Many product organizations have some type of Project Management Office (PMO), even if they refer to it by a different name. The PMO is a critical component to a successful product delivery, yet it often carries a reputation for being heavy-handed policy enforcers. When focused on the right things, the PMO plays a pivotal role in driving innovation process excellence and ensuring profitability.

What’s in a name?

What part of your organization owns the project and portfolio management processes, tools, training, and reporting?

When asking this question of people in IT, you’re likely to get an answer that it somehow relates to a PMO or a Project/Program Management Office. Often they currently have a PMO or they had one in the in the past– it is the standard as per the experts who wrote the book on it: Project Management Institute and Association for Project Management. But when mentioning these same three letters (PMO) in succession to someone in Innovation or Product Development (like I mistakenly did a few years ago) they will recoil with horror as if you had called their youngest child an ugly name.

The responsibilities of a PMO can vary wildly from company to company. Within R&D and even the enterprise, the PMO always owns the processes and tools that run innovation projects and drive new product commercialization. They are the champions for process automation, best practices, and executive portfolio reporting. PMOs can be the heroes that make the stakeholders look good. The PMO is not and should not be the enforcers!

Why PMOs get a bad rap

It’s really not surprising that PMOs get a bad reputation. Unfortunately, in practice, there are a lot of places where a PMO can run amuck including, but not limited to:

  • A lack of a clear PMO charter
  • An overly burdensome process
  • No link to strategy
  • Inadequate tools
  • An executive who gives lip service instead of leadership
  • A culture resistant to change
  • Lack of visibility across the defined scope of inclusion
  • Inexperienced PMO management and practitioners

The PMO implementation failure rate is over 50 percent…

PMOs seem to perform different functions in the organization depending on the company. Sometimes they own all of the projects being executed; other times they only own the resources (project managers) who manage the projects for other departments. Often this includes portfolio decision making and strategy, and sometimes it does not.

PMOs aren’t always a rousing success. According to the Association for Project Management, 50 percent of PMOs close within three years. Gartner recently reinforced this statistic at its 2013 PPM Summit, stating that since 2008 the PMO implementation failure rate is over 50 percent and 68 percent of stakeholders perceive their PMOs to be bureaucratic.

With an entity that is nebulous and lacking in success, I understand why people turn up their noses. But here is the dirty little secret for you product developers: that thing in your company that you call a “Center of Excellence” or “Innovation Office” is, to a certain extent, a PMO. (GASP!)

A single source of truth

Before you start sending me mean tweets claiming blasphemy, hear me out. When striving to deliver breakthrough innovations to market that will destroy the competition, doesn’t it make sense to have a set of standard processes in place that are continuously updated based on lessons learned?

Is it not reasonable to have a portfolio tool to help streamline those processes, eliminating manual effort, and ensuring that two different groups aren’t toiling away on solving the exact same problem?

Finally, isn’t it logical to gain efficiencies by having these all centralized in one location with trained experts and innovation veterans there to provide council, guidance, and best practices? This, my friends, is the spirit of a PMO!

A PMO approach that works

Research indicates organizations should consider a three-pronged approach to drive business forward and mature.

In the Innovation Management Maturity Model™, industry experts agreed that taking a three-pronged approach is the best way to move up the maturity scale and improve the management of innovation (not the innovations themselves). Organizations need to address people, processes, and tools. Focusing on just one or two of these aspects will leave your innovation program limping. While organizations may put more emphasis in one area to achieve their strategy, no one area can be ignored.

Innovation Management Maturity Model
Click to enlarge

Prong 1

The organizational structure of managing innovation, or the people aspect, is a key component of success that higher maturity organizations have mastered. It’s about having executive level visibility, leadership, and active sponsorship. It’s about leveraging cross-functional expertise, because even if it’s a clever product idea that is new to the world, how that product idea comes to life should be repeatable and efficient.

Prong 2

Automating and standardizing the commercialization process is critical so organizations can be nimble as they and the market evolve. Those at the highest maturity level continually improve processes and are able to identify projects that need to be killed early in the development cycle before committing too many resources.

Prong 3

Purpose-built tools, such as a Project Portfolio Management (PPM) system, can act as that desired single source of truth and visibility for decision making. And through the automation of processes, product development teams can get products to market faster.

Achieving Level 5 of the Innovation Management Maturity Model across people, processes, and tools is not necessarily the end goal for each company, nor should it be – it is only a framework to start the conversation within your organization. Decisions about the desired end state for each category should be included as part of the PMOs charter and measured on a regular basis to show progress up the maturity scale.

Keep it simple

You have to be willing to take a fresh look at where your organization is now and where you want to be.

While it may seem daunting or even insurmountable, don’t let the common pitfalls scare you away from the measurable value that can be derived from a PMO or Center of Excellence or whatever label helps you to avoid cringing. You have to be willing to take a fresh look at where you are now and where you want to be. There are few organizations that are fully mature in all areas, so you are not alone in needing to grow up a bit.

You must believe in the mission and value of a PMO (mockery will not serve you), keep it simple and right-sized in all things (clear processes, purpose-built tools), and show the benefits and innovations the PMO is helping to deliver. Take a deep breath and put one foot in front of the other. You can redefine PMO for your organization and give it the love it deserves.

By Carrie Nauyalis

About the author

Carrie Nauyalis, NPD Solution Evangelist at Planview, is passionate about establishing customer relationships, developing market positioning, defining field enablement strategies, providing market-based feedback into Planview product development, and being an overall evangelist and though leader for the Product Development market. She is an active speaker, MBA guest lecturer, blogger and vlogger on all things Product Portfolio Management, with warm places in her heart for the topics of innovation, Stage-Gate® and Agile.

Follow Carrie on Twitter: @PDPMprincess

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