membership is not possible. Training upper management to use authentic com- munication techniques promotes open, risk-free communication about problems that may arise. PMO personnel can constantly be training in the latest project man- agement best practices, data-gathering procedures, and consulting techniques. For Means, the PMO can supply all tools necessary to implement the project process from project selection to the end of the project outcome life cycle. Pro- vide a way for managers and project managers to put a project on hold if it does not have sufficient resources. Provide planning tools to project managers and func- tional managers to help them determine the work they require of team members, and how they might adjust that to meet the needs of each member’s functional manager. Develop a process to enable communication about projects throughout the organization; the PMO can serve as the hub. The support group can acquire diagnostic tools such as PEAT to help them develop methods for closing gaps be- tween the present state of project management and a more desired future state. For Motivation, the PMO can point out the dangers of proceeding if projects do not have adequate resources. Holding both project managers and functional managers accountable for the utilization and satisfaction of team members helps to focus them on optimizing human resources. Rewarding the communication of bad news is one important way to reinforce this behavior. Provide feedback and coaching to upper managers on open, honest communication actions that sup- port authenticity and integrity about project work. When possible, the PMO can run as an internal business, dependent on charging for its services. This structure supports and motivates an achievement focus, instead of projecting a controlling atmosphere. Basic cultural assumptions derive from the status of project management in the organization. In organizations that recognize project management as a core business process, issues of performance support are actively under debate and consideration, even if they may be undecided. In organizations in which project management is seen as a cluster of competencies for people who happen to man- age projects, there are more likely to be blind spots about most of these issues. Communication and Information Systems Support Communication and information systems support, the seventh success factor, is supported by an updated project plan that allows all stakeholders to easily obtain project information. This factor signifies an environment in which it is easy for team members to communicate with all other project stakeholders. It depends on a management information system developed specifically to support project man- agement. The most important source of project information comes from project reviews, which need to be held regularly, and the findings need to be shared across the organization. 268 Creating the Project Office For Leadership, the PMO can specify formats for project documents designed for easy understanding by everyone, as well as methods of distribution and post- ing so they are easily accessible to all stakeholders. Specifying a liberal policy for open access to stakeholders by project team members helps support this success factor. To help the organization make the best use of project management knowl- edge, the PMO can aid in the implementation of a project information system, and facilitate project reviews at each major milestone and a final review at the end. In addition, it can evangelize and institutionalize knowledge management processes for project review data and lessons learned. The PMO can sponsor con- ferences or forums where interested and informed people gather to interact and share their insights. For Learning, train project managers and team members how to write clear documents and how to post them. Train project team members in communica- tions and how to optimize their contacts with stakeholders—competencies often lacking in technically trained project managers and team members. Reciprocally, also train stakeholders how to respond appropriately when approached by project members. Everyone should be trained to input data into any knowledge man- agement system, run the system, and use the output of the system. Project man- agers, team members, and upper management can benefit from training on how to conduct a project review and why it is important to prevent reviews from being formalistic and without real substance—or worse, a search for scapegoats. To sup- port a knowledge management system, the PMO can train project managers and team members how to input data from their project reviews and how to access data at the beginning of their projects to learn from other projects’ experience. For Means, the provision of templates for project documents and communica- tions supports this success factor, as does supplying an electronic system for posting documents, making them easily accessible to all stakeholders while maintaining se- curity and version control. Providing guidelines, e-mail addresses, phone numbers, and other appropriate access information is important to supplement the electronic database. In some cases personal contact may be more frequent than database ac- cess. Inform stakeholders who are on the list and request that they respond when contacted. The PMO can support the use of the formal system by providing re- minders, training aids, and help screens. Providing a project review process and tools to support it, designing the process carefully, and installing an electronic storage and retrieval system are all important supports for this success factor. Providing an in- formal community chat bulletin board for project managers and team members will be a first step in helping to develop a community of practice. For Motivation, the PMO can follow through to ensure all managers and stakeholders use the system, reward and recognize those who use it, and highlight consequences for those who do not. Reinforce proper contact behavior for team members by sharing observations and supplying personal feedback. Devise metrics Looking Forward 269 that