Business transformation is the lifeblood of every enterprise today. Without a constant flow of innovation, no company can expect to prosper – or perhaps, even survive. How should an organization manage business transformation? Who should be responsible for it? How will the team responsible know what projects to work on? These are questions that businesses ponder during our times of rapid change. Many Fortune 500 companies have learned the hard way that standing still is no answer to a business world in flux.
Traditionally, the department managing the flow of projects, including innovation initiatives, is the Project or Portfolio Management Office (the PMO). According to the Project Management Institute, 71% of companies have a PMO, a steady rise over the past ten years. Other recent surveys suggest that 90% of large enterprises, 88% of midsize companies, and 61% of small companies now have a PMO, too.
The PMO’s role is based on controlling the delivery of projects to tight planning and budgetary cycles, as well as ensuring enough resources are in place and enough time is allowed for execution. Additionally, the PMO goes about getting the right forms filled in or gathering the correct numbers required for reporting. PMO culture, where project managers are usually trained to be steadfast and compliant, rule setters, and followers, and often report to a midlevel executives, can feel like it is one of contradiction with the more fluid innovation focused environment of today. To date, PMO culture has been one that does not seem to encourage thinking outside the box or taking on the risk of failure. Above all, it does not embrace the uncertainties of digital disruption or the global economy.
Perhaps the answer to this dichotomy lies in creating a hybrid. One that allows for the flow of innovation to align with the structure of the traditional PMO. In essence, we’d have a team that could provide value in the most efficient way by applying the same steps of innovation to designing project portfolios. There is an opportunity to create an Innovation Project Management Office (IPMO).
With relatively little investment and operational disruption, the IPMO would ensure that experimentation flourishes, the right business ideas move forward, lessons are learned, change is measured on a long-term basis, and innovation and transformation become properly aligned to corporate business strategy.
Watch my on-demand webinar, How Innovation & Portfolio Management Office Underpins Corporate Success, to explore the topic more.