Our team at Cornerstone Advisors has many clients wondering whether to establish a Project Management Office (PMO) as a means of improving the execution of strategic initiatives. The “PMO question” does not carry the same philosophical weightiness and oral brooding as Hamlet’s famous soliloquy, but it does pose a question that preoccupies many financial institutions. Whatever the size of the financial institution, it is reasonable to expect that there are more projects under way than can be effectively executed with available resources and that execution is rocky. There also comes a point where suffering “the slings and arrows of outrageous fortune” (Hamlet, Act III, Sc. i) (increasing volume of proposed projects, conflicting resource demands, and ever more complex projects) brings about the vexing PMO question.

No doubt, a direct correlation exists between the size of the financial institution and whether or not it already has or is considering a PMO. However, that size is trending downward. Reasons for this downward trend include the need for increased speed in reacting to market competition, customer expectations that even the smallest institutions will have full suites of product offerings, and ever growing regulatory compliance projects. Undertaking the question of the PMO isn’t an easy task, and knee jerk, cookie-cutter PMO implementations usually go badly, resulting in significant setbacks for the PMO cause in the long term.

First and foremost, there needs to be a determination of whether the organization is even ready for a PMO. In Hamlet, Shakespeare’s protagonist wonders if a person’s desire to remain in the world of the living may be derived purely from the fear of what might be found in the “undiscovered country.” (Hamlet, Act III, Sc. i) Stretching a bit, but there is definitely a parallel to be found in the PMO question. Will establishing a PMO result in something worse than the status quo? By worse, I envision a PMO Director, clad in red robes, wandering the organization, hither and fro, walloping managers with the holy PMBOK (PMI’s Project Management Body of Knowledge Guide) and proclaiming “no one expects the PMO Inquisition!”

To that concern, I say that banks that take the time to create a “best fit” PMO approach will avoid making things worse than the loose chaos present in most organizations. Instead of implementing a classic PMO structure from Project Management for Dummies, financial institutions should carefully design the changes in culture, discipline, process, human capital and even organization structure to make a PMO and a project culture successful. Some key design questions to consider:

1. Has senior management fully bought into and are they supportive of establishing a PMO? Without the blessing at the top, there is little hope for the PMO’s success, and much more work needs to be done to “catch the conscience of the king” (Hamlet, Act I, Sc. v). Building support for a PMO requires educating senior management on current project management issues, specifying the value a PMO can bring to the organization and estimating the potential costs. This may turn out to be an iterative process where the design of the PMO and project management procedures are tested through the senior team.
2. What do we want the PMO to be and what don’t we want it to be? Many senior managers worry about a PMO becoming a new staff empire where bureaucratic nonsense takes the place of getting things done. Therefore, before investing a dime it’s important to define the desired skill set, authority role of the PMO and what cultural changes need to be made. Defining the PMO role will help with the development of policies and tools for the organization and recruiting the right individual to lead the PMO. In fact, finding the right individual to lead the PMO can make all the difference in smaller, entrepreneurial organizations. We should take Polonius’ advice, “This above all: to thine own self be true” (Hamlet, Act I, Sc. iii) and candidly assess what the organization needs to improve its culture and what role a PMO can realistically play.
3. Who will the PMO report to? This question comes up often in discussions with executives. There will be those who strive to control the PMO and through that control drive their own agendas. Who the PMO reports to isn’t nearly as important as ensuring it resides in a unit that has a great deal of transparency and is perceived as not having a biased agenda. That being said, a PMO often ends up within the Information Technology department or reporting to the chief information officer. This doesn’t necessarily spell trouble for the PMO as a great deal of project management knowledge and talent resides under the CIO. The issue arises due to IT being perceived as a “black box” where things go in, mysterious things transpire and what comes out doesn’t always meet timeline or functionality expectations. In most cases, the value-driven PMO has a better shot at internal “street cred” when it resides outside of IT, but keeps a close working relationship with IT. This tends to provide the best performance relative to enterprise project portfolio management, alignment with strategic initiatives and long term measurement of results.
4. What raw materials (processes, skills and tools) do we already have to support projects? It may be surprising for many banks to find that the foundations for a PMO already exist inside their organizations today. There are probably some project managers out there in the organization that have learned through the school of hard knocks. Marry that experience with a little formal training, coaching and mentoring to produce project management all-stars. These folks probably aren’t going to lead the PMO, but they become a starting point for building the project management culture in the organization. Processes in existence today can be mapped to the more formal stages of project management: project initiation, planning, execution and closing. Banks can also refine the current budgeting and expenditure approval processes to support a more disciplined project initiation process. There may even be some project approval and tracking tools the bank could enhance to start its first PMO process. Cornerstone has found it better to utilize user-friendly and straightforward tools than to overlay additional complexity and sophisticated tools when a PMO is getting off the ground.
5. What does a successful project look like for the organization and how is success being proven? In most banks, there is little discipline for conducting post-mortem project reviews and tracking whether a manager ever achieved the committed project goals/objectives. Instilling this discipline will not only improve project management performance but will begin to create more healthy peer pressure on asking for resources and budget dollars. A PMO can be an effective place to conduct simple look-backs on project business case promises and whether they were fulfilled.

“There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy.”(Hamlet, Act I, Sc. v) As the project battles rage on and the struggle for resource demands continues, banks will need to consider these questions as they work to improve their project cultures. Somewhere between today’s chaos and the academic theories of classic project management lays the right answer to the PMO question. So, fellow GonzoBankers, “Go, Bid the soldiers shoot.”(Hamlet, Act. V, Sc. ii)
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 Note: Mr. Besselievre would like to recognize that W. Shakespeare is probably rolling over in his grave given the context in which his brilliant works have been quoted above.

 To PMO, or Not to PMO

If you’d like some assistance in accelerating your decision on the PMO questions, Cornerstone Advisors can help. Contact us today to talk about how we can help you keep it simple.