make stakeholders accountable for responding to team member requests (and make sure those metrics lead to consequences when people do not respond to re- quests). Positively reinforcing proper use of the system will probably not be enough. Making it user friendly to promote use will go a long way toward sup- porting its use. Get explicit commitments that project managers, sponsors, and review board members will conduct project reviews and take action on their find- ings. If a knowledge management system is set up and its use is ignored, it will probably languish. There is no better way to extinguish desired behavior than to ignore it. Basic cultural assumptions that support this factor are espoused acknowledg- ment that information and knowledge management are important open processes for the success of the company. An inhibiting assumption would be that knowl- edge is power and everyone should closely guard their knowledge rather than share it. Another inhibiting assumption would link a need-to-know norm to knowl- edge based on position or status. Times of great changes place a huge burden on communication systems, which can either support or hurt the change initiative, depending on the values of its leaders and how well good communications are supported by the project office. Organization Support Organization support is the eighth success factor. This depends on how well the organization supports project management best practices. It includes supporting teamwork, applying a consistent project management process, and defining the role of project manager as a professional position with specific selection criteria and career path. This factor is a measure of important aspects of the organiza- tion’s culture necessary to support project management over the long term. For Leadership, the PMO can specify that rewards and recognition will con- sider teamwork as a crucial factor. Encouraging the use of one adaptable process across the organization, with variations based on project size, complexity, and type, helps to achieve common terminology and consistent expectations through project life cycles. Designating project manager as an official job title with a recognized ca- reer path is crucial. Project management as a professional position is supported by establishing a standard selection process, as is emphasizing that project man- agement is a core business process essential for business success. For Learning, the PMO can train managers to set goals for performance in terms of contribution to the project team rather than in terms of individual be- havior. It can provide training so everyone understands how to use the adopted project management process. The process can be further supported by training project managers in a curriculum that meets the needs of the type, size, and com- 270 Creating the Project Office plexity of projects they will work on. A certification process can qualify them for progressive levels of size and complexity as they gain training and learning on the job. All training can include technical process and techniques, leadership, and business skills. The PMO can provide learning resources to reinforce these factors over time. For Means, the PMO can develop a formal process that rewards teamwork appropriately. Design a process that can be modified depending on the size and complexity of projects. Develop a tailored curriculum for project managers to meet specific needs. Specifying or adopting a certification process based on prac- tice as well as formal education helps ensure that project managers apply their knowledge to create successful projects rather than just pass certification exams. Supply performance support tools to support a common and consistent use of the project management process throughout the organization. For Motivation, the PMO can hold everyone involved in the project ac- countable for the outcome, process used, and the work of the team as a whole. Enlist support from project sponsors and review board members to support proper use of accepted processes. Push for established career paths specifically for project managers. Rewarding project managers appropriately with competitive compen- sation and tying that compensation to certification as well as performance helps tremendously to support this success factor. Basic cultural assumptions related to this success factor are associated with the status and prestige of project management and of project managers in the orga- nization. If project management is considered a core business process, the organi- zation is much more likely to support professional education for project managers as well as a career path for them. If project management is viewed as a set of com- petencies to use tools and techniques rather than as an organizational process, you may still see support of project management education and career paths. What re- mains missing would be everything else that we have laid out here. Economic Value Support Economic value support is the ninth success factor. This is based on how well the environment supports entrepreneurial or business-focused behavior for the project manager and team. The includes projects’ being based in part on a business case that includes market analysis, cash flow, investment analysis, and a listing of all assumptions. When this factor is strong, project managers are fully involved in de- veloping the business case with the support of Marketing and Finance rather than just handed a final business case after the project is approved. The team reviews the business case as part of project start-up. The business case is developed into a business plan as part of the overall project strategy and planning process. The Looking Forward 271 core project team includes key members who will have primary responsibility for managing operations to achieve the project outcome. Information is collected re- garding the success of the project outcome, then it is compared to the business case as part of the lessons learned by the organization. This factor is a measure of how much the organization emphasizes return on investment and shareholder value as important