Question

How can the PMO support the innovation process?

Our response

Today’s competitive global environment is forcing businesses to be more flexible, responsive to change and efficient than ever before. Gaining and sustaining competitive advantage is one of the biggest priorities and challenges that all organisations, in both private and public sectors, face.
Innovation, ‘…the process of translating an idea or invention into a good or service that creates value or for which customers will pay…’ is frequently seen as a tool to deliver and maintain an organisation’s competitive advantage.

However, experience shows that innovation, and particularly disruptive innovation, presents many challenges to organisations. Recent studies, conducted by Harvard Business School, show that a large percentage (70 – 90%)[1] of innovation products fail. Most organisations, over time, develop robust systems, processes and cultures suited to ‘steady-state’ operating conditions. High-risk discontinuous innovation projects do not fit well with the ‘traditional’ stage gate approaches to innovation, rendering their approaches unsuitable.

But why is innovation so hard to do well?

Keith Goffin, of the Cranfield School of Management, describes the innovation value chain as comprising the steps of ideation, project prioritisation, implementation and commercialisation (Innovation Pentathlon framework) [2]; these aspects are complemented by the organisation’s innovation strategy, culture and organisational structures.

For organisations to be successful in the innovation management process, they need to have the capabilities that will differentiate them from the competition. Studies have confirmed that these capabilities include:

• the ability to scan at the periphery with the view to identify emerging technologies and trends
• the development of ‘fuzzy front end’ approaches to include the seed funding of new innovative and risky projects involving cross-functional teams
• the development and nurturing of inclusive and ‘learning’ organisational cultures.

Can a PMO structure assist the innovation process in any way? Will the product or service development process benefit from a distinct organisational structure such as an innovation PMO? If yes, what would the innovation PMO look like and what characteristics would it have?

1) The innovation PMO should take a portfolio approach to innovation.

Traditionally PMOs tend to focus more on project management planning, establishing methodologies and tools whilst PMOs offering enhanced value to their organisations have extended this focus to include taking a more strategic approach to project management ensuring that the organisation, in addition to ‘doing things right’ does ‘the right things’.

Taking a portfolio approach to innovation, the PMO would ensure that a mixed portfolio of projects is progressing through the technology and product development pipelines; it would ensure that the innovation projects pursued are aligned to overall strategy and that the intended benefits are maximised taking into account investment required, project risk profiles, demand on resources and capabilities and any project interdependencies.

2) The innovation PMO should be involved more in the ‘fuzzy front end’ of the innovation process.

The role of the innovation PMO should include creating a ‘sandbox’ for ideation and experimentation to take place in a ‘safe’ environment involving cross-functional teams. The ‘right’ ideas can then be identified and elevated quickly to compete for resources. The innovation PMO working across silos and having responsibility for project resource management can further be a catalyst to accelerating innovation by involving the right people (with the right skills) at the right time. An innovative PMO would also support pro-active, non-committal explorative linkages with partners across the value chain in addition to long-term strategic alliances becoming an efficient integrator within the organisation.

3) The innovation PMO should become the Centre of Excellence for innovation within the organisation.

The role of the PMO should include making sure that the organisation develops, enhances and maintains critical innovation capabilities nurturing the right organisational culture and establishing best practice. The innovation PMO captures and disseminates success stories, and is also the conduit for establishing partnerships across organisational silos and with external partners.

Business strategy drives the need for appropriate capabilities which in turn drive the delivery of a specific portfolio of initiatives. These initiatives include innovation projects which are designed to support the development of products or services linked to gaining and sustaining competitive advantage for the organisation. The innovation PMO can play a vital role as an integrator, supporting and being involved in the innovation management process, especially in the ideation stage, providing effective use of resources and fostering the right cultures.

Costas supports clients in the private and public sector throughout their change initiatives from the initial vision setting stages, to identifying and clarifying the anticipated benefits, to establishing the right metrics to track benefit realisation, to facilitating conflict resolution amongst stakeholders.

