How To Build A PMO From Scratch
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Dear Subscribers,
A quick note to say that it’s been exactly 1 year since I started Relentless Velocity. I’m humbled to have this growing platform of smart professionals that read my work from time to time. Regardless of how long you have been on this journey with me, I want to say thank you.
Let’s get started on today’s exciting topic.
Throughout the last decade, I’ve discovered that the areas of work I’m most passionate about, are those that require me building things. If what I’m building is something that’s never been done before, the more exciting it is for me. During this decade of discovery, I have been fortunate to have led everything from building an entire operations function from the ground up for a growing startup to creating multiple functions for my own company.
However, one of the key highlights of my career up to this point was building a few project management offices from scratch. If you were to ask my why, I would highlight the following reasons:
PMO’s are loosely defined. And while there are specific types of PMO’s, it’s pretty difficult to find two that are the same.
PMO’s act as an integrator, with close relationships with the majority of the functions in the business.
And probably the most important to me personally, PMO’s centre around my passion, taking something that has never been done before and making it reality.
And with the world undergoing all sorts of changes due to disruption, I believe PMOs and their ability to be agents of change will play a more pivotal role in the present and long-term future of companies far and wide. In other words, if your organization doesn’t have an enterprise-level PMO, you can expect that to change.
If you're one of the lucky ones who have the opportunity to kickstart your company's own PMO, I am crafting this deep-dive for you. This guide will look at all facets of setting up a PMO from scratch and offer up some details that you may be overlooking. To keep things somewhat structured, this guide is split up into four chronological parts:
Step 1: Introduce & Implement Project Management
Step 2: Understand The Business
Step 3: Crafting The Pitch
Step 4: The Rollout
I hope that my track record and passion for project management, in general, will serve as your guide to generating a Project Management Office that acts as an accelerator in accomplishing the goals of your company.
Let’s get started.
Step 1: Introduce & Implement Project Management
Project management and its penetration in an organization should be viewed as an iterative process. Where the initial steps require laying the foundation of project management best practices in general and uncovering the types of projects to manage. To be clear, an organization should first experiment with project management before even thinking about building a PMO.
This step first and foremost requires a series of commitments. A commitment to treat a categorized area of a business as a pipeline of projects, a commitment to act as a project manager to lead these projects or hire an experienced one and finally, a commitment to set the foundation of the tools and processes that make project management so effective.
Let’s go through each one in a bit more detail.
Convert A Category Into A Pipeline Of Projects
Every business has a series of goals and objectives that usually translate into pieces of work. A digital marketing agency has clients they need to service in the form of strategy formulation or the creation of digital products, such as a website built. A Pharmaceutical company may have various products in different phases of the clinical trial journey they’re hoping to get approval on. Both of these companies have very different focus areas but also share one key fact: They have multiple initiatives at play that have start and finish dates and provide value when complete.
Step 1 is to test and eventually gain commitment to treating these initiatives as projects. You don’t need to tackle everything at once. Doing 1 at a time is acceptable at this stage. The aim is to experiment if project management is a viable option worthy of expansion and lay the groundwork to gain acceptance on this approach.
To really gain some traction here, look for areas of the business that tie into strategy or make an impact to key objectives. You’ll learn more about this in step 2.
Assume The Role Of Project Manager Or Hire For The Role
One of the most common ways professionals become full-fledged project managers is through accidental reasons. They are seconded or selected for an opportunity to lead a key project, and through some intense trial and error, they ultimately succeed, resulting in further opportunities to work as a PM.
When first introducing project management to your organization, this may be the situation you find yourself in as you prove its validity to gain some sort of investment. As the eventual leader of the PMO, acting as the PM upfront may be the best option, as it gives you a firsthand view of what the role will entail, how the suite of projects will operate, and gives you a much better sense of what it will take to formalize project management down the road. If you are already a seasoned project manager, this obviously makes things much easier.
If you prefer to start building your team right away and have the budget to do so, bringing in external talent is another great way to kickstart project management at your company. This person will bring with them key experience and, with a bit of a learning curve, give you the ability to take on more projects as a group, hopefully proving out your use cases further.
Whichever way you decide to go, this project manager should be mostly dedicated to their suite of projects rather than being designated a part-time PM. Remember, you want to prove the validity of project management, and encouraging full commitment will get you there faster.
Introduce PM Tools & Processes
Your final commitment will be to take all the initial learnings you’ve gathered, either managing projects yourself or with someone you hired, and begin the initial steps of structuring the execution of these projects.
