Introduction to Project Management in Organizations
Successful project management depends heavily on the organization's environment, which
includes its culture, structure, and strategy. These elements determine whether a project will thrive or fail.
Key Factors for Project Success
• Alignment with Strategy: A project should connect to the organization’s overall goals. • Team Selection: Choose the right people to staff the project team. • Clear Goals: Set clear objectives to guide the project’s direction.
Before Starting a Project
• Understand the organizational structure and how it impacts your project.
• Clearly define reporting relationships—who reports to whom. • Establish the rules and procedures that will govern the project. • Identify any staffing needs early on.
Example: Operation Desert Storm (1991)
• A great example of preparation: The U.S. and allies invested significant effort in creating a solid working relationship among coalition members. o Each group was assigned specific tasks. o Roles and responsibilities were clear. o The organizational structure was well-defined.
Projects and Organizational Strategy
Strategic Management is about making decisions that guide an organization to meet its objectives. The science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives
It involves:
1. Developing Vision and Mission Statements
o Establishes what the organization aims to achieve in the future. o Example: Bechtel Corporation's vision is to be "the world’s premier engineering, construction, and project management company." o Only projects that align with this vision are pursued. 2. Formulating, Implementing, and Evaluating Strategy o Create a clear vision or mission. o Assess internal strengths/weaknesses and external opportunities/threats. o Set long-term objectives and choose the best strategic approach. 3. Making Cross-Functional Decisions o Strategy involves a team of experts from different areas to collaborate and make informed choices. 4. Achieving Objectives o Whether aiming for market leadership, low-cost innovation, or superior quality, projects are the key tools to achieve these goals.
PROJECTS REFLECT STRATEGY
Projects and Organizational Strategy: TOWS Matrix
The TOWS Matrix is a strategic tool that helps connect projects with an organization's strategy by examining internal and external factors. The acronym stands for:
• T - Threats: Challenges from the external environment.
• O - Opportunities: Positive possibilities in the external environment. • W - Weaknesses: Internal limitations or areas for improvement. • S - Strengths: Internal advantages or capabilities.
Stakeholder Management
• Stakeholder Analysis: A method to identify conflicts or interests that may arise when introducing new projects. • Project Stakeholders: Individuals or groups who have a direct interest and active stake in the project and can influence its success, either positively or negatively.
External and Internal Stakeholders
• Internal Stakeholders: Individuals or groups within the organization who are directly involved in the project. Examples include: o Top management o Accountant o Other functional managers o Project team • External Stakeholders: Individuals or groups outside the organization who are affected by the project or have an interest in its outcome. Examples include: o Clients o Competitors o Suppliers o Environmental, political, consumer, and other intervener groups
PROJECT STAKEHOLDER RELATIONSHIPS
Managing Stakeholders
1. Assess the Environment:
o Determine the project's potential impact. o Example: EMC Corporation conducted market research to understand the need for a new product. 2. Identify the Goals of Principal Actors: o Understand stakeholder needs and concerns. o Example: A small IT firm lowered its fee to gain future business opportunities with a larger publisher. 3. Assess Your Own Capabilities: o Know your strengths and weaknesses. o If lacking political skills, seek help from someone with the right connections. 4. Define the Problem: o Clearly identify challenges or conflicts that need to be addressed. 5. Develop Solutions: o Create a plan that balances the needs of all stakeholders. o Consider potential reactions from different groups to your proposed actions. 6. Test and Refine the Solutions: o Implement solutions and adjust based on stakeholder feedback. o Treat this step as an iterative process to fine-tune your approach.
Organizational Structure
Key Elements:
1. Formal Reporting Relationships:
o Defines levels of hierarchy. o Establishes span of control for managers. 2. Groupings: o Organizes individuals into departments. o Groups departments within the entire organization. 3. Communication and Coordination: o Ensures effective communication. o Facilitates coordination and integration across departments.
Forms of Organizational Structure
1. Functional Organizations: o Groups of people with similar roles or activities in departments (e.g., Marketing, HR). 2. Project Organizations: o Form temporary project teams focused on specific tasks or goals. 3. Matrix Organizations: o Combines both functional and project structures. o Features a dual hierarchy where both functions and projects are equally important.
FUNCTIONAL ORGANIZATIONAL STRUCTURE
FUNCTIONAL STRUCTURES
Strengths for Project Management Weaknesses for Project Management
1. Projects developed within a basic functional 1. Functional siloing makes it structure require no disruption or change to the difficult to achieve cross-functional cooperation. firm’s design. 2. Lack of customer focus. 2. Enables development of in-depth 3. Longer time to complete knowledge and intellectual projects. capital. 4. Varying interest or commitment. 3. Allows for standard career paths.
PROJECT ORGANIZATIONAL STRUCTURE EXAMPLE
PROJECT STRUCTURES Strengths for Project Management Weaknesses for Project Management 1. Project manager sole authority 1. Expensive to set up and maintain 2. Improved communication teams 3. Effective decision-making 2. Chance of loyalty to the project 4. Creation of project management rather than the firm experts 3. Difficult to maintain a pooled 5. Rapid response to market supply of intellectual capital opportunities 4. Team member concern about future once project ends
MATRIX ORGANIZATIONAL STRUCTURE
Strengths for Project Management Weaknesses for Project Management 1. Suited to dynamic environments 1. Dual hierarchies mean two bosses 2. Equal emphasis on project management and 2. Negotiation required in order to share resources functional efficiency 3. Workers caught between competing project & 3. Promotes coordination across functional units functional demands 4. Maximizes scarce resources
Heavyweight Project Organizations
Organizations can achieve significant advantages by establishing fully dedicated project teams.
Example: Lockheed Corporation’s "Skunkworks":
• Increased Project Manager Authority: Project managers have more control over resources and decision-making. • Functional Alignment Replaced: Traditional departmental structures are set aside to pursue market opportunities. • Customer-Centric Focus: Emphasis is on meeting the needs of the external customer rather than internal processes.
Project Management Office (PMO)
Centralized units that oversee or improve the management of projects o technical details were offloaded from the manager o Expertise in project management skills o Repository of lessons learned documentation o Center for project management excellence
ALTERNATIVE LEVELS OF PROJECT OFFICES
Forms of Project Management Offices (PMOs)
• Weather Station: Monitoring, tracking.
• Control Tower: project management is a skill to be protected o Functions: and supported ▪ Standards establishment. ▪ Consultation. ▪ Enforcement. ▪ Improvement. • Resource Pool: Skilled project professionals. Maintain and provide a cadre of skilled project professionals Organizational Culture
• Nature: Unwritten rules, behavior.
• Transmission: Held by subsets, taught to new members.
