For the past years, the pace of innovation is faster than ever and has created important transformation challenges for companies. This race has led to a significant increase in cross-functional and digital transformation projects.
The increasing number of projects has revealed the structural and cultural barriers that prevent companies from innovating effectively and leading cross-functional projects successfully, all while maintaining profitability and avoiding operational disruptions across business divisions.
Many projects have been abandoned or postponed as companies prioritize core operations like production.
However, transformation projects are necessary for long-term business viability. The demand for skilled project managers and PMOs to lead such initiatives has introduced new complexities in project governance and execution. Alarmingly, approximately 70% of projects still fail.
Bertran Ruiz, CEO of Airsaas, explains the challenges:
“I"ve had the privilege of speaking with five CIOs or transformation directors every week for the past two years. From these conversations, I strongly believe that :
Business transformation is fundamentally changing as 90% of projects are now cross-functional.
Indeed, while transformation is needed for a company’s long-term strategy, it inevitably creates short-term instability within the organization ⟦...⟧”
The excessive number of projects create problems such as:
Many technologies that were once considered “new" have now reached a significant level of maturity. They are no longer seen as cutting-edge but have been proven, they are scalable and affordable. This has created high demand thus, leading to a decrease in acquisition costs.
To maintain a competitive edge and secure market share, companies must now embrace these technologies as tools for differentiation or risk becoming obsolete within a few years.
The main challenge today is no longer whether these technologies work but rather how to integrate them effectively. These technologies now come in a plethora of solutions, addressing increasingly specific problems and tailored to a wide range of needs.
However, for every need, there is a (often digital) solution and therefore a potential project.
Technology impacts everyone's daily life. This constant personal access to technology has made employees increasingly tech-savvy, they understand and use new technologies with growing ease. What once seemed intimidating not so long ago is now everywhere. Whether consciously or not, people use SaaS platforms, apps and connected devices all the time.
This growing familiarity with technology, which eases many personal processes, has led to a stronger demand and willingness, at all levels, to adopt solutions that improve business processes and create new services.
In theory, this should make employees more open to using new solutions easily. Theoretically it is, because today, technology itself is not the issue. As is often the case, what causes resistance or frustration is not the tool but the change itself and how it is managed.
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Many companies face the same challenges that all lead to the same conclusions: no single business unit can transform an entire organization on its own. Transformation is a collective effort that requires everyone to adapt.
Most companies founded before this era of accelerated innovation still work in silos or bear the structural legacy of organizational silos, making transformation a significant challenge.
Transformation projects are 90% digital and, when carried out separately within different departments, they often lead to wasted resources, both financial and in terms of time spent by teams. It’s not uncommon to see similar projects running simultaneously in different departments.
Moreover, in a silo approach to project management, there is little as to no cross-departmental feedback to improve how new solutions are implemented and to build on insights from similar projects.
Many projects that reach the testing phase are abandoned during industrialization. This often happens because other departments are brought in too late and notice that the project does not align with company standards. Such issues could have been identified and resolved earlier, but instead they lead to project failure.
Additionally, when one department takes the lead on transformation projects without properly involving other teams, it creates a technology-push dynamic. In this scenario, business units are given little choice in the matter, increasing the risk of misunderstanding their actual needs and facing strong resistance to change.
As a result, working in silos often ends in failure, leading to frustration and a sense of wasted time. This creates a negative group dynamic that hinders the company’s transformation efforts and discourages employees from engaging in such initiatives.
Another major issue with silo projects is that different departments struggle to collaborate effectively. Business expertise is essential for driving transformation, and regardless of the approach, these projects will inevitably need time from business teams.
What makes collaboration difficult ?
Initially, the PMO was assigned the role of overseeing project managers without having direct authority over them. Their mission was to ensure project assurance, making sure that all project managers were doing their jobs correctly and following expected methods.
However, within project teams, the PMO was often seen as the project manager who merely reports to the executive committee, acting like a monday-morning quarterback.
Without resorting to clichés, the controlling PMO does little to foster engagement or collaboration especially when project managers are expected to take on this role in addition to their responsibilities.
As a result, project managers and PMOs have often been in opposition, with inefficiencies blamed on poor project execution. This top-down dynamic discourages employees from fully committing to projects, further widening the gap between teams and the PMO.
Alongside the challenges of team collaboration and engagement, many PMOs are expensive, especially when brought in externally.
Much of a PMO’s time is spent on tracking tasks, sending follow-ups, compiling activity reports, gathering information and applying project formalism to ensure portfolio visibility. If 50% of a PMO’s time is spent making PowerPoint presentations, that’s an expensive slide deck!
Thus, this often boils down to administrative work, enhancing communication and information-sharing across departments, at a significant cost. Yet, many PMOs possess valuable project knowledge and expertise that could, and should, benefit transformation initiatives.
