Developing Maturity in Acquisitive Organizations: Converting IMOs to PMOs
By Global PMI Partners
My colleagues and I at Global PMI Partners are engaged at clients to prepare executive teams for acquisition integration planning prior to a deal close. During our assessment of a platform company’s internal landscape, we often find that management of general project initiatives is completed by brute force– with bright people engaged and delivering through heroics to get work done. This approach can be very effective to drive results quickly: sales growth, speed to market, and customer service.
As corporate growth continues, in our case by helping companies get through the acquisition integration process, internal teams find themselves in a larger, combined organization where they can no longer manage by brute force. At this time there is opportunity to leverage maturity established during integration work to increase overall corporate maturity. This comes in the form of transitioning the integration management office (IMO) into a project management office (PMO) to manage general corporate initiatives.
“If a project management office (PMO) does not exist, a PMO can be established after a merger or acquisition by taking advantage of an existing integration management office (IMO).”
Functions of a PMO
A project management office (PMO) is a governance body that supports more mature organizations that have a complex set of projects, and most likely have a project resource pool that reports into a matrixed organization. PMOs can vary in function, but most often they support the prioritization and selection of incoming projects, resourcing of projects, execution and control of projects, project delivery standards, cross-project dependency management, and executive reporting. When businesses grow, this governance and facilitation drives clarity in activity to enable a higher level of corporate performance. If a project management office (PMO) does not exist, a PMO can be established after a merger or acquisition by taking advantage of an existing integration management office (IMO).
Establishing an IMO as part of a Merger or Acquisition
Before discussing the transitioning from an IMO to a PMO, let us dive a little deeper into what an integration management office (IMO) is and how in IMO differs from a PMO. Pre-close of a transaction, an IMO is established to address a spike in work effort across all corporate business functions and drive clarity and governance to quickly integrate a merger or acquisition. Unlike in a normal PMO, the IMO is a temporary governance structure that ends when a majority of integration activity is completed, unless a company is a serial acquirer.
The IMO does have most of the functions of a PMO: Assessment of project activities, provisioning of resources, management of projects, tracking of status, completing lessons learned, and implementing quality assurance and continuous process improvements. After the IMO wraps up when most integration activity is complete, the rest of integration activity is then transitioned into normal operations or longer-term projects. At this point, there is an opportunity to assess if the IMO can be transitioned to a PMO if one does not already exist. With an IMO, cross-organizational governance is already in place and a cadence of integrated management has been established—something that a new PMO can take advantage of.
“A PMO can be hard to start from scratch as there is a tendency to continue following legacy project management practices.”
Converting an IMO into a PMO
A PMO can be hard to start from scratch as there is a tendency to continue following legacy project management practices. Having an IMO in place helps greatly, but there still are many of the same challenges that exist for setting up a PMO.
Executives within high growth companies, even after an acquisition, may still be accustomed to heroics and brute force to get work done, and may be suspect of the potential bureaucracy that a PMO brings. This suspicion is well founded as an overly bureaucratic PMO can create havoc in high growth setting– A situation to be wary of. PMOs do provide a vital function and being cognizant of these pitfalls will make your PMO execution stronger and self-correcting. Accept concern from executives that a PMO can be a drag on a company—listening and taking actions on their concerns will allow suspicious executives to be your greatest champions. Address common concerns head-on with the following four simple rules.
“When transitioning to a PMO, always ask: Who is the customer of this deliverable? Who is the customer of this process output?”
Four Simple Rules to Effectively Transition an IMO to a PMO
1. Keep a Proper Cadence Established in the IMO.
If an IMO is established with a set meeting cadence, take advantage of this for your PMO. Formally confirm and meet on a recurring basis, use and improve upon project management tools, and continue to ensure consistency in delivery. If a process is not followed one week or a meeting is delayed, consider why that is and make changes to improve adoption.
2. Always Have a Customer for Deliverables.
When transitioning to a PMO, always ask: Who is the customer of this deliverable? Who is the customer of this process output? The customer in this circumstance is likely an internal customer. If there is not a clear customer, formally eliminate the deliverable or process. Gaining respect of team members is critical, and there is no better way to do this than by eliminating unneeded PMO activities and deliverables. Remember, PMOs are to make teams more efficient, not less. PMO participants will enthusiastically take on PMO obligations into their daily work if they see their efforts driving efficiency.
3. Create Active Deliverables.
In today’s cloud-based world, we have a tendency to develop documents and store them in SharePoint or Google Drive, never to be looked at again. Instead, ensure documents are active and used in PMO meetings. Go through initiatives, risk registers, dependency lists, and task report summaries that are beneficial to the teams within the PMO and ensure they are used. If not, get rid of them. Most often these are the same deliverables that have been used to support the IMO.
4. Ask yourself other efficiency questions.
Keep basic questions in mind when establishing a PMO from an IMO:
- Does your PMO increase the speed of high priority task completion? Gaining clarity in what needs to be done first is a simple and effective benefit of a PMO.
- Does it make sense to have a person’s primary function be tracking tasks and addressing cross-functional dependencies as part of a PMO? In early-stage PMOs, it is important to allocate the right amount of time for a PMO lead.
- How can we make PMO meetings as short and efficient as possible? Time is important, if issues can be addressed prior to a PMO meeting and participants can update status ahead of time, PMO meetings can then allocate time to highlight status, issues, and dependencies best suited for the meeting environment.
- How can status reports and summaries be created automatically with web-based tools, versus manually created and manually rolled up? There are many cloud-based tools that can accomplish this simply, saving recurring effort and allowing for real-time status. Utilizing these tools early on in the IMO is a great start.
If you’d like to learn more about integration management offices and transitioning to project management offices, send us an email.
