In a market economy, each step in the value chain simply manages its immediate subcontractors. We buy beans from a grocery store or coffee boutique, and leave it to the store manager to figure out how to supply them. The store manager buys the beans from a distributor, and leaves it to the distributor to arrange for their production and delivery. And so on.

The market model can be applied within organizations as well. For every project, one group can be considered the "prime contractor." This prime can subcontract to peers within IT for help. The key is subcontracting for deliverables, not for people. For example, an applications developer (the prime on an application project) can subcontract to peers for a logical data model, a physical data model, installation into production, etc. Other managers can figure out how to produce these sub-deliverables.

In this paradigm, the subs become project managers for their components. Thus, the prime is still fully accountable for the entire project, but much of the project-management workload is shared with subcontractors. With this systemic approach to project management, you no longer need a small group of super-project managers in a PMO. Instead, everybody is a project manager for their respective deliverables, and the PMO helps them all succeed.

How to Implement Effective Project Management

The first step in implementing systemic project management is to charter a PMO carefully. Its job is to serve peers, not supplant them, sharing its in-depth knowledge of project management without actually being the project manager.

Next, every group in the organization must identify its products and services, both those sold to clients and those sold to peers within IT. This exercise teaches staff to accept responsibility for results, not just for technical competence. Defining each group's products and services requires an understanding of what business each is in.

Then, a CIO must establish a discipline of contracting internally, not just service level agreements with clients. This is essential to the prime holding internal subcontractors accountable for delivery of subcomponents.

Finally, a CIO must establish the practice of "walk-throughs" as the first step in project planning. A walk-through starts by defining exactly what the customer is buying and identifying the prime contractor who's in the business of selling it. Then, the prime decides what to buy from subcontractors, and subs buy from their subs, and so on. A tree-structured project plan emerges that defines who's on the project team and exactly what deliverables each is accountable for.

This systemic approach takes a bit more effort to implement than simply throwing in a PMO as a paladin, a shining knight there to save the organization from its incompetence. But the payoff warrants the investment. The systemic approach makes the entire IT organization successful at every project, not just the big ones. And it supports a culture of empowerment, entrepreneurship and accountability.

Dean Meyer helps IT leadership teams design high-performance organizations. Author of six books, numerous monographs, columns and articles, he brings innovative systematic approaches to what others consider the "soft" side of leadership. Contact him at dean@ndma.com or visit his Web site for information that can help you implement these ideas.