pmo turnaround: three frameworks within 30...

PM World Journal PMO Turnaround: Three Frameworks within 30 Days Vol. II, Issue VII – July 2013 by Abel Stephen, Niyati Reddy, Anna Marie www.pmworldjournal.net Case Study Thompson and Reena Bhavsar

© 2013 CalOptima www.pmworldlibrary.net of 15

PMO Turnaround: Three Frameworks Within 30 Days

Three frameworks that facilitated the turnaround of the Project Management Office

(PMO) at a local public agency.

By Abel Stephen, Niyati Reddy, Anna Marie Thompson and Reena Bhavsar

CalOptima

BACKGROUND: Based in Southern California, CalOptima restructured its Project Management Office (PMO) in January 2013, from an area that was historically a PMO in title into a PMO that could deliver measurable business value. CalOptima was created in 1993 by the Orange County (Calif.) Board of Supervisors as a county organized health system (COHS). It manages Medicare and Medicaid for low-income families, children, seniors and people with disabilities. Though CalOptima manages programs that are funded by the state and federal government, it operates independently under the leadership of a board of directors made up of members, health care providers, business leaders and local government representatives. A $1.5 billion public agency, CalOptima is the largest of six COHS plans in California. Since 2008, CalOptima’s efforts to formalize project management included the creation of a Strategic Development department, and then added PMO when it formed the Strategic Development and Project Management Office. Finally in 2011 it was moved into Operations and became a standalone department known as the Project Management Office. CalOptima’s PMO implements strategic planning initiatives ─ and manage agency-wide program initiatives ─ regardless of scale. The PMO department follows the mission and values of CalOptima thru each of these initiatives. The PMO team made significant strides in managing projects. In 2012, though the head of the PMO departed, the rest of the team helped CalOptima successfully launch eight agency-wide projects, three key initiatives and dozens of smaller projects over the course of a year. The extraordinary effort executing multiple large projects focused on completion, not on implementing required processes and metrics for measurable success. It used an ad-hoc operational approach to accomplish what needed to be done per the agency. The exclusive focus on doing what the internal client wanted ─ unfortunately did not position the PMO business value for CalOptima. Though the PMO had a stated focus on excellence, the effort was not optimal for accomplishing the agency’s goals. Outside of

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the PMO, the agency had a diffused set of project management experts ─ all with varying degrees of actual project management education, experience, formal authority and reporting structures. We knew that rebuilding a PMO is “much more difficult than to create one.i” We realized at the onset that our agency’s historical expectations (and culture) had to be managed and realigned to the new processes. THE ABCD APPROACH The PMO team decided that creating three frameworks within the first 30 days was necessary to establish some quick, operational wins collectively as a team ii. It needed to be done concurrently, as we developed long-term strategies, tactics and communications to turn around our prior PMO efforts. “Having experienced attempts at the PMO over the past three years, it made sense to look for quick wins to build credibility, while building a lasting foundation for long-term success,” said Anna Marie Thompson, Project Manager at CalOptima. Our framework began with identifying and accepting as a group, some foundational project management-specific definitions on quality and related terms. The PMO team discussed the elements below at length and reached a consensus that these were vitally important as a day-to-day operational reference for our team:

A. Quality is the conformance to what the customer wants or requires. “Note that the concept of quality does not necessarily require perfection. Quality is more about doing what was agreed to be done, rather than being perfect or exceeding expectations.” iii This naturally evolved into a discussion about who are the PMO customers.

B. Quality policy is the overall quality intentions and direction of an organization in regard to quality, as formally expressed by top management. This revealed that our executive team had to have an organizational intent for agency-wide quality, and not just limited to “projects.” As such, we were impressed that the new CEO revised the reporting structure of our PMO so that it would have better agency-wide visibility and accountability.

C. Quality management is that aspect of the overall management function that

determines and implements the quality policy. At this point, we defined that for the purposes of the PMO, management would mean the ability to direct activities and measure results. In essence, CalOptima’s PMO staff efforts are not exempt. We had to identify ways to measure and record our own efforts and results.

D. Quality system is the organizational structure, responsibilities, procedures,

processes and resources for implementing quality management. It was clear that





we would have to reassess how our PMO resources would be deployed, in contrast to prior practice at the agency.

