominating a CPO may not be a good political or practical solution in some companies). But, with or without a CPO, somehow a greater thrust needs to be made toward managing projects more effectively in organizations.
Hurry the River? According to ancient wisdom, a river can't be hurried along. It's got its own pace. It will do what it's going to do. But ancient wisdom allows that rivers can be navigated intelligently, by staying in the mainstream and away from eddy currents and sandbars. By contrast, a more go-go philosophy proclaims “Do it now!” In other words, get on with the show, champion the cause, make it happen!
WHICH OF THESE PHILOSOPHIES makes sense with respect to the CPO function? There's logic to the go-with-the-flow view. And a take-charge approach may be right in some cases. Something in between is probably right for most organizations, however. If companies have gotten along swimmingly for eons without CPOs, maybe they don't need them now either On the other hand, times are changing, and that calls for a proactive stance. Lots of thought needs to be put into making the move toward a CPO. The name is not important: increased focus on strategic project management is. Regardless of the name or the form given to the project management focal point in the company, as organizations are pressured to do things faster, cheaper and better, time grows nigh for optimizing corporate project management capability. As organizations complete the transformation from old-style functional “silo management” to dynamic enterprises of ever-changing projects, greater attention needs to be focused at a high level to ensure that ongoing projects contribute substantially to the company's bottom line. ∎
Paul C Dinsmore, PMI Fellow, is author of six books, including the AMA Handbook of Project Management (Amacom, 1993). He is president of Dinsmore Associates, affiliated with Management Consultants International Group based in Rio de Janeiro, Brazil. (Comments and suggestions to Fax 011 5521 252 1200 or e-mail to email@example.com.)
PM Network • December 1997