From single projects to contextualized project organization

Faced with the current complex and turbulent economic climate and the rapid pace of change, organizations today strive to generate value while remaining competitive in order to ensure long-term sustainability. As business leaders turn to project management methodologies to manage change, research indicates that most organizations are not set up to attain the maximum benefits of the project approach. In this paper, the author analyzes the basic functional elements of project management and suggests that organizations should adopt an integrated practice and cyclic organizational framework to achieve the maximum benefits from project management methodologies.

Abstract

In the current economic climate and fast-moving business environment, generating value whilst remaining competitive has become a key concern for the long-term sustainability and survival of organisations. In recent years, more and more organisations have been turning to project management disciplines to structure and manage their change activities; but experience and research have shown that most organisations are not set up to reap maximum benefits from this “‘project approach.”

This paper accounts a more than 20-year journey grounded in a reflective research-practice dialogue. It is meant to foster new thinking on the concept of project organisations, based on a historical analysis of single project management and a projection into the future, shaped by current trends in organisational and project research and practice.

After an analysis of the recent history of project management concepts, the paper deconstructs the current project organizational practice into its functional elements and analyses each of them in regards of their contribution to the whole, both in terms of behaviour and dependencies. Following this analysis, the paper demonstrates the need and validity of an integrated approach to organisational management and shows how, in the context of a complex and turbulent environment, organisations need to be both dynamic and responsive. Finally, the paper summarises these arguments into a cyclic organisational framework for project organisations (PO)1 and contends that, in that respect, project management, as a set of integrated disciplines, can help organizations remain competitive in a complex and turbulent environment.

Introduction

Darren Dalcher (2010), in a recent article, argued that “practice is the source of theory and theory leads to improved practice” (p. 3)…as long as there is a sensemaking process in place to create meaning. In that paper, he argues that new knowledge is generated by experience and advocates an ongoing dialogue between project theory and practice to create alignment. Dalcher encourages abandoning the idea of a universal theory of project management in favour of “personal discovery, reflection and sense-making”: a learning process that enables the discovery of their own theories (p.5). Likewise Edmondson and McManus (2007) argued that “Methodological fit in field research is created through an iterative learning process that requires a mindset in which feedback, rethinking and revising are embraced as valued activities” (p. 1156).

Over a period of more than 20 years, I have analysed the evolution of the practice and theory of value, project and program management, as well as decision-making and decision management, and developed conceptual methods and frameworks to support their practice. Although I did not intend it as a research project from the start, it quickly became apparent that this growing body of work was both an expedition into unchartered territory and a reflective journey: an enacted research strategy. This paper is based a theory-practice dialogue concept and supported by a number of professional and academic papers published since 1996; it summarizes the conclusions of my recently awarded PhD (Thiry, 2012).

In this paper, I have decided to use the metaphor of an orchard to describe the current practice of project management because each tree is tended to individually, maintained or culled, depending on their annual yield and any external influence is zealously monitored and managed; either to eliminate it (weeds and pests) or to encourage it (water and light). On the other hand, I have used the metaphor of an ecologically balanced mature forest for the contextualised project organisation because, in such a forest, all plants and animals develop and adapt in an ecologically balanced system that includes uncontrollable external influence (weather and geological events) and its own internal systems (soil, new and decaying plants, prey and predators, water systems, etc.).

“Modern” Project Management as a Well-Maintained Orchard

On 2 October 2008, at a Forbes Leadership Series meeting in Palo Alto, California, Rich Karlgaard, publisher of Forbes Magazine, said, “The practice of project management will be the activity that makes or breaks many global companies in this economic environment” (International Journal of Applied Systemic Studies [IJASS], 2010). But the real question is: “What” project management?

