PAPERS Building Value Through Sustainable
Project Management Offices
Mimi Hurt, MI 2 Consulting, Calgary, Alberta, Canada
Janice L. Thomas, Athabasca University, Athabasca, Alberta, Canada
ABSTRACT ■
Organizations’ attempts to implement and gain
value from investments in project management
have resulted in the rapid growth and, in some
cases, demise of project management offices
(PMOs). The recent research literature on PMOs
provides an ambiguous picture of the value
case for PMOs and suggests the tenuous nature
of their current position in many organizations.
In studying project management implementa-
tions for the Value of Project Management proj-
ect, we chose to use three detailed cases and
comparisons with the remaining 62 organiza-
tions in the value project to study how PMOs are
connected to value realization for organizations
investing in project management. Specifically,
we sought to understand how PMOs deliver sus-
tained value to organizations. Using the theo-
ries of Jim Collins (Collins, 2001; Collins &
Porras, 1994) as an interpretive framework, we
explore these cases to understand how to cre-
ate and sustain project management value
through investment in PMOs.
KEYWORDS: project management; project
management offices; value; sustainability;
success; leadership
Project Management Journal, Vol. 40, No. 1, 55–72
© 2009 by the Project Management Institute
Published online in Wiley InterScience
(www.interscience.wiley.com)
DOI: 10.1002/pmj.20095
INTRODUCTION ■
n the 1990s, as organizations began to recognize that their strategies and
I initiatives were essentially achieved via projects, their recognition of
project management as a critical competency took shape. As an out-
growth of this recognition, formal development of an organizational
project office (typically referred to as a project management office, or
PMO)—charged with developing and/or maintaining organizational project
management competency—began to take off in the 1990s and continues as
a major area of interest for both practitioners and researchers (see, for
example, Crawford, 2006; Hill, 2004; Hobbs & Aubry, 2007). The Project
Management Institute (PMI) has also taken a major interest in this emerging
functional group (see, for example, the release of OPM3 in 2003).
Although PMOs have been around since the mid- to late 1990s, Kerzner
observed that the vast majority of PMOs have either been recently created or
restructured (2003, p. 79). This, coupled with several studies that show
inconclusive results regarding the value of PMOs to the organization (see, for
example, Dai & Wells, 2004; Martin, Pearson, & Furumo, 2007), suggests that
the sustainability of PMOs and project management competency is a tenu-
ous issue.
In this article, we set out to explore how and why PMOs create sustain-
able value in some instances and fail to maintain their value contributions in
others. Drawing on the work of Jim Collins and his research team, as
described in Good to Great (2001) and Built to Last (Collins & Porras, 1994),
as well as previous research into PMOs and project managers, we suggest
ways to help develop a sustainable project management competency and
PMO. We illustrate these suggestions with observations from three in-depth
case studies and reference to other findings from the PMI–sponsored study,
“Researching the Value of Project Management.”
The Concept of PMOs
While some organizations rely on the functional manager, senior manage-
ment, or professional project managers to fulfill the responsibilities of devel-
oping, maintaining, and managing project management competencies,
others have developed a specialized group to take on some or all of these
activities. A PMO can take many forms, ranging from simply providing
administrative support for projects to providing coaching (e.g., as a center of
excellence, on project management practices, tools, etc.) to acting as a full-
blown execution function whose mandate is to formally manage and deliver
projects for the organization. See Table 1 for a review of previous research on
PMOs.
Many authors have described the basic functions of a PMO (see, for
example, Hill, 2001). However, Hobbs and Aubry’s (2007) empirical research
provides the most grounded exploration of the functions PMOs perform
in organizations today. Working from a comprehensive list of functions
March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj 55
PAPERS
Building Value Through Sustainable Project Management Offices
Authors Focus of Paper
Dai & Wells (2004) • Empirical study on
establishment and use of PMO
• Likert-type questionnaire
• Two samples of 234 (targeted sample)
and 96 (random sample)
• Identified different functions and services
of PMOs
• Assessed these against project performance
for both samples
Hill (2004) Describes continuum of PMO competency
Desouza & • Outlines nature and characteristics
Evaristo (2006) of PMOs
• Blends project management and knowledge
management concepts
• Classifies PMO archetypes with respect
to administrative vs. knowledge-intensive
dimensions
• Identifies critical success factors for PMOs
• Interviews with senior managers and
directors of PMOs in 32 IT organizations
Martin, Pearson, & • Use of formal project management practices
Furumo (2007) on information systems (IS) projects
• Identification of which specific project
management practices, including PMOs,
provide most value for IS projects
• Survey responses from 129 IS project
managers drawn from PMI
Table 1: Summary of recent research on PMOs.
56 March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj
Key Findings/Observations
• Majority of PMOs established mid-1990s to 2000
for different motivating factors; top two motivators:
improve all elements of project management and
achieve common project management approach
• Wide range of PMO mission statements, some
business-related (strategic), others project-related
(tactical)
• Proportion of budget devoted to PMO was estimated
as ⬍ 2% for approx 60% of companies in sample
• Statistical analyses showed:
• Project standards and methods had highest
correlation to project performance
• Use of project historical archives next significant
correlation to project performance for targeted sample
• Reported project performance is higher in
organizations with a PMO, but difference is not
statistically significant; however, these results
were different between the two samples
• Those organizations with a PMO did more in
promoting PMO standards, historical archives,
training, and mentoring than those without a PMO
• Five stages of increasing competency: project
oversight, process control, process support,
business maturity,center of excellence
• Higher stage has achieved competencies of lower stage
• Stage 3 adequate for most organizations
• Roles of PMO fall into three levels: strategic, tactical,
operational
• PMO archetypes = supporter, information manager,
knowledge manager, and coaches
• Archetype reflects degree of authority
• CSF:
• Understand how PMO will fit into corporate culture
and pick appropriate archetype
• Understand drivers for creating PMO
• Match type of project with project manager who has
appropriate skill sets for nature of project
• Have clearly identified roles, responsibilities, and
accountability
• Have a PMO charter, PMO policy, and PMO methodology
methodology
• Create and regularly monitor/report PMO
metrics that measure PMO performance
related to policy objectives
• IS project size had significant and inverse influence
on project quality and budget
• Organizations without a PMO were just as likely to
utilize standard project management practices as
those with a PMO (most likely due to PMI sample
bias)
(Continues on next page)
 Authors Focus of Paper
Hobbs & • Three-phase research program to better
Aubry (2007) understand PMOs and their perceived value
• Descriptive survey of 500 PMOs
• Development of classification typology
• In-depth study of four PMOs through
11 transformations
• Confirmatory study to validate findings
(forthcoming)
Hobbs, Aubry, & • In-depth qualitative and quantitative
Thuillier, (2008) analysis of four PMOs, whose life spans
were 4, 8, 10, and 12 years
• Each organization reconfigured its PMO
every 3–4 years, resulting in
11 organizational transformations
Key Findings/Observations
• Having a PMO did not influence project schedule
or project quality
• PMO presence significantly related to meeting
project budget
• Organizations should establish measures of
effectiveness of PMO in order to calculate its
worth
• Could not identify small number of definitive PMO
configurations
• Most PMOs are young and have a small staff
(2007, p. 78)
• 27 PMO functions grouped into five factors
(see Table 2)
• PMOs are viewed as overhead expenses
• PMOs are frequently reconfigured every
couple of years
• PMOs need to adapt their functions to the
organizational and strategic context
• Lack of consensus in the project management
community regarding the value for money and
contribution of the PMO to project/program
performance
• “Practitioners and organizations would be well
advised not to implement a PMO under naïve
assumptions of value for money or because
PMOs are popular” (2007, p. 85)
• Organizational tensions are primary drivers
behind implementation and reconfiguration
of PMOs
• Organizational politics play an important role
underlying these tensions
• The structure of PMOs coevolve with that of the
organization
• Because of the inherent historical instability of
PMOs, it is hard to determine if they are truly a
valuable innovation

developed from the literature and a
previous phase of the research project,
their research proceeded through a
multistep process of refinement. The
500 respondents covered a variety of
roles, but most were project managers
or within the PMO. Respondents
ranked the importance of each PMO
function on scale of 1 to 5, with 1 ⫽ not
at all important to 5 ⫽ very important.
Ultimately, the study identified 27 func-
tions that PMOs can perform. Factor
analyses grouped these into five dis-
tinct groups as reflected in Table 2.
A PMO’s effectiveness and success,
according to Hill (2004), depends on
choosing which functions to imple-
ment, and adapting and adjusting them
to fit the organization’s needs, which is
also an observation from Hobbs and
Aubry (2007, p. 84): “[the relative differ-
ences in importance of various individ-
ual functions] reinforces the need to
adapt to the organizational and strate-
gic context when deciding which func-
tions to include within the mandate of a
particular PMO.” This need to contextu-
alize the practice of project management
and implement only what is needed by
the specific organization at a specific
time is a major finding of the Value of
Project Management research as well
(Thomas & Mullaly, 2007, 2008).
Kerzner (2003) stated that project
management competency represents
important intellectual property for the
company, and therefore must be man-
aged wisely. He argued that this respon-
sibility is most appropriately that of the
PMO. Kerzner reviewed the roles and
benefits of the project office over sever-
al decades. Table 3 lists the benefits of a

