The purpose of a PMO is not to develop practices for how you manage projects. Then what is it? – learn from Mark Price Perry, SVP and founder of BOT International.

This is one of those must listen to interviews. Mark provides a great perspective on PMOs. Mark Price Perry is the Senior Vice President and Founder of BOT International. BOT International is a pioneer and market leading provider of productized offerings for PMO Content Assets.

His new book “Business Driven PMO Sucess Stories – Around the World in 80 PMOs” is scheduled to be published by J.Ross Publishing in Q3 2012.

 Why you should definitely tune in:

  • Hear insights on what your PMO should be focusing on
  • Understand how you can apply these ideas to your PMOs
  • Listen to two great pieces of advice for your career growth from Mark

 Email your comments at futureofprojectmanagement@gmail.com

Watch the interview:

Interview Transcript: 

Well, welcome to the future of project management. We’re in Minneapolis here. We are with Mark Price Perry and he is the senior vice president and founder of BOT International. He’s written books and he has some great ideas on PMOs and we’re going to talk to him today. Thank you, Mark, for doing this.

 Thank you for inviting me. It’s a pleasure to finally meet you.

 Yes, it is. Mark, do you want to start off by telling us maybe a story about a PMO that converted to this business-driven approach and the kind of benefits they got out of it?

 Gosh, I could give a lot of examples of stories over the years but my favorite one is a story of a small software company where the leadership team decided they wanted to have a PMO because the software company had grown. Their problems were one of success and they realized that the innovation and approaches to the management of business that served them well as a new start could not scale in support of their future growth so they needed to operationalize the best practices and behaviors.

 Specifically in a PMO company context, they were very interested to get a better grasp of the projects of the company both internal projects, development, infrastructure, and external projects that were the professional services implementation projects that they had with clients for which the billable revenue of the professional services projects plus about 50% of their business’s line.

 In this story the leadership team considered the idea of a PMO. They never had a PMO before. They interviewed a bunch of candidates and the first candidate that they interviewed was very, very talented. The second candidate that they interviewed was also very talented. Those two candidates made the final short list.

 Now, the first candidate was a certified PMP, had been a PMO manager at other companies. They liked his profile and professional experience quite a bit and felt that who better than and experienced PMO manager to do a PMO for an organization that never had one. The second PMO manager was extremely well versed and had deep business acumen in the type of lines that this company had in terms of sales, marketing, professional services, support, product marketing, but this person had never been a PMO manager before.

 Now they liked both candidates a lot. The company hired the first candidate, the PMP-certified PMO manager. In week two, that candidate presented a people-process-tools, cookie cutter strategy, and started the process of staffing PMO, implementing a project management tool, in this case, project server, developing methodology, and developing a program for training and certification for the formal project managers. To make a long story short, within six months everybody was unhappy. The reason everybody was unhappy was the strategy and actions of the PMO manager, though you can’t debate the effort, were not based upon business needs.

 Now, at the end of the six-month period, the executive team responded that we appreciate where we are with this PMO but the sales vice president was unhappy because the reason he wanted to have a PMO was to be able to increase the number of professional services projects to make quota. The professional services manager wanted a PMO because he was tired of the sales executives, after the deal was closed, agreeing with the customer on increased scope but not changing the budget or schedule and leaving the professional services on the hook.

 The business development manager wanted a PMO because all the business development projects that he was looking after like OEM relationships with partners, he was not getting the resources for those project initiatives because they weren’t producing immediate revenue because that OEM relationship usually produces no revenue immediately produces in the future.

 The product development manager who wanted a PMO was unhappy because the reason the product development manager wanted a PMO was because for quite some time the sales teams, in complex sales situations where the product really wasn’t the perfect fit but a good enough fit, would tell the client, “Well we can get a product engineer and custom develop that capability.” Though they would win the sale by taking that product engineer off the product development plan, it would compromise the schedule. No one would give the product manager a break so he’s left on the hook to make the schedule.

