A special initiative by organisations, typically set up when they are scaling up or going through a phase of transformation, Program Management Office (PMO) is a focused, high-impact effort to solve a burning issue such as accelerating sales or turning around profitability.
A special initiative by organisations, typically set up when they are scalingup or going through a phase of transformation, Program Management Office (PMO) is a focused, high-impact effort to solve a burning issue such as accelerating sales or turning around profitability. However, not all PMOs are successful in achieving the desired outcome. The implementation of the following points can be instrumental in running a successful PMO:
- Focus on solving just one burning issue
Setting-up and running a PMO is an intense, time consuming, and expensive exercise. This may tempt the management to try and achieve multiple objectives through this effort. However, this would diminish the required, single-minded focus. Organisations should thereby focus on solving just one burning issue—accelerating sales or managing a new product launch—at a time.
- Keep duration short and focused
PMOs work best in short spells—with a typical effective duration of about 12 weeks—and are differentiated from the regular business improvement efforts through their focus and intensity. Stretching the duration of a PMO invariably takes away this focus and intensity. Adopting a 2+8+2 format—the first two weeks to set-up the PMO and for the PMO team to achieve the desired pace, eight weeks of focused and dedicated delivery, and the last two weeks of handing over the initiatives back to regular business teams for sustenance—is an ideal approach for a successful PMO.
- Define upfront two to three objectives and one to three key results for each objective
Some of the new-age technology companies have successfully implemented the OKR (Objective and Key Results) approach for strategic alignment and goal setting. This approach works very well for setting up a PMO as well. As opposed to the traditional approach of focusing on activities and initiatives, PMOs are more effective by focusing on outcomes (objectives) and specific key results linked to objectives. Again, focus is key here—not more than two to three object two to three objectives and not more than one to three key results for each objective. As with the OKR approach, the key results should be quantitative, stretched, and aspirational (a 60 to 70 per cent achievement rate on key results will be considered very good).
- 90-180 Rule: 90 per cent focus on what is possible to do within 180 days
A PMO effort is akin to a booster or an accelerator, and in that, it differs from usual business improvement initiatives of an organisation. PMO effort should focus most on what is likely to generate impact over the next one year. To illustrate, for a typical profitability turn-around situation, the PMO should focus most on commercial initiatives (possible to implement in 90 days, 60 per cent of focus), followed by productivity improvement initiatives (possible to implement in 90 to 180 days, 30 per cent of focus), and lastly structural initiatives (possible to implement beyond 180 days, 10 per cent of focus). Hence, 90 per cent focus is on what is possible to do in 180 days. This is the reverse of the traditional business improvement efforts which should naturally first focus on long term structural improvement initiatives.
- Small but dedicated team
A common misconception is that successful PMOs require large teams. This is not true for most situations. Small, two to three member teams that are dedicated (working 100 per cent of their time on the PMO) are much more effective than large teams, which suffer from divided attention and high inertia. Such small dedicated teams find it much easier to work in short cycles, quick iterations, and be agile in their problem-solving approach. All these are hallmarks of a great PMO. The team may be drawn from internal resources, typically from strategy, finance, and accounting divisions or could be supported by an external consultant.
- Daily involvement of top management
In a regular business improvement project, the CEO or founder may engage once a month, or at best once in a fortnight, to check on the progress and offer suggestions. This mode of engagement, however, is not effective for PMO set-ups. A good PMO requires daily engagement from the CEO/founder to work in quick problem solving cycles, enable decision making, and cut through organisational hierarchies and inertia. This is critical to move the needle on defined key results in the short time frame of the PMO. Tactically, a daily 30/60 minute call either at the beginning of the work-day or towards the end of the day works well. This could be supplemented with a more detailed weekly review of 90/120 minutes.
- Minimise presentation slides.
Preparing presentation slides when not absolutely required, brings down productivity of the PMO team. Other communication modes—structured emails for regular updates, word memos for decision seeking notes, spreadsheets for analyses, and back-up—work much more effectively. As a rule, a PMO team should not make any presentation slides, unless absolutely required.
- Use a single consistent review format For the daily and weekly founder/CEO interactions, a common, spreadsheet-based review format works really well. While the review format remains the same, the spreadsheet format adds columns with daily frequency data (sales, cost, indicators of demand and supply) while providing a ‘week till date’ and ‘month till date’ summary on key results metrics.
- Plan for sustenance
While the main purpose of a PMO is to provide a boost to ongoing business, sustenance of heightened performance is critical as well. The most common enabler for ensuring this is the organisation. A good PMO should identify who in the organisation will carry forward the initiatives.
This exercise often results in identification and highlighting of gaps in the organisation for e.g., not having a dedicated person for conducting commercial negotiations. These gaps should be filled on urgent basis through external or internal hiring, before the formal PMO effort ends. Even a week’s delay will make the handover from the PMO team to the business team less than fully effective.
PMOs are often time-taking and expensive to set-up. Furthermore, they are generally set-up when the organisation needs help on a burning issue. Putting thought upfront in setting-up PMOs for success is therefore critical to achieve the desired impact.