March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj 57

PAPERS
Building Value Through Sustainable Project Management Offices

1. Monitoring and Controlling 2. Development of Project 3. Multiproject Management

Project Performance Management Competencies and • Coordinate between projects
• Report project status to upper Methodologies • Identify, select, and prioritize new projects
management • Develop and implement a standard • Manage one or more portfolios
• Monitor and control of project methodology • Manage one or more programs
performance • Promote project management within • Allocate resources between projects
• Implement and operate a proj- organization
ect information system • Develop competency of personnel,
• Develop and maintain a project including training
scoreboard • Provide mentoring for project man-
agers
• Provide a set of tools without an
effort to standardize

5. Organization Learning Other Functions (Not in Any Group):

4. Strategic Management
• Provide advice to upper manage-
ment
• Participate in strategic planning
• Benefits management
• Network and environmental
scanning
• Monitor and control performance of • Execute specialized tasks for project
managers
PMO
• Manage customer interfaces
• Manage archives of project docu-
• Recruit, select, evaluate, and determine
mentation
salaries for project managers
• Conduct postproject reviews
• Conduct project audits
• Implement and manage database of
lessons learned
• Implement and manage risk data-
base

Table 2: Importance of 27 PMO functions grouped into factors (n ⫽ 500, Hobbs & Aubry [2007, pp. 82–83]).

1990–2000 2001–present
• Accomplishing more work in less time with fewer resources and • Standardization of operations
without any sacrifice in quality • Company rather than silo decision making
• An increase in profitability • Better capacity planning
• Better control of scope changes • Quicker access to higher-quality information
• More efficient and effective operations • Elimination or reduction of company silos
• Better customer relations • More efficient and effective operations
• Better risk identification and problem solving • Less need for restructuring
• An increase in quality • Fewer meetings that rob executives of valuable time
• A reduction in power struggles • More realistic prioritization of work
• Better company decision making • Development of future general managers
• An increase in business and becoming more competitive
Table 3: Benefits of a project management office (Kerzner, 2003).

PMO in the 1990s and 2000s. Clearly,
the purpose of the PMO appears to be
shifting over the course of its lifetime.
The Concept of Value
The idea of value has been discussed at
length in the work of the “Researching the
Value of Project Management” project
(Thomas & Mullaly, 2007, 2008). A part
of the framework underpinning value is
described in Figure 1.
The literature just reviewed serves
to highlight the ambiguity of the value
case for PMOs and the tenuous nature
of their current position in many organ-
izations. We see that an organization’s
attempts to implement and gain value
from investment in project manage-
ment have resulted in the rapid growth
and, in some cases, the demise of
PMOs. Our question then is how is a
PMO connected to value realization for
organizations investing in project man-
agement? Specifically, we sought to

58 March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj

 Different Values of Project Management
Level 1—Satisfaction: Do the key stakeholders perceive that the project management initiatives provided value? This is measured
through perceptions/self-report satisfaction levels as well as through the use of objective measures (such as repeat customers)
wherever possible.
Level 2—Aligned Use of Practices: Did the project management implementation result in the desired processes? Do they do what
they say they do? Do project people know what they are supposed to do? This is assessed through a comparison of practices, poli-
cies, and procedures with what actually happens on projects.
Level 3—Process Outcomes: What project process improvements have been reaped from the project management implementation?
How effective is the project management process? This is evidenced by changes over time in things such as numbers of change
requests, budget performance, learning from past projects, and reliability of delivery.
Level 4—Business Outcomes: What business outcomes are related to these process improvements (e.g., improve customer satis-
faction and retention; the organization's ability to attract new customers through reputation effects, word of mouth, etc.; increased
ability to achieve strategic goals)?
Level 5— Return on Investment: For every dollar invested in the project management initiative, what return in terms of cost sav-
ings, revenue, etc., can be attributed to it?
Figure 1: Value framework (adapted from Phillips in Thomas & Mullaly, 2007).

understand how PMOs deliver sus-
tained value to organizations.
In order to explore the creation and
sustainability of organizational value
through a PMO, we turn to the theories
of Jim Collins as expressed in his books
Built to Last (Collins & Porras, 1994)
and Good to Great (2001). Collins sug-
gests fundamental activities necessary
to create and sustain value in organiza-
tions. The concepts in Good to Great lay
the groundwork to get the flywheel turn-
ing to create exceptional value, while
the concepts in Built to Last outline
concepts to keep it turning (i.e., to sus-
tain value). The concepts from these
two books are summarized in the
Appendix.
Methodology
In-depth detailed case studies were
conducted in three organizations as
part of a larger PMI study to analyze the
value contribution of project manage-
ment (Thomas & Mullaly, 2008).
Semistructured interviews were held
with various stakeholders, including
senior management, project managers,
members of the PMO, and project
sponsors. Data was also collected via
online surveys and document reviews.
In total, 46 interviews were conducted,
and 41 respondents completed online
surveys. Tables 4 and 5 provide an
overview of the case organizations and
their project management implemen-
tations.
Each case study was examined in
two different ways. First, each case
organization’s PMO implementation
was examined for similarities and dif-
ferences between the key events and
players in the three organizations.
Stages in the implementation were
identified, as well as fundamentally
important characteristics of each
implementation. Second, each case
was studied for evidence of meeting or
failing to meet the constructs as Collins
describes them (see the Appendix). The
interplay between examining the cases
for key events and then comparing and
contrasting these with the concepts
outlined by Collins provides significant
insight into these three PMO imple-
mentations.
Organization Descriptions
The three organizations are summa-
rized and compared in Tables 4 and 5.
Because AlphaGas has the longer-
running PMO, its history is described in
greater detail.
AlphaGas
AlphaGas is relatively conservative, views
itself as a fast follower, and is rapidly
growing. It relies on contract workers,
especially within project management,
to support its rapid growth. Projects are
viewed as a way to get things done with-
in the company, and effective project
management is viewed as critical to pur-
suing its strategic objectives.
After a merger in the late 1990s, the
culture of the company represents an
interesting blend between the results
orientation of one company and the
process orientation of the other. In gen-
eral, adherence to process and proce-
dure is a secondary concern as long as
desired results are obtained. It is also
viewed as a very collaborative organiza-
tion, with many people consulted
before doing anything. Consequently,
some (e.g., contract project managers)
perceive AlphaGas as very slow-moving.
The culture thus creates an interesting
context for project management, where
“cowboy” project managers who don’t
necessarily follow all processes appear
rewarded for results; yet clients, senior
management, and other project man-
agers express great appreciation for
having a strong project management
methodology with detailed processes
and procedures.
AlphaGas began building its IT
project management competency in
1999 after several large projects went