In summation, we agreed that we needed to:

1. Identify who the true customers are. These were often a matrix of subject matter experts at different hierarchy levels, from many departments and areas within the agency.

2. Assess the true customer’s wants and requirements. 3. Secure buy-in from the agency’s internal stakeholders. 4. Determine what, if any, controls exist or need to exist for the processes. 5. Deploy our strategies and tactics.

To facilitate communication, we termed this the “ABCD Approach.” FIRST FRAMEWORK: The ABCD Approach: A Is for Assess As previously noted, quality is conformance to what the customer wants or requires. However, equally important for our PMO success was for us to understand that the “voice of our customer” may tell us when there is an issue, but not why there is an issue, nor a solution. In order to move towards understanding the causes behind the customer voice, we had to be careful that we did not simply stop at the “audible” customer voice, but with intent to uncover the true needs. We had to manage this exercise of “assessing” as a starting point to manage quality itself. To that extent, we acknowledged that the true “voice of the customer” is discovered when:

Clear customer requirements are identified (usually through deliberate discovery).

Necessary conditions are set for customer satisfaction.

It is translated into performance characteristics that define the product or service. Next, we looked at the “voice of the process,” i.e., the aspects of processes that allowed for analysis and control. We specifically wanted to:

Identify some meaningful target process indicators to be measured.

Figure out a way to collect process and plot performance data on easy to understand visual control charts.

Establish some baseline state of the process to possibly control, respond to and eliminate variations.





Have the overall process broken down so that, if necessary, we could shift the process (e.g., bring it to newer customer specifications).

Reduce observable causes of variation.

Monitor and maintain “target” process performance easily through planned data collection and analysis.

What we as the PMO understood at this point, was that everyone agreed that a PMO was necessary. But not everyone understood the basics or the discipline of project management, including internal stakeholders, who were assumed to be functioning as experts in the project management discipline. These included personnel project managers within PMO, personnel in information services (technology), the agency’s business units and even outside consulting agencies. Project Specialist Reena Bhavsar in PMO at CalOptima said: “Many times project managers are mistaken for subject matter experts, and we do often go above and beyond PM duties to help move the project along. I think as dedicated employees, going above our roles is natural to help our colleagues as team players, and to help with a smooth transition for a change in program or policy. But it is important for stakeholders to understand what our duties as PMs truly are, on what we should be spending our time, and how we can make a difference in their projects.” We began our efforts with our PMO customers. Our client’s understanding would impact the effectiveness of project management and the speed and direction of our PMO restructure and accomplishments. It was critical to communicate to our clients, the project life cycle and how much PM time (on average) each life cycle phase should consume. After all, the project lifecycle is fundamental to making a distinction between projects and non-projects iv. A survey was the obvious choice for collecting the organizations’ PM “voice” on the project life cycle. But we also thought it would be useful to take the results and funnel them into a model that reflected DMAIC (define, measure, analyze, improve and control) for the overall effort to be practical long-term. DEFINE: Our survey broke down the project life cycle ─ Initiate, Plan, Execute, Control and Close ─ and asked the different sets of experts how they thought PMO resources should be expended across these specific project management processes. We created an Excel spreadsheet model for our survey data. MEASURE: Fit the structured data into a graph of polynomial curves for measurement. ANALYZE: We could then analyze for comparison against each customer’s specific “voice” on this issue, along with the actual hours and resources spent on projects. This would help us predict hours for future projects as well.





IMPROVE AND CONTROL: Afterwards we could use the Excel model as conversation points to go back to the different customers regarding their projects. Whether their projects were successful or not, we could determine the life cycle phase they should have spent their hours and resources on, to help ensure success. This became a variation of a control chart useful for improving and controlling schedule and resources allocation. Below are examples of the Excel model, with the DMAIC approach to capturing and using the customer voice regarding project life cycle. DEFINE:

(All models, data and charts are being refined at time of publication.)