 I could go on and on, but the bottom line was this company considered a PMO to meet these business needs but yet the traditional approach of how PMOs are set up oftentimes are done is a manner that is oblivious to business needs. To make a long story short, after the first year, the PMO manager quit. Now the CEO, in this real life example, tried to convince him to stay but he left.

 Now, the CEO and leadership team had to decide do we want to continue the PMO. Half of the team wanted to shut it down. We tried it. Our friends said not to do it at church, at the country club. They knew this was a bad idea. The CEO and half the leadership team, however, felt it was a good idea and some work had been done, but they did need to redirect it, focus it more on the needs of the business not just upon theoretical standards, tools, this and that. As fate would have it, the CEO called that other candidate.

 Oh, the second one.

 The one they passed over, explained everything that happened. By now, about a year and three months have passed. The second PMO manager accepted the position as PMO manager. When he started, he didn’t advance the strategy in the second week. He scheduled a planning meeting with the leadership team to say, “What are the business problems? Not 37, not 27, not 10. What are the top three business problems this year that your PMO can solve for you?”

 Then from there the second PMO manager basically engaged in business planning. Based upon business problems, how are we going to hold the PMO to account in terms of the fulfillment of meeting those objectives?

To fast forward, that was an example of the second PMO manager having a tremendous success and being a value to the organization and addressing fundamental business challenges. In the big scheme of things, the difference between the first PMO manager and the second PMO manager was not very much. What I mean is, the second PMO manager still had people processing tools kind of things in his arsenal, but those were the means to end.

Right.

The issue is, it’s not that those aren’t important. The issue is if we don’t focus on the end to be achieved, we’re likely not going to have a tremendous success with our PMO. Hence, it’s to no surprise, not just this example but if you look at the 2012 PMO research done by PM Solutions… In the PMO space, there are a lot of statistics by these research organizations like PM Solutions, PMI itself, the Standish Group, and Forester and Gartner. The bottom line is 25% of PMOs fail within the first year, 50% of PMOs fail within the second year, and 75% of PMOs fail within four years and these are permanent PMOs not program offices that decided to be temporary. In the research done in 2012 by PM Solutions, one of the top five issues was defining the purpose of the PMO.

Defining the purpose.

Hence, my point is that the purpose of the PMO is not to develop a methodology. It’s not to staff a team. It’s not to implement a tool. The purpose is to understand in the project context to the organization the problems that the PMO can address and solve. Now, for some organizations that might start with the people process tools, but that’s just the ante to a poker game; that’s not playing the hand.

Great. Mark you are passionate about this business-driven approach to PMO to program management office. You give a good example of this here. You give some flavor of what it is. For the audience there, would you like to elaborate on what it actually means? For example, if there’s a PMO, which in your definition is a business-driven PMO, what are some of the metrics that they would be measured on?

Great question. I’ve long advocated that there is no such thing as PMO models, that this idea in the project management community, or if you go to Google or PMI conferences, always someone is talking about PMO models; the weather station, the control tower, the report model, controlling PMO, directive PMO, enterprise PMO, strategic PMO. I’ve long advocated that there is no such thing as PMO models. I’ve tempered that perspective to say there actually is. There is a case to be made for PMO models but it’s not 27, it’s not the traditional view of strategic enterprise IT or departmental. There are really only two kinds of PMOs.

There are PMOs that are driven by business need and PMOs that aren’t. It’s just that simple. You might ask what some of the business needs are that an organization might have for which a PMO can serve.

In the case of the Miami company that we talked about earlier, when the leadership team sat around the table to discuss not the 10 needs, not the 25 needs, but the three top needs; the first top need that they had was they wanted to have a better view of the total projects of the organization, internal and external, because at present there was really no view of that.

The second need that they had was they needed to double the performance capacity for projects to meet up with demand. They knew the growth of the company, they knew the growth of projects, and they knew that if they don’t have the ability to double the capacity in 12 months we won’t meet demand.

The third need they had was they needed to a way systematically to manage projects, supply, demand, resources, risks that was something more productive than spreadsheets and standalone documents.