March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj 59

PAPERS
Building Value Through Sustainable Project Management Offices

Attributes AlphaGas BetaGas ITM Consulting

Ownership Publicly traded Publicly traded Private
corporation income trust
Industry Pipeline and energy Pipeline and energy IT consulting
Size Very large Large Medium
Organization Operational Operational Strong matrix
Competitive Regulated and deregulated Regulated and deregulated Many small competitors, 1–2
Environment industries industries larger ones operating
Fast-paced, with rapid growth in Fast-paced, with rapid growth in in this space
some sectors some sectors
Competitors are often partners Competitors are often partners
and/or customers and/or customers
Strategy Growth in all areas; build/acquire Double in size in 3–5 years Strategy ⫽ grow by 30% a year
Focus on build rather than buy in
order to increase size
Culture Fast follower; conservative Hard-working, results-oriented; tight Professional, open, careful
Conflict between results- vs. control from top; fast-moving screening of employees and
process-oriented subcultures clients for fit with values
and culture

Table 4: Organization attributes.

off the rails. There was also a pent-up
demand for new projects, as well as a
need to replace or upgrade many legacy
applications and infrastructure. A
trusted senior project manager, with a
strong process background, was tasked
with improving project performance.
Based on the belief that the company
would be unable to hire sufficient num-
bers of expert project managers, he
developed a comprehensive project
management methodology based on
the Project Management Body of
Knowledge (PMBOK) and industry
“best practices” to provide a consistent
structure for junior and contract proj-
ect managers. He felt that such a
methodology would improve project
performance and provide better con-
trols, especially around project costs.
He invested significant time training
project managers and senior executives
on the methodology and provided
extensive coaching and mentoring. His
first priority was getting proper status
reports established; next, he focused on
project closure, followed by establishing
proper project initiation and plann-
ing procedures. These were quickly
followed by other project manage-
ment processes. He created com-
prehensive documentation for the
complete project management metho-
dology, as well as developed and deliv-
ered detailed training materials and
seminars. In 2008, there were approxi-
mately 50 project management proce-
dures, 50 job aids, 20 checklists, and 30
templates accessible via the company
intranet—which had changed very lit-
tle since the PMO founder’s retirement
in 2004.
Both tangible and intangible value
was quickly realized, as measured by
standard on-budget, on-schedule, and
satisfaction metrics as well as anecdot-
al data. Senior management and
project sponsors expressed great confi-
dence and satisfaction around IT’s
improved ability to reliably and effi-
ciently get projects completed. In 2005,
the company received a PMI award for
project management excellence. For
the last few quarters leading up to Q2
2008, these metrics—while still high—
have been trending downward.
After the founder of the PMO
retired in 2004, an internal senior proj-
ect manager was put in charge of the
PMO. All project managers were trans-
ferred to the PMO, making it both a
coaching- and executing-type PMO.
The move was to help ensure adher-
ence to process and procedures and
provide better oversight of projects as
their numbers significantly increased.
In 2006, the director of the PMO was
transferred to a senior executive posi-
tion across the country in another busi-
ness unit; after several months’ search,
a new director was brought in from the
banking industry in the second quarter
of 2007. While never acting in a formal
project manager position, she had
experience with several large IT proj-
ects in the bank and had been manager
of client relations.
As mentioned, over the next few
years, the number of projects managed
per year increased dramatically (from
12–20 to 60–70 projects). The types

60 March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj

 AlphaGas
Length of Time of Project Approximately 8 years
Management Capability
Reasons for Creating • Projects failing
Project Management • Wanted better control of costs
• Projects getting bigger, more
numerous, more complex
• Fundamental belief that
competence in project
management is critical to
strategic success
• Wanted better confidence/
satisfaction around ability
to execute projects
Types of Projects • IT infrastructure
• Software development
Number of Projects 60–70
in Pipeline
Previous Approach to Informal, ad hoc, varied by project
Project Management manager; internal and contracted
project managers
Project Management Very formal with medium
Methodology adherence
What Implemented • Adapted from PMBOK/best
practices to fit needs of company
• Comprehensive methodology
and supporting tools/
documentation
• Portal to access all project-related
material, including project archives
• Initially, lots of training/coaching
of project managers, senior execs,
IT personnel
• Initially, close monitoring/follow-up
of project managers
• Monthly project management
meetings around projects
• Program managers
Project Manager 88% have 1–4 years
Experience
Table 5: Comparison of project management implementations.
BetaGas
2 1兾2 years
• Projects failing
• Wanted better control of costs
• Projects getting bigger, more
numerous, more complex
• Fundamental belief that
competence in project
management is critical to
strategic success
• Wanted better confidence/
satisfaction around ability
to execute projects
• IT infrastructure
• Vendor configurations
(Buy, not build)
13
Contract project managers
hired for ability to deliver
projects; each brought own
project management
approach
Moderately formal with
medium adherence
• Adapted from PMBOK/best
practices to fit needs of
company
• 13 basic processes, a few
templates for reporting,
charter
• Various tools/techniques
• Ongoing training/coaching
of project managers, senior
execs, IT personnel
• Close monitoring/follow-up
of junior project managers
• Program managers
83% have 10–20 years
ITM Consulting
2 1兾2 years
• Projects failing
• Wanted better control/predictability
of project-related costs
• Improve quality of projects,
reduce rework
• Wanted better confidence/
satisfaction around ability to
execute projects
• Projects getting bigger, more
numerous, more complex
• Larger partners asking for project
manager
• IT infrastructure
• IT consulting
200
“Cowboy” project managers
usually were technical leads
Moderately formal with high
adherence
• Adapted from PMBOK/best
practices to fit needs of company
• Basic processes, tools, and
templates
• Portal to access project
management documentation
and project archives
• Initially, lots of training/coaching
of project managers, senior execs,
IT personnel
• Close monitoring/follow-up of
junior project managers, weekly
project management meetings on
projects and project management
• Program managers
• Resource management
57% have 1–9 years

of projects went from primarily development projects. In 2008, approx- managers were added to the PMO;
infrastructure- and telecommunications- imately 70% of the 300 IT PMO project however, each operated in a different
type projects to include vendor appli- managers and staff were contract way. Some acted as true program man-
cation configurations and software employees. In 2005–2006, program agers, and others simply oversaw a

March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj 61

PAPERS
Building Value Through Sustainable Project Management Offices

Year Milestone Key Accomplishments

1999 Experienced project manager tasked • Focus on costs, status reporting, and formal change
with improving project management in IT process
• Introduction of project management as a discipline
• Began development of project management methodology
2000–2002 Continued development of project • Began work on closure phase: getting projects
management methodology completed
• Initiation phase focused on next, followed by
turnover and change control processes
• Extensive coaching, mentoring, training
2003 New CIO • Established strong foundation for project management
Project center of excellence created • Implemented changes to methodology once a year,
followed by extensive training
2004 New director of PMO • CIO edict: PMO would run all big IT projects
• Transfer of project managers to PMO
• Increase in number of projects (12–20)
• Increase in number of contract project managers and
PMO staff
2005 Won PMI Award for Project Excellence • Continued increase in number of projects (60⫹)
• Program managers introduced
2006 Director of PMO transferred • More project managers hired/contracted (little or no
orientation or on-boarding done—directed to project
management documentation on website)
2007 New director of PMO hired • Begin refresh of project management methodology,
develop vision and strategy for PMO
• Reposition most of existing program managers, hire
new ones
• Begin to develop resourcing strategy
2008 Previous director of PMO appointed as CIO • Continue work on refresh of PMO

Table 6: Critical project management events—AlphaGas.

large portfolio of diverse projects. At
the time of the case study, it did not
appear that the role of the program
manager was clearly documented or
integrated with the project manage-
ment methodology. Currently, a refresh
and refocusing of the PMO and project
management methodology are being
done to improve the management,
accountability, and effectiveness of the
PMO, project managers, and stakehold-
ers. A long-term strategy and resourc-
ing strategy is also being developed.
Table 6 recaps the critical project
management events in AlphaGas’s his-
tory.
BetaGas
As with AlphaGas, project manage-
ment was introduced at BetaGas by the
chief information officer (CIO) to pro-
vide a formal structure for managing
projects with standardized, repeatable
processes, as well as clear metrics for
tracking status and costs. His underly-
ing vision was to use formal project
management methodologies and tools
on IT projects as a prototype for how
projects should be run in the rest of the
organization. Similar to AlphaGas,
there were numerous IT projects that
needed to be done to acquire or upgrade
infrastructure and applications, and
there was a heavy reliance on external
project managers.
In 2006, an experienced project
manager was brought in to manage
several projects and develop a basic
project management methodology. She
had seen project managers who were
familiar with its fundamental princi-
ples use the project management
methodology and provided thorough
training on it to anyone who had any-
thing to do with projects, including
project managers, senior executives,
technical resources, and business staff.
Initially, she focused on providing sim-
ple, regular project status reports to

