What Is a Program Management Office?
A program management office (PgMO) is a department within an organization that guides the company’s employees to use best practices when executing projects and programs.
What Does a Program Management Office Do?
A program management office oversees and guides the programs of an organization. It doesn’t oversee projects, like a project management office does. A PgMO focuses on the success of broad organizational programs and the overall business strategy.
When Is It Time to Make a Change in the Program Management Office?
The program management office can become stagnant. Organizational employees can also come to see the PgMO as an obstacle to doing good work. Make sure to watch for the signs that your program management office needs to change.
Here are the signs that your program management office requires changes:
- The business drivers of your organization evolve and the PgMO doesn’t change with them.
- There is high employee turnover in your organization’s PgMO.
- You have a PgMO staff that is maturing and honing its skill set beyond the current structure of the office.
- There is a perception among employees that a PgMO works only to enforce policies that add little value and don’t help advance the organization.
- There is a perception among employees and stakeholders that your PgMO is stagnant.
Your program management office should follow the principles of continuous improvement. That means the PgMO should help employees apply the concept of continuous improvement to all of their projects and programs. The office itself should also focus on continually improving. (Learn more in this guide to continuous improvement models, processes, and plans.)
You can also track any need for change through baseline surveys that are a part of balanced scorecards. (Learn more in our comprehensive guide to balanced scorecards.)
How to Set Up a Program Management Office
Your organization must take some careful and important steps to set up a program management office. It must first determine why — or whether — it needs a PgMO. It must also enlist a key executive who supports the concept.
Here are six important steps to setting up a PgMO:
Step 1: Define the Challenge or Opportunity
You must define why your organization needs a program management office. While a large majority of companies have a PgMo, you may discover, after proper research, that you don’t need one.
Still, it’s rare to find a company that functions well without a PgMO. When an organization has programs that aren’t well defined or aren’t making real progress, that organization needs a program management office.
“It really comes from identifying what the challenge or opportunity is, then addressing it by saying, ‘We need to put some meat behind it,’” says Randy Englund, a project management consultant, a former program manager at Hewlett-Packard, and the author of The Complete Project Manager: Integrating People, Organizational, and Technical Skills.
Englund adds, “It’s no longer just talk. [Setting up] a program management office is the way to walk the talk. You're sending the message that you’re serious about this thing. I've seen many managers who say, ‘We're gonna do this. This is what we want.’ Then they do nothing to make it happen.”
Step 2: Enlist a Top Executive Who Fully Supports the Office
A top leader of your organization must support the PgMO concept. And they must support the practice.
“Find an executive sponsor who understands and supports PgMO actions,” Englund says. “This [step] is a critical prerequisite.”
Setting up a PgMO costs money and takes time. Without enthusiastic support from a top leader, it won’t succeed. It may not even survive the long process of getting started.
Step 3: Create a Charter and Mission or Vision Statement
Your organization will want to create a charter for the program management office. The charter will help set the structure of the office — including why it exists, what it will do, and how it will do it.
“It serves as operating instructions to authorize, staff, and support the program — when signed by the sponsor,” Englund says.
“Identify either a specific problem it solves, or establish a charter that clarifies its purpose. (That might include) improving time to market, facilitating portfolio management, or leading the continuous improvement of project management across the organization,” he says.
Beyond a charter, you may also want a mission or vision statement. That statement is less about structure and more about the ideal vision of what the program management office could accomplish.
“A program vision statement is a vivid description of a future state when program objectives are achieved,” Englund says. “It needs to be clear, concise, convincing, and compelling. It does not describe how the work is done –— but just describes what can be seen, heard, or felt when accomplished. When well done and written in the present tense, the vision statement motivates people by the energy it creates in wanting to make it happen.”
Englund says your team should spend sufficient time together to agree on that vision statement. “Do not rush this process,” he says. “Keep refining it until all members feel passionate about what they are doing.”
Jake Carroll, founder of Create Kaizen, a consulting company focused on personal, team, and organization development, says both a charter and vision statement aren’t always necessary. But one or the other is.