To borrow a well-known Chinese proverb: “Give a man a fish, and he will eat for a day. Teach him how to fish, and he will eat for a lifetime.”
With the growing number of projects and project managers, these new activities increasingly bypass traditional silos. As investments soar, top management becomes more inclined to tighten control over project execution.
A typical course of action is to focus on the task oversight process given that effective project management is first about structuring tasks and selecting the right methodology (e.g., PRINCE2, Scrum, etc.).
The biggest issue with the urge for more control is that it directly undermines employee engagement in cross-functional projects. These employees are often either recruited or volunteer on a best effort basis, making excessive control counterproductive.
So, instead of adding extra workload and pressuring employees to conform to rigid formalities they may not be used to, companies could use the PMO as a support system. Rather than controlling, the PMO could focus on training and easing the methodological burden of project management. By simplifying reporting and formal requirements through streamlined processes and user-friendly tools, project managers could spend more time executing and improving their work instead of justifying it.
If the process becomes smoother, more structured and fosters greater motivation among employees particularly through the SRR (which we will discuss later) then rest assured, the necessary information will naturally be provided.
On this matter, Bertran (CEO of Airsaas) adds:
This is just one example of how organizational and project management issues can create dysfunctions in transformation initiatives. However, it should not be confused with the major causes of project failure, as mentioned in the Journal du Net article about Airsaas.
According to the 2018 Pulse of the Profession study by the Project Management Institute, 70% of projects tend to fail. The three main causes of project failure are:
The two biggest challenges to project success are communication (59%) and accountability (29%).
A significant shift is taking place regarding the PMOs purpose, moving from task execution control, follow-ups with employees and chasing reports to the establishment of a project culture adapted to each company. This evolution aims to clarify and create a vision with no silos.
Alexandre Franchino, PMO at Efi Automotive, perfectly explains this evolution:
Thanks to such contributions, we can grasp the evolution of the PMO role which is transforming the corporate culture from a traditional support function (such as IT, innovation, etc.) to becoming a business partner, thanks to a transition from a vision of a task tracking and controlling PMO to one that enhances and leads a community.
When a new project management culture is implemented by the company, such as one that embraces cross-functional collaboration and multidisciplinary project teams focused on the company’s strategic goals and growing teams skills and business knowledge. This leads to increased operational efficiency and enhances the company’s ability to transform quickly.
Learning and relearning and adapting to technological advancements prevents the status quo from settling in which is a true threat as innovation accelerates.
To be more specific, this helps align project approaches, improve efforts and resources, thus leading to effective and pragmatic project portfolio management. The solution lies in the involvement and commitment of everyone.
So, how can the PMO foster project culture and collaboration?
If a PMO, with a portfolio-wide view and cross-departmental insights, reports that projects are failing due to a lack of skills or investment from project managers, and their only action is to report regularly to management, it means that either they are not in the right position within the company to take action or they lack leadership.
Given the PMO’s expertise in project management, it’s their duty to support others by actively sharing knowledge and best practices.
The PMO drives organizational growth.
As transformation projects typically feature a digital aspect, the IT department is often tasked with handling these initiatives. It’s become an automatic assumption for most.
For best results, the PMO should be established within the company’s most mature cross-functional project management department, based on its current structure.
Positioning the PMO within this department will promote strong project culture, as the department’s legitimacy in project management will give credibility to the PMO’s approach and allow it to become effective more quickly, without the need for major restructuring or extensive training.
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The new PMO has a more significant role in the strategic challenges of the company and should embrace a leading role in the transformation process.
Anticipating that transformation-driven resistance can trigger ego conflicts, the PMO must establish a proactive position supported by top management communication to prevent such dynamics.
To truly empower employees, the PMO should show empathy, proactively support project teams and anticipate challenges. They should be seen as someone who is there to help, to drive positive change for project teams. They must also be mindful of the team dynamics and respect existing hierarchical structures. Undermining an employee’s authority, even if justified, is not a healthy way for the PMO to collaborate.
Demonstrating pedagogy, establishing a framework of trust that allows disagreements to be expressed while maintaining respect, is key. The goal here is not to seek consensus, but simply show consideration.
We’ve often heard feedback from business teams who don't have good relations with IT or PMOs: "Ah! Here comes the one who will explain to me how I should do my job and what I should use."
Let’s remember that tools should adapt to the business, not the other way around (although they can influence practices). The PMO must be a facilitator of solutions and projects, not an obstacle. And in transformation, ego must be set aside.
Modern PMOs can learn from product culture, which emphasizes that market realities and user insights are the main sources of knowledge.
It’s often said that one of the main causes of inertia in large corporations is the load of established processes which are frequently contrasted with the agility of startup cultures.
The PMO’s implementation of cross-functional projects should encourage action within a streamlined environment, regarding processes, culture and tools. When in project mode, drawing inspiration from the agile practices of startups and reducing the impact of industrialization by smoothing procedures throughout the project lifecycle is key (hence the importance of creating a de-siloed project vision).