62 March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj

 Year Milestone Key Accomplishments
2005 Experienced project manager, with strong • Focus on status reports and standard project reporting
PMBOK background hired to improve • Introduction of project management as a discipline
project management in IT • Demonstrated value of formal project management
practices
2006–2007 Formal IT PMO established • Monthly overall project status report to senior executive
Continued development of project committee
management methodology • Extensive coaching, mentoring, and training of project
managers, executives, and other stakeholders
• Hiring new project managers
• Project sponsors begin writing project charters
2008 Introduce portfolio management • Introduce role of program managers
• Senior executives begin to take portfolio approach to
project prioritization and selection

Table 7: Critical project management events—BetaGas.

senior executives. Then she focused on
getting proper charters written to initi-
ate projects.
The results quickly demonstrated
value to senior management, and
quickly improved resource manage-
ment. In interviews, senior executives
strongly endorsed the use of formal
project management practices, and the
chief operating officer (COO) advocated
the use of formal project management
practices on other types of projects in
the organization (e.g., major capital
projects, acquisitions, and organiza-
tional change projects). Within the IT
PMO, the role of program manager is
being introduced due to an increasing
number of projects being undertaken.
Table 7 recaps the critical project
management events in BetaGas’s his-
tory.
ITM Consulting
ITM Consulting is a small-to-medium,
regionally focused IT consulting com-
pany, delivering infrastructure-type
projects, managed services, and devel-
oping security, business continuity
management/disaster recovery (BCM/
DR), and IT strategies for small-to-
medium-sized companies. Revenues of
$20M are split 40/60% between proj-
ects and managed services. Employee
and customer satisfaction are equally
as important as profitability on its bal-
anced scorecard. It currently has
approximately 135 employees. Its proj-
ect management methodology was
introduced in much the same fashion
as at AlphaGas and BetaGas, using an
experienced project manager to devel-
op its project management methodolo-
gy, using experienced project managers
to quickly demonstrate its value, and
providing thorough training on the
project management methodology to
everyone, especially junior project
managers.
ITM Consulting knows that it has
received significant value for its
approximate $500K investment in
developing its project management
office and project management com-
petency. Costs are better under con-
trol, and customer and employee
satisfactions have improved. There is
significantly less rework on delivered
projects and fewer disputes over
invoices. They also bill clients for proj-
ect management fees, which repre-
sents an additional revenue stream.
They feel they are more professional
and have greater credibility in the mar-
ket. They are getting larger, more com-
plex projects based on their success
record. One client indicated that, at
one time, they were on the verge of dis-
continuing their relationship with ITM
Consulting. After experiencing the
results of ITM’s formal project man-
agement methodology, they now not
only gladly pay for project manage-
ment fees, but also write letters of ref-
erence for ITM Consulting. ITM
Consulting feels that its project man-
agement practices deliver such consis-
tency and reliability that they are mov-
ing toward offering fixed-price con-
tracts for some types of projects.
Table 8 recaps the critical project
management events in ITM Consulting’s
history.
Perceptions of Value
In all three organizations, senior man-
agement, project managers, project
sponsors, and customers reported ben-
efits and satisfaction with the project
management implementation. These
were categorized into tangible and
intangible benefits by the researchers,
with different types of value observed.
These are reported in Table 9.
Using the specific types of value
described previously in Figure 1 (from
Thomas & Mullaly, 2008), Table 10 rep-
resents the researchers’ perceptions of
specific types of value that each of the
three organizations have received from

March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj 63

PAPERS
Building Value Through Sustainable Project Management Offices

Year Milestone Key Accomplishments

2006 Q1—Formal project launched to develop
project management methodology,
created by experienced project managers
2007 Implement continuous improvement
2008 Develop PM-Lite
Table 8: Critical project management events—ITM Consulting.
• Charter written—Q2
• Methodology, templates created, piloted
• Approved by senior management—Q3
• Rolled out, with training to relevant employees—Q4
• Continuous improvement of processes, tools
• Hired several more project managers as number of
projects increased
• Created PM-Lite for smaller projects
• Introduced program management
• Created resource manager position within PMO

AlphaGas BetaGas ITM Consulting

Focus of Project Within IT Within IT Organization-wide
Management/PMO
Organizational High Very high High
Commitment to Project
Management
Tangible Benefits • Cost savings in time • Revenue increases (through • Cost savings
• Reduced write-offs and rework support of acquisitions) • Revenue increases
• Reduced write-offs/rework • Reduced write-offs/rework
• Customer retention
• Increased customer share
• Greater market share
• Improved competitiveness
Intangible Benefits • Attainment of strategic • Strategic alignment • Attainment of strategic objectives
objectives • More effective human resources • New product/service streams
• More effective human resources • Improved general use of resources • Strategic alignment
• Improved reputation • Better project decision making • More effective human resources
• Improved regulatory compliance • Improved regulatory compliance • Improved reputation
Perceptions of Value • High • Significant • High
of Project Management • Spreading project management • Planning on spreading project • Increased revenues
principles to other types of management principles to other • Decreased costs for similar
projects types of projects projects
• Moving towards fixed-price
contracts
• Taking on bigger, more
complex projects
Table 9: Benefits of project management implementation.

Satisfaction Aligned Use Process Outcomes Business Outcomes ROI

AlphaGas

BetaGas Q Q Q Q
ITM Consulting Q Q Q Q Q
Table 10: Specific types of value from project management implementation.

