Moving on from the popularised view of Leadership — 3

Gaining control through letting go of control
By Dr. Reg Butterfield

24 Minutes Read

In our last three newsletters we introduced the important distinction of understanding management as the driving force for successful organisations instead of the overused term leadership. We also introduced three interconnected and collaborative organisational roles (Strategic Development Role, Purpose Alignment Role, and Operational Role) that we posit, together with a network weaver role, remove the need for growing organisations to transition into traditional hierarchical functional silos.

Last week we discussed the importance of reconsidering the role of the C-suite and what that will mean for the management of organisations. If the C-suite is not actively involved in day-to-day business and there is no conventional line management approach, then who is ensuring that things get done as required and how is any necessary control maintained?

Today we partly answer this question as we introduce the background story that leads to and reinforces the introduction of a new type of team; the Purpose Alignment Team (PaT). Next week we continue this discussion around the role of the PaT and will include its relationship with the role and activities of the Network Weaver, an integral part of ensuring the success and futureproofing of organisations. The last part of this chapter of the story will be the operational side of the organisation and its support mechanisms in a subsequent newsletter.

In our 19 June 2022 newsletter my colleagues Dr Ross Wirth, Silvia Calleja, and I discussed the increasingly complex relationship between people and technology in daily organisational life. We followed this with our 26 June 2022 newsletter that discussed the essential role of collaboration in organisations if they are to be successful in achieving the synergy required to thrive and survive in this rapidly emerging world of changing expectations of all parties, customers, and workers alike. We continued this discussion on 21 and 28 August 2022 with the importance of organisations working as communities if the synergies now required are to be achieved.

Significant evidence has been published by a wide range of researchers and management gurus to demonstrate that traditional hierarchical bureaucratic scalar organisations tend to form silos of expertise or specialist functions over time. These silos are independently measured and as such have been shown to be competitive for internal resources and attention. Thus, leaders tend to use their power to encourage silo focused behaviour to ensure their own success, often to the cost of the overall benefit or health of the organisation. The way that power is used as a control mechanism in organisations was discussed in our 26 June and 3 July 2022 newsletters and how the design of an organisation reinforces and/or supports that power process.

Any new form of organisation design will require a power and management structure that supports the work getting done in an environment that encourages and enables the commitment of the workforce. The importance of these was discussed in our 15 May 2022 when making sense of the needs, interests, concerns, and expectations of the different generational workforce and in our 14 August 2022 newsletter that examined reasons for the ‘Quiet Quitters’.

Alignment of Work

In our 22 January 2023 newsletter we discussed approaching the management of organisations under the umbrella of the DAC Leadership mantle Direction, Alignment, and Control. Last week (29 January) we discussed the major role of the C-suite in providing the Direction of the organisation through its Statement of Purpose, strategy, and associated objectives.

The challenge is how to align the work activity and associated outcomes with the direction and objectives set by the C-suite. The functional silo approach (whatever design it takes — tall, flat, matrix, Holacracy, Sociocracy, etc.,) is not achieving the synergies required because of the power struggles and/or the complex processes required to achieve it; a different approach is required. This is where the Alignment element of the DAC Leadership umbrella comes into force. This is the focus of today’s newsletter.

The functional silos typically have executive level management responsible for their respective outcomes; we remove these individual roles and associated hierarchies and replace them with a collaborative team that has very specific collective responsibilities and accountability.

We identify this role and associated activities through the assignment of a designated Purpose Alignment Team.

The rationale behind the introduction of a Purpose Alignment Team (PaT) and how it can operate as the central core for the operational success of an organisation is logical when looking at organisations anew and is discussed below. Yet it is challenging to discuss this approach when readers are so used to the traditional approaches of aligning work activity through hierarchical management by objectives and associated processes and measurement systems. This is our first attempt to write down this logic, albeit we have presented and discussed it orally in other forums and with organisations for several years.