He can be contacted on cchryssou@citi.co.uk

[1] http://theinnovationandstrategyblog.com/2013/04/innovation-products-fail-12/

[2] http://www.som.cranfield.ac.uk/som/p16897/Knowledge-Interchange/Management-Themes/Innovation-and-Operations-Management/Key-Concepts-Innovation-and-Operations-Management/The-Innovation-Pentathlon

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Question

Things have become difficult on my project, with some of the stakeholders in disagreement about the business changes that we can/should achieve, and it seems to be getting worse. Over the last month, several key senior managers seem to have ‘lost interest’ – they have stopped coming to most of my meetings, they never seem to have any questions and they rarely return emails. Yet I’m getting second-hand reports that one in particular is stirring up trouble – criticising my project, disagreeing with the sponsor, and generally being unhelpful with my team. What can I do about this?
Anonymous (major retail bank)

Our response

This situation feels ‘wrong’ on many levels, and you need to actively manage it!

Who owns this project?
A word of warning: you refer to this as “my project”. Remember that your role is in organising, managing and controlling the delivery of change into the business, but you do not ‘own’ the change. It has been requested by the business, for the business, and your job is to deliver the outcomes they determined. It is not in your gift to change the direction of the project, so you cannot become involved in negotiating scope and outcomes without the support and involvement of your sponsor and any other relevant senior stakeholders.

So do not consider for a moment tackling these troubles on your own. However the probable causes, and therefore responses, do differ depending on where you are in the project lifecycle. Early on and the problem is likely to be stakeholder conflict, whereas later it is possibly a ‘sleeper’ or two awakening.

Stakeholder conflicts
Let’s address the condition of stakeholders in disagreement.
It is to be expected that stakeholders will have different perspectives and even business priorities. Disagreement at the outset of a business change project or programme (BCPP) is in fact very desirable because it indicates high levels of stakeholder engagement. Conversely, mute agreement should be worrying: are stakeholders in agreement or are they not ‘switched on’? We would advise anyone initiating a BCPP to find ways to generate the debate and discussion necessary to identify these different agendas as early as possible.

The following two charts plot the level of discussion, debate & disagreement among stakeholders.

Figure 1: where disagreement is suppressed early in a BCPP, there is a period of relative calm, inevitably succeeded by recriminations and conflict at a point when it is less likely that there is time and money to put things right

Figure 1 is a useful conceptual diagram of what happens when a CPP starts off without the necessary debate or discussion of differences among stakeholders and where the BCPP is approved too ‘quickly’ or ‘easily’.

Figure 2: Explicitly managed conflict resolution at the outset will make stakeholders feel uncomfortable, even dissatisfied, but is the only way to gain broad agreement on the direction of a BCPP. The rest of the journey may still be rocky, but the major battles will have been fought, and key decisions made.

A more helpful way to think about engaging stakeholders at the outset of a CPP is illustrated in Figure 2, where debate is encouraged and conflict addressed early on. It can feel uncomfortable, even confrontational, and it does consume time up front, but ultimately it pays off in terms of saved time and effort on rework, and on increased, positive stakeholder engagement on the change journey.

So our advice to you is to bring your senior stakeholders into forums where they can identify and come to a negotiated agreement over the purpose, direction, scope and value of the BCPP.

There are no shortcuts or easy answers at this stage of a project. Furthermore you will need to engage your sponsor and other senior managers to help you make this happen. The results of these deliberations must be documented as they provide you with a compass to guide you on the change journey.

Incidentally, in the case where stakeholders cannot reach a large measure of agreement, and continue to argue for different agendas within your change initiative, then the only advice is to call for a halt until agreement is reached. Otherwise, your change initiative is almost certainly doomed to descend into conflict at a later stage. All manner of unhelpful organisational politics will emerge and consume the BCPP: professional experience tells us that it is unsafe to proceed.

