TOP Ideas

Our consulting company, Capability Management International, is 15 years old this year. So we start the year with 15 of our most critical insights.

“The PMO is (or should be) a sub-committee of the Investment Committee”

I sat opposite a PMO that had no authority but just collected and collated project reports and forwarded them on to the governing committee. They knew that many of the reports were misleading or blatantly incorrect, but they had no authority to question them or highlight this to the governing committee. The Committee thought they were receiving ‘validated information’ but were in fact receiving known-to-be-unreliable information. The PMO did not tell the Committee that it was unreliable (they would look stupid for forwarding known-to-be-incorrect information) so the pantomime continued.

This example highlights the danger of having an under-powered PMO.

Conventionally, Portfolio Management Offices (PMOs) have been created from the project arena — to provide oversight and coordination across a portfolio of projects. Consequently, the least valuable PMO role — reporting — is usually the first aspect implemented. Because it is of relative low value it compounds the situation by devaluing the role of the PMO overall so that it is not seen as capable or suitable to take on the higher value roles.

If, however, you see the PMO as a sub-committee of the Investment Committee with the attendant authority, the PMO can now really make a difference. It can question the status of projects. Validate business cases to ensure the projects are viable and feasible. Track scope changes over time to identify shortfalls or clashes across the portfolio. Take on management of common risks to reduce the individual programs’ workload. Promulgate policies and procedures/methodologies to make the project delivery process more effective and less work.

In our ‘six streams of project delivery model’, I recently swapped the placement of the PMO from below to above Project Governance as it should also track and monitor the performance of governance teams and sponsors.

It is (or should be) the eyes and ears of the Investment Committee, enabling the Investment Committee to fully understand the nature and dynamics of the portfolio and how to optimise it for the maximum return.
Otherwise, it just becomes a promulgator of mis-information.

Which type of PMO do you want? Post your comments below

The roles of the PMO are included in our “How to …” Guides and a set of PMO-specific guides will be available shortly