Rationale for the Purpose Alignment Team

In response to the well documented changes in the business and social landscapes of the last 30 years or so organisations have responded by developing new, more flexible organisational forms (Pettigrew, 2003) in which projects are both more numerous and more strategically important (Jamieson & Morris, 2004), which has increased the complexity in managing them (Fernez-Walch & Triomphe, 2004). This complexity of management is largely due to most of these changes having taken place within the framework of traditional hierarchical scalar organisations.

Unsurprisingly, this need to manage complexity has led to a range of creative ideas to best manage such situations (Pettigrew & Massini, 2003); programme and portfolio management (Pellegrenilli, 1997), project-based or project-oriented organisations (Thiry, 2004), and project management office (PMO) (Gareis, 2004) are the main examples.

What is important about PMOs?

Significant research across the literature identified that whilst all had individual merits, the project management office was the best candidate for further research in our quest to identify a core managing system for organisations in the future. It is important to note at this stage that organisational project management (OPM) has moved away from just delivering projects on time, within budget and conforming to the technical and quality specifications. Their goal is to create value for the business, an important consideration in our quest.

With this in mind, we now provide an overview of the growth and development of methods for managing and controlling projects, which are a form of team-based activities designed to achieve a strategic or customer outcome. It is important to bear in mind that this journey has been undertaken within organisations based on traditional hierarchical design and management systems, which we aim to replace.

The journey

Projects and programmes have always suffered from high failure rates and despite managerial efforts since the 1960s, particularly with the creation of the Project Management Institute (PMI) and other such organisations, managers have sought to rectify the situation. The reasons for failure included the guidelines and organisational structures that supported the operation of both project management and the PMOs (Barcauli,2012; Pinto et al, 2010; Verzuh, 2012; Kerzner, 2004; Dismore, 1996; Hobbs & Aubry, 2006, 2007, 2008, 2010a, 2010b); Hobbs, 2007).

Around the middle to end of the 1990s some forms of organisational structures emerged that focussed on project management. The term project management office (PMO) began to be widely discussed in various specialised books released in the United States (Hobbs et al, 2007; Pinto et al, 2010). The role of the PMO has grown significantly since those early days, albeit problems still exist as they develop into wider roles depending on the level of executive support for this enlargement. The 2020 report by project Management Solutions, Inc., indicated that 79% of organisations (93% of large organisations) had a PMO in place. The average (median) age of the PMO was 6 years, annual budget was $1.5 million, and a staff size of 8.

The diverse nature of a PMO means that all organisations have a different view as to its role and organisational function. The predominant roles of a PMO are still seen by senior management as improving project success rates and implementing standard practices. Even this definition does not encapsulate the additional functions that are now being added to the role as the business world becomes more complex and technology more advanced.

In a presentation paper Arul Nambi Thiruppathi (2007) identified the types of challenges inherent in managing a series of interdependent projects that a PMO can successfully manage, these being:

· Project schedules not adhered to, and implementation dates rarely met

· Senior management not having comprehensive insight into projects’ progress and performance

· Projects’ customers not sufficiently involved in product planning, design, and acceptance

· Disparate and inconsistent communication patterns

· Inadequate control and understanding of actual costs

· Lack of repeatable processes guided by best practices

· Unanticipated risk events and inadequate or missing contingency plans

· Unexplained changes in project scope, schedule, or budget

· Unacceptable quality of products and processes

· Unproductive or non-existent peer reviews

A PMO establishes an environment that prevents many of these issues from occurring. It also conducts monitoring and controlling activities that correct problem situations by:

· Implementing consistent project management and product development methodologies

· Establishing governance processes and structure for managing changes to the programme

· Conducting planning and control activities, including alignment with other strategic initiatives, integration with the governance process, and integration with resource planning

· Coordinating delivery of project information through consistent and standardised data gathering, analysis, and reporting

· Providing continuity and reinforcing commitment among business customers, project teams, and support organisations

· Initiating audit review procedures that identify problem areas and provide processes to closely monitor risks and issues

· Increasing project success rates by obtaining executive buy-in and gaining enterprise-wide support for program needs and objectives

To achieve these desirable traits and outcomes, the PMO can be seen by some organisations to undertake one of two different roles: a support role or a supervisory role. However, the optimisation of the PMO role is one that combines both the supervisory and support roles as they are not mutually exclusive. [These two roles will be shown later as critical in the way that new era organisations work].