“I absolutely think a program management office — much less any strategic team at a company — should have a mission statement or a charter or something to that effect,” he says. “It's especially important for a program management office to do that. Defining what the PgMO does, and especially defining what it doesn’t do — are very, very important.”
Review and download free program charter and other program management templates in our collection. Also check out our selection of free vision and mission statement templates.
Step 4: Determine Governance Model and/or Structure
Your charter may provide some basics of the program structure. But you will want to establish in more detail how your organization will structure and govern the office. That might include how positions within the office will be aligned and who will report to whom. It will also include who the head of the PgMO reports to within the organization.
Step 5: Evangelize the New PgMO
It’s important that PgMO leaders trumpet what the office will be doing and achieving. You’ll want company leaders, employees, and other stakeholders to understand the good that the office can do for the organization.
Step 6: Staff the Office
Finally, you’ll need to decide how your organization will staff the office. After you’ve set the structure and positions within the office, you’ll want to find experienced and skilled people for those positions.
“Recruit experienced practitioners who want to make a difference in how the organization operates,” Englund says. “Tap a variety of talents while ensuring they work well together as a team.”
Program Management Office Structure
A program management office will most often have a director to lead the office. Program managers will often work under that director. The PgMO might also include a tracking analyst and liaisons to business units, finance, and other areas.
Below is an example of a possible organizational structure within a program management office.
Program Management Office Roles and Responsibilities
In many organizations, a program management office might be relatively small. It often is made of a director and managers that work with specific projects or programs.
Team members might include the following roles:
- Program Management Office Director: Creates and guides plans for organization programs; oversees adjustments to programs; supervises program managers.
- Program Managers: Work with other team members to help plan capacity and guide projects or programs.
Program Management Office Best Practices
Experts recommend several best practices to set up and run program management offices. Best practices include recruiting the right people to staff your office, communicating well, and continuing to evolve.
Some top best practices include:
- Recruit Passionate Team Members: You may hire from the outside or other internal departments. Either way, you want to hire people who are passionate about the work the office will be doing. Don’t hire people who are resistant to change or aren’t willing to evolve how they do things.
“Recruit experienced practitioners who want to make a difference in how the organization operates,” Englund says. - Ensure Head of PgMO Reports to a Top Leader of the Organization: If the head of the PgMO office reports directly to someone lower in the organization, the office might not get the support and visibility it needs. It’s also important that the PgMO head doesn’t report to the head of a specific department. The office will be doing work for the entire organization. People shouldn't perceive it aligns with a single department.
“Have the office report high up in the organizational structure so they are not biased toward any one functional area,” Englund says. - Get Support from Top Organizational Leaders: As we mentioned above, you want to make sure you have enthusiastic support from a top organizational leader even before you set up the program management office. Then, as you’re setting up the office and beginning to run it, you want to make sure it has high visibility in its goals and its early accomplishments.
Make sure top leaders are aware of what the office is doing and achieving. The top executive who’s your enthusiastic supporter can help with this. But you need to make sure you spread that news in other ways, as well. You want top leaders to understand how the office’s work aligns directly with business strategy success. - Keep Things as Simple as Possible: You don’t want your organization’s employees to perceive the new program management office as focused on processes that everyone must follow and tools that everyone must use.
“Gain a reputation as necessary and productive,” Englund says. “It needs to not be perceived as bureaucratic overhead. ‘Oh, here comes that pesky program manager. He just needs to get his document completed. And he's bugging me again. And if the general manager closed that program management office, I'd be so happy.’ That's not a good thing.”
Instead, according to Englund, the program manager should say to their organization’s employees, “I'm here to help you get things done. What can I do to help you?”
“Make it simple, so that people understand and support what you're doing. And they believe in it. Because if they don't, that's when you encounter resistance.” - Be Transparent: You’ll want to be transparent about the office’s mission and goals, as well as how you plan to work to reach those goals down the project pipeline.
- Communicate Always, and Tell People About Your Victories: You’ll want to communicate widely and consistently to employees about what the office is doing.
That communication might come in the form of sharing best practices. That will help all employees understand how to do well in project and program management.
