Managing Transformations More Effectively: Why It’s Time to Evolve the PMO

Here’s a typical scenario for CXOs and other business leaders we work with: You’ve recently concluded a strategy review, which translates into a transformation that the board has accepted. You now face the challenge of defining and executing a complex, cross-functional transformation program and delivering the outcomes promised to your leadership and board.

Whether it’s a digital transformation, M&A integration, or some other big enterprise initiative, there’s an air of excitement around the opportunity to create immense value for your internal and external stakeholders. But there’s also a deep feeling of anxiety about whether you have the right capabilities and resources to scope out a program that you can actually execute, as well as the short-term impact this scale of change will have on your company or division. It’s understandable, given the challenges organizations face in executing big change initiatives.

Only 15% of companies in our recent survey achieved all of their key goals for their mission-critical projects.

In short: You’re going to be dealing with ambiguity and, to some extent, chaos. Fortunately, you can overcome the onslaught of obstacles and deliver on the strategic promise of transformation by evolving your PMO to be more agile and resilient.

Key Challenges and Considerations for Managing Transformation

Based on what many of our clients are going through, as well as our experience and expertise in delivering transformation and change programs, we’ve identified multiple overarching factors that must be considered. And an agile mindset is key.

Uncertainty about what constitutes the transformation. The target state has been defined in the strategy, but it’s almost never completely clear how to get there—at least in the early stages. Not every aspect of the transformation can be cleanly defined as a project. And some facets of transformations might not be defined as projects but are just as important: culture and behavioral change, leadership alignment, employee sentiment, and business-as-usual (BAU) activities, to name a few.

Transformations typically constitute a pipeline of programs, subdivided into initiatives and owners across the entire organization. Knowing how each of these smaller components are tracking as well as their interdependencies and overall impact on the transformation, is important so that you can understand the overall health of the transformation.

Understanding of people and financial constraints. Given your available resources and finances, you need a clear sense of how much of the transformation and/or change program can run concurrently. This is especially important because not all aspects fit into well-defined projects, which means there’s a greater need to understand resources and finances at a holistic level.

Funding the transformation. In many cases, transformations require process optimization, automation, and digitization to free up resources and funds that can be reinvested into the more innovative elements of a transformation. And this requires defining and managing complex business cases.

Real-time communications to maintain momentum. It’s becoming increasingly important to openly and transparently share all aspects of the transformation to the impacted organization or functions and even more to “show and tell.” Sharing even the smallest of wins with all those impacted will encourage everyone to stay the course.

Navigating complex data streams to deliver meaningful insights. Rather than a neatly defined set of distinct projects, most transformations involve a variety of different initiatives as well as culture change. This means the variety and complexity of data that a PMO must deal with renders traditional reporting frameworks, which purely focus on project status, inadequate. Additionally, the visualization of the data becomes even more imperative.

Driving progress without adequate tracking of milestones as they’re reached. The PMO needs to pivot its overall mandate from tracking and reporting progress to driving progress by:

• Garnering alignment at all levels
• Driving culture change
• Identifying and quickly resolving systemic impediments and conflicts
• Sustaining the drum beat of the transformation

Planning for a Successful PMO Evolution

In light of these factors, how should the PMO evolve to better manage transformations and change within your organization? Here are six important ways to improve your ability to execute with agility.

Incorporate more capabilities than what a typical PMO constitutes.

Ensure that change management (including leadership alignment), communications, and data analytics are an integral part of the PMO capability. This helps the PMO to drive culture change, communicate widely and regularly, and analyze varied and complex data. It also enables the PMO to create meaningful insights and visualizations so that everyone can track the transformation journey.

Embrace the principles of Agile delivery.

This allows for agility in decision-making and course correction, as teams continuously recognize success stories and adjust priorities along the way.

• Instead of projects, define workstreams with common themes or outcomes across functions.
• Define multi-skilled (think cross-functional) teams for each workstream.
• Define outcomes at an overarching, transformation level as well as for each workstream.
• Create backlogs of actions that can be reprioritized in alignment with the overall transformation.
• Align all workstreams to the same sprint cadences, which allows you to quickly identify and resolve systemic impediments, leading to less wasted effort.
• Reduce layers of data flow and encourage transparency.

Reduce the administrative burden of tracking and reporting that a traditional PMO prescribes.

Allow each workstream to manage its initiatives and actions using whatever tool or framework they’re comfortable with—as long as they align with the overall planning, delivery, and communication cadence.

Use a central, easy-to-set-up tool such as RGP’s customized Smartsheet tool that makes it easier to track workstreams and provide meaningful visualization of the transformation program. This should incorporate not only the progress of each workstream but also overall change adoption and employee sentiment.

Embed the right financial analysis capability (people and tools) to track the overall business case.

This requires understanding the overarching goals of the transformation and identifying workstreams related to cost optimization versus those related to innovation and growth—and accurately tracking operational as well as capital cost movements and returns.

Use dynamic resource allocation.

Defining resourcing needs for each of the underlying workstreams and dynamically allocating resources is key to a successful transformation, using tools to visualize resource allocation, demand, and supply. In most cases, daily BAU activities also need to be balanced with transformation activities, so determining realistic workload expectations is also key.

Take advantage of social collaboration platforms, employee engagement portals, and other digital communication tools.

Share successes, key updates, and overall progress of the transformation frequently and widely. This is important for maintaining momentum and ensuring that everyone involved and impacted remains informed, aligned, and engaged.

Transformations will always be complex, messy, and more than a little stressful—change is hard. But by evolving your PMO to manage transformations instead of programs and projects, you’ll be able to execute on strategy with a lot more clarity, agility, and board-pleasing impact.