The rise (and fall?) of the PMO

Michael Hammer, in his initial article on re-engineering, evaluated the historic patterns of organizing work. His assertion was that in the postwar period, entry-level people with basic skills were easy to come by, but experienced professionals were not. As a result, businesses pulled apart work into small, repeatable tasks, and focused information at the top of the organization, where people knew what to do with it.

It’s amazing how long it has taken us to move on from that, and recognize that with a more advanced workforce, companies have a lot more leverage in organizational structures. A process focused more on control than efficiency creates departmental silos, and personnel who no longer see the big picture or recognize their potential contribution to company innovation. Work that’s handed off from person to person and department to department becomes the very definition of inefficiency.

What organizational role rose at the same time as companies’ recognition of a new way to perform? Project management. It’s hard to find anyone who had the title of project manager, outside of civil engineering or defense, prior to the publication of Hammer’s seminal article in 1990. Project management is the easiest way for a corporation to transition from an inefficient, department-based process to a project-based approach, focused entirely on getting the product through organizational necessities in the quickest, most efficient way possible. When a project is owned, only one person is accountable for the end result of that work product, and costs and schedules can be more closely managed.

Many companies have benefited from the creation of a PMO, a Project Management Organization, which seeks to standardize methodologies based on corporate priorities. What’s most critical to the company? Controlling costs, increasing quality or keeping commitments? Those decisions can be reflected in the PMO, as projects are standardized to ensure alignment with corporate objectives.

If project management is such a great interim step, is it the right role for an organization beyond the transition from task work to project work? Once education is complete and results are standardized, does it make sense to continue the PMO? How much can a HR project manager hope to learn from being in the same department as an engineering project manager? In cases where there is little overlap in resource allocation, there is no need to continue project management as a separate organization. Project managers can reside within the organizations they support.

So what are the risks of dismantling the PMO?

  1. Project managers, now reporting to functional managers, may be requested that PM standards be bypassed, deteriorating the processes.
    This is a risk even in an organization with a PMO. Project management is at its best when it is challenged. One of the dangers of a central PMO is an organization that defends process at all costs. If a project managers is forced to negotiate his process, defending critical elements in terms of helping to achieve overall business objectives and reducing areas of lesser value, the result is a project management process that more clearly meets the needs of the business.
  2. Lose the mechanism for training new project managers.
    A centrally managed PMO can be a great structure for information sharing. However, it’s not the only organizational structure. A virtual PMO can meet on a monthly basis to talk about common issues and share best practices. Or a new project manager can buddy with one who is experienced, and has been with the organization for some time for her first project, and strike out on her own when ready. If the company has taken the time to get the right people on the bus, the organizational structure should not be a barrier to learning.
  3. Project management will become less aligned with strategic priorities.
    Without a centrally managed PMO, standardization of project management approach will eventually fall by the wayside. So if a PMO’s methodology has been based on the corporate priority of cutting costs across the board, how are those priorities going to be enforced in a virtual organization? The answer: They shouldn’t be. Organizations are not uniform beasts. A focus on cost-cutting in one department should be balanced by a focus on customer service in another department: each department determining their own needs and finding their best path to align with corporate strategy.

The organized PMO is a logical outgrowth of the changing workforce, and critical for a company as it moves towards greater efficiency. But just like everything else in a company, we shouldn’t take its efficacy for granted, but need to periodically examine whether the organizational structure continues to support the company as it evolves.


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