Application 2 – Annotated Bibliography
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The aim of this article is to enrich the current discussion on the valueof project management by presenting empirical results from aresearch on the performance of project management offices (PMOs).It proposes a novel approach to performance inspired by the Competing Values Framework (Quinn & Rohrbaugh, 1983).
Performance is often identified as the ultimate dependent variable in the literature on organizations. It is currently the focus of much attention in the project management literature (Thomas & Mullaly, 2008). The current focus on the topic seems to be driven by the belief that organizations will adopt project management only if it can be shown to generate value. After more than a half-century of history in the management of projects, its con- tribution to performance is still not acknowledged outside the group of professionals who believe in project management. The community of pro- fessionals and academics within project management associations are mostly preaching to the converted. However, outside of this community, the value of project management is not generally recognized, particularly at sen- ior levels (Thomas, Delisle, Jugdev, & Buckle, 2002).
A major piece of research on the value of project management led by Thomas and Mullaly has recently been completed (Thomas & Mullaly, 2008). They propose a framework where project management implementation and the value of project management are aligned within the organizational context through the notion of “fit.” The notion of value has been used to focus on what project management is worth to different stakeholders. The level of analysis is the organization in both Thomas and Mullaly (2008) and the pres- ent article. A major part of the research presented in this article was realized prior to the publication of papers and the monograph by Thomas and Mullaly (2008). However, efforts have been made to acknowledge their results.
The empirical work reported in the present article centers around PMOs. Centering the investigation on the PMO facilitates the empirical study of dif- ferent means of contributing to organizational performance and different perceptions of the value of these contributions. In brief, it increases the like- lihood of producing good results for several reasons. First, organizations that have PMOs have chosen to centralize several aspects of project management in and around these organizational entities, making project management more visible in the organization and easier to study. Studying the role of PMOs is, therefore, a practical means for studying project management as it is prac- ticed in these organizations. Second, PMOs are small units that are often located outside the major organizational units. They are thus in a position to be appraised by stakeholders in many other units. This improves the likelihood of
A Fresh Look at the Contribution of Project Management to Organizational Performance Monique Aubry, Université du Québec à Montréal, Montreal, Canada Brian Hobbs, Université du Québec à Montréal, Montreal, Canada
A better understanding of organizational per- formance and the contribution that project management can make is the aim. The article adopts the “Competing Values Framework,” a rich framework that is well established both theoretically and empirically but is not well known in the field of project management. The framework is summarized and applied in an empirical investigation of the contribution of project management in general and project management offices (PMOs) in particular to organizational performance. The examination of 11 case studies revealed multiple concurrent and sometimes paradoxical perspectives. The criteria proposed by the framework have been further developed through the identification of a preliminary set of empirically grounded per- formance indicators. The empirical results con- tribute to a better understanding of the role of project management generally and PMOs specifically. They also demonstrate the useful- ness of this framework for the study of project management’s contribution to organizational performance.
KEYWORDS: organizational performance; competing values framework; PMO; value of project management
Project Management Journal, Vol. 42, No. 1, 3–16
© 2010 by the Project Management Institute
Published online in Wiley Online Library
(wileyonlinelibrary.com). DOI: 10.1002/pmj.20213
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capturing multiple conceptions of their contribution to the performance of the organization. Third, research by Hobbs and Aubry (2007) has shown that the legitimacy of PMOs is being challenged in approximately 50% of organizations. The discourse that surrounds PMOs is thus often charged with tensions that make differing points of view more vis- ible and more easily captured in empir- ical studies. Fourth, Hobbs and Aubry (2007) have shown that PMOs fill many different organizational roles. In doing so, they potentially contribute to the organization in many different ways, making the diverse contributions more visible and easier to study. In addition to facilitating the study of the contribu- tion of project management to organi- zational performance generally, the PMO is a legitimate object of study in its own right.
Organizational performance is a sub- jective construct. This construct is subjec- tive because it exists in the minds of those who are evaluating. The organi- zational performance of PMOs will vary depending on who the evaluator is. Most of these stakeholders belong to different units that have different cul- tures and different values.
A construct is not directly observ- able. In order to evaluate it, the vari- ables that form it must be identified and examined. Justification of the PMO remains a recurring problem in organi- zations, with almost 50% reporting that the existence of their PMO has been recently questioned (Hobbs & Aubry, 2007). A PMO would be legitimate if it could convincingly demonstrate its contribution to organizational perform- ance. However, the evaluation of its contribution to organizational perform- ance is a complex question that may have as many variations as the PMO itself. This highlights the subjective side of organizational performance.
PMOs are performing many differ- ent functions (Hobbs & Aubry, 2007). Are these different functions regarded with the same value by different stakehold- ers? The contribution to organizational
performance by the PMO seems to take different forms. And it should be distin- guished from the contribution of proj- ects. The PMO’s contribution is, at least potentially, behind the performance of each individual project.
The context of diversity supports the definition proposed here for organi- zational performance based upon the competing values framework. There are two problems: the first one is to establish a clear definition as to what constitutes organizational performance, and the second is to propose a realistic and reli- able approach to its measurement. This leads to the research questions: What is organizational performance in the con- text of project management and how can it be assessed?
The next section of the article explores the literature on performance. This is followed by a presentation of the competing values framework, an inte- grative model that has the ability to capture the diversity of conceptualiza- tions of organizational performance found within organizations. Empirical results will then be presented, which illustrate the usefulness of this frame- work. The empirical portion of the arti- cle concludes with the presentation of a set of practical indicators that provides a more concrete representation of orga- nizational performance and facilitates the construction of metrics. Finally, a conclusion closes the article.