When ‘sleepers’ awake
The emergence of conflict during implementation of your BCPP sounds more like the scenario in Figure 2. It is clear that some unhelpful organisational politics (political ‘game-playing‘) is starting to intrude. You have on board what are termed ‘sleepers’, who have now ‘woken up’ and are causing trouble.

These sleepers may have been genuinely unaware of problems and have just woken up to the implications of the change, perhaps because you didn’t do a very good job of engaging them early on. On the other hand, they may have been consciously biding their time for an opportunity to attack the project from the side-lines. It matters little – their behaviour is a threat to the project, and this must be addressed head-on.

The answer is not for you to try to placate them with last-minute changes to scope or promises of ‘goodies’ in a future ‘phase two’. Our advice is similar to the above: engage them with the other senior stakeholders in negotiating a way forward.

It will undoubtedly prove even more difficult and messy to negotiate a way forward now that the BCPP is well underway, but it is still essential: without a prompt resolution there is even more trouble ahead, so it cannot be ignored.

If the resolution results in the BCPP being radically altered, then you will have to re-plan it from the ground up; if no resolution is possible then it must be carried forward or halted – in either case your senior stakeholders must be involved in making the decision and supporting you in carrying it forward.

In conclusion
When serious senior management concerns emerge, they must be resolved at the appropriate senior level in the organisation. Make sure that you are not left alone to bear the brunt of dealing with senior stakeholder dissatisfaction.

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Question

I work in the power generation sector. I’ve already got more than enough work on my plate, and now I’ve been asked to take on the role of ‘Accountable Executive’ for a big project in the Operations area of the business!  I don’t even know what that job title means, and even more confusingly, my boss now refers to me as the ‘Project Sponsor’!

What does it mean for me?  Is this something I can fit into my (non-existent) spare time?

Our response

This is a situation we see all too often.  It’s a great opportunity, but surrounded by many pitfalls for the unwary, so proceed carefully.

Firstly, know the full significance of your role.
The term Accountable Executive means ‘exactly what it says on the tin’: you own the project! You are accountable for the business success of the project (including whether the investment in the project results in realisation of planned savings or other benefits).  This means the ‘buck stops’ with you if the project fails to achieve its business goal.  No point in hiding behind the project manager or anyone else – it’s you they’ll come looking for if things go awry!

The term Project Sponsor is completely interchangeable with Accountable Executive (don’t ask me why, probably it’s to do with our apparent compulsion to invent new words for old concepts – probably to give the impression of original thinking).

So get to know exactly what the project is trying to achieve.  Make sure you know (and have challenged) the problem or starting point that makes the organisation want to invest in the project in the first place.  Get clarity and agreement on the business outcomes required (leaner process? better process? new line of business?) by the key stakeholders.

Beware of long ‘laundry lists’ of problems to be solved, or outcomes to be achieved.  Everyone wants to be a stakeholder in your project, and they all have an angle – something they want out of it.  You must be ruthless in cutting out all that are not central to the project mission.  In fact, the more concise you can be, the more precise you are likely to be.  Nothing speaks more of lazy or loose thinking than a project briefing note that goes on at length, meaning different things to its different readers.

You are now central to the governance of the project: in a nutshell you must make decisions about the strategy and outcomes to be achieved, and ensure that the business and the project team are interacting appropriately (most times this means ensuring that stakeholders are pulling in the same direction!).  Someone once described this as ‘Making sure the project is achieving the right things’: on the other hand, the project manager’s job is to ensure that the project is being ‘done right’.

It is important for you to be completely comfortable with your project’s strategy and business rationale because your job is to help the project manager drive the project in the right direction.

 Secondly, know the limits of your role.