64 March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj

 Understanding the Dimensions of Value
A company's hedgehog concept is at the intersection of three circles:
• what they are deeply passionate about,
• what drives their economic engine, and
• what they can be better at than anyone else in the world.
• Project managers are deeply passionate about delivering projects that meet requirements.
• Efficiently managing costs and effectively managing resources to meet on-time, on-budget requirements drive their economic engine.
• Project managers and PMOs should be better than anyone in the organization at managing projects.
their project management implemen-
tation since its inception.
As can be seen, all organizations
received significant value from their
investment in formal project manage-
ment practices, especially in the early
years. There was an apparent
deterioration of value in AlphaGas—
the organization with the longest project
management implementation. They
still report significant value and satis-
faction from project management and
would never discontinue following a
formal project management methodol-
ogy. In fact, they are looking at transfer-
ring the project management method-
ology to other types of projects outside
of IT. However, according to their own
analyses, if the downward trend contin-
ues, they will not meet their on-budget,
on-schedule target levels.
What caused this deterioration?
Was it the rapid growth in numbers
of projects? Was it a change in type of
projects? Was it simply a lack of adher-
ence to processes? Was it the change
in leadership? Was it the change of
Value
Time
Figure 2: Value sustainability.
=====
focus from a coaching-focused PMO
to an executing one? Is it the heavy
reliance on external project man-
agers? We began to ponder the sus-
tainability of project management
value. Is there a point of inflection, as
shown in Figure 2, where value levels
off or even decreases?
Exploring the diagram in Figure 2
with the other case study teams in a
research workshop, we realized that
other researchers were observing simi-
lar issues with the PMOs in their case
study organizations. Clearly, a question
of major importance is “How do organ-
izations increase or sustain the value
received from investments in project
management and, more specifically for
us, in PMOs?”
Discussion
In all three cases, the mechanism for
managing the investment in project
management was through the estab-
lishment of a PMO. Also, all three cases
began in a very similar fashion and
quickly realized similar benefits and
value, but the oldest PMO—AlphaGas—
has struggled to sustain these contribu-
tions. In this section, we discuss the influ-
ences on the value and sustainability of
PMOs by applying a lens of value cre-
ation and sustainability adapted from
Collins (2001) to our case studies and
focus on the insights this lens reveals.
The insights are identified in the follow-
ing themes:
• Build a core ideology for the long
term.
• Pick the right PMO leadership.
March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj
• Staff the PMO carefully.
• Create a culture of discipline.
• Confront the brutal facts, but keep the
faith.
Build a Core Ideology for the
Long Term
Collins’s (2001) recommended strategy
for building an organization that can
endure and adapt through multiple
organizational life cycles and leaders
suggests that the key is to start with a
long-term focus and vision and then
put in place the values and frameworks
that will support this vision. Applying
this to PMOs and project management
competency means that both must sur-
vive transitions in leadership of both
the organization and the PMO, and
adapt to changes in the needs of the
organization. Drawing on several of
Collins’s concepts, a PMO’s core ideolo-
gy should be based on a clear vision
and focus, guided by a frame of refer-
ence, which comes from its hedgehog
concept (see sidebar), and the “genius
of AND”1 as it applies to project man-
agement.
In essence, the PMO’s core ideology
should be based on the notion that:
• No one else in the organization is
more passionate or knows more
about how to manage/deliver projects
more efficiently or effectively.
• Flexibility AND a standard methodol-
ogy are compatible concepts, as is the
1 The “genius of AND” refers to being able to embrace both
ends of a continuum as feasibly possible rather than view-
ing the ends as “either/or” options.
65
PAPERS
Building Value Through Sustainable Project Management Offices
ability to be both a competent leader
AND manager, have both a people AND
a task focus, and manage internal
AND external relationships.
• It is better at supporting, managing,
and developing project managers
than anyone else in the organization.
This core ideology should be
reflected in the PMO’s project manage-
ment methodology. Furthermore, as
others have shown, organizational staff
and project managers must be involved
in developing their project manage-
ment methodology, even if from the
outside it seems like only minor adap-
tations from best practices (see the
Andersen and Vaagaasar; Eskerod and
Riis; and Mengel, Cowan-Sahadath,
and Follert papers in this issue). The
process of development and adapta-
tion increases a sense of ownership and
commitment to the methodology. It
becomes the organization’s way of
managing projects, not the PMBOK’s
or anyone else (i.e., “This is the way we
do things around here.”). This lack of
perceived ownership may provide
explanations for some of the uncer-
tainty of value found in the full set of
case studies when organizations
attempted or were forced to imple-
ment a new project management
methodology that had been developed
elsewhere (Thomas & Mullaly, 2008).
In all three case studies, the PMO
founder clearly created a core ideology
around managing projects, into which
they indoctrinated relevant stake-
holders through training, mentoring,
coaching, and rejection of noncompli-
ant work. One could argue that these
activities are fundamentally why formal
project management methodologies
and PMOs add value to organizations.
Collins (2001) suggested that sus-
taining the value generated from orga-
nizational investments requires both
“preserving the core” and “stimulating
progress.” “Preserve the core” has two
important implications. First, it
explains why appropriate on-boarding
of even experienced and contract proj-
66 March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj
ect managers is so necessary. Investing
in proper on-boarding allows the com-
pany to explain its adaptation of key
processes, identifies those artifacts that
are mandatory, and reinforces why it is
important to do certain tasks. Second,
PMOs should not get distracted from
their primary focus, their hedgehog
principles, by taking on other responsi-
bilities like benefits realization or addi-
tional governance functions.
In order to continue to add value to
the organization, PMOs must stay
focused on managing projects; however,
this does not mean stagnating or
neglecting core principles. As Collins
(2001, p. 108) observed, “If you success-
fully apply these ideas, but then stop
doing them, you will slide backward . . .
the only way to remain great is to keep
applying the fundamental principles
that made you great.” As discussed in
later sections, we think that AlphaGas,
somewhere in rapidly expanding
the number of projects it took on, the
number of project managers it hired,
and the changes in PMO leadership,
neglected to apply the fundamental
principles that provided value.
“Stimulate progress” can relate to sev-
eral PMO-related issues, including
developing project managers by having
them take on more challenging roles or
different types of projects, periodically
updating or refreshing the project man-
agement methodology, or adding new
functions to the PMO that enhance its
ability to manage projects on the orga-
nization’s behalf (see Hobbs and
Aubry’s 27 PMO functions in Table 2).
The key considerations are that all
changes should be based in preserving
core features of the original hedgehog
principle—embodied in the company’s
project management methodology—
while stimulating progress via modifying
and changing it around the periphery.
Any attempt to disrupt the core, for
example, a drastic change of the core
project management methodology
such as when a new PMO leader comes
on scene, will be dangerous and should
be approached with great care.
Pick the Right PMO Leadership
Collins (2001, p. 20) reviewed qualities
of leaders that headed up long-lasting
successful companies. The three PMO
founders we studied all exemplified
Collins’s successful leadership charac-
teristics (also see the Appendix for the
leadership model) of successful, value-
sustaining companies.
• They were passionate, focused, and
determined about what constituted
effective project management.
• Each founder had a low-key, patient,
but confident personality. Given they
were dealing with senior executives,
engineers, IT personnel, or clients/
businesspeople, a more forceful, direct,
or aggressive personality would have
quickly met with resistance from the
folks they were trying to persuade to
adopt new behaviors and methods.
• Each focused on quickly demonstrat-
ing the proof and value of what they
were advocating with quick, simple
wins. For example, the senior execu-
tives quickly came to appreciate regu-
lar, consistent, simple status reports.
The project management founder in
AlphaGas took this a step further,
illustrating how much money could
be saved in labor-hours by adopting
this standard procedure. Getting sen-
ior management on board provided
the project management founder
additional support for persuading
others (e.g., project managers) to fol-
low standardized procedures.
It is important to note, however, that
it is not just the organization the PMO
founder has to convince. He or she
also must convince, persuade, or dic-
tate to the project managers to follow
new practices. If the PMO is simply a
support or coaching role, then the PMO
does not necessarily have the authority
to enforce compliance or accountabili-
ty of project managers, and must draw
heavily on personality, soft skills, and
higher leadership qualities to persuade
compliance and create discipline.
Kellerman (2008) stated that “increas-
ingly, followers think of themselves as
free agents, not as dependent under-
lings,” and thus their management and
leadership is more challenging. In the
world of North American knowledge
workers and contract project man-
agers, this self-perception of free
agency is predominant. An in-depth
discussion of the nature of project
managers as followers is beyond the
scope of this article; however, accord-
ing to Goffee and Jones (2006), follow-
ers want authenticity, significance,
excitement, and the sense of being part
of a community from their leaders.
In the realm of project managers,
they want their leaders to be genuine
and have credibility as project man-
agers; they want to feel recognized for
their success as project managers and
made to feel important. Project man-
agers want their leader to engender
excitement around project manage-
ment “through their passionate com-
mitment to clearly articulated personal
values and to a vision” (Goffee & Jones,
2006, pp. 194–195). Interestingly, Keegan
and Den Hartog found no correlation
between project managers’ leadership
styles and the project team’s motivation
and commitment, although they did
find a significant correlation between a
line manager’s leadership style and
employees’ commitment, motivation,
and stress (Keegan & Den Hartog, 2004,
in Neuhauser, 2007, p. 23). In the three
PMOs we studied, each of the founders
exhibited these qualities and abilities, as
reflected in comments from both senior
and junior project managers. In
AlphaGas, even though the founder had
retired 3 years previously, his passion,
values, and vision for project manage-
ment were still talked about and referred
to with great respect and frequency.
Effective ongoing leadership is nec-
essary, especially with respect to main-
taining a clear and compelling vision of
what project management competency
means to the organization and how this
competency should be managed,
developed, and maintained. Both sen-
ior managers and project managers
require regular, consistent reminding
that project management practices cre-
ate value, which in turn reinforces the
need for disciplined action and adher-
ence to standards.
In the AlphaGas case, when replac-
ing the PMO founder, the organization
took the position that the visionary,
commitment gaining, and setting up
part of the PMO was “done” and all that
was needed in the replacement was a
transactional manager to be the keeper
of the methodology and processes. This
is similar to other cases in the global
value project where consultants were