requirements for project success. For Leadership, the PMO can specify a standard for developing a business case as part of the project selection process and require the involvement of Fi- nance and Marketing with project managers to make sure the cases are sound. Identify the role of the project manager in developing the business case and the project team in reviewing the case as part of the project start-up. The PMO can strongly mandate that members of the core team include a key representative of those responsible for operating the project outcome to promote a more holistic development of the total project venture. Developing a review system for an op- erate-and-evaluate outcome phase of the project and incorporate learning into the project review system will go a long way to broaden the perspective from project-centric to venture-oriented for creating shareholder value. For Learning, the PMO can develop business acumen among project man- agers and upper managers involved in project selection. Consider simulations and what-if analysis case exercises to develop the business acumen of all project man- agers and team members. This training encourages all team members to develop a commercial mind-set and make decisions with the commercial success of the project outcome in mind. For Means, providing templates and tools to carry out business case analy- sis helps to support it, as does authorizing the time needed to do the job. Further support comes from providing performance support tools to promote translating business cases into project goals and specifications, and incorporating them into project plans. Use these tools to supply inputs to decision support systems dur- ing project execution. For Motivation, the PMO can hold the relevant actors responsible for their roles in developing proper business cases. Engaging the team in a discussion about the business goals for the project helps incorporate these goals into the team’s be- havior. Holding the team responsible (along with other organizational associates) for the business success of the project provides the natural consequences to rein- force venture-oriented behavior. Holding the project manager and team account- able for creating a project outcome that meets the commercial goals set out in the business case helps to promote the development of more realistic business cases. A basic cultural assumption supporting this factor is that everyone can and should influence the economic profit of the organization. Another is that project management is connected to the process of asset utilization that is important for 272 Creating the Project Office business success. This connection is very evident in a company like Chevron (now ChevronTexaco) where capital expenditures are so large that efficient deployment of capital is crucial and tightly connected to a strong project management process (Cohen and Kuehn, 1996, 1997). This success factor may be inhibited by profes- sional values that favor technical definitions of success rather than business defi- nitions. It may also be inhibited by an internally focused process culture in which economic profit is guaranteed through regulation or some other monopolistic mechanism. ChevronTexaco represents a good example of what to expect when a PMO sets out on the long journey of embedding project management success factors into the organizational culture. The Chevron side of the company has long been a champion of promoting a project management process. The Chevron Project Development and Execution Process (CPDEP) is acknowledged in the industry and widely used and respected within the company. Chevron contributed to the best practice database for PEAT. Yet it took a long time for the company to get where it is today and it continues to develop and evolve as a project-based orga- nization. CPDEP was developed in 1993 as a response to benchmark data col- lected between 1989 and 1992 that showed Chevron ranking very low compared to its competitors in the efficient and successful utilization of capital (Cohen and Kuehn, 1996). In an industry that is as capital intensive as big oil this was a serious problem. CPDEP emphasized proper project selection as well as implementation and evaluation—pick the right projects plus execute projects right (Cohen and Kuehn, 1997). As the process was developed and refined, managers responsible for spon- soring and reviewing projects as well as project managers were trained in the process. The introduction met the usual resistance in the organization and a group was developed to train, consult, and support the process organizationally. This group, the Project Resources Company (PRC), focused on the larger more strate- gic projects. By the late 1990s it was evident that CPDEP was taking hold for larger projects, but was not widespread in the rest of the organization. The PRC developed a CD-ROM training program to introduce CPDEP training to a wider audience. Live CPDEP training was expanded through the Human Resources or- ganization to include both formal and accidental project managers—people with the title and those who had just found themselves responsible for projects— throughout the organization. Today there are still parts of the former Chevron organization that are in the process of adapting CPDEP to fit their needs. Now that Chevron has merged with Texaco, the company has a whole new group that will need to incorporate this process and the supporting success factors into their organizational culture. It seems that the process never ends, or at least everyone involved needs to realize that it will Looking Forward 273 take a long time. This started at Chevron in 1989. It has been going on for over twelve years. It is not complete, nor will it ever be. Evolving circumstances and the changing environment mean that the cultural transformation will be an ongoing process of aligning and mobilizing the organization around best practices and the success factors as they evolve to fit the business needs of the organization. Conclusion: Leading Strategy into Action Through Project Management This chapter explains the structure and dynamics of organization