Project management methodologies have been formalised in the second half of the 20th century and typically concern the delivery of single projects. “Modern” project management was conceptualized at a time where “scientific management” and “mechanistic” organizations were the norm. This “modern” view is based on segregation of work and control; it relies on a sponsor to link the project outputs with the expected business outcomes and focuses project management on deliverables. Such a system creates a gap between the organisation's business objectives and the projects that support it; preventing the “project approach” from becoming a true business capability. It is only very recently that project management researchers have started outlining the lack of integration between projects in the same organisation (Rungi, 2010); between project measures and strategic objectives (Anbari, Cioffi, & Forman, 2010), or of projects structures within the business (Aubry, Müller, Hobbs, & Blomquist, 2010).

Albeit a discourse towards a better integration, the project community is still shy of taking bold steps in that direction. But the situation is changing; for example, the Organizational Project Management Maturity Model (OPM3®)— Third Edition (Project Management Institute [PMI] 2012) Public Exposure Draft took a step in the right direction by describing organizational project management (OPM) as “a strategy execution framework that utilizes project, program, and portfolio management as well as organizational-enabling practices to consistently and predictably deliver organizational strategy to produce better performance, better results, and a sustainable competitive advantage” (p. 4). In the second edition, the definition was a “safer” segregated approach describing OPM as “the systematic management of projects, programs, and portfolios in alignment with the organization's strategic business objectives” (PMI, 2008, p. 9). It is the same bold step that I intend to take in this paper.

Segregation of work breeds a “context independent” view of organizational functions, including project disciplines, which is not sustainable in the current complex and turbulent context. Although more and more organisations are accepting the fact that project management can give them the means to deliver strategy effectively and efficiently, some researchers are starting to realise that it needs to be better integrated with other organisational activities to be successful (Killen & Hunt, 2010; Crawford & Cooke-Davies, 2010; Aubry & Hobbs, 2011).

Since the early 1950s, project management methods have been used to deliver tangible products like buildings, manufacturing processes and defence equipment, for example (Morris, 1997). In the last two decades, project management has been applied to the delivery of more and more complex “solutions.” This situation has led to the advent of complementary disciplines like complex project management, program and portfolio management and the creation of project or program management offices (PMOs) and its derivatives as a structure to organise the practice of project management across the organization (Thiry, 2010).

In the last 10 years, portfolio management has evolved to link projects, programs and even operations with the corporate strategy of the organisation (Thiry, 2008a, p. 50; PMI, 2013a). In parallel, the discipline of program management has evolved to fill a missing link between project results and strategic objectives (Thiry, 2008b, p. 73; PMI, 2013b). Finally, the PMO has evolved from a simple project support function, in the mid-90‘s, to a well disseminated organisational structure (Hobbs, 2007, p. 38). In the last 50 years, project management has evolved from a single project delivery methodology into a range of disciplines aimed at implementing an organisation's strategies, but it still needs to be embraced as an organisational capability.

Deconstructing the “Modern” Project Organization

Re-thinking the Organisation

Important theoretical concepts have stimulated debate in the management literature for the past 10 years but mechanistic, control-based organisational models (Clarke, 2004) still heavily dominate current organisational context. In parallel, project organisations (POs) have increasingly been reported as an emerging organisational form and many organisations in which project management was adopted on a wide scale in the 1990s have now matured. Project organisations can be structured into five conceptual areas as shown in Figure 1 (Thiry, 2006).

Five Conceptual Areas of Integration for POs (Thiry, 2006)

Figure 1: Five Conceptual Areas of Integration for POs (Thiry, 2006)

Organisational Context and Process Behaviour define the organisation's stance; they provide underlying concepts that set the characteristics for the organisation's culture. The three other conceptual areas provide the theoretical framework for defining organisational configurations that provide the functions, processes and structures that enable the organisation to achieve its goals. More specifically, they cover:

  1. a) Organisational Purpose, which is driven by value concepts and supported by the organisation's corporate vision and by its governance perspective;
  2. b) Strategy Formation, which consists of dealing with emergent situations in a complex world through Emergent and Realised Strategies (Mintzberg & Waters, 1985) that are supported by business strategies, program and portfolio management and governance systems;
  3. c) Strategy Implementation, which is carried on through programs, innovation, projects, and operations that aim to deliver results (and benefits) to the business in alignment with the purpose.