Now, there are a lot of needs other than that but those were the top three needs. Based upon those three needs, this organization set objectives for the PMO to say, “Here is our measurement of whether or not that need’s been met.” Now some of those needs are subjective like effective reporting in place in 90 days. We have to say what’s effective and use that timeframe. Some are subjective.

It’s really not so important that they’re technically precise but what’s important is they are mutually understood from a “do we have a shared vision of that which we’re trying to achieve” because the next question after we talk about the objectives is twofold. One is, what are the KPIs that serve as progress against that objective which are not the measures or the metrics of the portfolio management standard but there are going to be subsidiary measurements that serve as performance against that overall objective. That’s going to be a key metric to consider. The other metric to consider and revalidate annually or on a different basis is what the value is to the business of having achieved that PMO mandate.

The leadership team says, “Do these three things. One, two, three.” Next question is, as the humble PMO servant leader, I sign up, I’ll do those, but as the leadership team why don’t we have a brief discussion? What’s the value to you of having done that? That’s the value of the PMO. Not going from some theoretical maturity level of 1.2 to 2.7 but it’s having a goal, achieving that goal, having a leadership determining mandate, fulfilling that mandate, and having the leadership team determine the value of that and that’s the metrics, that’s the key PIs and that’s the value.

Yeah. It resonates with me so much especially you mentioned precise, some people try to measure things at such a precise level that you don’t really need that.

No.

It’s really hard to do that.

Well, take the case of a project and earn value management. If we were building a three-story parking garage with one S-curve, I could probably tell you with some degree of accuracy what I need by way of steel, concrete, wood, maybe some decals and stickers. With the exception of weather and parking permits, I can probably tell you what the schedule and cost is and use EVM.

For most PMOs, that’s not our project mix. They’re far more complex. They’re far more adaptive. The idea that when we know least about the project, casting in concrete that which we’re going to achieve does not work.

The other thing, as advocated by PMO experts like Steve Rollins and Gerald Kendall and their very fine work on project portfolio management, the reality is for most organizations the real issue isn’t the management of technical measures like scope, time, and cost. The real issue is what the project benefit is.

Yes.

 We may be perfectly happy to miss schedule or to miss time to realize the benefit. That serves as a good example that most project managers in the PMO industry categorically have misapplied the project  management triangle. The project management triangle, scope, time, and cost, was and is intended to identify project biases. It never was intended to be a measurement system for whether you’re a good or bad project manager.

 It’s not an end by itself.

 No.

 It is not. You were in sales and marketing for 16 years when you started out your career. How did you land up in the project management space?

 That’s a good question. I joined IBM in 1981 and had a pretty long career with them, almost 20 years. From the very beginning, though I was in sales and marketing capacity and went from a marketing rep, to staff, to manager, to staff, to branch manager, to staff, to general manager out to Japan then to Asia then over to India, in those capacities part and parcel to what we did were projects.

 In 1982 I was involved in a low-level program office to drive the transformation of IBM from a company in which you lease mainframes to a company from which you purchase them. Think of all the organization challenges. I would say in my 17 years of IBM, I was probably involved in more than a half a dozen program offices. One to launch DB2, another to deal with a 1987 financial restructuring of savings and loans industry agreements where during that period of time these institutions were in receivership, Y2K PMOs, in Japan a double-byte character set readiness PMO, translating U.S. software for the Japanese market. These projects, these PMOs are never going to be in the formal PMO mix of your PPM tools like CA Clarity and Planview, but these are very real program offices and project management offices. One would argue, and I would maintain, that the collective value of all that we call business-as-usual projects may be greater in value than the formal projects of the formal PMO’s.

