This Case Study is adapted from following source and modified for educational purpose: Kerzner, Harold. Project management: case studies. 5th edition, John Wiley & Sons, Inc., 2017

A:

The New CIO for Rose Industries

BACKGROUND

Rose Industrieswas a manufacturer of electrical products for the home. A large portion of its business base was devoted to the design, development, and manufacturing of specialized electronic components for public and private-sector clients.

Ralph Williams had been with Rose Industries for more than 45 years, beginning in the mail room and working himself up to president and chief executive officer (CEO) of Rose. He was now beginning his tenth year as president and CEO.

Rose Industries believed in inbreeding. All promotions were from within the ranks. Rose often had trouble attracting talented people, especially people with degrees, because the company's conservative policy dictated that all new employees begin at the bottom of the company and work their way up. Every senior manager at Rose had been with the company for at least 30 years. Rose Industries discouraged employees from taking outside seminars and courses. If you wanted to attend a conference or symposium, the policy was "Take vacation and pay your own way." There were several training programs available to the workforce, but they were all taught by internal personnel and covered only the skills needed to do each job more effectively or to become qualified for a promotion to the next pay grade. Each employee was allowed a maximum of seven days off a year to attend internal training programs.

The company did not have any tuition reimbursement policy. Numerous colleges and universities in the surrounding area provided a variety of evening programs leading to various certifications as well as undergraduate and graduate degrees, but employees had to pay all expenses out of pocket. In order to satisfy some of the needs of the employees at Rose Industries, many of the professional societies in the surrounding area held conferences, symposiums, and professional meetings on weekends rather than weekdays.

A TIME FOR CHANGE

By 2003, the ultraconservative nature of Rose Industries began to affect growth. Rose was falling farther behind its competitors, and gross sales were declining rather than increasing. Although Rose was considered a low-cost manufacturer, it was losing business to some higher-priced competitors whose advertising campaigns attacked Rose's weak project management capability. For years, Rose could not see any value in using project management and seemed to discourage its personnel from becoming a Project Management Professional (PMP). Project

management was never identified as one of Rose's strengths in its proposals during competitive bidding. Rose did use a few templates when managing projects, but no formal project management methodology existed.

Rose's information systems were somewhat outdated. When software was needed, especially for more sophisticated business requirements, Rose would look for off-the-shelf products even though the products were not 100 percent applicable to or did not satisfy all of the company's needs. Rose did maintain an Information Technology Department, which would create software for smaller requirements, but no systems development methodology was used.

HIRING THE CIO

Ralph Williams, president and CEO of Rose Industries, understood quite well the seriousness of the situation. The company must become good at project management, improve its information system, and develop methodologies for both project management and information systems. Mr. Williams decided to break with tradition and hire a new chief information officer (CIO) from outside the company.

After an extensive search and interviewing process, the company hired John Green, a 20-year veteran with one of the largest IT consulting companies in the world. There was no question about John's credentials and what he could bring to Rose Industries. The real issue was if and when he would be able to change the culture to accept his new ideas. Rose Industries had the same culture for decades, and getting the seasoned veterans at the company to accept change would be difficult. John was told about the challenges before he was hired, and he felt that he could adequately handle the situation.

A BULL IN A CHINA SHOP

During the first two weeks on the job, John interviewed personnel from all levels of the organization to ascertain how difficult it would be to change the culture. The situation was worse than he had been led to believe.

John knew from decades of experience in project management that there are four characteristics of an effective project management culture: communications, cooperation, teamwork, and trust. The interviews made it quite apparent that there was no project management within the company and senior management had been reluctant to initiate improvements. Communications were quite poor because of the lack of a good information system. Cooperation and teamwork occurred only if people felt that they could benefit personally. There was more mistrust than trust. The building blocks for effective project management simply were not there.

John originally thought that he could make the necessary changes within two years. Now, after the interviews, it looked like five years would be closer to the truth. If this five-year time frame were allowed to happen, the health of Rose Industries could significantly degrade during that time period.

John came up with a four-step approach for implementing change:

Step 1: Hire several PMP credential holders quickly.

Step 2: Create two project management offices (PMOs); one would function as an IT PMO, and the other one would be a corporate or strategic PMO.

Step 3: The IT PMO would create an IT systems development methodology suitable for Rose Industries

Step 4: The corporate PMO would create an enterprise project management methodology

for all of Rose's projects except the project in IT. The PMO would also participate in the portfolio selection of projects, strategic planning for project management, and project risk management activities.

John believed that this approach could accelerate the maturity in project management and some good practices could be in place in about two years. All he needed now was buy-in from the executive staff for his plan.

PRESENTATION OF THE PLAN

At the next executive staff meeting, John presented his plan. The responses were not what John had hoped for. The other executives in the room immediately attacked step 1, arguing that they had no intention of hiring additional people.

John would have to get some of the existing labor pool personnel trained in project management. When step 2 was addressed, the executives argued that creating two PMOs would be the same as adding layers of management on top of the existingorganizational structure. They simply could not see the need or value in having PMOs and viewed them as possible threats to their power and authority.

When step 3 was discussed, there were several questions as to why Rose Industries had to develop its own systems development methodology when several packages were commercially available. Some executives seemed to have no idea what a systems development methodology was or why it was needed at all.

When step 4 was discussed, the executives became furious that John was recommending that someone other than the executive levels of management participate in the portfolio selection of projects, especially project managers who were not even on a management career path ladder. The portfolio selection of projects was obviously seen as a job done entirely by executives. Likewise, allowing anyone other than executives to be involved in strategic planning and risk management was as a serious threat to some executives who perceived that this could impact their power, authority, and bonuses.

John now saw quite clearly what he was up against and that all of the executive support that he was led to believe would be forthcoming would not happen. However, within two weeks after the meeting, John decided to accept the challenge. He moved forward by forming his project team fromexisting labor pool personnel and creating just one PMO. On the other side Rose Industries executive team approved to reduce the scope to just IT systems development methodology for the first phase.

B:

The New IT PMO for Rose Industries

Mr. John Green, the new CIO of Rose Industries, is going to start his journey by setting up the new IT PMO. The whole process of designing and establishing a PMO especially in a company like Rose Industries where a PMO does not exist is a new concept and can appear to be a very big and challenging project itself. John strongly believes that creating a project for the designing, establishing, and implementing of a PMO is considered a best practice, which will maximize the outcome and will be the first step toward the company's long-term plan toallow the project management maturity of the organization to grow.

However, the ultra-conservative culture of the company and executive committee recruitment of forming the project team from existing labor pool personnel can add extra complications and challenges.

In the early stage of planning, John identified some of the key aspects of the work to be:Hiring project team, Job redesign, Project Management training, people change management,PMO organization, procedure development, process redesign,management reporting,androllout plan for implementation.

-End of Case Study

After Reading the Whole Case Study please answer the following question

Individual Reflection #1: Business Benefits Why do you believe the create IT PMO project was suggested by CIO? Financial or non-financial benefits?