The increasing success of PMOs has led to the creation of three major types of PMO: Project Management Office, Programme Management Office, and Portfolio Management Office. Typically, although not exclusively, the different types of PMO operate at different levels of the organisation’s business focus.

Project Management Office (PMO) tends to be set up for large projects and supports the project managers. This means that they are more focused at the daily tactical level at best.

Programme Management Office (PgMO) tends to be set up when there are many projects running under a programme. This office works with the relevant Project Management Office(s) and is more focussed on the operational level.

Portfolio Management Office (PPMO) is usually set up at a department, or Business Unit level and ensures that their projects are aligned to the overall enterprise business objectives. This more strategic tactical role includes business prioritisation of projects as well as value and business benefit realisation. Given its supporting, controlling, and coordinating roles, project managers can feel that their self-determination is threatened and lead to disagreements. [This need for more control over their work is a repeating theme in today’s emerging workforce and requires attention in new era organisational designs].

This realisation and categorisation of different PMOs is arguably the legacy of its slow development through experience and a bottom-up approach to solve identified issues as projects became more frequent and more sophisticated.

This approach has led to a lack of strategic alignment because of its focus on tactical and operational issues. Another difficulty has been that PMOs are often spread geographically in large organisations and as such tend to develop a silo mindset, which impacts on communication and cooperation, as well as poor utilisation of resources. The tactical focus means that it is difficult to obtain a clear overview or big picture of the project level operations for the executives at the enterprise level. Having dispersed PMOs also leads to a lack of commonality across processes and ways of working and measurement, which leads to a range of problems when trying to identify causes of failures and where successes can be used to learn across the enterprise. Finally, and probably most important given the historic issues around a lack of executive support for PMOs, insufficient visibility of PMOs at the top executive level; no visibility, no buy-in. [This reinforces a need to ensure the power relationships in new era organisational designs reflect those that are needed for success and not purely retaining the existing power systems because they are already there.]

PMOs and Organisational Tensions

When considering a new way of organising and managing an organisation it is important to make sense of the tensions created by change and the experience of developing PMOs can help to provide this understanding.

Research shows that in the majority of cases PMOs are unstable structures because organisations often reconfigure their PMOs every few years. This instability can be interpreted as both an illustration of structuring as an ongoing organisational process (Pettigrew, 2003) and as an illustration of organisational experimentation as organisations search for an adequate structural arrangement (Midler, 1994).

Organisational change occurs in a political environment. Changes to PMOs are caused by political forces and they shape a new political environment. This indicates that tensions within the organisation play an important role in determining the path that an organisation’s development will follow. In turn, each new structural arrangement realigns the power structure and creates new tensions. When considering the role and future changes to a PMO it is important to take into account the political environment and integrate the political dimension of organisational change. Innovation of and within PMOs is a major driver for change as organisations develop this function. It is suggested that viewing the tensions from the perspective of innovation in PMOs will add insights that can be used during change in order to reduce the impact of the political dimension and improve the overall change process.

Hobbs et al (2008) identified five categories of tensions that present an opportunity to understand the dynamics of co-evolution in the social innovation system of PMOs: economic, political, customer relationship, standardisation versus flexibility, and controlling the project machine.

If businesses rely more on the use of project-based models to achieve their objectives, the power and influence in an organisation will be inextricably linked to having power and influence over projects. In the ‘traditional’ view of organisations, senior line managers are accountable for business results and as such they will want control over project management even if they are not in the best position to make the necessary decisions.

One of the roles of a PMO is to provide accurate data for management, including project status. This often leads to tensions between the project manager and the PMO, as the latter tests the robustness of the project manager status reports, hence creating a potential trust issue between both parties.

This often leads to tensions between the project manager and the PMO as it tests the robustness of the project manager status reports and as such trust is a difficult thing to establish. [When integrating reporting and measurement systems in new era organisational designs, intelligent integration of the data management and information processes within the operating procedures will be a key component of its successful acceptance by all of the workforce].

