Balancing structure and flexibility with adaptive governance | PMO Insight Series 3/6

In our previous insights we’ve talked about how our PMO functions are adapting to the changing needs of our customers and the market. We identified three focus areas that need to be reshaped in order to support our organisations to evolve:

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1. Moving the focus from delivering outputs efficiently to delivering the right outcomes
2. Enabling the organisation to support delivering outcomes through adaptive governance
3. Shifting PMO tools to enable people to focus on value instead of enforcing process

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In this article we’re going to share some ideas that we’ve seen succeed that could help tackle some of the processes in your organisation that might be slowing down your evolution.

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We would like to start by addressing enabling organisations to deliver outcomes through adaptive governance!

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Traditional project management functions were designed for a sequential delivery approach of analysis, design, build, test and deploy. Funded annually, they generally lock in the projects to be delivered throughout the year. An iterative delivery approach harnesses the ability to change direction based on feedback and validation of ideas in quick cycles.

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While most organisations are making moves towards iterative delivery approaches, many of them still seem to be struck with the old governance model that was more suited to sequential delivery.

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How do we create a structure and process to fund, mobilise and prioritise our work, without stifling a creative, customer-centric, iterative delivery approach?

‍Adaptive governance focuses on providing the guidance and handrails necessary to fund the right outcome, mobilise the people, and optimise the results for the customer whilst being flexible enough to support a changing ecosystem which demands the ability to shift quickly if needed.

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Adaptive governance isn’t a one size fits all framework (it wouldn’t be very adaptive if it was) but can be achieved by embracing the evolving delivery governance models that might solve the governance challenges that are unique to your organisation. Here are a number of ideas that you can explore and experiment with on your journey.

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Value streams

A value stream model centres on optimising the activities and processes that deliver outcomes to customers.

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Using this lens, governance and funding could be modelled around the value streams identified in your organisation. Some examples of models that have aligned to value streams include:

• Spotify : Created an operating model that enabled them to optimise their delivery.
• McKinsey Tribe: This model is based on the ING agile transformation. We have seen it being adopted by some organisations within the NZ market
• SAFe: SAFe is Scaled Agile Framework for enterprise-wide Agile deliver programmes.

         
Funding and capacity planning‍

Funding and capacity planning are very tightly linked as we move to outcome, rather than output, based delivery. By better aligning demand and capacity available we can more easily fund the right work throughout the year.

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The goal should be enabling teams to focus on the highest value outcomes, in alignment to the organisation’s strategy and goals. Some examples of models that support outcome and capacity based funding include:

• Lean portfolio management: Lean portfolio management (LPM) is applying lean principles to managing a program and product portfolio. LPM helps with the alignment and execution of business outcomes across the enterprise.
• Beyond Budgeting: Beyond Budgeting looks to shift from traditional planning and control to empowerment and adaptive governance.
• #noproject: #noproject is set of principles, practices and ideas to enable business agility.

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Thanks for reading! We'd like to hear your thoughts - please feel free to leave a comment, or get in touch with Rob Franklin on LinkedIn.

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