MEASURE:





ANALYZE:

IMPROVE AND CONTROL:

The ABCD Approach: B Is for Buy-In We let our management know that they needed to publicly sponsor our efforts under the umbrella of a “quality policy,” i.e., the overall quality intentions and direction of our organization as regards to quality. We’ve set the expectation that the PMO needs an “executive sponsor” to be successful. The PMO team should not rely solely on our





ability to persuade and influence the agency into obtaining support for the PMO’s new processes. This approach worked well, as the agency historically would have an executive sponsor for agency-wide initiatives. The hope was that the efforts by the PMO were not seen as an isolated undertaking but one that was part of the agency intent. It would foster collaboration and support from both within the PMO and other departments throughout the agency. Project Management Lead Niyati Reddy at CalOptima said: “The buy-in approach is very important. Establishing a formal project charter and scope of work are critical drivers. Buy-in needs to be a sign-off. This type of approach needs to be accepted by all parties in and out of PMO.” The ABCD Approach: C Is for Control We then emphasized that the PMO would need C-level sponsorship to spearhead “quality management.” The PMO would own or delegate those aspects of the overall management function that determines and implements the quality policy. The ABCD Approach: D is for Deploy The actual effort to deploy is where we saw us arriving at a system ─ a quality system ─ within which resides the agency-wide structure, responsibilities, procedures, processes and resources for implementing quality management. Our team recognized that we – as the PMO – needed to align our efforts toward:

A pure quality system that assures expenditures to meet the customers’ requirements, are indeed for those activities that leads to a conforming product and service.

A quality system should only have those expenditures necessary for conforming activities to produce the end product and service.

Next, our PMO team solidified a major insight:

One major failure of prior PMO attempts was tasking the PMO staff with activities that did not contribute to the stabilization and efficiencies of the PMO.

The key to our agency was then to quantitatively measure, on a quarterly basis, the percentage of the PMO activities that meet and contribute to the PMO model of repository, coaching and enterprise that is most appropriate for CalOptima.

By proactively reducing activities unrelated to the PMO and PM functions for the PMO staff, we began institutionalizing quality processes. The long-term end result would be a PMO that actively builds project efficiencies.





For this effort, we undertook a formal process to begin recording the PMO staff’s weekly activities in a PMO Operational Summary Report, which was updated and reviewed each week. The chart below illustrates that the administration line was almost 40 percent of the PMO staff’s overall workload.

After reducing activities that were unrelated to the PMO and PM function, the chart shows that administration fell to 1.16 percent of the overall workload.

This was a quick and palpable win! “The mandate to reconstitute the PMO is showing the results we’re looking for: shared urgency, measurable accountability and a clear approach to govern process excellence. This is the beginning of a strategic and sustainable effort,” said CalOptima Executive Director, Operations Ruth Watson. CALOPTIMA PMO OPERATIONAL SUMMARY REPORT:

SECOND FRAMEWORK: Strategic Intent: We recognized that beyond the survey and tools referenced above, we needed to have an elevator pitch script that the entire PMO staff could understand and draw upon as needed, as we began interacting across the agency in our new role. To that end, we developed our PMO Strategic Intent document. The document was intended to formally serve as a distilled digest of our general understanding of present challenges and targeted solutions to turn around our PMO. It also serves as the central reference from which the strategic map, tactical plans and related efforts will be derived. Finally, each member of the PMO is expected to use the Strategic Intent document, as the primary resource to script their own individual elevator pitch – fitting their individual personality and style – to communicate the purpose and value of the PMO to the





agency. The document guides our PMO towards optimal effectiveness within the organization. Strategic Intent Document Our PMO currently offers its customers an “all or none” proposition. Due to organizational expectations for complete service ─ and the reality of significant resource constraints within the PMO ─ either the PMO takes on a project or it refuses it.

Taking over the entire project instituted low-quality as a norm since PMO capacity only allowed for quality to be inspected-in, rather than built-in. The PMO used to react to fix issues, rather than preventing root causes. In other words, the PMO takes on each project as a group of activities and deals with consequences as they arise, rather than having an established process which defines, measures, analyzes and controls the activities from their onset. Historically, this had yielded projects with significantly higher costs, delays and scope errors, than originally anticipated. Refusing to take on a project eroded trust in the intent of the PMO. No longer was it a useful, dependable service available for easy consumption. This contributed to the expectation that PMO should largely be utilized as administrative coordinators (e.g., after-the-fact of poorly planned project initiation, to schedule meetings, provide minutes, etc.).

