The PMO and Functional Organizations: Square peg in a round hole syndrome

A previous post I did on whether the concept of the PMO was obsolete garnered quite a response.  I posted the question on several LinkedIn groups and the unanimous conclusion was that while the “concept” of the PMO is not obsolete, the deployment, implementation and maintenance of it is.

In the PMI Central group, Ricardo I. Guido Lavalle had this to say about it:

NOW, maybe the point with PMO concept’s obsolescence has more to do with fashion and the way PMOs were initiated rather than with the concept itself. As Ginger suggests, most PMOs started as a bottom-up idea, many times originated in a burst of technical enthusiasm and not as the result of a proper strategic process. Yes, many (most?) PMOs are viewed as overhead in a similar way methodologies are considered a burden if no legitimate business case is starting them.

Just try this: draw an organizational scenario where *no* role is disseminating good practices at all, nor updating templates, nor summarizing cross-project information for upper management. The cost of NOT HAVING that is the cost of not having a PMO. Now, draw another scenario where a PMO cuts those costs, and you have a case for selling the PMO.

In short (“in short”! Just see what a long text I wrote!), I think it’s not the idea of PMO what is being objected, but its value proposition and, ultimately, the selling point in the organization for a formal PMO initiative.

In the Project Management Community group, Geoff Warnock states a similar line:

You need the right-sized PMO with an excellent communicator / leader / mentor at the helm in order for it to succeed. It needs to remain flexible to the real needs of the organization, not the perceived need of ‘successful projects’ – it goes much further than that. So, is the concept of the PMO obsolete? I don’t think so. Is the PMO doomed? It depends on who’s running the PMO. I also think that organizations that ‘get it’ will have the right PMO to do the right jobs at the right time.

In the group PMI Credentialed PMPs group,  Gary R. Heerkens states rather frankly that:

There is nothing wrong with the PMO concept. The issue is PMO implementation and operation. Mr. Reeves is correct when he states: “if used properly, PMOs can be exceptionally effective at driving quality and reducing complexity”. In addition, most PMOs are not allowed to play in the “business space” (participate in strategic planning, business case preparation, etc.), which where they could add the greatest value.

These are all valid points and made me realize that I really should have tiled my post, “Is the Concept of Deploying a PMO in a Functional Organization Obsolete?”, because I feel the vast majority of PMOs are deployed in a functional organization.  I think this can also include strong matrix and balanced ones as well.  Organizations that will typically need a PMO are the large ones like the Fortune 500 companies, yet the irony is that these large and usually process heavy companies will usually find that having a PMO is a distraction and even quite disruptive at times!

In this post by Kiron Bondale in Project Times, he outlines this distraction quite well when he states:

When managing projects within functionally-structured organizations it can often feel like a daily challenge to engage people managers effectively such that staff allocations are predictable.

Not only might the managers in such organizations be reluctant to make staff commitments, the true availability of your new team members are also likely to be subject to the ebbs and flows of operational work. To make things worse, it is rare in functional organizations that project managers have direct input into team member performance evaluations, so given that these evaluations are solely performed by the staff’s direct managers, it is a reasonable assumption that team member focus would primarily be on their day-to-day activities…

A fundamental difference exists in how projects are perceived between functional organizations and balanced or strong matrix ones. While we might consider projects to be the medium through which positive change occurs, in functional organizations, they represent a costly diversion for staff. As the percentage of effort spent by a team on operational work nears 100%, the greater can be the challenge in engaging staff on project work.

This issue cannot be resolved by a single project manager or even by a PMO – the change needs to come from the functional teams themselves.

Having worked in a PMOs for large Fortune 500 companies for the past decade, I can vouch for this sentiment.  On the one hand, having functional areas to pick resources from for large complex projects actually works quite well.  For example, if your in IT (where a large proportion of PMOs reside these days) you can typically size your project resource needs by the availability of specific resources.  So a project may need a few developers, business analyst, testers, etc. and you would work with functional managers to get these resources assigned to your project.

But like the post from Kiron indicates, the resources are also committed to operational work and this will have a higher priority especially if there’s a lot of operational fires to put out.  When that operational work nears the 100% threshold, it places a bottleneck on your project’s timelines as well as the rest of the projects in the PMO pipeline.  The PMO that is managing those projects become a distraction for the functional groups.  For those high profile projects with urgent deadlines, it becomes a major disruption when it comes down to fighting for the project or operational priorities.

In this situation, the PMO becomes the proverbial square peg trying to be rammed into a round hole of functional departments.  Kiron recommends a rotational staffing scheme which reallocates resources based on the priorities of the project or operational work that is needed at a given time.  This to me is still a band aid approach and is one that most PMOs adopt anyway out of necessity.

I think the real issue is that the concept of the PMO works best for an organization that is project oriented, but finds its need in functional organizations more (Construction companies have always been project oriented and is why they don’t need a PMO since their whole organization is a PMO anyway).  Ironically as the size of the organization increases in complexity and size, the more it will need a PMO yet will also find the antagonism and resistance to it increase.

I think because of the initial hype and hope of PMOs, that the benefits were touted without acknowledging the reality that it will always be a square peg rammed into round hole of a functional organization and the best thing to do is sand down the edges so that it will fit as easy as possible and not fall out!