The PMO should act as a strategic partner, empowering the business to overcome challenges by providing effective project management tools. By establishing successful pilot projects, they build precedents that foster employee efficiency and autonomy.
A first challenge in launching cross-functional projects is securing dedicated engagement from key employees. The PMO, in collaboration with management, must ease the allocation of dedicated time for these projects. Simultaneously, the PMO should implement systems that minimize unnecessary meetings and streamline stakeholder access to information.
Asynchronous work and collaborative tools are ways to achieve this.
A significant step towards fostering a cross-functional culture change is to nurture a sense of impact within the company for employees, ensuring that participating in new projects doesn’t feel like adding more constraints and paperwork. These projects should be engaging and promote a positive dynamic that values action, successes and also embraces the right to make mistakes, especially when dealing with innovative projects.
To achieve this, project teams need to be freed from tasks that don’t add value to their involvement, such as manual reporting, cumbersome processes and way too many meetings. The PMO should set up rules and tools that allow teams to focus on the main elements of their projects.
In supporting this culture, the PMO and business departments can collaborate using three guiding methods and principles:
Project Portfolio Management (PPM) provides a framework for strategically aligning and prioritizing projects. This leads to the evaluation of project risks and rewards, budget allocation, timeline estimation and expected outcomes.
The PMO-led decision-making group, composed of directors and sponsors, assesses project ROI, benefits and prioritisation to optimise the company’s financial and human resource investment.
That said, based on many lessons learned (REX), this approach is also evolving. Today, it’s all about adding project management by engagement, tracking milestones and decisions, rather than micromanaging tasks and time spent.
A robust PPM strategy is a key factor in decision-making and communication and it prevents many causes of project failure. It’s important to clearly define governance principles and tools for the project portfolio, as this is often where things go awry
People-Process-Tools (you thought we were talking about PowerPoint, didn't you? ;-) ), often referred to as the « golden triangle » is a strategy designed to enhance the relationships between employees, processes and tools.
You need people to do the work, processes to make the work more efficient and tools to make the work more effective and automate when it makes sense.
Feel free to read more about PPT, which is a very well-documented concept, by the way.
This concept (Sense - Role - Ritual) provides significant benefits for transforming the dynamics of cross-functional projects: reducing « best effort » participation, enhancing cross-functional collaboration, fostering a positive and effective project culture and structuring this activity around genuine commitment.
When it comes to tools, we can approach implementation in two stages, guided by a few core principles.
It’s ineffective and even counterproductive to try to impose a specific project management tool or methodology across the entire company. Each department might have different organisational structures, preferences and workflows, with specific tool requirements tailored to their needs. The most important is that each team uses methods and tools that are suitable and comfortable for them if you want them to be effective. For example, you wouldn't use the same project management tool in marketing as you would in IT development.
For cross-functional project teams, the PMO has the choice between adopting a project management tool already known and used by the teams if it’s suitable and collaborative, or recommending a task management tool. In either case, the PMO must make sure that entering information is as simple as possible.
However, it’s at this level of information that standardised access to information is necessary. We know that decisions which take too long are among the main causes of project failures. To help decision-making for management, who often switch between topics, they need to be given the right level of information at the right frequency, and, in a consistent manner.
To sum up, it’s best to let departments choose their own task and project management tools and automate the information flow from these tools to a governance and macro-reporting interface for project portfolios, highlighting the key project information that management needs to know.
Airsaas was designed based on the many experiences shared from companies undergoing transformation, to enhance project reporting and governance. The software is perfectly suited to provide management with the necessary information in a project portfolio without imposing excessive formalism on employees. It was built around the principle that, today, project management should be conducted by fostering team engagement and making information accessible for decision-makers.
Regarding resources, strategically allocate time for key talents and individuals, ensuring they are appropriately involved in project initiatives. This doesn't necessitate creating new departments or assigning dedicated project roles across the organisation.
Time can be freed up through business process automation or improvement or by including expert profiles within business units, enabling key individuals to contribute to cross-functional projects (ideally 10-20% initially) and subsequently fostering the culture across the organisation.
Now, this should only be a first step to limit the impact of « best effort » culture. The best approach is to gradually and continuously train and share this project culture throughout the organisation, ensuring that all projects don't rely solely on key individuals and that the company as a whole becomes more agile.
Moreover, executive leadership must invest in this culture as a strategic priority and save time to ensure its successful development.
The PMO’s central role in transformation and project culture is undeniable. They bring all departments together and are central to strategic decision-making. The role naturally fosters intellectual curiosity, leading to a broad understanding of business operations.
If they take the lead on project culture and change management, show the ability to manage without direct hierarchical authority and effectively drive change, then it wouldn't be surprising to see this type of profile progress into management and executive positions.