hired to set up the PMO and then a
caretaker manager was put in place. In
these cases, the methodology stag-
nates, as there is no one working to
engage the periphery and adapt the
methodology to changing environments.
Not any project manager can aspire
to lead the PMO. In Collins’s hierarchy,
successful project managers are most
likely to be at a Level 3 (competent
managers). Research on project man-
agers’ leadership styles tends to be
mixed. While many project managers
can be people- or relationship-focused
(Mäkilouko, 2004; Lee-Kelley & Leong,
2003, as reported in Turner and Müller,
2005), others have found that project
managers prefer task-oriented leader-
ship styles (Turner & Müller, 2005,
p. 57) and tend to use transactional
more than transformational-style lead-
ership behaviors (Neuhauser, 2007).
This was especially true for project
managers who came from a technical
background. However, Neuhauser
(2007, p. 23) stated “general leadership
research has found that transforma-
tional leadership is correlated with
more satisfied employees and a posi-
tive effect on productivity and financial
results.” Moreover, Müller and Turner
(2007, p. 31) reported “. . . we do see
that vision in the project manager can
be detrimental to project performance
[especially for engineering, informa-
tion systems, and organizational and
business projects], and vision is a key
component of the transformational
leadership style.” They concluded that
March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj
strategic perspective and vision are
unimportant and even detrimental in
project managers (2007, p. 31). The
leadership aspect of projects is the area
of skill that may be lacking for many
project managers” (Gehring, 2007, p. 50).
Clearly the controversy over a project
manager’s need for leadership and
strategic capabilities rages on.
Given the greater need for the PMO
to take an organizational focus, man-
age a broad range of stakeholders, and
act more like a functional department
than a project, and taking Collins’s
advice for building sustainable value
into account, we believe managing and
leading the PMO requires strong trans-
formational and people-oriented lead-
ership skills and behaviors—that is,
Level 4-type leaders. Given that the
research suggests that these skills are
not typically required or used by proj-
ect managers to a significant extent, the
PMO should ensure that evaluating and
developing such competencies is part
of its career advancement strategies for
those project managers that want to
move into PMO leadership roles.
Carefully Staff the PMO
In Collins’s (2001, p. 63) terms, one
should “get the right people on the bus,
the wrong people off, get the right peo-
ple in the right seats THEN figure out
where to drive it.” Like Collins acknowl-
edged, one doesn’t always have this lux-
ury in project management and in the
PMO. As pointed out by Graham and
Englund (1997, in Gehring, 2007), “For
most organizations, the most natural
thing to do is to draft a technician or
administrator with a good reputation
within the organization to lead the
project. . . . Accidental project man-
agers typically have strong skills for
understanding the technical aspects of
the project. However, the technical
part of a project is often the smallest
and easiest part.” Walker and Peterson
(1999) stated that “in order to create a
mutually successful corporate environ-
ment, it is important to create an envi-
ronment for success by putting people
67
PAPERS
Building Value Through Sustainable Project Management Offices
into positions to succeed. Not everyone
is destined to become a project leader,
any more than everyone is destined to
become the CEO” (p. 5).
Recognizing that not all people are
suited to managing projects, it is
incumbent upon the PMO leader to
develop an understanding of the skill
sets and competencies that are preva-
lent within the organization and among
its project managers. This is critical to
building something that will be able
to add value to the organization.
The “right people in the right seats”
concept also relates to what role project
management support staff should play
and what their respective competencies
should be. Developing role/job descrip-
tions, competency profiles (including
competency profiles for specific types
of projects), and RACI2 charts are ways
of addressing these issues. A corollary to
developing competency profiles is that
one needs to develop effective, accurate
evaluation processes of such compe-
tencies. Developing these profiles and
evaluation processes, as well as follow-
ing and managing them, typically falls
within the realm of the PMO. Lastly,
related to the PMO leadership concept,
clear career paths and professional
development should be provided to
those who want to advance into PMO
leadership roles.
According to Collins, time and pro-
moting from within are ways to pre-
serve the core and achieve sustained
value. This is supported by the Value
Project, which found that organizations
relying heavily on contract project man-
agers do not realize improvements in
project metrics (Thomas & Mullaly,
2008). An organization that relies heavi-
ly on contract project managers is more
focused on immediate project needs
(time telling, in Collins’s terms) rather
than organizational competency devel-
opment (clock building). Organizations
risk losing valuable insights, learning,
and knowledge through dependence on
2 RACI charts identify who is Responsible, who is
Accountable, who needs to be Consulted, and who needs
to be Informed about an activity.
68 March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj
contract employees. Thus, in a world
dominated by contract project man-
agers, good hiring and screening mech-
anisms need to be developed to ensure
good contract hiring. In addition, effort
must be expended to ensure that the
PMO’s culture is strong enough to pull
these contract staff into its realm and
indoctrinate them appropriately into
their core ideology through good on-
boarding mechanisms.
Create a Culture of Discipline
The notion of discipline around project
management is profoundly important.
According to Collins, success and sus-
tainability require disciplined people,
disciplined thought, and disciplined
action—in that order.
Key elements in a culture of disci-
pline are disciplined people and disci-
plined action. This relates to accounta-
bility and responsibility. In all three
organizations, professional managers
in all business areas welcomed clear
delineation of roles and responsibili-
ties, and actively fulfilled them.
Furthermore, as mentioned, each PMO
founder closely monitored, coached,
and mentored project managers in ful-
filling their responsibilities, thereby
enforcing disciplined action while they
developed inexperienced project man-
agers to have self-enforcing disciplined
thought and action.
In AlphaGas, despite having no
direct authority, the PMO founder cul-
tivated a significant amount of disci-
pline around following the project
management methodology and appro-
priately applying its artifacts. He close-
ly monitored status reports, change
requests, and so forth. He required
project managers to redo them if he felt
they weren’t adequate—and provided
hours of coaching on why these tools
were important and how to do them
properly. He diligently followed up to
see if corrective actions were imple-
mented, and that all relevant parties
properly fulfilled their roles and
responsibilities (which were detailed in
project management documentation
and RACI charts for each project).
These actions reinforced responsibility
and accountability.
After his departure, an experienced
project manager with senior manage-
ment experience was put in charge of the
PMO. The successor reaped the benefit
of inheriting disciplined people who had
disciplined thoughts and actions.
Because they successfully executed proj-
ects, the number of projects began to
increase. Larger projects, more complex
projects, and different types of projects
were launched. The growth in projects
and project managers caused the new
PMO leader to introduce the role of pro-
gram managers. One can assume he del-
egated much of the coaching and moni-
toring activities to them. Although most
of the program managers had worked in
a project environment, some were new
or contract hires (and conceivably un-
indoctrinated to the PMO’s core ideolo-
gy) and/or had little true project man-
agement experience. (It is unclear if they
would be classified as competent man-
agers or effective team members in
Collins’s leadership hierarchy.) The pro-
gram managers who were interviewed
acknowledged that coaching and moni-
toring compliance was part of their role;
however, the project managers reported
that coaching, training, and discipline
around accountability and delivery
dropped off. Concerns around cumber-
some or inconsistent adherence to proj-
ect management processes were not
heard, much less addressed. Project man-
agers began to lose faith in the project
management processes and became
resistant to following them. As noted in
Collins (2001, p. 121), increased bureau-
cracy—which creates greater overhead
costs—usually takes place in the absence
of disciplined people, thought, and action.
These increased costs can contribute to
decreased perceptions of PMO value.
Confront the Brutal Facts
Collins (2001) explained that it is vitally
important for organizations to always
understand the brutal facts of its envi-
ronment, its reality, its problems, and
so forth, but never lose faith in the
organization’s ability to win out in
the long run. Recent research suggest-
ing best organizational practices for
project management similarly suggests
that the best way to improve project
management is to have the “difficult
conversations” necessary to keep proj-
ects healthy (Grenny, Maxfield, &
Shimberg, 2007).
PMOs, as well as the project manag-
er, need to ensure that the brutal facts
associated with a project are recognized
and addressed in an effective, timely
manner, as these are warning signs that
things aren’t going the way they should.
These issues are compounded in multi-
project environments. The PMO is typi-
cally responsible for facilitating the
handling of issues and ensuring people
feel safe to act on concerns. More
importantly, the brutal facts must be
responded to; otherwise, project man-
agers and other project team members
will quickly come to view the proce-
dures as simply bureaucratic red tape.
One of the first tasks undertaken in
each of the three PMOs was the imple-
mentation of regular, consistent, clear
status reports presented to project
stakeholders. They each followed the
simple green-yellow-red indicator for
key metrics. The PMO ensured a con-
sistent, standardized report across all
projects and project managers, includ-
ing external contract project managers.
In each organization, senior manage-
ment and project sponsors quickly
came to appreciate these; it was one of
the tangible products that led them to
recognize the value in formal project
management methodologies. Problems
were quickly surfaced and addressed.
In BetaGas, senior managers soon real-
ized that red flags associated with their
projects were not good, as the CEO and
peers put pressure on them for correc-
tive action during monthly project
review meetings. Consequently, project
sponsors took quick action when yel-
low flags surfaced.
In AlphaGas, just before the PMO
founder retired, a new CIO came on
board. (This CIO left shortly before this
study was done.) The CIO launched a
strategy to rein in spending and get the
IT budget under control. Several hun-
dred IT positions were eliminated.
Growth was slowly restarted, with
more projects being launched. We
heard project managers comment on a
“reign of terror” and how bearers of
bad news tended to get beat up in lead-
ership meetings. Not surprisingly, bru-
tal facts started to be downplayed or
hidden or budget/schedule/scope
changes were approved, causing the
yellow/red flags to disappear. Although
formal change processes were fol-
lowed, these did not necessarily
address the causes of the original yel-
low/red flags. A root cause analysis of
project failures over a several-year peri-
od revealed that a similar set of prob-
lems consistently caused problems
from project to project. So while brutal
facts may have been surfacing, nothing
was done to address them.
While an individual project manag-
er must not lose faith that a project will
be completed, the PMO must not lose
faith that the company’s best interests
are paramount, even if that means can-
celling or stopping a project. A project
manager who has developed the ability
to doggedly pursue a project until its
end might not have the ability to recog-
nize brutal facts that indicate a project
should be stopped. This is where a