You’ll also want to communicate your office’s early achievements widely. That will help you win support from top leaders and your organization’s employees. - Listen to Skeptics, and Convert Them: Skeptics within your organization will question the value of the work of the office. Listen to what they have to say. Explain the office goals. And make adjustments if they make sense.
“Expend effort to turn doubters about the value (of the office) into supporters,” Englund says. - Prioritize: Organizations must prioritize projects that help them reach organizational goals. Program management offices must do the same. They must focus on the work that is most important, and not get bogged down in minor details of various programs and projects.
“The fluidity of the office means that a lot of different people from all around the company come to us for a lot of different things,” Carroll says. “And if we don't have a standard way of prioritizing not only what we support, but how much time we spend supporting it, then we're doomed to fall into that administrative role. That further lessens our value for the company. And further lessens our validation to increase the scope of things we work on. It's very easy to get pigeonholed in that role.” - Continually Assess and Improve: Your program management office will likely teach employees how to continually evolve and improve processes and products as they work on projects and programs. You should treat your own office as a product. That means its processes should also always evolve and improve.
“Don’t be tied to certain things because that’s the way you’ve always done them,” Carroll says.
“If we practice what we preach and start treating our internal operations — our internal tooling, our best practices, our processes — as our products, and the rest of the company, as our consumer, we should be going through these stages ourselves,” he says. “You should continually be in the state of discovery. You should continually be in a state of iteration.”
Below is a chart that includes some top key performance indicators (KPIs) for program management offices.
Program Management Office Key Performance Indicators
Top KPIs for program management offices (PgMOs) include:
KPI | Description |
|---|---|
Time to Market | Average time for a product to get to market, for organizations that have programs that overseeing product development |
Quality Control | % of products developed that have recognized defects |
Project Efficiency | % of projects within a program that meet budget limits |
Program/Project Success Rate (or Program/Project Failure Rate) | % of programs and projects that a PgMO oversees that are completed (or fail before completion) |
Percentage Spend by Strategic Category | A measurement that shows how a PgMO ensures alignment of projects and programs with organization's strategic goals |
Return On Investment | Average ROI for all projects and programs that a PgMO oversees |
Benefits of a Program Management Office
A well-run program management office will bring many benefits to your organization. It will help the organization become more efficient and achieve results in projects and programs that would not happen without the office.
Here are some common benefits:
- Ensuring Direct Link to Organizational Goals: A good program management office will ensure that all integrated teams monitor all projects and programs and that all projects and programs have a direct link to a company’s strategic goals. If projects don’t have that link, the program management office should ensure they don’t start or that they end quickly.
- Help Win Support for Important Initiatives: A program management office can help focus on and support important initiatives for the organization. It can help those initiatives gain widespread support among employees. That support will help the initiatives move forward and reach successful conclusions.
- Standardized Methodologies: A program management office can help project and program managers and employees with standardized methodologies to organize and work on projects. Sharing those methodologies will mean employees will know what works and won’t waste time and effort on things that don’t work. It will make all projects more efficient and able to reach a successful conclusion more quickly.
- Achieving Outcomes Not Possible Without a Coordinated Effort: A program management office can help employees collaborate on a wide range of project work. That will mean more projects will have more successful outcomes.
- Leveraging Tools, Support, and Mentoring: A program management office can provide employees with a one-stop office for a wide range of tools, ideas, support, and mentoring. All of that will offer employees guidance and expertise they wouldn’t have without the office. That will also make employees more efficient in their project and program work.
Below is a grid that provides details on some of the responsibilities of a program management office. Several of those responsibilities are more narrow; others are more strategic and focus more broadly.