Organizational Performance in the Project Management Literature Two conceptions of performance dom- inate the project management litera- ture: economic and pragmatic. In the former, researchers try to demonstrate the direct economic contribution of project management to the bottom line (Dai & Wells, 2004; Ibbs, Reginato, & Kwak, 2004). Interestingly, none of these researchers have been able to convincingly demonstrate the econom- ic value of investment in project man- agement. The results of the research by Ibbs et al. (2004) are not statistically
significant (Thomas & Mullaly, 2008). The clear demonstration of the direct influence of project management on return on investment (ROI) is not easily accomplished, as explained by Thomas and Mullaly (2008). In addition, the reduction of project management value exclusively to financial indicators underestimates major contributions that project management brings to organizational success—for example, innovation (Turner & Keegan, 2004), process (Winch, 2004), and people (Thamhain, 2004). Furthermore, the multifaceted concept of project per- formance is acknowledged by several authors (Dietrich & Lehtonen, 2004; Shenhar, Dvir, Levy, & Maltz, 2001). The balanced scorecard is based on the eco- nomic conception. The balanced score- card approach has been proposed to assess project management perfor- mance (Norrie & Walker, 2004; Stewart, 2001). It has the advantage over the traditional economic vision of project performance in encompassing four complementary perspectives. However, the foundation of this approach rests on ROI. It structures the creation of value hierarchically with financial value at the top (Kaplan & Norton, 1996; Savoie & Morin, 2002).
The second conception of perfor- mance in the literature on project per- formance is pragmatic. Several authors have encompassed the problem of per- formance in an approach that seeks to identify success factors (Jugdev & Müller, 2005). A clarification should be made here to distinguish between suc- cess factors and success criteria. Success factors refer to a priori condi- tions that contribute to positive results, while success criteria are used to assess a concrete and measurable result a pos- teriori (Cooke-Davies, 2002). Cooke- Davies (2000, 2004) has examined the empirical evidence supporting the many best practices and success factors found in the literature. He concludes that most of the contributions have been based on the opinion of members of the project management community
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and that only a small number have been empirically validated. Based on the empirically validated data, Cooke- Davies (2004) proposes a set of 12 fac- tors related to three distinct ways of looking at performance: project man- agement success (time, cost, quality, etc.), project success (benefits), and corporate success (processes and deci- sions that translate strategy into pro- grams and projects). It is noteworthy that the success factors are different at each level of analysis. Cooke-Davies (2004) argues these three groups are intimately linked; corporate project and program practices create the con- text for individual project and program practices. While the research on success factors has identified some conditions in organizational project management that are associated with performance at different levels of analysis, the under- standing of performance and the a priori conditions that contribute to performance remains limited.
There is no consensus on the way to assess either performance or the value of project management. The financial approach alone cannot give a correct measure of the value of project man- agement for the organization. Project success is a vague approximation and, as such, a rather imperfect system for measuring results. New approaches are needed in order to extricate ourselves from what looks like a dead end. Organizations are multifaceted, leading to a variety of perspectives and evalua- tion criteria. The international research on the value of project management draws similar conclusions (Thomas & Mullaly, 2008).
What Is Organizational Performance? Performance has its origin in the old French parfournir and is defined today as “something accomplished” (Merriam- Webster’s Collegiate Dictionary, 2007). The etymology brings us straight to the point: what indeed is accomplished by project management, and how should it be evaluated?
How to Define Organizational Performance? The concept of organizational perfor- mance is not new. At the end of the 1950s and in the early 1960s, sustained efforts were made notably to understand the success of organizations. This literature developed in the 1960s and 1970s, and after 1980 narrowed down to concepts like quality (Boyne, 2003). Several words are used almost as synonyms to organi- zational performance—for example, efficiency, output, productivity, effec- tiveness, health, success, accomplish- ment, and organizational excellence (Savoie & Morin, 2002). The concept of organizational performance has been adopted in this research because it is more appropriate in the context of organizational project management.
Trying to give a clear definition of organizational performance is not an easy task. Attempts made to clarify it by definition have not led to an acceptable result. Two alternative approaches are explored: (1) a definition of the concept by the identification of its characteris- tics and (2) a definition of the concept by the identification of its limits/ borders. The definition by its character- istics is called a definition of com- ponents, where a term (in this case, organizational performance) is given in reference to its constituent parts or its characteristics (Van de Ven, 2007). Organizational performance has been approached in the literature using dif- ferent sets of characteristics or vari- ables. A first difficulty with this type of definition is the uniformity of the levels both conceptual and operational among the characteristics (Cameron & Whetten, 1983; Quinn & Rohrbaugh, 1983; Van de Ven, 2007). There are other difficulties with this type of definition. It is inherently subjective (Cameron, 1981). It can be difficult—even impossible—to reconcile the multiplicity of points of view from different stakeholders. It can be difficult even for individuals to iden- tify their own preferences for an orga- nization. Preferences change over time, in keeping with social values and the
life cycle of the organization or of the unit. There exists simultaneously in the same organization a variety of contra- dictory preferences that this type of definition cannot capture.
