Controlling innovation? Really?

Having worked in and with both medium sized companies and larger corporations, the notion of establishing an agile Project Management Office (PMO) has intrigued me. From the distance of a senior management team members not having product teams report to you, product development can easily be experienced like a black box where product teams spend a seemingly endless innovation budget for little output. This feeling only grows as digital transformation and innnovation budgets piped to the product teams increase and soon take up more than half of development budgets company wide.

In turn, sennior management team members feeling left in the dark, starts to feel the urge to re-establish transparency and clarity around how and where money is spent as digital transformation budgets have anything but added to this. Their need is around understanding what is actually going on and by that, being re-invited to the engine-room of making decisions. That is, after all what the senior managemen team is for: making decisions. This is their raison d’etre.

One popular solution for the digitally unnative companies seem to be establishing Project Management Offices (PMOs). A PMO exists to bring structure, certainty, and transparency into what projects are running and how they are progressing. It typically governs by imposing stage gates: specific points in the lifecycle of a project, where senior management must decide whether to pivot or persevere. As such, product teams only have mandate to continue a project after having reached agreed goals and outputs if the steering committee of the PMO has allows them to.

Conflicting mindsets

In other words, if stage-gate meetings take place every 2nd month, and a product team has achieved what they set out to do after 5 weeks, then they are not permitted to continue. In fact, they might not have the funding to continue, as funding in stage gates are allotted specific requirements (scope) – to output rather than outcome. Allotting funding is a primary mechanism of control of stage gates for their PMOs.

This adherence to ensuring compliance with standardised processes and procedures can come at odds with the agile approach’s flexibility and adaptability. In contrast, the main mechanism for control in agile is timeboxes (2 week sprints, 3 month cadences, etc.). Within a given timebox, the product team has full autonomy to progress as far as they can. Even further than initially planned and agreed on (if possible) – steered by a vision rather than a requirement. Product teams have stable funding around their team members rather than funding around their initiatives.

Let us examine the conflicting mindsets.

The Stage-Gate approach of the PMO

The stage-gate approach is a structured process that divides product development into distinct stages with predetermined gates that determine whether the project should proceed to the next stage. Each stage has specific deliverables and milestones that must be achieved before the project can move forward. This approach is popular in large organizations with complex product development processes.

The primary benefit of the stage-gate approach is that it provides a structured framework for managing projects. The gatekeepers, who are usually senior managers, review the deliverables and make decisions based on predefined criteria. This ensures that projects align with the organization’s strategic goals and minimizes the risk of failure.

The stage-gate approach is often used by management teams as a way to gain certainty in an uncertain and chaotic environment. However, product development is a complex domain, where there are many variables and factors that are difficult to predict or control. This complexity can create uncertainty, and management teams may feel that they need more control over the development process to minimize risk and ensure success.

By imposing extra structure with stage gates, management teams seek to gain more visibility into the development process and create a sense of control. Each gate provides an opportunity to assess the project’s progress and ensure that it aligns with the organization’s strategic goals. This can be reassuring for management teams who may feel that they need to justify their decisions to senior executives or stakeholders.

However, imposing more control can be counter-productive to the intentions of management. Teams may become overly focused on meeting the gate criteria, leading to a box-ticking mentality and a lack of focus on delivering value to the customer. The stage-gate approach can easily create unnecessary bureaucracy, which can slow down the development process and lead to delays. Each gate requires extensive documentation, review, and approval, which can take time away from actual development work. This can be frustrating for product teams who may feel that they are being micromanaged or not trusted to make decisions.

The Timeboxing approach of agile

Instead of imposing more control, management teams should focus on creating an environment that fosters creativity, innovation, and continuous improvement. This can be achieved through the timeboxing approach, where teams are given more autonomy to experiment and make decisions. By setting clear goals and objectives, and providing regular feedback and support, management teams can ensure that the development process remains focused on achieving goals and objectives rather than ticking off boxes on a list.

The timeboxing approach is a more flexible approach that grants full mandate to the team, allowing them to make decisions and manage their own work. Instead of predefined gates, the team is given a specific timeframe or “box” to work on a project. At the end of the timebox, the team conducts an introspection to determine whether the project should continue or not.

The primary benefit of the timeboxing approach is that it empowers teams to work in unhindered flow, which fosters creativity and innovation. Teams have more autonomy to experiment with different ideas and solutions, which can lead to breakthroughs in product development as teams experiment with alternative routes to achieve objectives. The approach also promotes a culture of accountability and transparency, as teams are responsible for delivering value within the allotted time.