PMO must manage processes with quality built-in, not inspected-in, to best provide meaningful value to CalOptima.

KEY: Quality Built-In, Not Inspected-In The PMO audit of prior strategies and existing processes found missing the exercise of identifying the minimum operational components (execution engine). The process when implemented with disciplined accountability, would build-in quality towards continuous and measureable improvement. In light of existing challenges, this execution engine should be comprised of the Work Breakdown Structure (WBS), Critical Path and Earned Value and will holistically be the central process for PMO staff’s effective excellence. KEY: Execution Engine = WBS + Critical Path + Earned Value

PMO must also leverage the execution engine as a touchstone around which the PMO can create and offer scalable services.

These services are within governance, consultation and support. The success of these services requires assignment of tasks which are non-essential to the PMO





execution engine, to be transferred to the PMO clients’ delegates (client PMs, vendor project planners, etc.). This will optimize leverage capacity by:

Creating a hybrid organizational matrix.

Create the adoption of standardization via real-time application and accountability.

Having greater institutional focus on measurable quality as the norm. KEY: Scalable Services = Governance + Consultation + Support

CalOptima PMO Service Matrix:

*Administrative Coordination: We expect that process maturity will allow the consideration and institution of PACER and Roles as a requirement for all meetings. PACER: Purpose, Agenda, Code of Conduct, Expectation, Roles and Responsibilities. Roles are: a team leader who sets guidelines and goals; a timekeeper who ensures deadlines are met; a scribe who makes ideas visible on the board; a facilitator to keep the team focused; a spokesperson who reports to others; and a recorder to take notes.

THIRD FRAMEWORK: CalOptima Strategy Map: From the Strategic Intent above, we derived the tentative final framework that the PMO, the agency and its leadership would all understand. We created the Strategy Map below:





Conclusion: CalOptima’s PMO team assessed ourselves first, and acknowledged that our capabilities needed to methodically move from basic to established, then institutionalized to strategic, to finally being best-in-class. In this way, we create and deploy intangible assets such as customer relationships, information technologies, employee skills and knowledge. As well as a corporate culture that encourages innovation, problem-solving and general organizational improvements v.” Our efforts evolved into the frameworks below: First Framework: Our initial framework was geared for practical, quick wins through the ABCD Approach which included the:

PMO Operational Summary Report to control and measure weekly PMO activities.

DMAIC-based customer voice survey Excel model to measure actual project life cycle conformance to the ideal; the ideal being what is revealed by actual practice or through expert opinion.

This provided immediate focus to both the PM as well as the business units that were engaged.

The ability for the PM to be objectively measured in terms of their contribution to the PMO supportive activities eased much of the PM’s uncertainties about how they should do business.

Likewise, the Excel model captured, quantified and visibly demonstrated the gaps between the different PM experts with respect to the time and expenditure into the various phases of the project life cycle, proved to be helpful. It gave the PM’s a





touchstone which could be easily communicated to business units. The projects were now being deliberately planned to conform (i.e., the conformity index shown by the model) to actual hours observed in practice for the most successful projects or what was predicted by expert opinion. Furthermore, the Excel model can be used at the close of every project or even in different phases of the project life cycle to determine conformity. This could help determine the variance from the plan, eventually contributing to portfolio management discussions and ideas. Second Framework: The first framework helped shape the second ─ Strategic Intent ─ which was refined into the PMO Scalable Service Matrix. It clearly showed where the PMO should focus in order to fulfill governance, consultation and practical support. The necessity of the executive engine (WBS, Critical Path and Earned Value) is at minimum becoming the proverbial “line in the sand.” Either business units will afford the PM the time needed to create and operate the execution engine, or take full responsibility for the lack thereof in their projects, as well as the consequences. Third Framework: Lastly, the Strategy Map is the organizationally visible road map which is not only operationally necessary; it also serves to build confidence in the organization that the PMO has clear direction within the value chain of the agency. We noted at the outset that rebuilding a PMO requires much more than creating one. As with any turnaround effort, the hardest part is simply the initiation. And, of course, the difficulty is compounded by not knowing where to begin. We believe that these three frameworks ─ created and executed within 30 days ─ may be useful in answering the “how and where to start” when setting in motion the turnaround of any PMO.

