Two PMOs, One Mandate
A logistics group acquired a rival eight months ago. The acquirer's PMO (12 staff) runs a stage-gate governance process; the acquired firm's PMO (5 staff) runs lightweight intake and monthly reporting to its former CIO. Both still issue separate portfolio reports, and roughly 40% of the 90 active projects appear in both with different RAG ratings. Executives spend the first 30 minutes of every steering meeting reconciling numbers. The COO wants "one PMO by Q3" and has asked you for a design recommendation. The CFO questions whether any PMO is worth the cost. Both PMO managers are candidates for the single lead role, and each argues that their own model should prevail. You have eight weeks before the Q3 steering cycle.
1. The COO has already decided the answer is "one PMO by Q3". What must you establish before you commit to an operating model, and why does the merger make this urgent rather than optional?
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The consolidation and the date are decided; the mandate is not. Before structure, establish decision rights: which decisions the PMO owns outright (intake thresholds, portfolio prioritisation inputs, reporting standard, gate authority), which it advises on, and which it is explicitly outside of. Also establish the demand-side problem the design must solve. The 40% duplication is not a two-org-chart problem, it is a decision-latency and data-credibility problem: executives cannot act on two RAG ratings, so portfolio decisions stall or get made on anecdote.
The merger makes this urgent because authority is currently ambiguous in a way that is expensive. Two PMOs both nominally govern, which means neither can enforce a portfolio call, and the CFO's cost challenge is really a question about who is accountable for spend decisions. If you choose a structure first, you get a merged org chart while both reporting systems and both escalation paths persist.
Practical first step: a written mandate signed by COO, CFO and CIO covering decision rights, funding, and the PMO's customer. Note that "one PMO" can legitimately mean one governance standard and one reporting spine with staff embedded in two businesses - separating standard from staff location is the design freedom the word "one" is hiding.
2. How do you decide between the two competing models and handle the two incumbent managers? Set out your approach and what you would not do.
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Agree selection criteria with the COO first, before either model is assessed: decision latency today, cost to run, fit to the dominant project type (large capital projects vs. high-volume smaller change), sponsor satisfaction, data reliability, speed to implement, reversibility. Then test both models against the actual 90-project portfolio rather than against their advocates' claims. Typically you find that neither pure model wins: the stage-gate suits 15 large projects, the lightweight intake suits 75 smaller ones, and the answer is a tiered design with one reporting spine.
On the managers: do not run a bake-off that produces one winner and one resentful loser who stays. Run a transparent selection against the published criteria, tell both candidates the criteria and the outcome, and give the non-selected person a defined, substantive role (lead one service line, own the merger integration of the portfolio) or a clean exit. Ambiguity - "co-leads for now" - is the worst outcome and will reproduce the duplication.
What I would not do: merge by compromise. Keeping both report formats, both RAG definitions and both meeting cadences is precisely the political settlement that preserves the 40% duplication. Consensus on the artefact is not consensus on the decision.
3. What is the minimum you would put in place in the first eight weeks, and how do you avoid the new PMO being seen as one side's PMO imposed on the other?
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Eight-week minimum:
- One portfolio inventory - single list, one RAG definition with written criteria, one named owner per project, duplicates resolved by the COO where the two businesses disagree.
- One reporting product and one steering meeting - replacing two packs; explicitly short, decision-focused.
- Signed mandate and decision-rights document - COO, CFO, CIO. This is the artefact that lets the PMO act without renegotiating every time.
- A cost baseline - because the CFO's question will not go away and answering it late looks defensive.
- A tiered intake threshold pilot - small work follows the lighter route, large work follows stage-gate.
On legitimacy: brand the change as "one portfolio, one number", not "our way". Run the first cycle using inputs from staff on both sides, and be seen to adopt the better practice rather than the winner's practice - keeping the acquired firm's lightweight intake for small work is a visible signal. Deliver one win before the Q3 cycle: a reconciled portfolio view that halves the reconciliation time in the steering meeting. That is the evidence that the merger was worth the disruption.