Elevate your Project Management Office (PMO) to become one of the most effective strategic partners in your organization.
You have big plans for the new year. But how do you turn those plans into business outcomes while navigating the unexpected? It all starts with a mindset shift.
Adopting a sponsor’s mindset enables the PMO to drive value across the business, even when faced with disruption and economic uncertainty.
In this post, we’ll cover the importance of the sponsor’s mindset and how the PMO can use it to address the shifting needs of the enterprise.
How Does Your PMO Think?
The PMO has the potential to become one of your organization’s greatest strategic partners. Think of it as your strategic advisor, helping drive strategy to meet executive expectations.
How do you go from a traditional governing body focused on tactical execution to a strategic driver? It all starts with how the PMO thinks.
If your PMO thinks more like a project manager or governance function, they’re probably more concerned with output. Or they focus too much on execution excellence and end up creating rigid governance that slows down value delivery.
But a strategic PMO thinks in business terms. Its role is to help your enterprise improve performance through projects. The PMO is a business function at the end of the day.
How can the PMO help your enterprise improve performance through projects, while simultaneously being a strategic value driver? By adopting a sponsor’s mindset.
Understanding the Sponsor’s Mindset and Why It’s Important
Adopting a sponsor’s mindset requires changing the way you measure success. It requires you to focus on outcome rather than output.
This means projects are approved based on the benefits they deliver. Those benefits are the outcomes.
Output is whatever is produced by the project team. This can be a product, service, process, system, or any other deliverable.
Output doesn’t equal business value, though. Outcome does.
Output is simply a way of enabling those outcomes to occur.
This might sound very straightforward, but many people fall into the trap of focusing on output rather than outcome. Adopting a sponsor’s mindset can help the PMO ensure your time and resources are directed to initiatives that yield a desired outcome.
Moving from output to outcome
So, what does the sponsor’s mindset look like?
This mindset doesn’t just focus on traditional measures of project success, like whether a project is on schedule, under budget, and within scope. These are all important things to keep in mind, but there’s a bigger picture: the business outcomes.
The sponsor’s mindset considers things like capital, costs, and ROI to determine whether projects drive business value.
To enable organizations to be more successful through projects, PMOs must look at these elements and ensure projects are prioritized and managed with those outcomes in mind.
How does this look in the real world?
Now that we have covered the basics, let’s look at an example showing the difference between being output and outcome driven.
Output-driven scenario: If a project delivers on time, includes every feature in the scope, and only uses the planned resources, this is viewed as a successful project. This doesn’t take into account that the project could fail to deliver a solution that achieves the business outcomes.
Does this sound like a good approach? Compare it with the scenario below.
Outcome-driven scenario: A project is delivered a little later than expected, more expensive than planned, and missing a few features. However, despite these setbacks, the business achieved the desired benefits they expected from the project.
Of these two scenarios, which one is better for the business:
- The scenario that follows the plan 100 percent but doesn’t yield the intended benefits?
- The scenario that experiences setbacks but still results in expected business value?
Most would agree that business value is more beneficial.
This isn’t to say that output isn’t important, because it is. But how projects deliver value to the business should be what’s prioritized.
What This Means for the PMO
What does the PMO that’s adopted the sponsor’s mindset look like? It is a little different, but the goal is still to enable the organization to be successful through projects.
Under this mindset, the PMO has the responsibility to help project managers become outcome driven. This means helping them manage projects in a way that prioritizes outcomes over outputs.
A big part of this is changing the culture and governance structures.
It’s up to the PMO to create a project delivery environment that prioritizes outcomes. And that means empowering teams to deliver their best work using their preferred delivery method (Agile, waterfall, hybrid).
It’s the responsibility of the PMO to guide project managers not only to understand that, but also to manage their projects to put outcomes first. Most importantly, the PMO has to create a project delivery environment where the philosophy of outcomes over outputs is the norm, regardless of whether the work is being delivered through waterfall, Agile, or hybrid approaches. That’s what it means to think like a sponsor.
Ready to Learn More?
You know the benefits of adopting a sponsor’s mindset. We talked about why your PMO should become outcome driven. Learn how to transform your PMO into the strategic value driver of your organization.
Register for our upcoming webinar, “Elevate Your PMO: Adopting a Sponsor’s Mindset,” on February 20th, 2024. Join me and Dave Blumhorst as we cover the steps needed to turn your PMO into a strategic partner for your business leaders.