The DANCEing PMO
next generation PMO for a disruptive world
Jack S. Duggal, MBA, PMP
Managing Principal, Projectize Group LLC
Is your project/program management office (PMO) ready to deal with the reality of today's disruptive DANCE (Dynamic and changing; Ambiguous and uncertain; Nonlinear; Complex; and Emergent and unpredictable) project environment? Today's PMOs have to sustain and survive in an increasingly disruptive world. PMOs continue to be challenged as they struggle to recognize the DANCE and the disruption of their business and industry. They are often viewed as antithetical to the need for agility and innovation. While PMOs continue to build and sustain practices based on scientific management and mechanistic approaches, they fail to recognize that these traditional management approaches are necessary but insufficient to deal with a rapidly changing, uncertain and unpredictable DANCE world.
According to our survey, 60% of PMOs are not equipped to deal with the disruption. How do you transform the PMO for a disruptive world? How does the PMO support agility and innovation? How do you achieve rigor, but without rigidity? How do you deliver results in an uncertain world? How does the PMO become the steward of value and impact? This paper will address these questions and discuss the need to recognize and understand the challenges posed by the DANCE project environment and the need for new approaches. Fundamental distinctions and paradoxes will be discussed to distinguish traditional versus next generation approaches. Characteristics of the “DANCEing” PMO that are better designed to deal with the DANCE will be identified.
The observations and insights discussed in this paper are based on working with a few thousand people from hundreds of organizations over a decade, in leading PMI's SeminarsWorld® Next Generation PMO and Portfolio Management seminar where these ideas have been discussed and debated from multiple perspectives. Additionally, these are real-world challenges and ideas that we are implementing in organizations around the world in our next generation PMO practice.
Disruption and DANCE and the Need for a DANCEing PMO
Today's PMOs have to withstand the disruption in an increasingly DANCE world. According to our survey, 72% of organizations are facing some degree of disruption. “Disruptive Innovation” was a term first popularized by Clayton Christensen of Harvard Business School. A disruptive innovation is an innovation that helps create a new market and value network, and eventually disrupts an existing market, displacing an earlier technology. In a digitized and Internet-enabled world, established companies are being disrupted and upended in many industries. Uber in taxi and transportation, Airbnb in hotels, Netflix in entertainment, Amazon Web Services in technology infrastructure and data center services are only a few of the leading examples. The average life span of an S&P 500 company has decreased from 67 years in the 1920s to 15 years today, according to an analysis by Richard Foster of Yale University. A classic example often used is that of Eastman Kodak, which declared bankruptcy in 2012. Even though Kodak invented the digital camera, the company could not capitalize on it, while Instagram, a startup in the related digital photo arena, was bought for US$1 billion by Facebook, and Snapchat already has an even higher valuation. Digitization accompanied by breakthrough technologies and new business models are creating multiple inflection points. Though inflection points have always been a part of business reality, the frequency of inflection points has rapidly increased in today's turbulent environment. The unforeseen and unexpected are happening at a faster pace, causing a greater degree of DANCE in the project environment, which must be dealt with by the PMO.
The challenges are evidenced by recent PMO findings: although the PMO has become a common organizational fixture in many organizations, the success rate has not gone up. According to Projectize Group's survey-based PMO research (2005–2015), key PMO stakeholders perceive 52% of PMOs as unsuccessful. These findings are echoed by recent reports from organizations such as Forrester Research, Boston Consulting Group, and a multiyear study by Hobbs and Aubrey (2010) called “Project Management Office (PMO): A Quest for Understanding.” A lack of buy-in and acceptance continues to plague PMOs. Of those surveyed, 39% responded that the relevance or existence of their PMOs has been seriously questioned. Just 33% responded that the PMO has realized its full potential in contributing business value to the organization. It is imperative for the PMO to recognize the DANCE and be ready to deal with the disruption.
The DANCE is characterized by a project and program environment that is Dynamic and changing; Ambiguous and uncertain; Nonlinear; Complex and Emergent and unpredictable. Projects have to face dynamic and constant change, driven by disruptive factors and shifting stakeholder needs and priorities. There is ambiguity and uncertainty, it is not clear who are all of the stakeholders, and the identified stakeholders are indecisive: they do not know what they want. Project direction is not clear and there is a lot of uncertainty about the future. Sequential tasks and dependencies do not seem to hold in a nonlinear, changing and unpredictable project reality. The environment is complex because of a combination of factors, such as ambiguity of scope, sheer number of linkages and dependencies or the multiplicity of stakeholders involved. Scope, requirements and solutions are emergent in nature and can be hard to pin down and plan for in a continually shifting landscape.
The conventional approach for dealing with the DANCE is to structure a PMO based on heavy scope, plan, execute and control (SPEC) processes to support traditional deterministic methods of classic project management. But reductionist plans based on sequential tasks and dependencies do not seem to hold in a nonlinear, changing, and unpredictable project reality.
