The Project Management Institute recently commented that organizations are, in increasing numbers, seeing added value from appointing chief project officers.
According to Rebecca Langdon’s piece on Morgan International’s supply chain blog, the chief project officer (CPO) is responsible for providing governance over an organization’s internal projects. Specifically, he/she:
Chief project officers, which are more common in some industries than others, are sometimes seen as preferable to project management offices because project management offices may not have board-level influence and therefore can’t accomplish their strategic priorities.
Langdon pointed out that chief project officers are in the ideal position to raise the profile of the project portfolio, and to demonstrate the importance of projects to business development and maturity. “The CPO can also ensure that projects are resourced effectively. In organizations in which there is no chief project officer representing the needs of projects, projects might suffer for resources compared with other functions that shout louder,” she said. “A CPO is also a cost-effective option than a full-scale PMO.”
Jordan explained why having a project management office and rolling project portfolio management (PPM) into it doesn’t go quite far enough. “At best, the PMO is a subset of the accountabilities of a CIO or COO, and the focus and objectives of those functions reflect that. Sooner or later, that is going to send the message that PPM is not a top organizational priority, which in turn results in a loss of focus and a degradation of performance,” he said. “By creating an executive role responsible for project execution, an organization sends a very strong message. It is a visible commitment to the importance of portfolio management as a tool to deliver corporate results, and ensures that there will always be a focus on not just delivering those benefits this year, but also on improving the effectiveness and efficiency of the process going forward.”
When project management is elevated to this level of importance, it can no longer be viewed as optional by other business functions that may have their own processes. A chief project officer, said Jordan, makes it easier to manage initiatives in a multitude of departments, reduces the organization’s risk exposure, and drives lower costs, better results and a more engaged employee base.
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A strong chief project officer also removes the perception that PPM is limited to IT, and can assume responsibility for any PMOs that exist within the organization – folding them into an effective enterprise project management office (EPMO) that can leverage economies of scale and eliminate departmental politics.
“A c-suite executive can also help to expand the reach of project best practices into areas that have not historically been exposed to structured project and/or PMO structures, which will further improve the overall quality of project execution,” Jordan explained.
Jordan went on to discuss benefits realization. “For portfolio management functions, getting accurate information on the real benefits that a project is delivering is difficult because there isn’t the depth of access to finance or other line of business functions that is required,” he said. “An executive-level function can overcome those barriers and facilitate the flow of information.”
Enhanced project management career pathing is yet another pro of the chief project officer role. “Project managers often feel as though their career options are limited, either because there is no clear advancement path within the organization, or because the organization doesn’t value project management sufficiently,” said Jordan. “While only one person can be the chief project officer at any given time, the commitment to the function helps to reinforce its importance and demonstrates that career paths do exist.”
But c-suite accountability, in Jordan’s opinion, is the most critical advantage of the chief project officer role. “An executive-level owner provides the organization with clear accountability for success. Ask a CEO today what benefits their project management office is delivering and they’ll struggle to answer. There should be a clearly identified individual who is accountable for the portfolio and a single person who is ensuring that the PMO is delivering a return on the investment. We accept that in every other functional area of an organization, so why shouldn’t we expect the same from project execution?” Jordan argued.
In the last two years, the chief project officer role hasn’t seemed to gain all that much traction. But the companies that have fully embraced it are experiencing terrific results. In a new article on the UK-based business site Raconteur.net, Project Management Institute president and CEO Mark Langley cited the example of Telstra. The Australian telecommunications company recently hired its first chief project officer, Alicia Aitken.
“This was both a bold and logical move for the company, which has a history of commitment to project management and supporting the profession overall,” said Langley. “While there are many organizations that achieve project and strategic success thanks to having a project management office (PMO) or an enterprise project management office (EPMO), having a chief project officer can help an organization maintain a constant, forward-looking focus on connecting the project portfolio to strategy.”
Like other companies, Telstra struggled with an overemphasis on fixing past problems rather than preparing to be competitive in the future. Telstra’s chief project officer role is meant to address this issue. “The company’s EPMO is staffed with people who are experts in project management and can deliver on the promises of today. In contrast, Ms. Aitken’s role is more future-focused,” explained Langley. “Creating the CPO role was not a retitling of Telstra’s PMO or EPMO, it was a step beyond.”
For her part, Aitken is committed to raising the bar with respect to delivery and execution. “According to PMI’s research, $122 million of every $1 billion invested is wasted due to poor project performance – a 12 percent increase over last year,” she said. “The role of chief project officer was created to ensure we have professional project management as a standalone capability distinct from our engineering, IT or business skills. We want to safeguard our portfolio from this statistic. The better we can execute our projects, the more money we will have to invest in delivering world-class technology to our customers on a world-class network.”
Does your organization currently have a chief project officer? If not, has the topic ever come up? Comment below.