behavior and cultural change necessary to consolidate a PMO in any organization to accom- plish its potential for adding value to the business. It suggests a concrete, coordi- nated set of actions based on PEAT and L 2 M 2 that will help to reinforce behaviors necessary to create an environment for successful projects. These actions increase the potential for environmental changes to become embedded in the organiza- tional culture. These suggestions are not meant to be exhaustive, they simply demonstrate the importance of recognizing the systemic character of organiza- tional change at the technical, behavioral, and cultural levels. This complicates the role of a PMO in any organization if it is to be truly suc- cessful. While the PMO can provide Leadership, it also influences leaders through- out the organization to support the project environment. Training to provide Learning, a classic function of the PMO, is not just for project managers anymore. It has to include team members and all influential stakeholders and suppliers of projects so as to treat the whole project system and promote behavior change and development toward organizational culture change. A successful PMO has the sta- tus, influence, and authority to make sure that the Means and Motivation exist to support all aspects of desired change toward a more successful project system. This includes many areas that are outside the traditional sphere of a PMO, such as changing reporting relationships, budgeting resources, and influencing the perfor- mance management system. True success will be quite a challenge! To invest in this challenge effectively will bring impressive returns because project management is much more than a set of competencies, tools, and tech- niques to organize discrete packages of work. Project management is a core busi- ness process essential for implementing the strategy of any company. Through its project portfolio, any organization is creating its future just as its present success is based largely on the project portfolio of its past. Thus creating an environment for successful projects is essential for improving business results. Embedding these PEAT success factors in the organizational culture will create a culture that sup- ports leading strategy into action for business success. 274 Creating the Project Office Summary This chapter lays out suggestions for how to drive the process of transforming the organization’s enterprise project management to its ideal state. It demonstrates ways to make the change stick and embed enterprise project management into the culture of the organization. We suggest that the principles of enterprise project management must become habits for everyone in the company to reach final suc- cess. A framework is presented that focuses on a combination of action areas. These include Leadership to define the change, Learning to provide the knowl- edge and skill necessary to support the change, Means to supply the resources for the change, and Motivation to reinforce the change. These are then applied to the important success factors necessary to support enterprise project management: Strategic emphasis Upper management support Project planning support Customer and end-user support Project team support Project performance support Communication and information systems support Organization support Economic value support The complete successful change agent • Invokes a project office to take on the role of leading the change • Provides the learning to support the new ways • Ensures the resources and all necessary means are in place to carry it out • Provides motivation • Uses a framework that supports action toward the ideal vision of enterprise project management • Realizes that making change stick requires concerted attention and continuous efforts applied systemically across the organization Looking Forward 275 This chapter adds a few concepts and metaphors aimed at cinching the creation of a successful project office. The objective is to reach “the tipping point.” We describe templates from workshops that serve a convenient means to plan your approach and record your thoughts. The tale we tell is completed but yours may be just beginning. 1. 3. 4. 5. 6. 7. 8. 9. 10. 11. The tale we tell Refreeze Change Unfreeze 2. Pathway to Organizational Change 277 CHAPTER ELEVEN THE TALE WE TELL I t was a dark and stormy night. The cell phone rang. The boss wanted to know “Where is that .?”The program manager didn’t have a clue. The surprise was, this was the first time he heard of this request from the manager. So the dream was really a nightmare. Many dreams exist for what should be in a final chapter to pull everything to- gether for a book’s readers. Fulfilling that dream is especially difficult for such a complex undertaking as changing an organizational culture to realize the poten- tial of a project-based organization. We would love to try to put on one page, in a large font, the secret answer to creating a project office and leading organizational change—but our publisher would not let us take up a page and a half of blank space to make the point, and that is as close as we could come. The truth is that there is no simple or secret answer. The journey is long and arduous, but for those armed with the drive and support and guidelines herein, well worth the effort. Nonetheless, sometimes you may find that modifying or cut- ting short the journey may be the right thing to do under the circumstances. Greater value may be obtained by moving on to something else rather than spend- ing valuable resources on something that the culture may never support or reap benefit from. Taming your chaos starts with naming the resistance. So give real names to the obstacles—lions, tigers, and bears—the upper manager who doesn’t get it, the Y . implement the project process from project selection to the end of the project outcome life cycle. Pro- vide a way for managers and project managers to put a project. process. The process can be further supported by training project managers in a curriculum that meets the needs of the type, size, and com- 270 Creating the Project