From the beginning of time project managers have had three main focus areas in their PMO that have been the staples of how we deliver projects; Scope, Schedule, and Budget. Those three main focus areas are in the DNA of every project manager. When a project manager is assigned a project, they focus on those critical items from the very beginning and throughout the life of the project. Today, those items are still necessary, and key conversation areas we continue to have with our executives.
However, that is going to change. Sorry, I mean, that has to change! Long gone are the days when we only think about those three items, we need to expand our business acumen and consider the bigger picture and how we move our companies forward.
Let me explain:
First, let’s get some definitions out of the way.
Iron triangle: This is a model that consists of the project scope, schedule, and budget. Resources are also added to this model, but for the most part project managers think scope, schedule, and budget. This term has been around for years, we get it & we live by it.
Now let me introduce a new term. Business success metrics: These are metrics that measure such things as business value, customer satisfaction, governance, organizational change management, etc. These are relatively new to project management, but something businesses have relied on for years. For example, think about the JD Power ratings and how Ford® trucks have been at the top of that list for years.
What do you think? Still wanting more? Check out Bill’s webinar on the topic here.
So, what is a Balanced PMO?
A Balanced PMO is a PMO that balances project trade-off decisions across both the iron triangle and key business success metrics. Project trade-off decisions are best described as scope, schedule, and budget, which project managers have been using for years, but when you think about a balanced PMO, you start adding business success metrics to that equation.
Most PMO managers focus on the iron triangle and not business-success metrics, and consequently do not run a balanced PMO. When PMO Managers allows this to happen, they are making the same mistake over and over, and are not providing as much value to the company as they could in the projects they release. Moving to a balanced PMO is a simple matter of giving business success metrics the same consideration as the iron triangle items on your project trade-off matrix.
So, what does that look like?
Traditional Project Trade-off Matrix
Look familiar? We have been using that model for years. You select, one Fixed item, one Choose item and one Adjustable item. So, I could say I am Fixed on my Costs, I choose Scope, but I am adjustable on my Resources. In this matrix, Time was not selected on any of the three, and therefore you would default to adjustable. The idea holds true as well, when we look at the Balanced PMO trade-off matrix.
Now, let’s look at that same matrix adding the business success metrics onto it.
Balanced PMO Project Trade-off Matrix
What do you think? Yep, it is a bigger matrix, but the same principles apply, you still only select one Fixed, one Choose, and one Adjustable, but the key to this process now is that you are choosing across a bigger category list. As noted above, anything not selected you would default to adjustable. Having those additional items on the matrix has you choosing the same focus areas, but across the eight categories, not just four(iron triangle). Look again, that is easy right? It is one way to force projects into looking across both business and project attributes, and moving away from just deciding off the iron triangle.
This is the Balanced PMO model! When we start making project trade-off decisions across both iron triangle and business success metrics we are going to make a huge difference to our businesses!
Ok, implement this new trade-off matrix for a while and see the difference it makes to your business. I think you will be surprised by how big an impact this little change has on companies. Once you use this model for a while, think about the next set of possibilities with this concept. Think about adding business metrics to your PMO maturity models, or to PMO reporting. There are endless possibilities of where you can incorporate this Balanced PMO concepts.
The Balanced PMO approach is a completely new way of making project trade-off decisions on our projects, and something I strongly recommend you implement in your business immediately!
Webinars (watch for free now!):
Tactical Guide for Building a PMO – How to Run a Successful PMO
Showing PMO Love Through Monitoring and AUtomation