Remember, the long-term goal is to build out a PMO, but before getting to that stage, you need to prove to yourself (before anyone else) that project management is a value-add to your organization. Adding consistency around communication, the management of risks, and planning are great first steps in creating efficiency and quality.
You can look to traditional tools such as timelines, standardized project kickoffs, etc., but I also challenge you to bring forth items that are unique to your business and the projects you expect to run.
And, in order to do that at the highest levels, you will need a solid grasp of step 2.
Step 2: Understand The Business
A PMO’s ultimate purpose is similar to that of any other function. At its very core, the PMO function must help the business fulfill its underlying mission by supporting the completion of its short-, medium-, and long-term objectives.
With this in mind, it’s easy to see why understanding the business is a core step in setting up a PMO. And for the record, while this is called “step 2,” I consider this step more of a 1b, as the very nature of the PMO leader is to fully grasp the vitals of the business as a whole.
Your task here is to live and breathe the business. In order to do that, you need to focus on four things: 1) Understand the company’s mission, 2) Determine its objectives, 3) Uncover its overarching success metrics, and finally, 4) Identify the key players in strategy and execution.
Again, let’s briefly go through each one.
Understand The Company’s Mission
Every great company has a mission, something that makes the day-to-day operations worth doing. And while most companies believe selling something for profit is the ultimate goal, it doesn’t tell the whole picture.
Selling something for profit won’t give you any additional insights into the characteristics of the company and the people leading it. But the mission statement does.
Let’s take Best Buy, for example, which I’ve covered here before. This is their mission statement:
At Best Buy, our purpose is to enrich lives through technology. We do that by leveraging our unique combination of tech expertise and human touch to meet our customers' everyday needs, whether they come to us online, visit our stores or invite us into their homes.
The above statement is powerful and you can get so much of what Best Buy is trying to do as a company, including where their strengths lie. Outside of the emphasis on enriching the lives of their customers through technology, the text highlighting their tech expertise and multi-channel approach to serving their customers is no accident.
If your company is public, getting this information is as easy as performing a simple Google search. If not, look to your boss, company town halls, and presentation documentation as aids to uncover your company's mission. If all else fails, a neat little trick I use is checking out your company's LinkedIn company profile. Here is Best Buy’s page. Notice anything similar?
Determine The Company’s Key Objectives
Once you have a grasp of your company's mission, you next need to turn your attention to what they are trying to achieve to realize their mission. These key objectives are their strategic priorities that need to be executed on. Some of them will be within the fiscal year, while others much longer.
A key point for you to consider as you begin thinking long-term: Most of the time, key objectives can be converted into portfolios and programs of your PMO, where the strategic objectives are executed by a team of experts familiar with bringing new things to market. In other words, if the areas of the business you decided to focus your project management efforts on in step 1 are not aligned with things that roll up to key objectives, now is the time to pivot. Understanding these objectives will be very important as you make your way into step 3.
Uncover The Overarching Success Metrics
With key objectives mapped out, companies must then decide what success looks like for each of them. Specifically, company leaders want business objectives that are quantifiable to help map out what success looks like and how to measure progress along the way.
As you've probably guessed by now, learning what these metrics are is very important as you begin planning out your PMO. Most success metrics live within execution, meaning a function like the PMO is the perfect candidate to track progress, health, and risks associated with these initiatives and help move the needle for them.
Once you understand what success looks like and how to measure it, begin thinking about the projects you and your team currently run. Is there a way to demonstrate success that roles up to these overarching metrics? If yes, you are on the right track.
Identify The Key Players
Finally, to gain any traction in the following step, you need a pretty good idea of who the key decision-makers are. Most of the time, these people have prominent positions at the company, but they don’t have to. They could very well be an individual contributor who is seen as an expert in the field and has a great deal of influence at the company.
As you enhance the viability of project management at your company, take some time to build relationships with these key people once you identify them. Not only will they be more receptive to buy-in should you find yourself in that position, but you will also gain valuable insight into their challenges and pain points. This should prompt the question in your mind, 'How can a PMO assist this person?'
PMOs are a fluid function that can serve countless areas of a business. The upfront groundwork will provide you with a foundation to build on as early as possible.
Step 3: Crafting The Pitch
For many looking to start a function, regardless of whether it’s a PMO or not, fear this step the most. And honestly, I can’t blame them. Pitching the idea for a new function will either be met with some level of acceptance or flat-out rejection. It’s do or die at this step.
Looking into this further, the real reason this step is so scary is that we tackle it completely wrong. Most professionals start with this step right up front, resulting in a pitch that’s lacklustre and without any substance. There is a reason I put two lengthy steps ahead of it.