The second approach to a defini- tion is based on the identification of limits/borders, which is a semantic def- inition. A semantic definition describes the meaning of a term by its similarities (positive semantic definition) or by its differences (negative semantic defini- tion) with other terms (Van de Ven, 2007). Addressing the question “What is organizational performance?” also comes back to trying to define the scope of the total construct by delimit- ing the components located inside and outside its borders. Cameron (1981) discusses this question from two view- points: the theoretical borders and the empirical borders. Practically speaking, the theoretical borders of organization- al performance do not exist. No theory is completely satisfying, and the research undertaken so far is made up of a collection of individual essays that lack integration (Cameron, 1981). It is difficult to grasp the construct when approaching it theoretically, and still today, there is no clear definition of the- oretical borders (Savoie & Morin, 2002). A few authors have tried instead to define an empirical border. Moreover, this inductive approach is appropriate when there is a high level of complexity, which is the case here (Patton, 2002). This being the case, each study has been done as in a “silo,” each author observing in an isolated fashion a par- ticular type of organization (Cameron, 1981). Therefore, approaching a defini- tion of organizational performance by the identification of a border does not allow us to determine what is inside the border, because theoretical research is insufficient and empirical studies are varied and lack integration.
To overcome the problem of defini- tion, Cameron (1981) suggests that orga- nizational performance be defined as a subjective construct anchored in values and preferences of the stakeholders.
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This definition offers significant poten- tial for adaptation to organizational sit- uations and offers the possibility of acknowledging that a variety of per- formance evaluation models may exist simultaneously. This construct is also coherent with the constructivist per- spective, which recognizes the exis- tence of several competing logics.
In this perspective, organizational performance is anchored in the values and preferences of the stakeholders. In the context of project management in general and PMOs in particular, stake- holders are individuals and groups who have a substantial interest in the man- agement of the projects of the organiza- tion. The stakeholders could include the project governance board, the busi- ness unit managers, the customers of the projects, the users, the PMO man- ager, the project portfolio managers, the functional managers, project man- agers, project controllers, and so on.
The Competing Values Framework Origin and Development of the Competing Values Framework Organizational performance was the object of a worldwide study for a nucle- us of researchers (Cameron & Whetten, 1983; Quinn & Rohrbaugh, 1983) toward the end of the 1970s and the beginning of the 1980s. Quinn and Rohrbaugh (1983) were, however, the first to have proposed the competing values approach. This approach came out of a research program over a period of several years at the Institute for Government and Policy Studies, intend- ed to evaluate performance in the pub- lic sector. This sector is enormously complex, and at a time when the econ- omy was affected by high inflation, it was important to ensure the best possi- ble use of public funds in all public institutions (Rohrbaugh, 1981).
The theoretical basis of the compet- ing values approach rests on the fol- lowing assumption: tensions exist in all organizations where needs, tasks, val- ues, and perceptions must compete
(Thompson, McGrath, & Whorton, 1981). Rather than imagine a new model, Quinn and Rohrbaugh approached the problem in a highly original way by undertaking research based on criteria already identified by Campbell (1976, cited in Quinn & Rohrbaugh, 1983). They treated these criteria using a combination of the Delphi approach and statistical model- ing with the participation of a group of very reputable researchers on two pan- els. The research led to a set of 17 unique criteria grouped into three significant dimensions: the structure dimension (paradox between flexibility and con- trol), the focus dimension (paradox between internal and external), and the dimension of purpose and orientation.
These dimensions formed three sets of values that explicitly expressed the dilemmas or paradoxes present in organizations. These values are in con- stant competition in organizations, and to succeed, organizations must reach good overall results, without necessari- ly seeking a balance. In this context, organizational performance depends
on the values of those who are evaluat- ing (Cameron, 1986).
The third dimension (orientation and purpose) was not often used in empirical research based on the com- peting values approach, including research by Cameron and Quinn (1999). In a fashion consistent with this stream of research, only the structure dimension (paradox between flexibility and control) and the focus dimension (paradox between internal and external) have been employed in the present research (see Figure 1).
The research of Quinn and Rohrbaugh (1983) thus led to the for- mulation of a framework that presents 17 criteria and their dimensions in four quadrants, each associated with a spe- cific preexisting model of organizational performance: the open system model, the human relations model, the internal process model, and the rational goals model. Sixteen of the seventeen criteria are associated with one of the four models, each representing a different conception of organizational perfor- mance. The 17th criterion, output quality,
HUMAN RELATIONS MODEL
INTERNAL PROCESS MODEL
17. OUTPUT QUALITY
OPEN SYSTEM MODEL
RATIONAL GOAL MODEL
1. Value of human resources working in project 2. Training and development emphasis 3. Moral of project personal 4. Conflict resolution and search for cohesion
12. Growth 13. Flexibility/adaptation/innovation in project management 14. Evaluation by external entities (audit, benchmarking, etc.) 15. Links with external environment (PMI, IPMA, etc.) 16. Readiness
8. Profit 9. Productivity 10. Planning goals 11. Efficiency
5. Information mangement and communications 6. Processes stability 7. Control
Note. The 17 elements listed in the figure are the criteria associated with each conception.
Figure 1: Models of organizational performance and their associated criteria.
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was not associated specifically with any of the models.
A precision must be made to differ- entiate between open systems and rational goal models. The open systems model values effectiveness. On the other hand, the rational goal model val- ues efficiency, profitability, and ROI.
The competing values approach has been applied in a variety of areas. Originally, it emerged in the public sec- tor (Rohrbaugh, 1981), but several sectors have been studied since: higher education (Pounder, 2002), manufactur- ing (McDermott & Stock, 1999), research and development (Jordan, Streit, & Binkley, 2003), and banking (Dwyer, Richard, & Chadwick, 2003), as well as a cross-sector study (Stinglhamber, Bentein, & Vandenberghe, 2004). More- over, Cameron and Quinn (1999) account for more than a thousand inter- ventions in organizations from several industrial sectors as diversified as agri- culture, insurance, and construction. This wide empirical base confirms the applicability of this approach in various organizational contexts.