Using Burns and Stalker's (1961) concept linking mechanistic (static) organisations to stable environments and organic (dynamic) organisations to turbulent environments, I have identified two theoretical perspectives in the literature that represent opposite ends of a spectrum and are at the core of current theoretical debate in that area (Thiry, 2006).

Below is a table of the concepts that underlie both ends of the continuum in each of the five areas:

Conceptual Areas Ends of Mechanistic-Organic Continuum
Organisational Context: Stable/Predictable img Turbulent/Unpredictable
Process Behaviour: Performing img Learning
Organisational Purpose: Shareholder Focus img Stakeholder Focus
Strategy Formation: Deliberate Strategy img Emergent Strategy
Strategy Implementation: Means-end rationality img Value-based rationality

Table 1: Conceptual Organisational Areas and Mechanistic-Organic Paradox (Thiry, 2006)

This view, coupled with thinking in contemporary project and organisational literature (Siggelkow & Rivkin, 2005; Rappaport, 2006; Crawford & Cooke-Davies, 2010; Aubry & Hobbs, 2011) elicits a number of issues concerning organisations set in a complex and turbulent environment, and particularly project organisations. Among these:

  1. – the obligation to create and realise value in a more sustainable way, so that organisations can remain competitive in the long-term;
  2. – the need to view projects as an integrated entity of the organisation rather than as single ventures with a bounded beginning and end; and finally;
  3. – the necessity for organisations to encompass the project approach as a whole rather than as discrete functions independent from the rest of the business.

Organisations in Context

Porter (2004 [1985]) was one of the first to coin the term “sustainable competitive advantage” (p. 11), as a result of a strategy composed of “an internally consistent configuration of activities that distinguishes a firm from its rivals” (p. xvi). Recently, this approach has been contested as too rigid, and some authors have suggested changing “Sustainable” competitive advantage for “Transient” competitive advantage (Gunther McGrath, 2013). I have decided to keep the initial term as it does not preclude of the techniques that are used to achieve it and the challenge mostly concerns those. Porter and Siggelkow (2008) argue that in order to sustain competitive advantage, firms have to carry out two types of activities:

  1. Context independent activities that are not affected by other activity choices. Porter and Siggelkow (2008) argue that a “firm that does not attain parity on such activities is at a competitive disadvantage [but that] firms are unlikely to attain a sustainable competitive advantage from these activities” (p. 37). These types of activities typically have a low level of ambiguity like operations and control-driven governance, portfolio management (in the sense of resource allocation: a management activity), and product-linked projects.
  2. Contextually interdependent activities, as the activities arising from a set of activities a firm puts in place as part of a strategy. Porter and Siggelkow (2008) argue that “competitive advantage is more likely to be sustainable if it arises from […] strategy-specific activities” (p. 37). These activities are mostly ambiguous and often uncertain, because they involve context-dependent change. Typically business strategies, programs and benefits-linked projects, portfolio management (in the wider sense of benefits contribution and achievability: a leadership activity) or mission-driven governance, fall in this area.

It is in a 2002 paper that I first developed an organisational context model driven by ambiguity and uncertainty (Thiry, 2002b). Based on a number of theoretical concepts (e.g., Earl & Hopwood, 1980; Mintzberg, 1990; Weick, 1995; Siggelkow & Rivkin, 2005), one could argue that ambiguity is driven by complexity and uncertainty by turbulence. Complexity is a situation where many interactions between elements of a system create high number of possible options for each decision, therefore increasing ambiguity: a state of confusion where a situation is subject to more than one interpretation (Weick, 1995). Turbulence, on the other hand, is characterised by the pace of change and therefore prevents the collection of accurate knowledge before a decision has to be made; this fosters uncertainty, which can be described as a state where knowledge is limited (Galbraith, 1977, p. 38; Weick, 1995). Both affect predictability, but in different ways.2 In my 2002 paper, I argued that ongoing organisational activities were typically a low uncertainty area, whereas change in general, and programs and projects in particular, were subjected to high uncertainty. I also argued that high levels of decisions, supported by the need to learn, bred ambiguity whereas execution was typically an area of low ambiguity.