 Though I was in sales and marketing for the first two decades, I just, from the very beginning, embraced the idea of project management as a means to an end. I think what makes my perspective a little bit different is I’ve always viewed project management as a means to an end not the end itself. I viewed a PMO as a means to an end not the end of itself. Imagine my surprise when I found myself in the project management community 20 years later where people viewed the PMO as the purpose of a PMO is to be organization that develops practices for how you manage projects. I’m sorry. That’s not the purpose of the PMO. That’s kind of where I’ve come from. I think that backdrop is one that’s very complimentary to project management’s profession and it’s one that inherently views project management as the benefits it brings about, not as some sort of staff function that we just manage whatever projects come our way.

 That’s true. You do a lot of speaking. You do a lot of teaching, coaching. What are some of the trends that you’re seeing out there? If I were to ask you what is your vision of project management, how would you articulate that?

 Two great questions. The trends are all about us. The trick is, do we recognize them and do anything about them or de we wait until it’s so apparent that we have to deal with them? It’s one of do we proactively step outside the box and receive what’s going on or do we stay inside the box and just have blinders? Many people, and I advocate, as an example, that the formal project management industry, say PMI and their standards, have had several blind spots for Agile over the years. It’s kind of gone from we’re going to ignore it, we’re going to resist it, to now we’re going to embrace it.

 I guess my vision, and a vision that I’m very passionate about, is a multi-dimension vision that says, at the end of the day, all organizations have maturity landscapes for project management that really fall in to one of four kinds of quadrants.

 What I mean by that is if you take a look at how you manage project-related work, at one end of the spectrum you have plan driven project management, scientific management, Taylorism, all that stuff that our Agile friends reject. At the other end of the continuum, you have complex adaptive systems. It’s the management of project related work with less formal guidelines, self-organizing teams, emergent behaviors, no boundaries.

 You take a look at how you manage project-related work from scientific management to complex adaptive systems as one dimension. On the other dimension if you take a look at projects as being the formal projects of an organization in terms of that which is going to be found in the PPM portfolio, and then the informal projects of all the business’s usual projects, you really end up with a quadrant of maturity landscapes that the traditional PMO community for the most part is somewhat in the plan-driven project management techniques for the formal projects for the organization which is really one of four quadrants. There are another three that they’re not playing in.

 Now the Agile folks have been in one of the quadrants for years and that is using adaptive techniques for the formal projects. Both the traditional project management community and the traditional Agile community really are not involved in the business-as-usual projects.

 A good example, if you go to a marketing organization or legal department or sales organization and you ask someone what’s PMI, they’ll think you’re talking about project mortgage insurance. If you ask them what’s PRINCE2, they’ll think you’re talking about the brother of the future king of England. The point is, our professional industry associations really are siloed in a formal plan-driven project management of the formal projects which is a very important silo, but once you get to a certain degree of maturity, and a lot of experts suggest that level might be a level three from a maturity index scale, that if you’re at level three of technical project management you’re done. The reality is the time, cost, and effort to get to high levels of maturity is not competitive with addressing these ubiquitous areas of project management and these other non-plan-driven techniques.

 Got it. It’s strange you give the example of marketing because some of the software that I see the way that people are trying to market software… For example, A/B testing software. Those kinds of companies are trying to market the software to the marketing folks, and their pitch is, you do not need to involve your IT department to do this. Do this, this is what you see, you can do it yourself, no need to involve these IT guys, do it yourself. That’s one of their pitches and it’s working. It is working.

 One other question I had is you are the founder of BOT International. You’re also the host of PMO Podcast. For these project managers, program managers and managers of project managers who are watching, if they are looking at starting their own businesses, – , and I think the PMO Podcast has more than 220 episodes I found. What advice would you give them? Any piece of advice?

 My advice is always the same. It is try to find that which you’re passionate about. At the end of the day, if you’re not passionate about what you’re doing, you’re not going to be satisfied. You’re probably going to stop growing as a professional. You probably won’t have that adrenaline rush that makes you excited about Monday morning verses dreading Monday morning.