This approach has two important strengths: the values underlying the eval- uation become obvious and the changes in the way these values are exerted are also identified (Morin, Savoie, & Beaudin, 1994; Quinn & Rohrbaugh, 1983). In conclusion, the competing val- ues approach has the potential to grasp the dynamic of organizations by creat- ing a dialogue between people having different, sometimes opposite, values that underlie their evaluation of organi- zational performance.
The Competing Values Framework in the Context of PMOs Because the empirical portion of this research is centered on the PMO, the two dimensions and the paradoxes that these dimensions give rise to are exam- ined in the context of the PMO.
The Structure Dimension: Paradox Between Flexibility and Control The PMO usually belongs to the hierarchy and, as such, participates in maintaining
stability. One of the most important roles for the PMO is to monitor and control the performance of projects. Another important role is the standard- ization of methods and processes. At the same time, the PMO is part of mul- tiple project management networks where projects and ad hoc committees are created, dissolved, and re-created according to project management needs. Projects are temporary organiza- tions often associated with innovation and change, disruptive or incremental, as each project brings a new and unique solution to a particular prob- lem. In this context, the PMO supports creativity and innovation, or at the very least should not impede it. The PMO participates in the line of control, giving the necessary stability while at the same time encouraging innovation and change with flexibility. In this sense, a PMO can be said to be an ambidextrous entity in developing ability in both con- trol and flexibility (Tushman & O’Reilly, 1996). These examples illustrate the paradox between control and flexibility as it applies in the context of PMOs.
The Focus Dimension: Paradox Between Internal and External The PMO adopts an outright external focus when, to measure project and project management results, it looks at quantitative financial indicators and compares itself to other organizations or industries. Kendall and Rollins (2003) suggest that the main indicators for measuring the value added of a PMO are related to three major elements: • reduction of the life cycle of projects; • completion of more projects during
the fiscal year with the same resources; and
• tangible contribution for reaching organizational goals in terms of cost reduction, revenue increase, and a better return on investment.
The professionalization of project management also contributes to the fact that organizations want to compare and share their best practices. On the
one hand, the PMO has an active role to play relative to the internal focus through the development and dissemi- nation of project management metho- dology, the fostering of internal com- munication including the presentation of project results to upper manage- ment, and the development of compe- tencies. A PMO is often responsible for creating the common language relative to project management. At the same time, the PMO is connected to the exter- nal world by means of consultant firms and project management associations. When a PMO is asked to benchmark the internal project management process- es, the internal common language must be translated to a universal common language. The PMO is an entity in which there exists a permanent arbitrage between internal and external focuses.
The examination of the two dimen- sions in the specific context of the PMO confirms the existence of paradoxes identified by the competing values framework within a project manage- ment context. The evaluation of the organizational performance of the PMO can shed light on the different perspectives from which organizational performance can be examined based on the values of those evaluating. The competing values framework repre- sents a means to make these values explicit, which will then lead to an understanding of what constitutes a contribution to the performance of the PMO and of the entire organization.
Methodology The methodological framework for this research is based upon a constructivist epistemology. In this epistemology, the phenomenon is in the reality and the researcher in part of the interaction that takes place between the researcher and the object of study. Knowledge cre- ation is the ultimate objective (Allard- Poesi & Maréchal, 1999). It modifies the more traditional researcher role by “lis- tening” to the reality (Midler, 1994). In the case of PMOs, this position is appropriate, as theories are almost
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nonexistent and the complexity found in the reality cannot be explained using existing simple models and a positivist approach (Hobbs & Aubry, 2007). Just as organizations are complex social entities, so too are the specific organi- zational project management struc- tures that encompass PMOs. The methodological strategy is designed to understand such complexity.
Drawing on Van de Ven’s (2007) engaged scholarship brings together different points of view of key people involved with PMOs, using a combina- tion of qualitative and quantitative instruments. PMOs represent a com- plex phenomenon not only by the vari- ety of their expressions, but also by the number of entities they relate to in a single organization. In matrix organiza- tions, projects naturally form networks, which converge in one or more PMOs. Yet, within a single organization there are multiple managers and profession- als in relationships with the PMO. How do they value the PMO’s contribution to organizational performance? It depends on the perspective of each of these stakeholders. In the quest for a better understanding of the PMO’s con- tribution to organizational perfor- mance, a global methodological strategy
is proposed that can capture these per- spectives and tensions.
This research is part of a mixed- method program of research built for robustness (Brown & Eisenhardt, 1997). In this specific research project, a case- study approach has been used to explore and better understand the con- tribution of PMOs to organizational performance (Yin, 1989). Four organi- zations participated in this research. A retrospective historical approach cov- ering the period since before the imple- mentation of the first PMO was adopt- ed. The periods covered ranged from 2 to 13 years, with an average of 7.24 years. As is common among PMOs globally, the PMOs in these organiza- tions were restructured every few years (Hobbs & Aubry, 2007). A total of 11 dif- ferent PMOs were analyzed, each con- stituting a case study.
Two types of data were collected: interviews and a questionnaire. The most important data came from inter- views where open-ended questions were asked specifically on the performance of the PMO. Interviews were codified and analyzed in a grounded theory approach (Strauss & Corbin, 1998). Transcripts were coded using the 17 criteria from the competing values framework grouped
into the four conceptions (Quinn & Rohrbaugh, 1983) adapted for use with PMOs (see Figure 1). Respondents were chosen to represent different roles, potentially leading to different concep- tions of the PMO’s contribution to orga- nizational performance (see Table 1).
