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The Power of PMO Leadership
October 2008
Copyright 2008 by Point B Solutions Group, LLP. All rights reserved.
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October 2008PMO Leadership Slide 2
PMO Leadership
Current Business Issues
PMO Challenges
Project Portfolio Management (PPM)
PMO, PPM, and Project Leadership
Conclusions
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October 2008PMO Leadership Slide 3
Business Problem
90% of Corporate Strategies Are Never
Implemented Balanced Sco recard
Col labo rative, 2007
Companies struggle with formu lat ing real ist ic
strategic goals and tu rning s trategy into
outcomes
Strategic
PlanningExecution Results
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October 2008PMO Leadership Slide 4
Industry Project Success Measures
Standish Group Results
0%
10%
20%
30%
40%
50%
60%
1994 1996 1998 2000 2004 2006
Year
P
ercent Challenged
Success
Impaired
Standish Group
Success: on-time, on-budget, with required features
Challenged: late, over-budget, with fewer features
Impaired: canceled or delivered but never used
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October 2008PMO Leadership Slide 5
The State of PMOs
0%
10%
20%
30%
40%
50%
Perc
entof
Com
panies
Level 1 - Initial Level 3 -
Institutionalized
Level 5 -
Optimized
PMO Maturity
PMOs have been around for several years, but few are mature
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October 2008PMO Leadership Slide 6
PMO Underachievement
PMOs could have much more of a business impact
Most PMOs fail for these reasons:
Created for the wrong reason
Lack of visionLack of executive sponsorship
Poor execution - inconsistent methods, skills, governance
Too tactically oriented
Poor alignment with the business
Lack of leadership
Most PMOs end up as order-takers
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October 2008PMO Leadership Slide 7
Positioning For Success
Value to CustomerCanUniquelySupply Unique supplier
of something
nobody wants
Commodity
Provide something
that nobody wants
and cant even do it
uniquely
Strategic
Goal
Guy Kawasaki
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October 2008PMO Leadership Slide 8
Converting Business Goals into Action
Project Portfolio Management connects strategy to execution
Why?
Because it encourages a discipline of strategic investing
It provides transparency It addresses a commonly neglected issueis the strategic plan feasible?
It helps the organization focus on value delivery and execution
ResultsStrategic
PlanningExecution
Project
Portfolio
Management
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October 2008PMO Leadership Slide 9
What is Project Portfolio Management?
PPM - applying the tools and discipline of financial
management to project management
Portfolios are investments capable of generating value
Portfolio considerations
Investment strategy ROI
Growth
Profitability
Balance Diversification
Risk
Alignment to goals, mission
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October 2008PMO Leadership Slide 10
PMO Focus for Strategic Value
Lifecycle
Templates
Standards
Training
Change Control
Status reports
Projects
Programs
Initiatives
Strategy
PPM
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October 2008PMO Leadership Slide 11
Project Portfolio Management Goals
Align projects to strategy
Facilitate the transformation of strategy into results
Eliminate marginal and poor project investments
Provide a way to evaluate, prioritize, and sequence
projects
Optimize resource utilization
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October 2008PMO Leadership Slide 12
Breaking PPM Down
Construct
Portfolio
ExecuteEvaluate Assess
Results
Prioritize
Match Investments
to Opportunities,
Align with Business
Program/Project
Management
Financial
Retrospectives,
Project PostMortems
Account For
All Projects
Review
Investment /
ResourceAllocations
The Process of PPM
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October 2008PMO Leadership Slide 13
Constructing a Portfolio
Business Info Financial
Project
Line of
Bus. Business Initiative Type
Financial
Contribution Motive Funded
Segment
Gross
Margin
Segment
Growth
Investment
(budget)
Investment
as Percent of
Total
P14 Internal Fulfillment Throughput Maintenance Operational Discretionary Y 63% 15% 11,233,456$ 27%P18 LOB-A Customer Support Maintenance Operational Discretionary N 71% 5% 8,607,643$ 21%
P4 LOB-A Fulfillment Throughput Enhancement Operational Discretionary Y 71% 5% 7,000,000$ 17%P3 Internal Customer Support Enhancement Revenue Discretionary Y 71% 5% 3,569,540$ 9%
P7 LOB-B Grow US Sales New Operational Strategic Y 43% 7% 2,000,000$ 5%P16 LOB-D Grow US Sales Enhancement Revenue Discretionary Y 60% 13% 965,432$ 2%P19 LOB-C SOX Maintenance Operational Compliance Y 63% 15% 890,755$ 2%
Project Name Metadata Cost
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October 2008PMO Leadership Slide 14
The Portfolio is Your Strategy
$0.00
$200,000.00
$400,000.00
$600,000.00
$800,000.00
$1,000,000.00
$1,200,000.00
$1,400,000.00
$1,600,000.00
LOB 1 LOB 2 LOB 3 LOB 4 Internal
Investment By Line of Business
Proposed
Funded
$-
$200,000.00
$400,000.00
$600,000.00
$800,000.00$1,000,000.00
$1,200,000.00
$1,400,000.00
$1,600,000.00
$1,800,000.00
Investment By Initiative
Proposed
Funded
$0.00
$500,000.00
$1,000,000.00
$1,500,000.00
$2,000,000.00
$2,500,000.00
$3,000,000.00
$3,500,000.00
Revenue Operations
Investment By Contribution
Proposed
Funded
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October 2008PMO Leadership Slide 15
Using PPM To Increase Strategic Results
Strategic
PlanningExecution Results
Two Key Pitfalls PPM Can address:
Inadequate Resource Management
Inadequate Risk Management
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October 2008PMO Leadership Slide 17
PPM Ensures Feasibility Risk Management
Key Factors Contributing to Risk
Risk Profile Impact on CoreBusiness
Ability to Deliver
Political Exposure
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October 2008PMO Leadership Slide 18
Risk DNA Contributing Factors
Risk Profile Ability to Deliver
Organizational
Acumen and
Experience
Requirements
Resource Capacity
Schedule Flexibility
Quality Control
Do we control the plan?