References:

i. Alderton, Matt. (2013, February) PMO 2.0. PM Network, 27(2), 48–53. Retrieved from http://www.pmnetwork-digital.com/pmnetworkopen/201302?sub_id=nVUl0J5yFYjN.

ii. The Staff of the Corporate Executive Board. (2009, February 20) Avoiding the Quick Wins Paradox. Business Week. Retrieved from http://www.businessweek.com/managing/content/feb2009/ca20090220_344589.htm.

iii. Centers for Disease Control and Prevention. (2006) Project Quality Management. CDC Unified Process Practices Guide. 1–5. Atlanta, GA: Author. Retrieved from http://www2a.cdc.gov/cdcup/library/practices_guides/CDC_UP_Quality_Management_Practices_Guide.pdf.

iv. Patel, M. B., & Morris, P.G.W. (1999). Centre for Research in the Management of Projects, Guide to the Project Management Body of Knowledge, University of Manchester, UK. (p. 52).

v. Kaplan, Robert S., & Norton, David P. (September 2000). Having Trouble With Your Strategy? Then Map It. Harvard Business Review. Retrieved from: http://hbr.org/2000/09/having-trouble-with-your-strategy-then-map-it/ar/1.



http://www.pmnetwork-digital.com/pmnetworkopen/201302?sub_id=nVUl0J5yFYjN

http://www2a.cdc.gov/cdcup/library/practices_guides/CDC_UP_Quality_Management_Practices_Guide.pdf

http://www2a.cdc.gov/cdcup/library/practices_guides/CDC_UP_Quality_Management_Practices_Guide.pdf



About the Authors

Abel Stephen, Niyati Reddy, Anna Marie Thompson, Reena Bhavsar Abel Stephen is the Director of Project Management at CalOptima, a $1.5 billion government agency in Orange County, California that administers publicly funded health coverage. Abel is responsible for creating and executing strategy and operational design for CalOptima’s PMO. He has over 15 years of experience in project management, strategic planning and solution architecture and design. Prior to CalOptima he was the Chief Operating Officer of Evolutionate where he instituted the project management process as a strategic discipline. Abel has a Bachelor of Science in Biology from the Brooklyn College of the City University of New York. He is a member of the Project Management Institute (PMI). Abel can be contacted at [email protected]. Niyati Reddy is Lead Project Manager at CalOptima implementing and monitoring the agency’s strategic management goals, and strategic process improvement. Before CalOptima, Niyati was an Advanced Consultant for GME Solutions. She has nearly a decade of experience in health care management and has a Master of Health Administration and Management from the University of Southern California. She has a Bachelor of Science in Child Development/Psychology from California State University, Northridge. She is an active member of the Project Management Institute (PMI) – Orange County chapter. Niyati can be contacted at [email protected]. Anna Marie Thompson is a Project Manager at CalOptima. She provides leadership, coordination and staff support for the development and implementation of major projects at CalOptima. Anna Marie has over 15 years in financial reporting and accounting management. She has extensive experience in process improvement, period end closing process and analysis, cost control and people management. Prior to CalOptima,



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Anna Marie was a Senior Manager of Financial Reporting at Volt Telecom Group. She has a Bachelor of Science in Accounting from Viterbo University in La Crosse, Wisconsin. Anna Marie is a member of the Project Management Institute (PMI) – Inland Empire chapter, and a long-standing officer with Toastmasters – Well Said Club #5372. Anna Marie can be contacted at [email protected]. Reena Bhavsar is a Project Specialist at CalOptima managing regulatory initiatives projects, and works with the PMO to implement standardized processes. She has over seven years of health care administration experience, including project management, strategic planning and process improvement. Before CalOptima, Reena was a Development Associate at St. Joseph Hospital. She has a Bachelor of Science in Business Administration from the University of California, Riverside and a Master of Science in Health and Strategic Communication from Chapman University in Orange, California. Reena is a member of the Project Management Institute (PMI) – Orange County chapter. Reena can be contacted at [email protected].





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