Establish a Project Management Office or adopt a value-centric approach?

How do organisations balance structured project management with the need for agility?  

Organisations in the tech world often grapple with a critical choice: adhere to traditional Project Management Offices (PMOs) or embrace the more dynamic lean agile approach, known as LACE (Lean-Agile Centre of Excellence). They could also opt for a decentralised path. 

So how should an organisation go about choosing the right approach? Drawing from my own experiences with diverse implementations, I’ll share insights in the hope they resonate and spark exploration. 

Traditional Project Management Offices (PMOs) 

Traditional PMOs serve to stabilise by employing well-established methodologies to guide projects along a reliable trajectory. With a longstanding presence, they navigate the complexities of projects and manage delivery risks with a familiar touch. Despite their merits, PMOs sometimes carry a mixed reputation. Beyond providing program and project oversight, PMOs offer: 

• A source of consistency, assurance, and continuous improvement — critical for staying ahead, and maintaining a streamlined operational environment. 
• Consistent application of industry standards, such as PRINCE2, APMO, or ISO standards, for example in Critical National Infrastructure (CNI) programmes. 
• Established governance structures, decision-making processes and project approval criteria, providing clear guidance to project teams. 
• Resource management, ensuring optimal allocation of people to projects, fast-tracking project team formation and accelerating the delivery of value. 

These advantages can unravel when PMOs function sub-optimally and become bureaucratic, for example: 

• Overemphasis on adherence to prescribed processes and frameworks diverting attention from delivering customer value.   
• Without the right tools, approach and mindset, PMOs can be an expensive overhead and guilty of over governance.  
• A ‘command and control’ environment can take shape, demoralising delivery teams. I have witnessed over-zealous change management processes implemented uniformly across all changes for all teams, regardless of severity and priority. This exacerbated delays, inflated overheads and incurred penalties due to missed customer SLAs. 

Lean Agile Centres of Excellence (LACE) 

An alternative is often to follow a lean agile approach. Over the past decade or so, much hype has surrounded the publicised benefits of scaling lean agile methodologies. Given the current high demand for increased agility and value creation, alongside the heightened need for technology assurance, I believe adopting lean agile practices does work well and also delivers customer value, which should be top priority. 

The approach carries with it compelling benefits if implemented with proper buy-in from leadership and teams alike: 

• It puts the customer front and centre, leading to increased customer satisfaction. 
• It strives for leaner operating environments where relentless improvement, learning and a healthy focus on removing delays from process is the norm.  

• It helps with the alignment of business strategy to delivery execution through the use of value streams meaning fully aligned teams are working towards a common goal with a shared purpose.  

The list of benefits, at least from my perspective, is comprehensive… but a word of caution: 

• ‘New’ roles are essential, demanding a significant shift in mindset from traditional delivery roles. Unfortunately, I often observe Project Managers having their roles transitioned to newer Scrum Master or Product Owner without sufficient coaching, and in some instances, formal training. Offering training / support is key. 
• The benefits of the lean agile approach are often impeded when an organisation’s core functions remain aligned to previous operating models, such as finance/budgeting mechanisms. In my experience, changing mindsets and practices after the delivery function has transitioned to the new way of working can lead to confusion, delays, increased costs and often backtracking. 
• Solution engineering practices must also evolve. Fortunately engineering talent often aspires to work in a lean agile environment. I’ve been in the middle of evolving engineering practices in the past, and I have found that the shift towards lean agile starts within the engineering community, leaving the rest of the organisation to catch up. 

It is important to acknowledge that lean agile is not a one-size-fits-all solution that can be seamlessly applied out-of-the box to any organisation in any context. 

Why establish a centralised, specialist function? Why not distribute responsibilities across all delivery teams and let them work it out for themselves? 

This is, by far, the most common approach I encounter, regardless of whether a PMO exists in name only or is purely operational. While it has its merits, it consistently presents a host of drawbacks that I continue to observe time and again. 

Generally, in the name of cost savings, organisations rely on the best endeavours of their people to drive consistency, continuous improvement, application of industry standards, change their ways of working and keep up with delivering customer value. That’s a lot! Depending on the size of the organisation, the complexity of the deliverables and the environment in which the business is operating, going it alone is often fraught with difficulties, duplication and risk – and hidden costs that can spiral, outweighing the cost of an optimised PMO or LACE.   

Where does this leave us? 

Rather than favouring one approach over another (or having no approach at all), blending the strengths of each is in my view the best way forward. A traditional PMO provides the structure and accountability an organisation needs, acting as the anchor alongside the LACE, which focuses on customer centricity, lean operating practices and alignment to strategy – with continuous improvement and learning at its heart.  

To achieve alignment, both PMO and LACE can use the Objectives and Key Results (OKRs) framework alongside a shared assessment tool. Both provide visibility into the effectiveness of the chosen approach and highlights necessary course corrections. 

OKRs provide a common ground across the delivery organisation for setting and measuring goals.  OKRs interconnect organisation, team and individual objectives. OKRs are transparent, helping teams to understand broader goals and how their contributions ‘move the dial’ towards achieving measurable results.   

Even traditional phase gates, often perceived as inflexible, can be reimagined. Instead of acting as roadblocks, they become checkpoints aligned to OKRs, indicating progress and allowing for adjustments. By using a shared assessment tool, duplicated effort can be prevented whilst a complete picture of how projects are performing against the intended operating model can be achieved. 

Keeping an eye on progress, setting benchmarks, and using measurements become crucial. Both PMO and LACE rely on real-time insights to make informed choices. A well implemented ‘Adaptive Project Management and Reporting’ toolset provides the information needed to support data-driven decisions and can support traditional, hybrid or agile environments.   

In conclusion, I believe success lies in integrating the stability of traditional PMOs with the flexibility of LACE, guided by OKRs and informed by data. Forget about the labels, what is currently in vogue, prescribed doctrine or dogma; focus on the ultimate goal – delivering customer value in the most appropriate way for your organisation.   

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By Richard Cleaver| Optimiser