Reflection

Whilst space and time in this newsletter restricts a more detailed overview of the five tensions, our analysis of them has led us to several important contributions to understanding the impact of bringing about a new way of organisational operations, management, and associated structure.

PMOs can be understood as organisational innovations and as they are deeply embedded within their ‘host’ organisation they coevolve. This provides an excellent opportunity to learn about evolving organisational forms and associated tensions, which are also amongst the primary drivers of change. It is also an opportunity to identify that the role of politics and power is not just about risk management and stakeholder analysis, which tends to be the focus of most change processes, it is very much about taking into account the organisation and integration of functions; of which PMOs are an example.

Taking the concept of a PMO to its next stage in our exploration of organisational forms and management, we now explore the role of an extended form of PMO. This is often called an Organisational PMO (OPMO) or, increasingly, an Enterprise PMO (EPMO). We will use the term EPMO from hereon.

Enterprise Project Management Office (EPMO)

In the preceding discussion we have demonstrated that whilst the installation of PMOs has grown significantly over the last decade or so their piecemeal development has resulted in different approaches and problem resolutions. We also identified the variation between tactical and strategic approaches of PMOs and that for organisations to benefit more widely a business focused approach that combined the two functions was needed. Hence the development and installation of an EPMO is gaining popularity, albeit only about 32% of organisations currently engage in some form of Strategic Project Management (SPM). However, a much higher percentage of organisations with high-capability PMOs practice SPM compared with those with low-capability PMOs (67% vs. 22%), (Management Solutions Inc., 2020).

The EPMO is a centralised business function operating at a strategic level with the enterprise executives. It provides organisation wide support on governance, project portfolio management best practices, mentoring, tools, and standardised processes. In doing so it ensures that there is a strategic alignment between business objectives and the execution of projects.

It is important at this stage to understand that in a ‘traditional’ organisational setup an EPMO does not remove the need for Project, Program, or Department level PMOs. Its role is to ensure that whilst the PMOs are doing the ‘right things’ through their tactical and operational activities, they also need to be undertaken in the ‘right way’.

The distinguishing factor of the EPMO is the level at which it operates. Typically, this is at the business function level reporting to one of the ‘C-suite’ members, depending on the focus of the business; for example, if it is an IT organisation it will usually report directly to the Chief Information Officer (CIO) or even the Chief Digital Officer (CDO) in the newer organisations.

Operating at this level enables an EPMO to effectively control the programmes and projects running across the enterprise. [Note that this control is not management of programmes and projects but their strategic alignment and shared practices.]

Given that the overall nature of this part of the newsletter is an introduction to make sense of and describe a component of a new form of management system for an organisation (a Purpose Alignment Team), an important point to clarify here is that the EPMO is not restricted to any one single aspect of the business such as IT. It can also include other organisation’s PMOs such as the sales PMO, finance PMO, marketing PMO, and HR PMO functions operating with a higher strategic focus on cross-organisation alignment.

In a global organisation any dispersed PMOs also report to the centralised EPMO. Therefore, an EPMO collaborates and supports cross functional and international projects, which leads to improved synergy across the organisation’s global projects. This provides them with an opportunity to align all corporate based and departmentally based projects against the strategic plan and to manage project prioritisation and resourcing issues. Figure 1 is an example of what the EPMO structure can look like.

Figure 1: Enterprise Project Management Office — example

Whilst the role and structure of EPMOs are individually designed and different for each organisation’s needs, Rochford et al, (2020) suggest that they should aim to achieve the following benefits for the organisation:

· Strategy optimisation

· Assessing true value drivers

· Maximising portfolio potential

· Undertaking maturity audits and realigning against organisational priorities

· Providing effective and efficient governance to deliver change through people

· Mobilising and motivating the right resources to remove constraints and deliver results

[These benefits are in line with the wider needs for management systems that are required for new era organisations.]

