Interview with J. Kent Crawford, the founder and CEO of PM Solutions, expert and author of many books and articles on the strategic aspects of project management, conducted by Szymon Pawłowski
The main subject of 2013 PMO Symposium was the connection between PMOs and strategy management and planning. But because project management originates from technical fields, from heavy industries and engineering, in years past it has not been linked with strategic management. Project managers and PMO staff have not been involved in strategic planning and management. Don’t you think it’s too big a gap for the PMO to become a kind of strategy management office?
Well, I think the challenge is that there is a gap on many fronts. Organizational strategy is generated from vision, mission, goals and objectives. The organization that deals with strategy goals and objectives is a strategy office, and may report to the CEO.
But then there remains a huge gap between development the strategy and actually executing a strategy to deliver results. Project management covers a part of that; it covers the execution of the project we chartered, through to its conclusion.
Project management really doesn’t cover the conversion of the strategy into what a project should look like. It doesn’t cover the business case of the strategy or incorporating it into the portfolio, so that’s a big gap.
The other gap that is not covered by project management or the PMBOK® Guide is post-closure of the project – benefits realisation. Between the elements of initiating strategy execution and benefits realisation there’s a huge gap that most organizations are not dealing with effectively. And that is where I think the PMO plays a very, very crucial role. Whatever we call it, whether „project management office” is a right term or not – and there are probably many other terms we could use – I think it really covers that gap well. Because a project management and PMOs are an execution arm and not necessarily strategy formulation arm.
In last year’s PM Solutions report about project portfolio management, there was the data that in only 30% of companies that do project portfolio management, the PMO is in charge of portfolio management. So, there are other corporate entities that do portfolio management.
Well, it was only 30% but that was double the percentage that had a PMO involved in portfolio management in the previous study. Many of the companies that reported having a small executive committee doing PPM were very small companies, as well, a group that was overrepresented in that particular study.
Where companies are doing PPM without the PMO, I wonder: are they managing the portfolio strategy? I would contend they are not; I would contend that’s part of the execution of the strategy. The strategy, the strategic objectives, the goals, for what comes in the future year, should be generating the drivers, the determinants for what then you use to structure the portfolio. Then the project management office or demand office, or whatever we call this, uses these drivers to build the business cases. Some organizations have great alignment for organizations between strategy and execution but where that is lacking, we’ve got to fill the gap. The steps that come after the identification of the strategy and the initiatives that will fulfill it, those steps are not really performed in a strategy office. The PMO needs to cover that.
Isn’t it too wide an area of interest for a PMO: from controlling or managing single projects to executing the whole corporate strategy?
The PMO cannot determine the priorities of the portfolio, that is only for the governance body to determine. But managing projects is an element of strategic execution. And the execution process helps to structure the portfolio; helps to refine and rebalance it. And then the other thing, which is critical, is determining the value of what is being done, or benefits realization, which, if it is not being done elsewhere, this is a gap the PMO can fill… The PMO does not do this alone. They are partners with many other functions in the organization.
The number of companies that have PMOs grows year by year, now it is very huge number, but still, PMOs are challenged or their value is questioned. What do you think PMOs should do to prove their value, to demonstrate value to the company so it can become stable element of the company?
First of all, PMOs that perform well are not usually questioned as to their value. The State of the PMO research that we perform every two years has shown that, when PMOs are mature and contribute results, upwards of 80% are highly regarded by their executives. So delivering results is what matters. After delivering results, clearly communicating those results is also critical. What is important for PMO leaders is to speak the language of business, in addition to speaking the language of projects. Most of the challenges PMOs face come from communicating with executives from primarily a PMBOK® Guide-based or project management standpoint. The reality is the value of PMOs can be expressed in business outcomes such as improved profitability, decreased time-to-market, reduced cost, and other business factors. If we lose the business mindset and stick to the traditional, tactical things like “on time, on budget”, well, it will be really hard to justify in the language of business, which is the language of the C-suite.
We have many books on PMOs but we do not have a standard. Do you think it is possible to create a PMI standard for PMOs or some practice guide for PMOs? Or are PMOs too diverse to set a standard for them?