strong, strategic-oriented PMO leader
must step in. The prolonged absence of
such a person in AlphaGas potentially
affected its ability to effectively surface
and address project-related brutal
facts.
Space limits discussion of technolo-
gy enablers and the flywheel concepts.
One can see, however, how each
founder in AlphaGas, BetaGas, and ITM
Consulting unconsciously incorporat-
ed and applied the Good to Great con-
cepts in developing their respective
project management competencies.
Each nudge—each status report filed,
each coaching instance, each monitor-
ing and control effort enacted, each
March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj
team member or sponsor held to
account for each time rework didn’t
happen on a project, each time a
client/sponsor and project team satis-
faction report came out, and each time
a project celebration was held—started
turning the flywheel. By many different
measures and various stakeholder per-
spectives, each PMO can be seen to have
effectively developed a project manage-
ment competency that delivers value to
its organization. And when, in the case
of AlphaGas, attention was not paid to
maintaining and continuing these
nudges, value started to fade away.
Conclusion
There are many articles, blogs, and
books on PMOs that cover the different
roles and responsibilities that the PMO
can fulfill, its benefits and challenges,
and how to go about establishing one.
Research has shown that PMOs are rel-
atively new creations in the organiza-
tional milieu and undergo frequent
changes in relatively short periods
(Hobbs, Aubry, & Thuillier, 2008). Our
discussion adds to this knowledge base
by examining the start-up of three
PMOs, their success, and their sustain-
ability. All three PMOs experienced sig-
nificant initial success, but after 9 years
and several changes, one PMO started
to exhibit cracks in its effectiveness.
Using concepts from Good to Great
(Collins, 2001) and Built to Last (Collins
& Porras, 1994), we examined reasons
for this success and decline. Given the
research suggesting the short lifespan
of many PMOs, we believe that explor-
ing these cases in detail provides useful
insights for both practice and research.
Hobbs et al. (2008) reported that
PMOs have a short life span before they
are restructured or refocused. They
imply that this is a negative finding and
speculate it is a reflection that PMOs
ultimately add little sustainable value
to an organization. We disagree with
this notion. We think effective PMOs
continue to add value specifically by
changing and reinventing themselves—
as long as they stay focused on the
69
PAPERS
Building Value Through Sustainable Project Management Offices
principle of improving project manage-
ment in the organization. PMOs are
typically formed to address a specific
set of problems (e.g., help get project
costs under control). When those prob-
lems are addressed, effective PMOs
identify new goals and objectives for
themselves (e.g., ensure adherence to
processes or manage a broader span of
projects). These new goals may require
a new structure and new processes for
the PMO, but as long as they preserve
the core project management ideology
and focus, they will continue to provide
and add value to the organization.
Building a good PMO doesn’t nec-
essarily guarantee the sustainability of
project management competency
or project management value. Certain
elements need to be put in place, as
well as certain activities regularly carried
out, in order to facilitate the sustain-
ability of a value-adding PMO and the
sustainability of project management
competency. The qualifications and
competencies necessary to build and
sustain a project management compe-
tency are not necessarily the same ones
that make for a good project manager.
In other words, a good project manager
will not necessarily make a good PMO
manager/director; consequently, it
should not be assumed that a project
manager’s career path naturally lies
within a PMO.
Developing an organizational proj-
ect management competency that pro-
vides sustainable value is like getting
physically fit. It takes vision, will, per-
sistence, discipline, and many, many
nudges to reach one’s goal. You have to
confront the brutal facts of your current
unfit state, your slow progress, and
your constraints and setbacks, while
never losing faith that you will attain
your goal. But simply achieving your
goal and becoming fit isn’t the end.
This is your inflection point of value. As
with any other sustainability initiative,
continuous effort and focus must be
expended to simply maintain your new
level. If you stop exercising, if you lose
focus, you will become unfit again. If
70 March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj
you want to become stronger, faster, or
improve another aspect of your fitness,
in other words, to increase the value
you’ve gained—not just maintain it—
then you need to develop a new vision
and goal (e.g., improve your endurance),
identify new strategies and procedures
to get you there, and invest even more
than what it takes to simply maintain
the current state and value. (In many
respects, the PMO plays the role of per-
sonal trainer.) Building a project man-
agement competency and an effective
PMO function that continues to deliver
value is not a one-time effort, nor an
overnight one—it is an ongoing, con-
tinuously evolving investment that
needs to be managed by qualified,
visionary, effective leaders.
Acknowledgments
We would like to thank all the research
participants—both organizational and
individual—who made this project
possible. In addition, PMI deserves
recognition for the financial and other
support provided to the Researching
the Value of Project Management proj-
ect that made this study possible.
Finally, our fellow researchers in the
value project contributed to our under-
standing of value and project manage-
ment in so many ways—we gratefully
acknowledge their insights on this topic
that are embedded in this article. ■
References
Collins, J. (2001). Good to great: Why
some companies make the leap and
others don’t. New York: HarperCollins.
Collins, J., & Porras, J. (1994). Built to
last: Successful habits of visionary com-
panies. New York: HarperCollins.
Crawford, L. (2006). Developing orga-
nizational project management capa-
bility: Theory and practice. Project
Management Journal, 37(3), 74–86.
Dai, C. X., & Wells, W. G. (2004). An
exploration of project management
office features and their relationship to
project performance. International
Journal of Project Management, 22,
523–532.
Desouza, K. C., & Evaristo, J. R. (2006).
Project management offices: A case of
knowledge-based archetypes.
International Journal of Information
Management, 26, 414–423.
Gehring, D. (2007). Applying traits the-
ory of leadership to project manage-
ment. Project Management Journal,
38(1), 44–54.
Goffee, R. & Jones, G. (2006). Authentic
followership. In R. Goffee & G. Jones,
Why should anyone be led by you?
What it takes to be an authentic leader
(pp. 189–201). Boston: Harvard
Business School Press.
Graham, R., & Englund, R. (1997).
Creating an environment for successful
projects. San Francisco: Jossey-Bass.
Grenny, J., Maxfield, D., & Shimberg, A.
(2007). How project leaders can over-
come the crisis of silence. Sloan
Management Review, 48(4), 46–52.
Hill, G. M. (2001). The complete project
management office handbook. New
York: Auerbach Publications.
Hill, G. M. (2004). Evolving the project
management office: A competency
continuum. Information Systems
Management, 21(4), 45–51.
Hobbs, B., & Aubry, M. (2007). A multi-
phase research program investigating
project management offices (PMOs):
The results of phase 1. Project
Management Journal, 38(1), 74–86.
Hobbs, B., Aubry, M., & Thuillier, D.
(2008). The project management office
as an organisational innovation.
International Journal of Project
Management, 26, 547–555.
Keegan, A. E., & Den Hartog, D. N.
(2004). Transformational leadership
in a project-based environment: A
comparative study of the leadership
styles of project managers and line
managers. International Journal
of Project Management, 228,
609–618.
Kellerman, B. (2008). Followership:
How followers are creating change and
changing leaders. Boston: Harvard
Business Press.
Kerzner, H. (2003). Strategic planning
for a project office. Project
Management Journal, 34(2), 13–25.
Lee-Kelley, L., & Leong, K. L. (2003).
Turner’s five functions of project-based
management and situational leader-
ship in IT services projects.
International Journal of Project
Management, 21, 583–591.
Mäkilouko, M. (2004). Coping with
multi-cultural projects: The leadership
style of Finnish project managers,
International Journal of Project
Management, 22, 387–396.
Martin, N. L., Pearson, J. M., &
Furumo, K. (2007). IS project manage-
ment: Size, practices and the project
management office. Journal of Computer
Information Systems, 47(4), 52–60.
Müller, R., & Turner, J. R. (2007).
Matching the project manager’s lead-
ership style to project type.
International Journal of Project
Management, 25(1), 21–32.
Neuhauser, C. (2007). Project manager
leadership behaviors and frequency of
use by female project managers. Project
Management Journal, 38(1), 21–31.
Thomas, J., & Mullaly, M. (2007).
Understanding the value of project
management: First steps on an inter-
national investigation in search of
value. Project Management Journal,
38(3), 74–89.
Thomas, J., & Mullaly, M. (2008).
Researching the value of project man-
agement. Newtown Square, PA: Project
Management Institute.
Turner, J. R., & Müller, R. (2005). The
project manager’s leadership style as a
success factor on projects: A literature
review. Project Management Journal,
36(2), 49–61.
Walker, C., & Peterson, A. (1999). Are
you a project manager/leader or just
managing projects? Proceedings of the
30th Annual PMI Seminars and
Symposiums. Newtown Square, PA:
Project Management Insitute.
Mimi Hurt holds a PhD in management from the
University of Texas at Austin. Her broad consult-
ing and research background includes issues
such as management and delivery of informa-
tion services (IS), IS-user relationships (both
internally and externally based ones), user sat-
isfaction, IS service quality, and managing the
next generation of IS professionals. Her current
research focuses on project management and
project management leadership. Her clients
include many large global companies, as well as
municipal and state-level government agencies.
Her academic experience includes over 20 years
of developing and teaching a variety of informa-
tion systems and e-business courses at the
graduate and undergraduate levels at Athabasca
University, the University of Calgary, and the
University of Texas.
Janice L. Thomas is an associate professor in
the Centre for Innovative Management (CIM).
Over her almost 10 years with CIM, she has
worked to build links with external organizations
such as PMI and the International Project
Management Association. She is currently the
March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj
program director for the Executive MBA in
Project Management program. She is also a
visiting professor with the University of
Technology, Sydney, and Bond University,
Australia, where she supervises master’s and
PhD research students. She is well known in
the international project management commu-
nity, both from serving on the PMI Research
Member Advisory Group and in an editorial
capacity for journals such as the Project
Management Journal, International Journal of
Project Management, IEEE Transactions on
Engineering Management, and the
International Journal of Business Performance
and Management, and through her involve-
ment with collaborative research such as the
Researching the Value of Project Management
project and Rethinking Project Management
(funded by the United Kingdom’s National
Science Research Council). She has led a num-
ber of PMI-sponsored research projects includ-
ing the recently completed Researching the
Value of Project Management global study. Her
research interests include organizational
change, project management, team building
and leadership, complexity theory in relation to
organizations, and the professionalization of
knowledge workers. Ultimately, all of her
research is aimed at understanding and com-
municating how the practice of project man-
agement in organizations can be improved.
Prior to becoming an academic, she spent 10
years as a project manager in the fields of
information technology and organizational
change. In addition to research and teaching,
she maintains close ties to the practical reali-
ties of project management in organizations
through consulting and membership in profes-
sional associations.
71
PAPERS
Building Value Through Sustainable Project Management Offices