 Now, having said that, there’s a lot of value to working with large organizations. The near 20 years I spent with IBM were wonderful. There are a lot of things that when you work in a large organization, a government organization, even a small organization that you can learn and do that you’ll never be able to do in your own company. However, there are a lot of things in your own company, whether that’s a one-person practice or a small 5-, 10-, 15- person practice, that you can be responsible for and be passionate about that you will never be able to do in a large company. The trick is trying to understand and find out what you’re passionate about and, based upon your passion, are you where you need to be both physically, in terms of am I at the company or place of work were I need to be, and mentally.

 The two points of advice I give, and I know they’re perhaps fluffy and kind of airy in nature and that soft touchy feely stuff, but the two points, again, the passion and the second point of advice that’s a story as well that I give people is get in the habit of reading one book a week.

 A book a week.

 A book a week. Now, this may sound like “why bother?” but I’ll tell you one of the things that was very beneficial in my career. When I was promoted to general manager of IBM, I had a boss and we were having our meeting to set performance plan responsibilities. I was in Singapore and he was in Tokyo. He flew down to meet with me. He was reviewing with me my performance plan. In the performance plan, it had, “Read one book a week and write a one page report on it.”

 Now, here at the time I was a general manager of IBM with a very large revenue quota, a customer sat quota, and a profit margin target. I kind of made an offhand remark and said, “Look, amongst the revenue, profit, and customer stats, we don’t really need this book measurement.” He looked at me in the face and said if I didn’t want to read a book a week and report back to him I’m welcome to go back to the United States.

 His point was it’s so instrumental and valuable to a professional, whether it’s an individual contributor, manager, or general manager, to continually broaden your perspectives that it’s essential as part of your, not just professional development, but the things that you need to do.

 That was a habit I got into, reading one book a week. At first, it was a chore, but then very soon it became a pleasure. I just can’t tell you how many thoughts and ideas that I’ve learned over the years, sometimes even discussions with other authors, or things that I would have never, ever even known about had I not been told, “If you don’t read a book a week, you’re fired.”

 That’s basically the two advices. Find your passion and read a book a week.

 Back then, we didn’t have podcasts and videocasts like you’re doing so maybe I’d temper this now by saying if you can’t read a book a week find a videocast like yours and listen to one of those a week as a substitute for a book.

 You mentioned there are some things in the large organization that you may not be able to do in your own organization as a small organization, something that you are responsible for and passionate about. Is there a specific example you can think about you could not do in IBM but now you can do it in BOT International?

 There are a lot of examples. I guess in my perspective, I have many character flaws. One of my biggest character flaws is not being able to accept things that don’t seem right, not being able to accept things that don’t seem fair, and being told to follow a process or do something that makes no sense.

 When you’re with a large company, a lot of times there’s information that you’re not privy to that, at the present, what you’re doing may not seem like it makes sense. Think of all those rollouts of CRM that you go tell professionals, “You had a week of activity. Go enter your time.” Almost always, initial deployments of those kinds of things are going to be fraught with execution difficulties. Unless they’re done and worked out over time, some organizations may never have the actual data they need to make decisions. That’s the good side.

 The bad side is sometimes these tools are rolled out so poorly that you’re never going to get where you need to go. It’s a public secret. It’s the elephant in the room. Everybody knows about it. When you’re a large company, sometimes you just have to be quiet and accept it and have the feeling that this too shall pass. I’ve never been good at holding my tongue and being able to accept that, one day, this too shall pass.

 I think in small companies, oftentimes your strategies are just as ineffective and non-perfect as large companies but the resolution is very self-correcting. When you’re in a small organization, you don’t push on a bad strategy very long. It self-corrects very quickly.

 That’s a good example. What are some of your other hobbies and interests?

 That’s a good question. I like to read, of course. From a sports perspective, I enjoy golf. I like to snowboard. Then I guess from an artistic perspective, I can’t play like I once could play but I enjoy playing the trumpet, piano, guitar, and the violin. I have a couple of instruments that there was a time that I could make music with. Now I think I make noise. I find them very relaxing. Sometimes if I’ve had a very stressful day, if I can just get lost in an hour of classical music or some jazz, my equilibrium is restored.

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 – Samir Penkar

About Samir Penkar

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