Program Management Office: Two Levels of Work
More Direct and Narrow Work: Project Level Help | Bigger Picture Work: Strategic Thinking and Guidance |
|---|---|
Trains and mentors staff, helps them develop skills in project and program management | Ensures all projects and programs align with organization's strategic goals |
Ensures teams follow defined project management processes, produce required reports | Establishes a structure and decision-making criteria that allows organization to set priorities for all projects and programs. |
Helps direct regular communications to wider teams about specific project and program work | Ensures that employees can execute similar projects in a consistent way and that the project processes are repeatable. |
Provides tools and resources that help employees understand and use best practices in project management | Encourages continuous improvement processes in organization's projects and programs, and in the program management office. |
Directly runs some projects and programs | Establishes appropriate KPIs that then monitor the effectiveness of all projects and programs |
Helps to manage collaboration and information-sharing among projects related to each other or part of one program | Communicates to upper management about structural hurdles that affect projects and programs |
Pitfalls to Avoid When Setting Up a Program Management Office
Experts also warn about pitfalls to avoid as you set up your program management office. Don’t assume the delivery of a plan means everyone will follow it. And understand how organizational roadblocks and politics can be hurdles to success.
Here are some common pitfalls to avoid:
- Delivering a Transformation Plan and Schedule and Thinking You’re Done: Your office will need to do more than simply lay out a new plan and way of doing things and then just monitor progress. People have become accustomed to doing things a certain way. Your program management office likely will be recommending changes. You’ll need to understand how to influence people’s behavior and supportively encourage them to change.
- Ignoring the Silos: Almost all organizations have organizational silos. Different departments do their own work while ignoring and often not supporting the work of other departments. Organizations can even unintentionally reward that by using key performance indicators focused on the work of individual departments.
But programs almost always involve work and goals that encompass the entire enterprise's portfolio. Leaders in the program management office must help all employees understand the larger business vision for the office. They might lay out overall business objectives and key performance indicators. They might establish a work-team structure that involves leaders and employees from many different departments. - Allowing the Program Management Office to Compete with Departments for Money: Employees and department leaders can’t see the new program management office as competing for organizational funding that otherwise would go to a specific department or departments. The office must get its funding in a way that doesn’t affect or influence the funding of other departments.
“Be careful not to usurp resource allocation away from function managers –— which then creates resistance,” Englund says. - Prioritizing Pet Projects of Individual Company Leaders: The program management office can’t be seen as favoring work and ideas from a specific company leader or group of leaders. That will result in almost immediate skepticism of and resistance to all of its work — from many organizational employees.
The work the office prioritizes should focus on broad business objectives. And it should use a collaborative and transparent process in choosing those priorities.
Project Management Office vs. Program Management Office
A project management office (PMO) guides projects for an organization. A program management office will instead focus on an organization’s larger overall programs. A PgMO will also focus more on the overall strategic goals of an organization.
In some ways, the two offices are similar. They both guide workers on best practices in either project or program management. And in some ways, those best practices are similar. Both offices also work to ensure workers are using those best practices in doing their work.
But while a project management office focuses on the organization’s projects, a program management office focuses on broader areas for the organization. It works to help guide larger programs — often made up of many projects. And it works to ensure those broader programs are aligned with the organization’s overall strategic goals.
People sometimes refer to both integrated project management offices and program management offices with the acronym PMO. Increasingly, experts refer to project management offices as PMOs. They refer to program management offices as PgMOs.
Some organizations may use other offices in managing portfolios, projects, and programs. Below is a graphic that provides details on some of those offices and their characteristics and mission.
History of the Program Management Office
Program management offices grew out of project management offices. While PgMOs have a broader focus than project management offices, their history and purpose are very much aligned with the early history of project management and project management offices.
Here are some major milestones in the history of the program management office:
- 1909: Frederick Taylor published The Principles of Scientific Management. In the book, Tyalor was the first to assert that as efficiency increased in an organization’s work, so did positive results.
- 1930s: The U.S. Army Air Corps created a project office to track the development of its aircraft.
- 1969: A group of business leaders started the Project Management Institute to help people understand the benefits of project and portfolio management to strengthen organizations and learn skills in order to bring about change.
- Late 1990s: The work of the federal Y2K office was an early example of computer technology leaders successfully using a project or program management office. When experts began to fear that a worldwide computer bug might cause widespread computer system failure because computers might recognize the year 2000 as the year 1900, the office worked to prevent such potential global damage.
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