Appendix
Good to Great (Collins, 2001) Built to Last (Collins & Porras, 1994)
Leadership (summarized on pp. 39–40) Clock Building, Not Time Telling
Fully developed Level 5 leaders (executives) at the top who Build an organization that can endure and adapt through
have a combination of professional will and personal multiple generations of leaders and multiple product life
humility (p. 21). cycles (2001, p. 197).
Level 4 leaders (effective leaders) catalyze commitment to This concept of putting in place values, frameworks, and/or
a compelling vision (p. 21). procedures with a long-term focus, rather than an immediate
Level 3 leaders (competent managers) organize resources to or short-term focus, is relevant for other elements in the
an effective and efficient pursuit of objectives (p. 21). framework.
A contributing team member (Level 2 leaders) works
independently to contribute to the goals of the group (p. 21).
Highly competent individuals (Level 1) make valuable
contributions through talent, skills, knowledge, and good
work habits (p. 21).
In Collins’s hierarchy of leadership, higher levels of leadership
embody the traits and abilities of lower leaders—that is,
they have the traits and abilities listed for lower levels (p. 21).
A high-profile, charismatic leader is not necessary to
successfully create a visionary company (p. 32).
First Who, Then What (summarized on pp. 63–64) Genius of AND
Get the right people on the bus, the wrong people off; Embrace both extremes on a number of dimensions
get the right people in the right seats THEN figure out at the same time (2001, p. 198), rather than thinking
where to drive it (p. 41). in limiting “either/or” ways.
The “genius model with a thousand helpers” is not likely
to be successful when the genius leaves (p. 46).
Confront the Brutal Facts, But Never Lose Faith Core Ideology
(pp. 88–89) Instill core values and a core purpose as principles to guide
Create and consciously maintain an atmosphere where decisions and inspire people throughout the organization
“brutal facts” will be heard, but never doubt that you can over a long period of time (2001, p. 198).
and will reach you goal.
The Hedgehog Concept (pp. 118–119) Preserve the Core/Stimulate Progress
Develop a simple, but deeply insightful frame of reference Preserve the core ideology as an anchor while at the same time
for all decisions. stimulating change, improvement, innovation, and renewal
Simplicity within the intersection of three circles: (2001, p. 198).
Circle 1—What you are deeply passionate about
Circle 2—What you can be best in the world at
Circle 3—What drives your economic engine
If you successfully apply these ideas, but then stop doing
them, you will slide backward . . . the only way to remain
great is to keep applying the fundamental principles that
made you great.
A Culture of Discipline (pp. 142–143)
Success and sustainability require disciplined people,
disciplined thought, and disciplined action.
Build a culture around freedom and responsibility
within a framework (p. 124).
Technology Is [Only] an Enabler (2001, p. 160)
Technology is an accelerator of greatness, not a creator of it.
Technology by itself is never a primary root cause of either
greatness or decline.
Become a pioneer in carefully selected technologies that
clearly fit the hedgehog concept.
The Flywheel and the Doom Loop (pp. 162–163)
Many small, persistent, continuous pushes in one direction
are necessary to get a flywheel turning; no single grand
push or initiative is sufficient.

72 March 2009 ■ Project Management Journal ■ DOI: 10.1002/pmj