Do we know what we are doing?
Do we have the commitment to deliver?
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October 2008PMO Leadership Slide 19
Visualizing Risk Using PPM
Is there the right balance?
P1
P2
P3
P4
P5
P6
P7
P8
P9
P10
P12
P3
P24
0
1
2
3
4
5
6
7
8
9
10
0 1 2 3 4 5 6 7 8 9 10
Reward-->
Risk -->
Portfolio Mix(bubble size = investment)
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October 2008PMO Leadership Slide 20
PPM Benefits
Project investments discussed strategically Feasibility and risk assessed and mitigated before investing
Transparency to stakeholders
Resources deployed on only the highest-value projects
Detailed trade-offs understood when new ideas are
suggested
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October 2008PMO Leadership Slide 21
PPM Summary
Project Portfolio Management involves applying thetools and discipline of financial management to
project management
PPM requires competencies in strategic planning,
financial and project management
Overall objective of PPM: Manage projects, people,
processes, and information assets for maximum
business benefit
PPM requires leadership to be successful
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October 2008PMO Leadership Slide 22
Project Leadership
Project Leadership is expertise that combines the scienceof project management with the art of leadership essential
to solving tough problems and getting business results.
PMO/PPM/Project Leaders:
See the big picture Get people to agree on priorities
Are decisive
Accommodate different executive styles, processes do not
Are accountable; they address issues and mistakes Understand how to turn vision into reality
Conquer uncertainty
Deliver results
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October 2008PMO Leadership Slide 23
Managing & Leading
Enforcing Standards
Resolving Issues
Budgeting
Planning
Reviewing Status
Coaching
Providing Vision
Motivating
Aligning Stakeholders
Demonstrating Standardsand Providing Structure
Managers are people who do things right and leaders are people who do the right thing.Bennis and Nanus, 1985
Most U.S. corporations today are over-managed and under led.Kotter, Harvard Business Review 2001
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October 2008PMO Leadership Slide 24
Management & Leadership Behaviors
Manag
ement
L
eadership
Identifies
Project Tasks
Estimates
Accurately
Manages
Schedule
Manages
Budget
Identifies
Issues/RisksCommunicates
Leverages Adapts Challenges
Supports
Promotes
Teamwork
Acts with
Integrity
Makes Sound
DecisionsSolicits Input
Mitigates
Issues/Risks
AnticipatesSeeks
Feedback
Fosters
Ownership
Innovates Motivates
Envisions
Project Leadersh ip behaviors augment and complement
pro ject management behaviors to enhance execut io n
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October 2008PMO Leadership Slide 25
Leadership In Action Strategic Execution
The Problem: The client needed to evolve its online platform in order togrow and better serve customers.
The Challenge: Complex, transformational projects often fail
Project Leadership Behaviors:
Created a shared vision and a process for achieving it
Established high trust at the executive level
Created an entrepreneurial atmosphere focused on execution
Garnered crucial support from around the organization
Forced tough decisions that kept the project focused and moving forward
The Result: A successful open, scalable new technology platform
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October 2008PMO Leadership Slide 26
Project Leadership Testimony
Point B brought in a way of thinking that elevated
the internal mindset and successfully got us through
this inflection point. They helped us focus our
innovation and gave us a lasting understanding ofhow to handle large-scale projects in times of
extreme transition.
- CEO
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October 2008PMO Leadership Slide 27
Conclusions
Business issues abound 90% of corporate strategies are never implemented
Project success rates are only 35%
Most PMOs rate themselves at 2 out of 5
PMOs should strive to be a business partner, not an
order-taker
PPM will help improve business results PMOs, PPM, and Project Execution will not be
successful without leadership
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October 2008PMO Leadership Slide 28
Contact Information
For a copy of these slides or other questions, contact:
Gaylord Wahl
206.517.2762
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October 2008PMO Leadership Slide 29
About Point B
Point B is the first professional services firm focused on project leadership
and execution. Founded in 1995, the firm provides a diverse and experienced
team of locally-based project leaders to companies in Seattle, Denver,
Portland, Phoenix, San Francisco, Los Angeles and Chicago. Organizations
ranging in size from startups to Fortune 100 corporations turn to Point B for its
ability to step into any segment or role of a mission-critical project and helplead it to success. And, unlike many professional services firms, Point B
works exclusively for its clients and does not enter into alliances, reseller
agreements, or other relationships that might compromise the firm's
objectivity. Point B has attracted top project leaders from various industries by
offering a culture that promotes flexible work schedules and well-rounded
lifestyles for its more than 300 professionals. Additional information on thefirm and its offerings can be viewed online at http://www.pointb.com.
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