Assessment of competences of project-oriented companies

application of a process-based maturity model

Introduction

The model of the project-oriented company (POC) is introduced. Emphasis is given to the processes, which are specific for the POC, such as

•  Assignments of projects and programs

•  Project management

•  Program management

•  Project and program coaching and auditing

•  Project portfolio management

•  Networking between projects

•  Personnel development in the POC

•  Organizational development of the POC.

For the performance of these processes specific competences are required by individuals, teams, and the POC overall. A maturity model for the assessment of the organizational competences is presented.

Strategy, Structure, and Culture of the POC

A POC is a company that:

•  Defines “Management by Projects” as an organizational strategy

•  Applies temporary organizations for the performance of complex processes

•  Manages a project portfolio of different project types

•  Has specific permanent organizations to provide integrative functions

•  Applies a “New Management Paradigm”

•  Has an explicit project management culture

•  Perceives itself as being project-oriented.

POCs consider projects not only as tools to perform complex processes, but also as a strategic option for the organizational design of the company. “Management by Projects” is the organizational strategy of companies dealing with an increasingly complex business environment. By applying “Management by Projects” the following organizational objectives are pursued:

•  Organizational differentiation and decentralization of management responsibility

•  Quality assurance by project teamwork and holistic project definitions

•  Goal-orientation and personnel development

•  Organizational learning by projects.

POCs perceive projects and programs as temporary organizations for the performance of complex processes, such as contracts for external clients as well as product developments, marketing campaigns, or reengineering activities for internal clients.

The more projects of different types a company holds in its project portfolio, the more differentiated it becomes and the higher becomes its management complexity. In order to support the successful performance of the single projects as well as to ensure the compliance of the objectives of the different projects with the overall company strategies, specific integrative structures, such as a strategic center, expert pools, a project management office, and project portfolio groups are required. Some of these permanent organizations might be virtual.

The POC is characterized by the existence of an explicit project management culture, i.e., by a set of project management related values and norms. In the POC project management is considered as a business process, for which there exist specific procedures and a common understanding of the performance of this process.

Further, in a POC the application of a “New Management Paradigm” is required. Traditional management approaches are emphasizing detailed planning methods, focusing on the assignment of clear defined work packages to individuals, relying on contractual agreements with clients and suppliers and using the hierarchy as central integration instrument.

Exhibit 1. Strategy, Structure, and Culture of the POC

Strategy, Structure, and Culture of the POC

Exhibit 2. Specific Processes of the POC

Specific Processes of the POC

Compared with this traditional management approach the major concepts common to “new” management approaches such as:

•  Organization as competitive advantage

•  Empowerment of employees

•  Process-orientation

•  Teamwork in flat organizations

•  Continuous organizational change

•  Customer-orientation

•  Networking with clients and suppliers

•  Can be perceived as a “New Management Paradigm.”

Processes of the POC

The POC is characterized by specific business processes as shown in the spider web presentation in Exhibit 2. The core processes project management, program management, and project portfolio management, are briefly described.

Project management is the core business process of the POC. It consists of the subprocesses project start, project coordination, project controlling, project discontinuity management, and project close down.

The project management process starts with the formal project assignment and ends with the project acceptance by the project owner. The project management process is performed in addition to the contents related processes to achieve the project results. Examples for contents related processes of engineering projects are engineering, procurement, logistics, and construction.

Objects of consideration in the project management process are the project objectives, the scope of work, the project schedule and the project costs, as well as the project organization, the project culture, and the project context (project environment relationships, relationships to the company strategies, relationships to other projects, etc.).

Program management has to be performed in addition to the management of the single projects of a program. The program management methods are similar to the project management methods, i.e., there is a program work breakdown structure, a program bar chart, a program environment analysis, etc.

The advantages of designing program organizations instead of defining a “megaproject” with several subprojects are as follows:

• A less hierarchical organization

•  Clear structures and a clear terminology (a program manager and several project managers instead of one project manager and “project managers” of the subprojects)

•  Empowerment of the projects of the program by allowing for specific project cultures, specific relationships to environments, specific project organizations, etc.

•  Differentiation between program ownership and different ownership for the projects.

The objectives of the project portfolio management are:

•  Optimizing the results of the project portfolio (and not of the single projects)

•  Selection of projects to be started

•  Definition of project priorities

•  Coordination of internal and external resources

•  Organization of learning of and between projects.

The basis for the management of the project portfolio is a database, which allows the development of project portfolio reports. Typical project portfolio reports are the bar chart of projects, the projects profit versus risk graph, the progress chart of projects, etc.

Maturity Models for the Measurement of Organizational Competences

In order to describe and to measure organizational competences, models of organizational maturity can be applied. The first model relating to the measurement of the quality of the software development process, the SEI Capability Maturity Model, was developed by the Software Engineering Institute (SEI) (Paulk et al. 1991).

Exhibit 3. Maturity Levels of the SEI Capability Maturity Model

Maturity Levels of the SEI Capability Maturity Model

Exhibit 4. Spider Web Presentation of the Organizational Project Management Competence

Spider Web Presentation of the Organizational Project Management Competence

During the last years several specific maturity models, to describe and to measure the organizational project management competence, have been developed. Most of them are based (e.g., Ibbs & Kwak 1997) and A Guide to the Project Management Body of Knowledge (PMI 1996).

Traditional maturity models use four to five steps to describe and to measure the competence to perform a specific process in an organization. The scale usually used is initial, repeatable, defined, managed and optimized, according to the SEI Capability Maturity Model (Paulk et al. 1991).

Project Management Competences of Companies

Project management competence can be defined as the capability, to perform the project management process professionally. Project management competence requires project management knowledge as well as project management experience. In the POC project management competences are required by individuals, by project teams, and by the organization overall.

