The Project Management Office, or PMO as it’s usually called, is commonly found in organisations where project management is the primary means by which business change is delivered.
It really only takes one or two major project failures for executives to realise why having a PMO is so important. It can be very career limiting when a major project goes off the rails. The PMO typically reduces project management risk by standardising and formalising how projects are delivered, therefore avoiding calamities in the future. Well, at least that’s the theory.
When an organisation needs to integrate an acquired business through an M&A deal of some kind, the overall coordination can fall to the in-house PMO function. While the in-house PMO might sound like the natural choice, in reality, it’s not always a great idea. A few reasons why:
Commonly known as the Integration Management Office (IMO), its job is to meet the unique demands an M&A integration place on an organisation.
An IMO acts as the ringmaster for all integration activities. It can also have its own unique cost centre to capture integration-related costs.
The IMO can be a truly powerful and positive force, for it has the ability to get stakeholders, executives and teams all working to a regular and rhythmic drumbeat. Moreover, by tracking and reporting on progress, everyone knows where they’re at and what’s left to do.
However, a good many organisations are increasingly looking at M&A as a way of transforming what they currently do. They want to define their own future, not hide from it. Also, it’s not just short-term savings they’re after, but also those revenue synergies that hold a special promise for more meaningful and sustained business growth. This could be around an improved customer engagement, new products, or capabilities they currently don’t have.
Compared to cost synergies, revenue synergy execution is a much more demanding exercise. This is where a Value Management Office (VMO) comes in. While it might sound like some kind of snappy name change created by the marketing department, a VMO is in fact a very different kind of construct. Let me explain the differences.
By making the notion of value the focus and reason for being, the VMO becomes a business function – not just a project management function, with a unique and highly worthy centre of excellence. This gives the VMO a special kind of virtue that silences those naysayers who think that it might be some kind of bureaucratic overhead.
Secondly, the VMO oversees both the planning and executing of projects, and the commercial results they produce. This ensures a balance between ‘doing things right’ and ‘doing the right thing’. After all, no one wants to say to a pilot: ‘great landing, wrong airport!’
Thirdly, organisations are somewhat haphazard when trying to identify, evaluate and prioritise revenue-creating opportunities. They’ll certainly give it a go, but they often lack the prerequisite skills, tools, and techniques to do it well – it’s simply not their forte. This is where a VMO comes to the rescue with its secret sauce. Through deep know-how, personal coaching and facilitated workshops, a VMO can help individuals and teams gain the skills and expertise on how value can be successfully engineered. Moreover, a VMO can help shed light and give analytical clarity to the significant pools of opportunity that commonly get overlooked.
Finally, the tracking, measuring and scorecard reporting of value, has a way of changing behaviours and the things management talk about. Whether it’s tweaking a product feature, changing the marketing, or modifying the profit model, the conversation should always be around the synergies and various value levers that deliver upon the engine of growth. With a value tracking scorecard in place, regular conversations and management routines begin to change.
A VMO is about opportunity – identifying it, evaluating it, and through dogged persistence, implementing it. It’s fundamentally an innovative exercise as it forces organisations to think, manage and act differently. Opportunity can indeed become reality – once the management of value becomes part of the daily rhythm of work.