PMOs and related project and program management tools and techniques are based on a deterministic and reductionist approach, which is based on linear cause-and-effect thinking that is the basis of the traditional management concepts and scientific principles of management that emanated during the 19th century after the Industrial Revolution. In a mechanistic way, you determine the scope and decompose it into a work breakdown structure, which is the core of project management techniques. The challenge is how to break down the scope when there is ambiguity and uncertainty and the stakeholders don't even know what they want.
It is important to understand a fundamental distinction between a mechanical versus an organic mindset and models. A mechanical mindset is a factory model where projects are manufactured using structured processes in a controlled environment that can deliver predictable and consistent outputs. The organization is an inanimate decision-making machine that works with processes and technology designed to scale efficiency and take the human out of the process. It relies on manuals, step-by-step instructions and detailed specifications. On the other hand, an organic mindset is knowledge-oriented and based on information, people and connections, and relies on experience, insights, intuition and judgment, using a nuanced and context-sensitive application of process with an understanding of behavior designed to bring the human back into the PMO.
PMOs need to understand that the mechanical mindset of traditional PMOs can be limiting and is insufficient to deal with a rapidly changing, uncertain and unpredictable DANCE world. Peter Thiel (2014), who has been at the forefront of disruptive companies such as PayPal, Palantir and Facebook, explains the concept of Zero to One. That is, most traditional companies and businesses are organized for One to N to copy the existing and scale efficiencies. The challenge is how to structure a move from Zero to One to innovate and create and support new products and services. Traditional PMOs are set up to scale for efficiencies and implement processes that are perceived as bureaucratic and that stifle creativity and innovation. How can the PMO support a startup culture that is nimble and guards against bloat and bureaucracy that slows things down? As one executive in a global conglomerate remarked, “Our enemy is not the competition; it is unnecessary complexity in our processes.” You have to create a culture where you can work together and focus on initiatives and projects that matter the most, make jobs easier, simplify processes and enhance customer experience. Organizations like General Electric, ConAgra, Vanguard and others have embraced simplification as a strategic initiative.
Beyond Agile: Process Agility Versus Strategic Agility
As a result of the limitations of traditional approaches and the inability to manage the DANCE effectively, the software development community adapted agile practices for project management. Agile has become popular and is spreading outside of software development into other areas as well. It is certainly a step in the right direction, but it does not solve the problem from a PMO standpoint. In our experience with organizations that have adapted agile approaches, there are mixed results. Although agile is designed to short-circuit the waterfall approach, the basic paradigm is still linear and involves incremental development with iterative approaches and a primary focus on execution processes. Even though agile tools and techniques appear to be different, they are actually an extension of existing approaches and tools, and as a result, you get more of the same. There is, however, a difference between execution and process agility versus holistic strategic agility. Besides agile methods and processes, the PMO has to address multidimensional and contextual agility in other areas of strategic selection and prioritization, governance, performance measures and analytics, communications, organizational change management, innovation and other areas.
From Efficiency and Effectiveness to Experience and Impact
Any company designed for success in the 20th century is doomed to failure in the 21st.
– David S. Rose, Angel Investing: The Guide to Making Money and Having Fun Investing in Startups
If you trace the history of management focus of the past hundred years, it was mostly about efficiency—faster, better and cheaper processes, products and services. In the later part of the 20th century, the focus shifted towards effectiveness—extracting value and benefits, instead of efficiency for the sake of efficiency. Many PMOs are stuck in the efficiency paradigm and a few have evolved toward effectiveness. Today's disruptive business is based on experience—starting with the end user and customer experience with a built-in optimization of efficiency and effectiveness with a focus on transformative purposeful impact. Exhibit 1 highlights the evolution and key distinctions between efficiency, effectiveness and experience-oriented PMOs.
How to Transform the PMO for a Disruptive World: Characteristics of a DANCEing PMO
The DANCEing PMO needs to build and cultivate a combination of the following characteristics.
To deal with the DANCE and manage the unexpected, an organic approach is required. An adaptive and ambient PMO that cultivates the capabilities to sense, respond, adapt and adjust (SRAA) to business uncertainties is required. Sensing PMOs develop acute awareness and vigilance to sense their current environment and anticipate unexpected changes. Responsiveness prepares them to view the unique situation and respond accordingly in that moment. Adaptation helps PMOs quickly adjust to disruption and respond as needed.
Focus on Customer/End User Experience
Traditionally, PMOs start with a focus on process and efficiency. Scientific principles of management aimed to remove the person from the process and achieve efficiency with detailed procedural steps and automation. PMOs have focused most of their efforts on defining, developing, documenting, implementing, reviewing, certifying and measuring process. You can have the best process or system but if people don't change their behavior and adopt the process or use the system, what good is it? We have come full circle and now there is a realization that we need to bring the human back into the PMO. In a DANCE world, you cannot separate the dancer from the DANCE. PMOs have to empathize and immerse with the customers and end users; the customers determine success.