Exhibit 5. Sample Question of the “PM-Competence” Questionnaire

Sample Question of the “PM-Competence” Questionnaire

Not just individuals but also organizations have the capability to gather knowledge and experience and to store it in a “collective mind” (Senge 1994). Willke (1998) describes organizational knowledge as hidden in the systems of organizational principles, which are anonymous and autonomous and define the way organizations work.

It is hard to imagine, that organizations possess a “collective brain,” but one could find the organizations knowledge and experience in operation procedures, description of work processes, role descriptions, recipes, routines, and databases of product and project knowledge.

An instrument for self-assessing and for benchmarking project management competences of organizations is the “pm-com-petence” model (Gareis/Huemann 2000). Basis for “pm-competence” is the above-described project management process, with its subprocesses. For the description and the measurement of the project management competence a “spider web,” with the axis project start, project controlling, project coordination, management of project discontinuities, project close down and design of project management process is used.

The spider web presentation has the advantage, that it is a multidimensional presentation of the pm-competence, allowing the different maturities of different project management sub-processes to be visualized. The overall project management competence of a company or a business unit is presented by the area, resulting of the connection of the project management competence points at the scale of the spider web axes.

The gray shaded area in Exhibit 4 visualizes the current project management competence of a POC that has a lot of competence in project controlling, as it has a “standardized” controlling process, where it applies all required pm methods for all project types defined in this organization. The project coordination, the project start, and the design of the project management process score 40. Further improvement is primarily necessary regarding the project close down and the management of discontinuities, where the project management competence scores 20.

The assessment of the project management competence of an organization is based on an IT-supported questionnaire, with about 80 questions. The questions, e.g., relating to the project start process, are grouped in questions regarding project management methods for the planning of project objectives, project risk, project context relationships, project organization and project culture. For the single questions the current project management competence level is assessed according to the answering possibilities “always,” “sometimes,” “seldom or never.”

As it can bee seen in the following sample question, in the questionnaire it is not asked for the application of a given project management method, but for the resulting project management documents.

In order to relate the answers to the questions to the competence points on the scales of the spider web a weighting system is used. As the single project management documents have different impacts on the project performance, different weights are assigned to the questions.

The maturity of a POC overall can be measured by applying the same approach to the spider web model shown in Exhibit 2. The competences for the performance of each process can be evaluated applying a scale from 0 to 100. For this evaluation a detailed catalogue of questions for each process can be used, similarly to the one presented for the project management process.

Benchmarking the Organizational PM-Competence

In a project management benchmarking research project with companies of different industries “pm-competence” was applied.

Exhibit 6 visualizes the practice of nine companies regarding the design of the project organization in the project start process. Partners 1,2,3 are from the engineering industry, partners 4, 5, 6 are from the IT industry, while partners 7, 8, and 9 are from the service industry. The engineering and IT companies perform primarily external projects, while the companies of the service industry are mainly performing internal projects.

Exhibit 6. Project Management Benchmarking Results Regarding the “Design of Project Organizations”

Project Management Benchmarking Results Regarding the “Design of Project Organizations”

The column “Best Theory” shows the required project management competence, as defined by the PROJEKTMANAGEMENT GROUP. The dark gray symbol indicates a “MUST” competence, the gray symbol indicates a “CAN” competence.

Generally, differences in the project management competences for the performance of internal and external projects as well as differences in the project management competences of different industries could be observed. As can be seen from Exhibit 6 in a comparison of the engineering and the IT industry no major differences regarding the design of the project organization could be observed. In the Benchmarking Workshop it turned out that the IT industry more frequently applies integrated project organizations, involving representatives of the client and of subcontractors in the project team and in the project steering committee than the engineering industry. From Exhibit 6 a difference regarding project related incentive systems can be seen, which are used in engineering companies only.

Further Development of the Competences in the POC

Specific competences required in the POC can be described, assessed and further developed. The above described competence model can be applied to assess the status of the organizational competences of a POC and to identify potentials for the further development of these competences in an organizational learning process. Similarly, individual and team learning have to be organized. The relationships between individual, team, and organizational learning in the POC are shown in Exhibit 7.

Exhibit 7. Relationships Between Individual, Team, and Organizational Learning

Relationships Between Individual, Team, and Organizational Learning

Instruments for the further development of the competences have to be differentiated for individuals, teams and organizations. Instruments to develop the competences of individuals are, for example, self-assessments and training (class room, on the job). Instruments to develop the competences of teams are, for example, workshops, reflections, and supervisions. Instruments to develop the competences of the POC at an organizational level are, for example, benchmarking and organizational development projects.

References

Project Management Institute Standards Committee. 1996. The Guide to the Project Management Body of Knowledge. Newtown Square, PA: Project Management Institute.

Gareis, R., and Huemann, M. 2000. PM-Competences in the Project-oriented Organization in: The Gower Handbook of Project Management, JR Turner, SJ Simister (ed.), Gower, Aldershot, p. 709–721.

Ibbs, W., and Kwak, Y.H. 1997. The Benefits of Project Management: Financial and Organizational Rewards to Corporation. Newtown Square, PA: Project Management Institute.

Paulk, M.C., Curtis, B., and Chrissis, M.B. 1991. Capability Maturity Models for Software. Carnegie Mellon University, Pittsburgh.

Senge, P. 1994. The Fifth Discipline Fieldbook: Strategies and Tools for Building a Learning Organization. Doubleday.

Willke, H. 1998. Systemisches Wissensmanagement. Lucius & Lucius, Stuttgart.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

Proceedings of the Project Management Institute Annual Seminars & Symposium
November 1–10, 2001 • Nashville, Tenn., USA

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