In addition to interviews, a ques- tionnaire was built with the objective of capturing the different conceptions of the PMO’s contribution and their under- lying values. The questionnaire contains the same 17 criteria. Respondents were asked to assess the importance of each of the criteria in their current context using a 5-point Likert scale, where 1 was not important at all and 5 was very important. Criteria with a score of 4 or 5 were considered important.
Empirical Results A Typology of PMOs Based on Organizational Performance Criteria As mentioned previously, the compet- ing values framework takes into account the values within organiza- tions, and it provides an instrument that helps highlight paradoxes between values. The diagram shown in Figure 1 forms a typology based upon the four different conceptions of organizational performance. Each PMO from the case
Industrial Sector Telecommunication Financial Multimedia Financial
Years since implementation of first PMO 13 9 5 2
Number of PMOs (n � 11) 4 3 3 1
Number of interviewees (n � 49) 13 16 15 5
Interviewees by role
Project manager 3 3 1 1
PMO director 0 5 2 1
Manager in PMO 4 2 0 0
Executives 2 1 1 1
HR 1 0 2 0
Financial 1 1 1 0
Other manager 2 1 1 1
PMO staff 0 3 7 1
Table 1: Profile of respondents.
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studies has been assigned a position within this framework so that they can be compared more easily with each other (see Table 2).
Each of these case studies has its own dynamics. Space restrictions pre- vent these from being explored here. In all, the results are coherent with the proposals from the competing values framework. There is no such thing as a perfect balance, but rather different val- ues underlie what organizational per- formance represents in organizations (Cameron, 1986). A plurality of perspec- tives on the contribution to organiza- tional performance is observed. The results show that certain perspectives prevail at certain times and evolve with the context. One problem when try- ing to understand the contribution of PMOs to organizational performance is related to the fleetingness of the PMO itself (Hobbs & Aubry, 2007). Assessing something that is fast-moving contains in itself a major limitation. In this research, the evolution of the PMO and the evolution of the perception of its contribution to organizational per- formance were tracked. Results from the pre-PMO period have been intro- duced in this analysis. However, no pattern resembling a predetermined life cycle in the evolution of their con- tribution to organizational perfor- mance was found.
The Actor’s View of the PMO’s Contribution to Organizational Performance As discussed earlier, the competing val- ues framework is based upon the assumption that many conceptions of organizational performance coexist in a
single organization. This should trans- late in this research into different pat- terns for different stakeholders in their evaluation of the importance of organi- zational performance criteria. Figure 2 illustrates this phenomenon within one organization from the case studies. It pertains to the evaluation of the existing PMO at the time of interviews. As can be observed, differences exist between actors in their assessment of the impor- tance of the performance criteria.
Globally, results confirm the posi- tive contribution of PMOs to organiza- tional performance. The Likert scale offers the choices of low values of importance, but no criteria falls under the middle position, which indicates that all criteria are of at least some importance. The results of one case with 15 respondents are illustrative but cannot be generalized.
An examination of the variations in responses between stakeholders in dif- ferent roles is informative. In Figure 2, it
can be observed that project managers do recognize the importance of the PMO’s contribution in the human rela- tions and rational goals criteria. In this particular case, the PMO is active in human resource functions participat- ing in the career path of people working in projects. However, project managers do not recognize that internal process- es are as important. This may be because project managers perceive these processes to be a constraint on their freedom to act. The PMO director considers all criteria as important. This situation is not specific to this case— the same result was observed in almost all cases. This confirms the positive bias of PMO managers when asked to assess the PMO’s contribution to organiza- tional performance. Other managers within the PMO are more critical specifically of human resource criteria. Otherwise, these managers recognize the importance to other groups of crite- ria. Executives recognize some impor- tance for all groups of criteria, but none reach the level of significant impor- tance. This is consistent with the poor perception of project management’s ability to contribute to organizational performance reported by Thomas et al. (2002). Curiously, the human resource manager does not attribute that much importance to the PMO’s contribution to human resource performance. This may be a reflection of issues related to
Equilibrium Internal Focus Internal/External External Focus
Flexibility 1 1 3
Equilibrium 1 0 2 flexibility/control
Control 2 1 0
Table 2: Number of PMOs classified by the importance of their organizational performance criteria.
Project Manager PMO Director
Manager within PMO
Human relations Internal processes Rational goals Open systems
Groups of criteria
Figure 2: Importance of organizational performance criteria by role.
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jurisdiction over human resource issues. The human resource managers do recognize the PMO within the inter- nal processes and rational goals crite- ria. PMO employees are of particular interest; they attribute significant importance to human resource and open system criteria but not that much to internal process and rational goal criteria.
These results also show some of the paradoxes in the expectations relative to the PMO’s contribution to perfor- mance. For example, the financial man- ager considers the internal processes criteria to be the PMO’s most important contribution to organizational per- formance. However, project managers consider these to be the least impor- tant. When it comes time for the PMO manager to discuss the contribution of his/her unit with the financial manager, arguments concerning internal processes will probably be important, but the same arguments are not as like- ly to convince the project managers. It is easy to see how these differences in perceptions and appreciations can lead to tensions and even to conflicts. Results from the competing values framework may also offer the opportu- nity to open up discussion between dif- ferent and sometimes opposite ways of understanding the PMO’s contribution to organizational performance.