To survive in a disruptive world, speed and agility are key and simplicity is a strategic imperative. The PMO should detoxify and simplify. It should reinvent itself as the Department of Simplicity. The PMO's reinvented mission should aim to minimize the paperwork and reporting burden and ensure the greatest possible benefit and maximize the utility of the information created, collected and maintained. Part of the goal is to remove obstacles for project managers and the PMO's customers and design a clutter-free, clean and consistent PMO experience. The PMO should make things take less time and make people more efficient. Overall, the PMO should be simpler, more collaborative and easier to do business with.
Disruptive organizations are built on a foundation of experimentation. The emphasis is on ongoing prototyping, testing assumptions to learn, and implementing a minimum viable product to enable a faster user experience. The PMO needs to understand the mantra of “fail fast and fail often while eliminating waste” and support and enable a culture of experimentation instead of stifling it with restrictive processes. If one of the criteria is failing fast, how do you measure success?
The key question for the PMO is how to define and measure success in a disruptive world. Is the PMO focusing and measuring the right things? Though we have evolved from traditional triple constraint metrics of time, cost and scope (efficiency) to benefits and business value (effectiveness), today's disruptive world calls for a focus on customer experience metrics (experience) such as customer adoption, satisfaction and net promoter score. In a world of ubiquitous data, the PMO has to find ways to embed sensors to collect real-time data. The current set of PPM tools has evolved but is not quite complete. There is a lot of room for improvement to provide dashboards with real-time, meaningful, actionable information. The PMO itself should measure and get feedback from a customer and stakeholder perspective. A holistic and balanced approach should measure efficiency, effectiveness, experience and impact.
Like friendly speed indicator displays (SID) on roads that help us self-regulate our speed, PMO processes can provide project information and self-regulating feedback that helps and supports project managers rather than providing threatening status reports. Just as the SID is designed to slow traffic to a preset limit, project management processes, project sensors and data can be used to define the boundaries with preset triggers for escalation.
We can all identify processes in our organizations that have survived far beyond their desired purpose. There are processes in practice that have been institutionalized simply because they have been done for a long time and nobody has questioned them. Good processes should have a built-in mechanism for being changed or eliminated. Part of PMO governance should include a method to decide when a process or practice is no longer useful or when it needs to be updated to make it useful again.
Rigor Without Rigidity
On the one hand, there is a need to establish rigor with a sound governance structure; on the other, there is a demand for freedom and flexibility. This is indeed a primordial paradox between the simultaneous need for discipline and freedom. This dilemma hounds the successful implementation of project management and PMO processes. An adaptive PMO strives to find the sweet spot to strike the right balance of rigor without rigidity. This balance depends upon a number of factors such as your organizational culture, the nature of your business, the scale and scope of your projects and your organizational project management maturity. For a more detailed explanation of the above characteristic, see “Rigor without Rigidity: How to Achieve Balance in the Next Generation PMO,” proceedings of the PMI Global Congress 2009—EMEA, Amsterdam, Netherlands.
How do you foster a rich environment of collaboration and engagement where everyone is excited about the PMO? PMO stakeholders follow the processes because they want to, not because they are forced. They connect with one another, solve common problems and collaborate in creating methods that are appropriate for them. They volunteer to share lessons learned and influence one another to use best practices. Project management spreads from the bottom up and everyone collectively owns and values best practices. Though community-based PMO might have sounded like a novel idea a few years ago, today many organizations are implementing them. Communities provide a framework for much-needed autonomy of self-organization and decentralization. They recognize the effectiveness of informal structures to promote learning and sharing of knowledge and best practices, coupled with the convergence and popularity of social networks and the associated collaboration technologies.
In today's world the unforeseen and unexpected are happening at a faster pace, causing a greater degree of DANCE in the project environment that the PMO has to deal with. PMOs continue to be challenged as they struggle to recognize the DANCE and the disruption of their business and industry. PMOs based on traditional approaches are not set up for success in today's world. PMOs based on 20th century mechanical mindset are not ready for the 21st century DANCE and disruption. They need to move from a focus on efficiency and effectiveness to a focus on experience and impact.
PMOs need to start with the end user and customer experience, with a built-in optimization of efficiency and effectiveness and a focus on transformative purposeful impact. In the traditional efficiency paradigm, the focus was on process and optimization, and the emphasis was on removing the human from the process. There is now a realization that we need to bring the human back into the PMO. In a DANCE world, you cannot separate the dancer from the DANCE. PMOs have to empathize and immerse with the customers and end users who determine their success.
To transform for the disruptive world, PMOs have to constantly sense, respond, adapt and adjust. They must detoxify and simplify, and support a culture of experimentation, failing fast and minimum viable product. There is a need to redefine project success and use data and sensors to measure what matters. PMOs have to strive to find the right balance of rigor without rigidity and to foster a rich environment of autonomy, community, collaboration and engagement where everyone is excited about the PMO, which serves as the steward of value and impact.
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© 2015, Jack S. Duggal
Originally published as a part of the 2015 PMI Global Congress Proceedings – Orlando, FL USA