An EPMO’s role typically embraces:

· Optimising and delivering strategy, considering alternatives, and seeking to remove decision bias

· Ensuring that the organisation’s strategy stays ahead of trends

· Responsibility with the Executive for transformation and facilitating and driving the leadership function

· Prioritising and maximising the portfolio potential and assessing any changes

· Managing and directing the strategic portfolios, programmes, and Projects

· Providing effective and efficient governance to deliver change through people

· Assessing and focusing on value-added

· Mobilising the right resources in line with the organisation’s priorities (re-allocating from secondary priorities)

· Mitigating risks and constraints

· Reporting and controlling

· Assisting in communication of vision, objectives, and achievements

Where EPMOs are set up and report to the ‘C-suite’ the benefits for the organisation can include:

· Increased number of projects delivered on time and within budget.

· Improved strategic alignment between business objectives and the projects initiated.

· Finances used more appropriately.

· Increased leadership buy-in for department level projects and therefore improved opportunities for project success and obtaining support when needed.

· More effective enterprise-wide utilisation of resources.

· Reduced or no overlap of effort between departments. Minimal or no duplication of work undertaken by different departments.

· Improved communication across the organisation and therefore quicker and more effective decision-making.

· Increased and better collaboration and coordination across departments.

· Higher visibility of initiatives across the enterprise.

· Greater financial returns of the projects implemented.

· More efficient delivery of projects and therefore faster time to market

· Improved risk mitigation and structured risk resolution.

[These benefits are moving in the direction of those required by any new era organisation and as such a lot can be learnt from studying the EPMO model].

Structure and positioning of an EPMO

The bumpy history of the installation and continuity of PMOs indicates that how and where the EPMO is positioned within the organisation is an important factor in its potential to deliver its promises. The following guidelines have been identified as a result of limited research and many expert opinions across the internet (McCormick, 2011; Honkanen, 2011; Cote, 2020; Muller et al, 2019)

Positioning — probably the most critical consideration is the direct reporting line of an EPMO. Given its strategic role and the need for its authority to be recognised throughout the organisation it must report directly to a member of the ‘C-suite’.

Role clarity — earlier we discussed the issues around PMO tensions, and it is important that such tensions are not repeated at the EPMO level, particularly between senior management and PMOs. Project managers and PMOs need to be shown that the EPMO is not trying to interfere within their territories, they are there to complement and support them.

Equally, the executives should not be given cause to feel that the EPMO is interfering with their roles and responsibilities. Constant and consistent leadership support and buy-in for the EPMO to perform its role is essential in providing information for executives to make critical decisions. A clear way of reinforcing this is to demonstrate that the EPMO is seen as a function supporting the executives and not overlapping their responsibilities.

Functional status — the EPMO should be established as a separate business function/group to avoid it being seen as part of any specific function such as finance, IT, HR, sales and so forth. It is there to support projects across the whole enterprise, irrespective of project owner.

It follows that the organisational structure is such that all PMOs directly or indirectly report to the EPMO. Therefore, the flow of communication and escalation paths should be clearly defined to avoid any confusion or delays.

Staffing — The role of the EPMO includes a strategic understanding of the wider perspective of the business projects and as such it is important for it to be staffed by people with both project management experience and sound business acumen. This wider view also enables them to introduce a reasonable level of standardisation across the organisation’s business departments and functions; usually lacking in most organisational designs of traditional business models.

Reflection

The discussion around the role of projects and their management within organisations has highlighted a significant number of benefits and difficulties in the development of a series of project management systems. The systems have developed over time and were predominantly based on a bottom-up process predicated on different needs, operational, tactical, and subsequently strategic.

Figure 2 illustrates this development process of the different support and management functions for projects. The hierarchy is based on a general understanding of the development process, albeit not all organisations took each step sequentially or, indeed, operated each form of support. However, it does indicate that the management and support of projects can be a slow and costly process if all levels are in place within an enterprise. Therefore, the benefits are rightly being challenged on a cost basis versus added value by many executives. This is an important aspect to be considered when reviewing the subject with a new form of organisation in mind.

Figure 2: Hierarchical development process of moving from PSO to EPMO.

