Why PMOs fail
By Yolandi Nortje, executive of Intuate Group
The outlook for the project management office (PMO) may be considered, by some, as bleak, says Yolandi Nortje, executive of Intuate Group. According to the Association for Project Management, 50% of PMOs close within three years, with Gartner quoting just over the same percentage for the correlated PMO implementation failure rate since 2008.
An IBM Change Management Survey of 1 500 executives found that only 40% of projects meet schedule, budget and quality goals, while Standish Group's CHAOS report cited a mere third of all projects being successfully completed on time and on budget. With 68% of stakeholders perceiving their PMOs to be bureaucratic, according to the 2013 Gartner PPM Summit, it is easy to see why we have used the word "bleak".
One of the prevailing issues fuelling these poor statistics is the fact that, in many organisations, there is a gap between what the PMO is doing and what the business expects. There is a way of doing things and a way of getting things done and they are not always the same. Many organisations have a PMO, which is charged with defining processes and best practices - the way of doing things - but this entity is not always the best at actually getting things done. This misalignment has serious consequences for both the PMO and the business, as we have seen above. The reasons for this may be a lack of adequate tools, or the fundamental pillars that drive programme success - such as resources, money, deliverables and benefits - but the most common reasons for PMO failure are often not process or technology issues, but rather people issues. At the end of the day, a PMO's success rests in the hands of its team members.
In our opinion, here are the top reasons PMOs fail:
The lack of executive stakeholder commitment. For anyone in project management, this is a common scenario: The executive team realises there's a problem with projects not delivering results. So they authorise the creation of a PMO hoping that it will solve the problem. However, when the next status meeting comes around, they send lower-level staff, who simply do not have decision-making authority. Then, when projects are once again performing poorly due to resource contention and prioritisation conflicts, they blame the PMO and disband it.
Cookie cutter PMO leadership. Despite similarities on paper, what worked in one company will almost certainly not work in another. Woe betide the PMO leader who is not adaptable and tries a "cookie cutter" approach based on experience from a prior job, because in this case, the PMO will likely fail. A better approach is to understand the unique drivers and pain points for the specific organisation, the various personalities and motivations of key stakeholders, and whether the culture of the organisation supports the ability to develop a plan with achievable goals.
Accountability, authority and responsibility. Very often, PMO managers are given the responsibility, and are held accountable, for the success of the PMO, but they have no authority over resources or processes in or outside of the PMO. It is vital to ensure that the PMO manager has the necessary authority to ensure that processes are implemented properly and that resources are contracted as required. It is advisable to appoint the PMO manager to the executive level within the organisation.
The PMO police. The PMO leader has to wear many hats, that of a cheerleader, a salesperson and a coach, making sure that the PMO's charter is well-communicated and all the relevant stakeholders buy into it. However, what typically happens is the PMO leader sells the processes to a CIO to get executive-level support and then uses that support as their stick to make sure the processes are followed. These people are often referred to as the PMO police by project managers. If a PMO becomes part auditor and part methodology police, forcing the adoption of inappropriate methodologies or gathering unnecessary information, it will become a hindrance to project managers and rejected by an organisation.
The strategic versus the tactical. Focusing on tactical, day-to-day project execution is fine, but PMO leaders need to ensure that they do not lose sight of the bigger, strategic picture. If a PMO leader is unable to understand and communicate the business challenges faced by senior executives, and help facilitate organisational change to meet those challenges, they will become less relevant in the organisation.
A lack of analytics and metrics. Unless a PMO leader has an analytical mind, a PMO will not be successful. For example, when it comes to deciding how many of the business' key projects can actually be delivered, the discussion too often turns to pure guesswork. Without an analytical mind and metrics-based understanding of resource capacity, it is impossible to match demand with the actual supply of human resources.
Poor PMO staffing. It's a conundrum: PMOs are often staffed with process-type individuals who do not have significant experience delivering projects. If they did, they wouldn't be in a PMO role, they would be getting their hands dirty actually delivering the project. Organisations can't afford to have their best project managers doing process work; they need them delivering results to the business. Since the PMO team often lacks experience, they don't receive the respect of the experienced project managers ("who are they to tell me how to manage a project"). This arrangement is common and is doomed to fail from the outset. A solution is to put experienced project managers into an advisory committee to review the PMO-generated processes and provide feedback.
Unfortunately for many organisations, the costly endeavour of establishing a PMO has not been successful, providing limited, or no, value. A PMO is not for every organisation; and few companies have performed due diligence on the PMO to determine whether it was suitable for them, or whether they were suitable for a PMO, before crying failure. Instead, many saw the benefits that PMOs have provided to others and decided that they must implement the same, without giving careful examination to what exactly they wanted to achieve. Ultimately, the successful organisation must ask: "Does it make sense?" Does it make sense to create a department, complete with possible layers of management and administrative help, to improve the way projects are conducted and maintain that level of improvement? There are certainly legitimate reasons for an organisation to have a PMO. However, there must be some middle ground in-between having no governance and having a bureaucratic entity consuming overhead spend while providing no value.