The Development of Indicators Specific to the Evaluation of the PMO’s Contribution to Organi- zational Performance The four conceptions and the 17 gener- ic criteria initially proposed within the competing values framework (Quinn & Rohrbaugh, 1983) can be applied in dif- ferent contexts. For this reason they are at a more abstract level. Cameron and Quinn (1999) recognize that the four models and the 17 criteria are quite abstract and recommend that sets of criteria be developed that are specific to a particular use. In a manner consis- tent with this recommendation, specific sets of indicators were developed for
each of the four models and the 17 cri- teria. The sets of indicators create value in two ways. First, they enrich the understanding of the PMO’s contribu- tion to organizational performance by providing detail that is meaningful in this context. Second, they provide the basis for instruments to measure the presence of the models in real organiza- tional settings.
The goal here is to be more specific and to identify relevant concrete indica- tors in the context of PMOs. Transcripts of the interviews have first been coded using the 17 criteria. Then, excerpts have been scrutinized for their meaning in order to group multiple variations under a common indicator. From this second step, a list of 79 unique indica- tors was produced.
Indicators inform us about the vari- ety of possible ways the models mani- fest themselves and the different ways that measurements can be made in the different PMOs. An advantage of this exercise is to render explicit and opera- tional notions about the contribution of the PMO to organizational perfor- mance that until now may have remained abstract. See Appendix A for the complete list of indicators.
Indicators Within the Human Resources Conception The indicators related to human re- sources foster a clearer understanding of the role that the PMO can play in this area. Indicators vary greatly from one organization to the next. It appears that each of the four organizations has a dif- ferent flavor in the way the human resource contribution of the PMO is valued. For example, the organization in the multimedia industry stands out with the largest number of indicators in human resources. The scope of these indicators often covers all of the resources working on projects rather than only PMO employees or project managers. In this case, the PMO plays a direct role in the development of com- petencies for personnel, according to the needs of upcoming projects, and
according to employee wishes. It is unusual that an organization structured by project (which is the case here) stresses the contribution that personnel make to projects and intensifies the role of the PMO in human resources management. But management of human resources, in this organizational context, is a particularly critical func- tion. The personnel are exceedingly young: the average age is less than 30 years old. This fact accounts for the strength of the company at the same time as it produces its own nightmares. These “teenagers” require a consider- able amount of supervision in order to respect the project constraints and the never-ending challenges. There is an important shortage in qualified person- nel in this high-technology sector. This company has invested extensively in training in conjunction with local gov- ernments. It has also implemented an internal school to provide skilled work- ers for its own development needs. Furthermore, personnel turnover is sig- nificant. In summary, the management of human resources is an important function in which the PMO plays an active role.
The significant number of indica- tors identified within the human rela- tion conception shows that underlying values exist in organizations to assess the contribution of the PMO to organiza- tional performance regarding the human resources. A PMO manager confirms the impact of his entity on the degree of sat- isfaction of project managers:
Well, we took it all [multiple PMOs] and centralized it; it [the degree of satisfaction of the employee] went from 0 to 24 in 12 months. The ener- gy, the empowerment—there was a huge improvement.
It is also notable that the PMO plays a social role and that it has an influence on the work-family balance. Analysis also revealed that the capacity for nego- tiation is a competence essential to the resolution of conflicts surrounding the state of advancement of projects.
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The role of PMOs within human resource management is often neglected in the literature on PMOs with the excep- tion of a few authors that dedicated their efforts to emphasizing this role (Crawford & Cabanis-Brewin, 2006; Huemann, Keegan, & Turner, 2007). From the qualitative analysis, it can be seen that the PMO can make a signifi- cant contribution to organizational performance regarding human resources and that concrete indicators can be used to assess this.
Indicators Within the Internal Processes Conception The internal processes conception of organizational performance shows the largest number of individual indicators of the four conceptions. This empha- sizes the position of project manage- ment and the PMO in their traditional roles of process management.
Many indicators bear on the criteria of information and communication management. The PMO seems to col- laborate in many networks and play a central role in the circulation of infor- mation. A respondent emphasizes this role when saying:
I think that the PMO has an impor- tant role in the sense that they have a vision of what is going on else- where in the organization. . . . Normally, the PMO has antennae in each portfolio. . . . I think it could have a unifying role.
Indicators also reflect both the qual- ity of information and the ease of its flow throughout the organization. The crite- ria dedicated to the stability of processes pinpoints more specifically the tradi- tional role of PMOs in standardization of project management. The criteria of control included of course meeting costs, deadlines, and project scope. However, PMO control is becoming increasingly diversified and is often exercised on the processes themselves.
Of particular interest is the situation with multiple PMOs where the values given to indicators are quite different.
One of the financial services case organizations had two interrelated PMOs: a central one and one in a busi- ness unit. These two PMOs don’t value the same elements as far as the quality of deliverables and communications management is concerned. This is understandable in complementary but paradoxical terms: the business- unit PMO values product quality and business results, while the central PMO values process maturity and project performance in terms of cost, schedule, and the project requirements. As can be seen from this example, two PMOs in the same organization may have com- plementary but conflicting priorities.
