How the PMO Can Understand, Measure and Report the ... · PDF fileHow the PMO Can Understand,...

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How the PMO Can Understand, Measure and Report the Business Impact of Projects

Introduction

Measuring the business impact of projects, initiatives

and launches is complicated. Since project management

offices (PMOs) offer a broad spectrum of services to

various parts of an organisation, calculating return on

investment (ROI) is often a challenge.

That said, it doesn’t matter if an initiative was on time

and under budget if it was doomed for failure from the

start. The best project leads don’t limit measurement to

on-time and on-budget metrics for that very reason. If

you are unable to prove beyond a reasonable doubt that

your efforts generate more value than they cost, you risk

losing your programme.

Exploring the Complexities of ROI Calculation

Most project leads measure time, cost and scope as

part of tracking the success of their initiatives.

The project “whats” are measurements taken after the

fact and answer these questions:

� Was the work completed?

� Was it on time?

� What resources were spent to complete it?

� Was the customer satisfied?

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The project “hows” are tied to the risk, resources and quality associated with

the initiative. While these factors are a bit harder to measure and

communicate, it’s important for project leads to do so as initiatives grow in

complexity.

Organisations are increasingly competing on a global scale and dealing

with projects involving dispersed team members from different cultures and

backgrounds. As a result, how initiatives are managed is critical to success.

The complexity theory helps guide what to measure in this type of

environment, focusing not on what gets done but how it gets done. Two

organisations that have done this well are Google and The LEGO Group.

Google famously allowed employees to spend 20% of their time on any

project of their choosing. And this “20% time” led to some of the company’s

biggest product successes, including Gmail, AdSense, and Google Talk.1 To

ensure its workplace is highly motivating and engaging, The LEGO Group

measures employee motivation and satisfaction and sees higher levels than

industry benchmarks.2

To adopt a similar mindset, the PMO must consider and understand the

project hows as well as the whys.

Why is the organisation doing this?

How are we going to implement this initiative?

How does it fit into the company’s overall strategy and help deliver on the strategy?


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This multi-dimensional approach encourages the PMO and project lead to

think about the vision and mission for the initiative. It also paves the way

for measuring, not only the project what, but also the project how.

By incorporating this added dimension into the initiative, PMOs can ensure

they are building and cultivating environments in which it is acceptable to

ask for help—and that is critical to completing projects efficiently and

effectively. Consider the example of creative firm IDEO’s designers, who are

coached to expect that they will need help—and they should ask for it. The

company’s leaders model this behaviour by asking for and giving help. This

cultural mentality helps IDEO design and deliver products that its clients

love.3

Here’s the formula for this multi-dimensional approach:

How did we go about the project?

How does it fit into the company’s overall strategy and help deliver on the strategy?

How does employee satisfaction rate when it comes to that collaboration?

Once told what the project is, ask meaningful questions, including “why this project?”

Determine why the project is being pursued (and

why the organisation is dedicating resources to it).

Leverage the project team as a resource for scoping and planning how the initiative will be delivered.

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Equipping Project Teams to Deliver Measurable Impact

To ensure the project team delivers measurable impact, PMOs can embrace the

concept of PAM, which helps tie the team’s everyday work back to the

organisational strategy. PAM stands for Purpose-Autonomy-Mastery and

provides a framework for empowering project members to succeed. Let’s

explore.

Purpose. The project lead needs to understand how each team member’s role contributes to the overall success of the initiative. The LEGO Group grasps the importance of giving employees a sense of purpose, saying: “We see a need to continuously communicate and involve all employees in the unique LEGO culture and LEGO strategy to understand the reasoning behind it and their specific role in it.”4

To that end, the PMO must be able to answer these questions:

The goal is to equip project managers to adopt a business mindset and

understand what it takes to run an initiative as a strategic business

endeavor with appropriate measures.

Autonomy. The second part of the framework is about giving team members the space to do their jobs. While each person needs something different in this regard, the key is to stop focusing on what people do or deliver, and shift to how people do their jobs. Yet, it’s the “what” that the PMO and project leads most often track and measure.

Because the PMO and project-based workers want to avoid surprises, they

tend to dictate how work should get done. As General Patton said, “Never

tell people how to do things. Tell them what to do and they will surprise you

with their ingenuity.”5

Why are we creating or did create the PMO?

How does our organisation make money or generate value?

Why does our business or organisation exist? What is its purpose?

In most implementations, a PMO is created to help project managers perform their roles better. If the primary audience for whom the PMO was created fails to see the value in its work, it’s highly likely that others in the organisation will fail to see it as well.


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Focus on Meaningful Metrics

Questions to ask before project:

� Does it align with our

strategic goals?

� Does everyone involved

understand the goals of the

project and how it aligns with

our strategic goals?

Questions to ask after project:

� Was there good

communication and

collaboration throughout the

project?

� Were issues and red flags

identified early enough to

handle them?

� Did the project output

meet the executive team’s

expectations?

A better and more meaningful measurement focuses on how team members

interact with others in the course of the initiative. Are they competing or

collaborating? When relationships have an impact on productivity,

cooperation and collaboration are far better than competition in projects and

generate greater value and vital partnerships in the long term.

Mastery. When the PMO is focused on the what of a project, it’s difficult to justify budget for training. But if the focus shifts to how the project will get done, it’s easier to make the case for training.

In the end, the ROI for training is not about the money spent, but about

identifying and defining success. When team members are trained to be

valuable project contributors, the PMO can better assess and select the right

projects and ensure more repeatable and predictable project processes.

Adopting this multi-dimensional approach is a proven way to take initiatives

to a new level, and it provides organisations with further insight into the

attributes, skills and behaviors that contribute to the highest levels of success.

By defining these differentiators at an individual and team level, organisations

can also take steps to reward employees accordingly, and upskill when

necessary.

References

1 HRZone, Why did Google abandon 20% time for innovation?, June 3, 2015

2 The Lego Group, About Us – Our Mission: To Inspire and Develop the Builders of Tomorrow,

http://www.lego.com/en-us/aboutus/responsibility/employees

3 Harvard Business Review, 5 Ways to Get Better at Asking for Help, December 18, 2014

https://hbr.org/2014/12/5-ways-to-get-better-at-asking-for-help

4 The LEGO Group, We want all employees to be inspired by our purpose and engaged in the

LEGO® Strategy., http://www.lego.com/en-us/aboutus/responsibility/responsibilityreport2014/

responsiblebusiness/employees

5 The Official Website of General George S. Patton Jr.,

http://www.generalpatton.com/quotes/index3.html

PMO: People + Motivation = Opportunity


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