The Importance of unhindered flow

While the stage-gate approach may provide a sense of control in complex environments, it can be counter-productive to the intentions of management. By imposing more structure and control, management teams can stifle creativity and innovation, and create unnecessary bureaucracy. Instead, management teams should focus on creating an environment that fosters unhindered flow, which can lead to breakthroughs in product development and improved outcomes for the organization.

Empowering teams to work in unhindered flow allows them to experiment, innovate, and deliver. It also fosters a culture of accountability and transparency, as teams are responsible for delivering value within the allotted time.

In a timeboxing approach to portfolio management, teams are given more autonomy to make decisions and prioritize their work based on the feedback they receive. Rather than controlling adherence of the work that must be delivered, senior management teams should focus the time spent on achieving an objective.

Stage gates represents hand-overs. By reducing handovers and promoting cross-functional collaboration, the timeboxing approach help to eliminate silos and promotes a shared understanding of the the commonly shared objective.

Trust is a cornerstone

Senior Management teams might worry that without predefined gates, there is a risk that projects may lose focus or direction. Teams may become too engrossed in experimentation and lose sight of the overall objective. Especially in the absence of trust between team and management, more focus on control, transparency, and compliance seem to be the common response.

Management may have concerns about whether the product teams can deliver value within the given time frame or whether the team’s decisions align with the overall strategy of the organization. They may also worry about whether the team’s decisions and actions are in line with the corporate values and principles.

In such cases, management may try to impose more control over the team’s decisions and actions, which goes against the fundamental principles of the timeboxing approach. This can lead to frustration and demotivation among the team members, who may feel that their autonomy and decision-making authority are being undermined.

A lack of trust can lead to a lack of transparency and communication. Without open and honest communication, team members may not receive the feedback they need to make informed decisions about their work, and they may not dare to raise concerns or issues that need to be addressed. At worst, the lack of trust can create a blame culture, where team members may feel that they are being held responsible for issues that are outside their control. This in turn can lead to a lack of accountability and a reluctance to take risks or make decisions, which can slow down the development process.

Providing support to clear the value stream for unhindered flow

By understanding the flow of work and the challenges faced by the product teams, management can provide targeted support and resources to help the teams succeed. Contrary to the gut-instict of the before mentioneed senior management teamms, they should focus more on empowering and supporting product teams rather than controlling them.

The controlling mentality of the stage-gate approach can lead to longer cycle times and more errors. Teams may focus more on meeting gate criteria than delivering value to the customer. This approach can also create silos and promote a “throw it over the wall” mentality, where team members may not have a shared understanding of the shared product development process. The result is often misunderstandings and errors, which can slow down the development process.

Unhindered flow for product teams, such as what the timeboxing approach allows, can lead to better cross-disciplinary collaboration with fewer handovers, shorter cycle times, fewer errors, less technical debt, and faster go-to-market. By fostering collaboration and communication, promoting cross-functional teams, and delivering value in small increments, the timeboxing approach enables teams to work more efficiently and effectively, delivering high-quality products that meet the customer’s needs.

An alternative approach for PMOs

If there was such thing as an agile PMO, it wouldn’t steer with stage gates, but rather timeboxes. It would focus more on managing outcome rather than output and put more trust on teams and individuals rather than a controlling process.

Rather than focusing on requirements and what output is to be expected, senior management teams should rather define how success looks like (a vision), recruit a team that has the foundation to make that happen, and provide the trust and funding to make it happen.

Management teams should not shy away from inspecting the work through recurring rituals defining cycles of development (timeboxes), but do so on the work, not on the process.

Through stable funding based on competences rather than work items, they should provide the trust and autonomy needed for teams to succeed. As teams are led astray, they should provide support and guidance to get them back on track through recurring inspection rituals. This is what product teams do themselves through sprints. Management can impose a similar structure, but rather in cadences of 2-3 months.

Using timeboxes instead of stage-gates can be a better alternative to the workings of traditional PMOs because it promotes a culture of flexibility, adaptability, and continuous improvement. By adopting an agile approach, senior management teams and PMOs can steer their teams towards faster innovation and better delivery velocity, which can ultimately result in a more competitive and successful organization.

Anders Toxboe Author

Based out of Copenhagen, Denmark, Anders Toxboe is a Product Discovery coach and trainer, helping both small and big clients get their product right. He also founded and a series of other projects. Follow Anders at @uipatternscom.