Indicators Within the Rational Goals Conception The indicators for the rational goals or efficiency conception are less numer- ous but are the most frequently cited. Indicators included the profit criterion, which is not surprising; they reflect the interest in selecting the right projects— the ones that contribute to the busi- ness’s bottom line. The contribution of the PMO to organizational per- formance is recognized through its involvement in portfolio and program management. Regarding the productiv- ity criterion, the contribution of PMOs can be significant, particularly in the allocation and efficient use of resources. This point highlights an important issue for organizations hav- ing multiple highly specialized expert profiles working on multiple projects. From the case studies, this issue was of prime importance in two organizations having projects where 200 to 300 employees work in parallel. In those two organizations, PMOs centralize the allocation of human resources. The idea here is to not leave anyone “on the bench.” The director of a PMO pin- pointed his role in the allocation of project managers:
We wanted to use project manage- ment resources in a better way so that, for example, if a project man- ager was freed up in one product
line, and there was a need in anoth- er product line, we could move that person over if the competence and the profile both matched the requirements.
Productivity in project management is a constant challenge. The challenge is even more evident in international organizations where there is competi- tion between different units in different locations. Productivity in project man- agement becomes an important factor for decisions as to where projects will be executed. The role of PMOs in project productivity is often recognized in the literature (Kendall & Rollins, 2003). These authors link the PMO’s productiv- ity directly to its legitimacy.
The criterion of planning in the PMO context mostly refers to their strategic and multiproject functions. Indicators proposed by respondents give some idea of the concrete out- comes that relate to the strategic action of PMOs in selecting the right projects. Indicators also emphasize the role of the PMO in the portfolio equilibrium regarding their risks and their short- and long-term benefits. Capacity plan- ning indicators recognize the PMO’s role in the allocation of resources on the long run, the capacity to deliver, and the capacity for internal resources to absorb changes from projects. The alignment of employees’ objectives with organizational objectives was also found under the planning criteria. This indicator recognized that PMOs are involved in the appraisal process of individuals working on projects.
There are two indicators related to efficiency criterion. The first one refers to the relationship that a PMO has with other parts of the organization. From interviewees, this refers to numerous inefficient meetings with PMO employ- ees or managers. PMOs often perform a monitoring and controlling function on project performance. In order to accomplish this mission, additional information to that available on reports or Web sites is needed. Different com- mittees or meetings are called to share
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information. People working on proj- ects repeat the same information in several different meetings, resulting in inefficiency and frustration. At the same time, the role of the PMO in nego- tiation when it comes time to decide on the status report color is recognized. The second indicator mentioned is project success and, more specifically, the role of the PMO in fostering project success.
Indicators Within the Open System Conception Indicators within the open systems or effectiveness conception are the fewest in number. These mostly deal with flex- ibility, adaptation, and innovation in project management. The first criteri- on, growth of the organization, refers directly to the business side of the organization, taking into account sales, qualitative results, and effectiveness. These elements relate to the benefits from projects. It emphasizes that the PMO could be involved in a wider proj- ect life cycle, covering the benefits from projects. This stretches project man- agement toward the product life cycle (Jugdev & Müller, 2005).
The criterion of flexibility, adapta- tion, and innovation show numerous indicators, few of which are shared from one case to another, except for delinquency, with respect to project methodology. One respondent stated: “A lot of flexibility, what matters to me is the result; I couldn’t care less if we used a saw or a screwdriver to get there.” This highlights the fact that the contribution of the PMO to organizational perfor- mance is not limited to the establishment of a methodology in project manage- ment (from the internal processes con- ception), but also the flexibility with which the PMO encourages its use. While no indicators were mentioned in the evaluation by the external entities criterion, respondents mentioned some for the criteria of having links with the external environment. Benchmarking was mentioned often in a context of jus- tification of the PMO, particularly to
justify the number of staff working in it. The criterion of responsiveness includ- ed two indicators that were mentioned quite often by respondents: (1) the PMO should be able to respond quickly in order to make projects succeed and (2) the PMO should be able to adapt to different situations.
Indicators in this open system con- ception contrast with the ones included in the internal processes conception. This confirms that paradoxes exist. There are individuals that value the respect of project management processes, while at the same time in the same organization, others value exactly the opposite and encourage delinquency. The competing values framework offers an opportunity to acknowledge these paradoxes and, from there, to open up a dialogue to develop a common basis and under- standing of organizational performance. This work supports the recognition of the diversity of the contributions a PMO can make to an organization. And also it should help to develop the awareness of PMO managers and their employees of the paradoxes that are at work in their organizations regarding their perform- ance. This approach can be a valuable instrument to initiate a dialogue and come to a common understanding of what is valued. PMO actions could then be aligned on this common understand- ing of organizational performance.
Indicators of Output Quality The quality criteria include three indi- cators. First, the quality of the product has been included here, as many inter- viewees mentioned this element in relation with the PMO’s contribution to the overall quality performance. The second and third are indicators of satis- faction of the PMO sponsor and clients of the PMO. These indicators are quite common when assessing quality.
Conclusion The aim of this study is to understand the contribution of the PMO to organi- zational performance with a view to understanding project management’s contribution to organizational per-
formance. Research on organizational performance in project management does not produce entirely satisfactory results. Each piece of research brings important contributions—but consid- ered all together, a global vision of proj- ect management performance at the organizational level is still lacking.
The competing values framework has the advantage of integrating the financial perspective of performance with the other conceptions in order to form a multidimensional perspective. Indeed, the four conceptions of the framework give us a multifaceted repre- sentation of the performance of organi- zational project management. The rational goals and efficiency conception integrates the economic values of prof- itability, project management efficiency, and return on investment. The open sys- tems and effectiveness conception includes variables that measure growth and take into consideration innovation and project effectiveness. The human relations conception emphasizes the development of human resources, cohe- sion, and personnel morale. All of these elements are often absent from the eval- uation of organizational performance. The internal processes conception captures measurements related to cor- porate processes tied to project manage- ment such as project delivery method- ologies, communication processes, and knowledge management processes. Overall, the competing values model bears directly on performance (objective variable) instead of bearing on success factors (explanatory variables).
