From postbox to poster child: The PMO’s evolution

Leon Naudé.

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Too often, project management offices (PMOs) are seen as little more than reactive, compliance-driven administrative postboxes, collecting reports, chasing updates and ticking governance boxes. This is the perspective of Leon Naudé, head of strategy execution and delivery at SBV, an end-to-end cash management solution for national banks in South Africa, Namibia and Lesotho, who spoke at the latest PMO Forum event for PMO leaders. 

Hosted by Project Portfolio Office, the PMO Forum is an interest group under the umbrella of Project Management South Africa (PMSA).

The tide is turning, Naudé stated, thanks to forward-thinking organisations that are transforming their PMOs into strategy execution engines that proactively shape outcomes, enable delivery and drive measurable business value.

During his address, Naudé unpacked how PMOs can reposition themselves as trusted partners to leadership, spearheading strategy execution and driving greater organisational impact.

“The first consideration for any PMO leader is to ascertain whether there is a clear understanding of where projects fit into an organisation’s overall strategy. Are projects being delivered in isolation or are they part of a portfolio that is aligned to the greater overall corporate strategy?”

In larger organisations, especially within the financial services space, Naudé explained, it’s easy to become bogged down by governance and administration, instead of focusing on value and outcomes.

“It’s said that strategy without execution is hallucination, but execution without strategy is merely a database, so we need both sides. Unless your project is aligned to strategy – driving measurable business value – you’re just ticking boxes.

“At SBV, for example, for each business unit, we look at their projects alongside strategy to marry both together, and if the two don’t align, it sparks an uncomfortable but valuable discussion. Every project should directly support the organisation’s goals and outcomes.”

There’s a growing shift from the more traditional PMO towards a value management office (VMO) and, while few organisations have the luxury to create a separate VMO, this type of mindset can still be embedded within existing frameworks, Naudé believes.

“Traditionally, PMOs measure success by time, cost and scope. And these are still important but, increasingly, factors such as return on investment (ROI), strategic alignment and value realisation (also known as benefits extraction) are being emphasised. 

“This means that the focus must move from administrative control to strategic, outcomes-driven impact. It goes beyond just delivering on schedule and budget and looks at whether the project creates the intended value for the business.”

Naudé then made an analogy, calling for attendees to imagine an ant inside a circle drawn on a piece of paper. The ant won’t cross the line because it believes it’s a barrier, until it realises it can simply step over it.

This is often how PMOs operate, he noted, pushing paper, focusing on governance and making sure that they deliver according to methodology. “We get so fixated on the governance model as a measure of success, essentially becoming stuck in the circle like the ant, instead of viewing ourselves as strategic value enablers and breaking through those invisible barriers.”

Naudé also referred to several subtle, but powerful, changes made at SBV to reinforce this type of mindset. These have included renaming the PMO to the Strategy Delivery and Execution Office, as well as retitling project portfolio managers as delivery leads, and project managers to delivery managers.

“These were very simple changes that were deliberately aimed at changing the mindset that a PMO is not just managing projects, it’s delivering strategy and value into the business,” he added.

Beyond this, PMO metrics used to be simple: green if on time, on budget and in scope. But this can be misleading, said Naudé. “A project might be within time and budget but, because the business landscape has shifted, it’s no longer relevant or applicable and not providing the value-based outcome it should be.

“We need to highlight the business value metrics and whether a project has delivered against both project performance and business impact. For example, a project that runs two months late but doubles the value originally envisaged should be celebrated.”

A PMO’s true measure of success lies in people, Naudé advised. “A PMO sits in a unique position as it resides within a centralised environment, is cross-functional and essentially acts as a barrier breaker within an organisation – the glue that holds the business together and connects teams across silos.

“This flips the script on how we approach project planning, scoping and delivery, and empowers project managers to lead change, instead of managing it.”

Naudé’s recommendation is for PMOs and their project success to be measured across a combination of traditional project metrics, such as schedule and budget variances, and quality (based on the number of change requests), together with benefits extraction – namely benefits realised versus benefits predicted. “It can be a real struggle to change to this outlook – forcing business units to commit to benefits before a project kicks off is like taking teenagers to the dentist!

“After the mindset change, the next step is the adjustment in metrics; moving from reporting to storytelling, from tracking to predicting, from compliance to confidence, and from delivery to outcomes. This involves moving towards a data-driven PMO, where data is used to proactively inform on the change initiatives that need to be executed, positioning it as a strategic advisor to the business.

“Following this, we must look at ‘mining’; we need to become obsessed with benefits mining and realisation, otherwise it’s all too easy to default back to task-based project execution. And this is relevant across multiple elements – financial, strategic, operational, process – make sure you understand what success means for your business or client and then retrofit this to project success.”

Naudé noted in closing that changing a culture doesn’t happen overnight. “What we require are small shifts in language, mindset and project success metrics that can fundamentally change how a PMO is perceived, from a postbox that processes governance to a strategic partner that drives organisational value.”