I’ve heard many opinions of what standards should be. Actually PMI just produced a research standard that described five different types of PMOs. We could argue whether it is an accurate standard or not. The challenge of research is you can research and you can report what is, but that does not necessarily determine what should be. We at PM Solutions have put a lot of effort into thought leadership into how PMOs should operate. We’ve had many different discussions on how organization should structure those things called project offices. At the end of the day, those who are considering it should look at different options and determine what is right for them because one size doesn’t fit all and there may be other options. The PMO is as individual as the company. It serves the company’s needs. Trying to adhere to a general standard may not be wise.
The concept of the PMO has changed very much in the last ten years. How do you think it will evolve over the next five or ten years and what direction it will be – strategic execution direction or maybe some other?
It is an interesting question. In some organizations the evolution of PMO has not changed that much. From fifteen years ago, twenty years ago even, the traditional industries like aerospace and heavy construction have very highly mature PMOs and to some extent we are replicating those yet today. Now, for those organizations that were not in those industries, PMOs have changed dramatically. Part of challenge is that, we have been learning by doing. Many of those deploying PMOs started as project managers so their perspective is primarily as a project manager. So there has been evolution slower than I would have predicted, but we’ve begun to change.
So, what is coming with next five to ten years? PMOs tend to be much more actively involved with strategy determination and strategy formulation. The final decision makers will influence strategy more and more by using lessons learned from previous product lines and projects and using that as predictive models for what we should do when developing new products or a product line.
Another area is organizational change because – think about it – every project we deliver changes the organization in some form. I believe the next five to ten years PMOs are going to be integrating organizational change in a much larger and broader fashion.
Another thing PMOs are very possibly going to begin looking at, is implementing new approaches in vendor management. Outsourcing vendors and the ability to manage vendor contracts as an owner-manager, that’s not something procurement functions are very good at right now. Managing unique contracts that have specific project and program deliverables is a unique talent where I think the PMO may move.
How did you find last year’s PMO Symposium? What is, in your opinion, the main idea or result of the symposium?
The most positive thing that’s come out of this symposium is that we’ve escalated the level from tactical project management and Project Management Offices to much more business-focused terminology. The PMO Symposium has done a good job of raising the level of discussion to “business speak” and changing the language of PMO Directors, or at least putting that concept out there. In 2001 I wrote the book The Strategic Project Office, and we talked about that connection between strategy and execution. That message we have been talking about for 13 years now, but I think that message needs to be repeated and repeated. I think this conference did a very good job of doing that; for the first time I’ve really seen we’ve elevated the message. That’s been good.
Kent Crawford is the founder and CEO of PM Solutions, the leader in applying project and portfolio management processes to drive operational efficiency. He is also founder and CEO of the firm’s training subsidiary, PM College. In addition to his executive role, he is an influential member of the project management community, highly respected as a thought leader. He is a sought-after speaker at business conferences worldwide and the award-winning author of The Strategic Project Office. Crawford has infused PM Solutions with dynamic leadership, vision, and spirit. Under Crawford’s guidance, PM Solutions spearheaded numerous innovations, including the creation of a unique research program that has contributed over a dozen significant studies to our understanding of project management best practices and trends.
[PL] Redaktor naczelny Strefy PMI. Konsultant, trener, mentor i kierownik projektów z wieloletnim doświadczeniem we wdrażaniu rozwiązań z zakresu zarządzania projektami, portfelami, PMO i ryzykiem. Obecnie pracuje jako PPM Architect w PeopleCert, rozwijając standardy zarządzania spod znaku AXELOS (PRINCE2, MSP, MoP, MoR itd.) Pasjonat zarządzania projektami, ciągłego doskonalenia i dzielenia się wiedzą. Prywatnie – miłośnik górskich i leśnych wędrówek, żeglowania, książek, czarnej kawy i czerwonego wina.
[ENG] Editor-in-chief of Strefa PMI. Consultant, trainer, mentor, and project manager with many years of experience in implementing solutions in the field of project management, portfolios, PMO and risk. Currently works as a PPM Architect in PeopleCert, developing AXELOS’ PPM suite of standards (PRINCE2, MSP, MoP, MoR etc.). Passionate about project management, continuous improvement and knowledge sharing. Privately – a lover of mountain and forest hiking, sailing, books, black coffee and red wine.