The eventual aim of the project management process is the alignment of the project activity with the purpose and goals of the enterprise, which is improving as experience develops. During the development period the issues around various forms of tension need to be considered with an appropriate change management process undertaken. Executive ownership and responsibility for their strategic link to projects via an EPMO is critical for overall project alignment and business success.

With this in mind, we discussed the importance of the PMOs being integrated and growing with the organisation as it matures to meet the market changes and wider project demands (Bourne, 2006). Maturity in this sense is the organisation’s ability to translate business strategy to business benefit and competitive advantage through programs and projects. At the same time, we suggested that this is best achieved when the design and management of an EPMO, or a PMO where an EPMO does not exist, is undertaken with and by senior management.

In developing its relationship with the executives, the PMO needs to be aware of its organisation’s current and evolving level of maturity and leverage its effectiveness by stages as it plays an increasingly important role in the organisation — helping the organisation to achieve success through its own successful participation in the business of the organisation.

Part of this process we identified earlier is the communication process, an element of which is delivering adequate and appropriate performance indicators. Whilst performance management and performance indicators are an important part of the discussion, we will cover this in a later newsletter.

Summary

The first part of this newsletter has served as a foundation for understanding the complexity and issues surrounding the increased use of projects to meet the changing landscape of business environments. In doing so it is argued that we are more able to make sense of the type of organisation required to replace the traditional bureaucratic model that is struggling to cope today.

We believe that where team-based organisations exist they too can learn from the ideas encapsulated in the PMO and EPMO way of coordinating dispersed activities and achieving collaboration and cohesion across the enterprise, irrespective of its size or operations.

It is from this viewpoint that we offer the Purpose Alignment Team (PaT) as a critical component of future organisational design. The PaT can be considered as an extended and more comprehensive form of an EPMO. It is more than the management of projects; it is about managing and retaining control of the whole organisation.

Purpose Alignment Team (PaT)

The primary focus and principal objective of a Purpose Alignment Team is to ensure that the whole organisation meets its business objectives set by the C-suite to achieve the organisation’s Statement of Purpose (SoP), hence its name — Purpose Alignment (team).

It does this in the knowledge that it is directly and collectively accountable to the C-suite, which sets the team’s Business Objectives and Key Performance Indicators (KPIs).

Before moving on, it is important to discuss what we understand the term alignment to mean in the context of this role.

What do we mean by alignment?

Alignment in the context of the PaT role is far more than the simple idea of setting things out in an ordered, often linear, fashion that is found in dictionary definitions.

It is a responsibility to ensure that the organisation operates in an environment of collaborative and integrated behaviour that enables and sustains all activities necessary to deliver the work required to achieve the mandated outcomes of that work. The outcomes being defined by the PaT in response to the corporate Objectives and KPIs.

In essence, we mean agreed cooperation across the whole organisation in both strategic and organisational behaviour.

Management at its Best

We argue that the PaT process provides a form of management that other organisational designs fail to achieve. It does so because the key strategic decision-makers and high-level experts operate as one team in harmony and not leaders of silos in conflict or differing priorities.

To achieve this mandate, the PaT has a wide range of roles and activities to undertake that are beyond day-to-day management, many of which are often neglected in the current “fingers-in” style of traditional hierarchical scalar management systems.

The fingers-in approach is where the management become involved in the day-to-day work at the operational level unnecessarily. This takes a significant amount of time and energy that is lost to other activities that people in their positions need to undertake. These range from external networking at the senior management level, tracking the market trends and future impacts on the business, identifying technology changes and their impact on the current and emerging workforce, the identification and maintenance of the working environment, and so on. Basically, the day-to-day work gets in the way of these important and necessary strategic activities.

An often-missed problem associated with “fingers-in” management is that of failing to make changes when necessary; either to react to or prevent identified potential problems or opportunities. This leads to episodic change, which has a well-documented history of limited success.

The detailed activity, operations, and responsibility associated with the Purpose Alignment Team will be discussed in the next newsletter, together with the role of the Network Weaver, which is their important link to operations.

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