Organizational performance must be examined from different viewpoints and be scrutinized at several loci of analysis. PMOs are positioned at the interface of several entities, some of which belong to project networks and others to operational organizations (Lampel & Jha, 2004). They are in touch with the projects, programs, project port- folios, corporate strategy, and functional and business units. The PMO is there- fore at the center of numerous perspec- tives on organizational performance. ■
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Monique Aubry, PhD, is a professor in the grad- uate programs in project management at the School of Business and Management at the Université du Québec à Montréal. She is an active researcher within the Project Management Research Chair under the aegis of project governance. Before her academic career, she worked for more than 20 years in the management of major projects in the finan- cial sector. She is a member of the Project Management Institute’s Standards Member Advisory Group.
Brian Hobbs, PhD, PMP, Project Management Research Chair (www.pmchair.uqam.ca), has been a professor at the Université du Québec à Montréal in the Master’s Program in Project Management for 25 years, a program accredited by the Project Management Institute’s Global Accreditation Center. He has been a member of PMI’s Standards and Research Member Advisory Groups. He has presented many papers at both research and professional conferences world- wide.
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Appendix: List of Indicators This Appendix presents the list of all 79 unique indicators that were identified from the four case studies. Indicators provide an explicit element to assess the
contribution of PMOs to organizational performance. Indicators have been clas- sified using the conceptions on per- formance from the competing values framework (Quinn & Rohrbaugh, 1983).
Table A1 presents indicators within con- ceptions of human resources, output quality, and internal processes. Table A2 presents indicators within rational goals and open systems conceptions.
CRITERIA INDICATORS CRITERIA INDICATORS
Indicators Within Human Resources Conception Indicators Within Internal Processes Conception
1. Value of human 1. Empowerment 6. Information and 1. Accuracy of information in progress resources working 2. Stimulating projects (participate to communication report in project something big) management 2. Transparency of information in
3. Visibility for good work in projects progress report 4. Individual assessment 3. Circulation of the information on 5. Internal recruitment privileged projects (transverse role) 6. Team work valued 4. Keeping the memory of projects for 7. Trust in PMO forecasting (historical statistics)
5. Existence of project documentation 2. Training and 8. Training in project management 6. Capacity to absorb a lot of infor-
emphasis on 9. Level of experience of the personnel mation (project managers and development working in PMO coordinators)
10. Encouragement for PMP 7. Creation of open places for people 11. Individual development plan for project to discuss
management competencies 8. Politics—visibility of the CEO 12. Diversity in competencies 9. Learning from errors 13. Coaching 14. Organization of events—knowledge 7. Stability in 10. Standardization in the way things
transfer processes are done 15. Change management in project 11. Importance of the resource
management appointment process 12. Existence and stability of project
3. Moral on project 16. Pleasure in working management processes personal 17. Career job security
18. Employee satisfaction in project 8. Control 13. Rigor in the project management 19. Work-family equilibrium process 20. Number of overtime hours 14. Control of the appointment process
to avoid thieving 4. Conflict 21. Conflict prevention 15. Capacity to act (difference between
resolution and 22. Resolution of conflict in HR management monitoring and controlling) search for 23. Negotiation on progress report 16. Control of project delivery date cohesion (e.g., color code) 17. Control of costs
24. Negotiation on actions to be taken from 18. Control of scope progress report 19. Control of earned value
25. Negotiation on project selection in portfolio 20. Ratio number of changes/respect of costIndicators Within Output Quality
21. Equilibrium between time and 5. Output quality 1. Quality of the product budget
2. Satisfaction of the sponsor 22. Control of risks 3. Satisfaction of clients 23. Percent of precision in control data
Table A1: List of indicators within conceptions: Human resources, output quality, and internal processes.
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CRITERIA INDICATORS CRITERIA INDICATORS
Indicators Within Rational Goals Indicators Within Open System
9. Profit 1. Profit from projects 13. Growth 1. Sales results 2. Benefits planning within 2. Qualitative element from busi-
project business case ness case (business positioning) 3. Effectiveness
10. Productivity 3. Order in productivity 4. Best utilization of resources in 14. Flexibility/ 4. Innovator, creator, and good at
project management (leave less adaptation/ conflict or problem resolution people on the bench) innovation in 5. Hiring of project management
5. Index of productivity project personnel having creative skills 6. Bureaucracy management 6. Existence of initiatives in project 7. Internal competition (e.g., between management methodology
units in different countries) (sometimes being delinquent) 8. Existence of an organizational 7. PMO product a variety of reports
structure to deliver projects 8. Hiring of external consultants to know the best practices in project
11. Planning in 9. Importance of the strategic dimension in management goals to reach the selection of the “good” projects 9. Evolution in project management
10. Equilibrium in projects of a portfolio process and tools (risk, benefits on the short-, medium-, 10. Participation of stakeholders in and long-term value) the development and evolution of
11. Prediction of the delivery capabilities project management processes (resource allocation)
12. Alignment of enterprise objectives with 15. Assessment by none the employees’ objectives external entities
12. Efficiency 13. Efficiency in the relations between 16. Links with 11. Link with the local PMI (some- PMO and functional or business units— external times too much!) negotiation on projects environment 12. Benchmarking
14. Project success (PMO impacts on projects) 17. Readiness 13. Being agile
14. Responsiveness in appointment when urgent need
Table A2: List of indicators within conceptions: Rational goals and open system.
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