You are NOT the supervisor of the project manager, nor the ‘project expert’.  You do not have to check up on their work, review their detailed schedules, or have them account to you for their timekeeping.  As mentioned above: you set the business direction, and help them drive the project to that destination.  So don’t be tempted to ‘take over’.  It is sheer madness to try to take the steering wheel out of their hands: you will almost certainly not know what you are doing

It’s a partnership of different, but equally vital roles.  You and the project manager have something in common: you both want her (or him) to succeed!  Therefore your job is to offer help and support as needed.  This means ‘political support with awkward stakeholders, gaining agreement in highly charged situations, not offering expert technical advice.  So whilst checking up, ask supportive questions, like ‘What’s your biggest obstacle at the moment?’, ‘What do you need from me?’ or ‘How can I help?’

Thirdly, spend your time on the project wisely.
Here are a few tips for spending what little time you have to the best effect:

1. Make sure that the project you are sponsoring is desirable: it should have stakeholder buy-in, a including a willingness from them to provide resources; a sound business rationale, with realistic benefit projections; a business priority that means it is less likely to be pushed to one side when the next ‘urgent problem’ comes along. .
2. Make sure your project is doable, including appropriate resource allocation, a realistic budget, and timescale and reasonable expectations about scope and quality.  Beware of ‘aspirational’ project targets, which are just an excuse for another ‘pie in the sky’ mission impossible.
3. Keep networking with the stakeholders: you can reach places the project manager will never be invited into, so speak about your project, encourage support, listen to problems, seek solutions.
4. Focus on resolving business level issues, including shifting roadblocks to progress, and let the project manager look after the detail.
5. Talk to the project manager frequently. Get him (or her) to help you understand the business implications of the technical issues they discover.  Get them to translate the arcane language of project management into plain English, and carry the important messages of the project to the Board and other senior management with whom you come into contact.

SO, it’s a big role…but somebody has got to do it!

It’s also very rewarding, and the big prize for you is (as long as you do it well) you will grow your reputation as a change champion, and it is well-known that success in change projects is a fast-track for sponsors to gaining promotion and even more accountability within their organisations.

There is much more to say on this topic: if you would like to find out more, please post a comment, or contact us at consulting@citi.co.uk.

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Question

Our PMO seems more interested in policing my projects than in providing useful help. They are always asking for updates against standard templates and exception reports but when we ask them for assistance e.g. development support, specialist advice or to organise facilities for us they simply refuse. Why is this the case and what can I do about it?

Our response

The behaviour of a PMO is based upon two considerations. What the ‘sponsor’ or owner are expecting it to provide to the business and how mature the organisation, the PMO and its management are.

In the first instance whoever has paid for the PMO will have dictated what products and services it provides to the organisation. If this is a member of senior management they may well be fundamentally interested in the overall risk, cost and delivery rates of the corporate portfolio of change initiatives. Their perspective is one driven out of minimising the organisations risk profile through defensive mechanisms; hence the requirement for standardised reporting on the performance of projects as a proxy for the level of cost, risk and progress that they are exposing the business to.

If this is the sole, or even primary, focus of the PMO it is understandable why you see their behaviour as being ‘policing’ as it fundamentally is:– make sure all projects stay in line. They do this by focusing their efforts on being able to spot and react to deviant initiatives; we typically style these as control PMOs.

More mature organisations also require a ‘bed-rock’ of sound information on their change initiatives but are progressive enough to recognise that the best way to achieve increased safety in the portfolio is to aim efforts at prevention rather than reaction. In this situation the mandate of the PMO will be to provide support and development opportunities to the organisation’s projects and their managers. The need for management information is more a ‘necessary hygiene-factor’ (they must provide it but it is not central to their ethos or the way they operate) for such guidance PMOs and so they don’t appear as overbearing as the former control type.

You would be far more likely to approach a guidance PMO as it would offer you advice and expert counsel on such matters as tailoring lifecycles/methodologies, initiating projects cleanly and leveraging maximum effect from risk management.

By the sound of it you are hoping for a guidance PMO but being faced by a control PMO. However, in either event you are likely to be disappointed in your request for administrative support; neither type of PMO should be providing that – their function is not and never should be, to provide administrative headcount to projects.

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