In order to improve the odds of a formalized PMO function, what better way than to operate as if the PMO function exists already? Both steps 1 and 2 gradually take you there, and as project management grows in importance at your company, you are also making it known outside of your (hopefully) growing team as well.
As you turn your attention to making the official ask for a PMO function, you want to first make sure you are personally satisfied with the progress you’re seeing up to this point. You have to have the mindset that proving the need for the PMO rests on your shoulders. It’s your job to prove that standing up a PMO is right for the company. And the best way to do that is with key learnings and case studies chock full of data.
Learn, Adapt and Learn Some More
Operating anything new will no doubt come with mistakes, issues, and, if we’re lucky, some wins. Most of the time, professionals don’t put in the effort to take things further. Which, in my opinion, is a massive mistake. Every component surrounding these wins and losses is the opportunity to learn. Intake what happened, get to the root cause, and then offer suggestions to improve. Being a trailblazer in the world of business requires you to act as a seasoned scientist and experiment with the aim of always getting better.
After every learning, create documentation with the right amount of detail to be applicable to a wide audience. You want learnings replicable and easy to digest.
Build Case Studies
Once learnings become wins in their own right, you need to build presentation decks or similar items to highlight them. Being a trailblazer also requires you to be an excellent salesperson, regardless of whether sales is in your title or not. Demonstrating how Project A saved the company money or Process B generated X amount of revenue through issue reduction sounds much better than an opinion-based pitch on why this company should have a PMO.
Once the two items mentioned above are completed and you are satisfied with the results, only then will you be ready to craft your pitch, build your pitch deck, and schedule a meeting with your boss or anyone else relevant. If you have been managing projects up to this point, you should ideally have been reporting on the progress made week-to-week and month-to-month. You want to position your idea as a natural progression of project management rather than a significant shift in direction.
Remember, you don’t need to convince all decision-makers right away. All you really need now is one champion. Regardless of whether it’s your manager or someone else with authority, having buy-in from this person not only proves your use case that a PMO can be a viable addition, but also gives you an ally to help win everyone else over incrementally.
From here on out, your focus should be on continuing to prove the value of project management and how it can accelerate the company's objectives through sound execution. Eventually, the green light will come your way when the costs of not having a PMO become too great.
Step 4: The Rollout
Congratulations on being awarded a PMO function. With some major obstacles overcome you want to take a moment to appreciate what got you to this point, but remember there is still lots of work to be done.
Rolling out a PMO follows 3 key steps: immediate - cement the strategy, Within 3 months - Get a Key Win and long-term - gradually penetrate the business.
Immediate - Cement The Strategy
Whenever I start a PMO, the first thing I do is review the assets that awarded me the function or position to begin with. This has me looking at my findings during the initial steps right up to the pitch deck. Most of the work lives here, and my first goal is to structure it in a way that makes it living, breathing, and catered to the right audience: my team.
I take the first two weeks to create this document, which includes the North Star of the PMO and how it aligns with the organization as a whole. What follows next is my detailed recommendation of what the next 12 months look like to take the PMO closer to its North Star. The key thing to point out is that the above is a recommendation. Leverage your team to fine-tune the roadmap so you have something forward-looking and unified. A powerful combination.
Within 3 Months - Get A Key Win
Following strategy must come sound execution. And it's important to achieve a win within the first 3 months to build the PMO's reputation, boost the team's confidence, and have a foundation to build upon.
Please note that a key win doesn't have to be big or complex. In fact, it's better if it's not. By this time, you should have an idea of where opportunities lie, either through conversations with key players in step 2 or through your own research. Pick something that's easy to implement yet offers real value. Pulling this off in the first three months is an excellent way to get started and build trust within the organization.
Long-Term - Penetrate the Business
All that’s left is to slowly build from here. Managing a PMO in the early stages is definitely a marathon and requires a combination of patience and a keen eye to push the PMO in new directions.
As I started this article, one of my favourite aspects of leading a PMO is the level of ambiguity involved with this function. There is no limit to where your team can get involved and where you can provide value. Build a culture of continuous improvement and always look for pain points within the PMO and outside of it. Over time, taking action on these discoveries will enable the PMO to be the accelerator in business value that it was meant to be.
Conclusion
With project management offices becoming a key cog in the engine of business transformation, the demand for these functions will continue to grow. As you trail-blaze project management in your organization, I hope this guide can serve as your very own instruction manual to minimize turbulence on your journey.