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Is This Seat Taken? Why It Is Time to Add a Chief Project Officer to the Executive Round Table Print

In organizations in which robust project management tools and processes are matched with highly effective project management staff but projects chronically fail to deliver the rewards organizations require, it is very likely that the problem lies not within project management operations but at the very highest level of the organization.

More often than not, the organization has not valued the role that project management plays and does not understand that project delivery drives the achievement of the organization's goals.  Without such an understanding, it's easy to see why the institution of a project management business function with its own executive leadership is not commonplace.  The purpose of this article is to explain how the success of any type of business can be improved with the establishment of a Chief project Officer.

Establishing a project management business function chips away at the authority and control of other business functions, i.e., finance, operations, technology, etc. Not surprisingly, this is often the rub, but with sufficient planning, it doesn't need to be.  Still, the mission and benefits of a Chief Project Office can persuade even the most ambitious of peers to support its installation.

For instance, senior leaders are learning that the presence of a project-centric business function removes the "squeaky wheel" syndrome in project investment decision making, which promotes wiser corporate investing. Sound investment decisions tend to lead to improvements in financial performance, for which executives are handsomely compensated and stockholders are overjoyed. Everyone wins.

The mission of a Chief Project Officer (CPO) is two-fold: to ensure the corporate-wide alignment of project delivery to the enterprise's strategy and to perpetuate project management proficiency throughout the organization. This duality of focus is reciprocal, which allows the business function to create increased value over time. Though each element of the mission contains both strategic and tactical aspects, the overriding value to the organization is the CPO's strategic management of the master project portfolio.

As steward of the corporation's master project portfolio, the CPO is responsible for ensuring that the organization is selecting the right projects to deliver. To do this, the CPO leads the effort to define the company's master project portfolio blueprint. The blueprint's structure is evaluated within the context of the firm's market indicators, industry imperatives, product mix, client demands, financial targets, and internal factors (i.e., capacity, culture, management maturity, etc.) and is agreed upon by the executive team. The executive team annually reviews the project portfolio definition, categories and criteria against the firm's long-term strategic vision to ensure the blueprint's continued relevancy in the enterprise.


With the structure of the portfolio decision making finalized, the CPO's responsibilities then turn to vetting future and current projects against the structure. As such, the CPO chairs the project prioritization meetings (some organizations conduct these monthly, others do so on a quarterly basis) attended by the CPO's peers and other senior leaders, i.e., SVP of Sales, CTO, etc. These meetings are a forum for reviewing both new projects' business cases and high level status of the enterprise's approved projects in progress. Attendees reject or approve new project requests, evaluate initial project funding for new projects and make ongoing funding decisions for in-flight engagements.

Additionally, the team uses the portfolio blueprint to define the relative priority of each project within the master project portfolio. Though the group functions as a team for the purposes of setting portfolio direction, it is important to note that the CPO is ultimately accountable for the final decisions.

The CPO's master project portfolio authority is often the source of the peer executives' resistance to the role. In reality, the CPO role is an apolitical function. Because the purpose of the role is to ensure that the company's assets are allocated to engagements that fit the portfolio blueprint, vis-à-vis to align the master portfolio's projects to the organization's strategic vision, project selection and funding decisions are purely based on the merits of either the business case (for project requests) or the project's performance to objectives (for active engagements).  In contrast, companies without this independent role and portfolio alignment mission find that project investment decision making has become a politically-motivated process. In these environments, the master project portfolio often does not mirror the strategic direction of the company. The financial consequences of such misalignment can be dire.

Another issue that can be contentious in the organization's change to a CPO structure is the reporting relationships of the function level project offices. Unless the project offices are found to be sorely dysfunctional, CPO leaders should insist that the department and/or business unit project offices maintain their solid line reporting relationships with their functional management hierarchies. The caveat to this arrangement is that the CPO and the project offices will be joined through a dotted line relationship.

The dotted line management structure allows a few things to occur. First, the CPO is able to maintain a light and nimble methodology for managing the master project portfolio (i.e., objectives-based), which frees it up to be flexible to changes in strategy. Second, this structure encourages the line of business project management teams to deepen their function-level project management expertise and build prescriptive processes and relevant methodologies for their area. This instills in them a sense of ownership in the organization-wide project management maturity improvement initiative. Finally, the dotted line relationship is the conduit through which information flows back and forth between the project offices and the CPO.

The information that flows between the project offices (PMO) and the CPO contributes to both the alignment of the organization's project portfolio and the proficiency of the project management discipline.  The CPO is responsible to the multiple PMOs for communicating project prioritization direction; setting corporate-wide objectives-based project management performance expectations; delivering project management training, career path and education programs; and disseminating best practices from internal and external sources to the groups.

In turn, the individual PMOs are responsible for forwarding new project requests approved by their functional management to the CPO; allocating and prioritizing resources toward efforts in their queue in accordance with the CPO's direction; supplying project performance data (alternating weeks if monthly prioritization meetings, monthly if the meetings are quarterly); and cycling knowledge gained and lessons learned to the CPO. This final activity gives all teams an opportunity to participate in advancing the project management discipline in the enterprise and provides valuable real-world insight to the CPO, executive team and other project offices.

Adding to the real-world insight is the CPO's responsibility of business case realization tracking, the literal last step in a project's life cycle. In this responsibility, the CPO and CFO collaborate to gather and analyze financial data related to deployed projects' business cases. Of interest in this exercise is pinpointing flaws and accuracies in assumptions upon which previous business cases were built and approved so as to improve the integrity of future business cases. The notion here is that more precise business cases promote quicker and wiser project investment decision making.

In summary, the establishment of the Chief Project Officer role positions project management discipline as the strategic asset it is and increases the business value of the organization's collective project portfolio. Though implementing the Chief Project Office infrastructure requires a reasonable amount of change management, judicious executives who focus on the CPO's benefits will find that the measurable benefits are compelling reasons to make the change.

Let's add that chair to the executive round table.

Andrea Nicholas, MBA, PMP, LSSGB (c) 2008 


 
About the Author:

 Andrea Nicholas is the founder and CEO of Optimize!, a Project Management Office (PMO) solutions consulting firm located in Dallas, Texas. With nearly 20 years of experience in the project management discipline, Ms. Nicholas's career has included building PMOs from scratch, managing PMO day-to-day operations, successfully leading multi-million dollar domestic and international engagements, and deploying sustainable portfolio management and process improvement initiatives for firms in the financial, utility, technology, and consulting industries.

Ms. Nicholas frequently speaks publicly on the broad topic of project management and has published articles for PM World Today. She possesses a Master of Business Administration degree from the University of Dallas and a Bachelor of Arts and project management graduate certificate from the University of Texas, Dallas. She also holds a PMP® certification from the Project Management Institute® and is a Lean Six Sigma Green Belt. She can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

 

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