If we accept that, from a results-oriented point of view, the main function of an organisation is to “Sustain [its] competitive advantage.” This main purpose can be subdivided as follows (Thiry, 2012):

  1. Maintain competitive edge, a decision-based approach which can be divided into:
    1. 1.1. Maximise Long-Term Value: the domain of leadership and portfolio (deliberate corporate strategy and governance)—A high ambiguity & low uncertainty context.
    2. 1.2. Maintain High Comparative Value: the domain of creative networking and programs (Distinction business strategy and value management) —A high ambiguity and high uncertainty context.
  2. Increase short-term advantage, an execution-based approach which can be divided in:
    1. 2.1. Maintain/Improve Performance: the domain of management and operations (maintenance and incremental improvements) —A low ambiguity & low uncertainty context.
    2. 2.2. Create Short-Term Value: the domain of entrepreneurship and projects (controlled change and innovation)—A low ambiguity and high uncertainty context.

As shown in Figure 2, each of the four areas delimited by the degree of ambiguity and uncertainty define both a focus and type of behaviour, which together define an approach. For example in a high ambiguity, low uncertainty context, which is typical of stable environments, managers have time to rationally analyse their decisions, which can be fairly complex due to the number of elements involved. In a high uncertainty, low ambiguity context, typical of projects, the main decisions have been made and objectives clearly outlined, therefore reducing ambiguity, but uncertainty is high, due to the pace of the action; in this case the objective is to gather data through planning to reduce ambiguity and focus on results. Each area contains both context independent and contextually interdependent activities.

An Ambiguity-Uncertainty Based Organisational Model

Figure 2: An Ambiguity-Uncertainty Based Organisational Model

At a high level, the diagram can be summarised as follows:

  1. – Low uncertainty is the domain of ongoing actions, where turbulence is low and there is time for analysis whereas high uncertainty is associated with change actions where the pace is faster.
  2. – Low ambiguity is an area where scope and requirements are clear; it is the domain of execution, whereas in high ambiguity, decisions have to be made in the face of many possible options.

Mintzberg and Waters (1985) defined a strategy as “a pattern in a stream of decisions,” based on this definition, they have defined two types of strategies: the intended strategy—leadership plans and intentions—and the realized strategy—what the organisation actually did. They further defined “deliberate” strategies—realized as intended—and “emergent” strategies—realized in the absence of intentions. The first is typically based on precise intentions, shared by all stakeholders—projects, for example—; the second is largely responsive, developing patterns of action in response to environmental pressures—incremental change, for example.

In contrast to strategies developed to maximise long-term value, which are mostly intended, strategies developed to maintain comparative value are generally realised and display a mix of deliberate and emergent. Because of this, I have labelled them “responsive strategies.” Responsive strategies depend on the organisation's environment and, as the environment becomes more turbulent, they become more emergent and enacted (Weick, 1977).

Maintain Competitive Edge

Maintaining competitive edge is an area of high ambiguity that is represented by the upper part of Figure 2. It concerns more specifically the leadership and decision processes that deal with the need to stay competitive in a fast moving environment. It combines both medium and long-term intended strategies (low uncertainty-high ambiguity) and short and medium term responsive strategies (high uncertainty-high ambiguity). Intended strategies, often labelled corporate strategy, address the corporation as a whole and are mostly linked to its high-level purpose; they deal with broad issues and are relatively context independent. Responsive strategies, also labelled business strategy, are the means by which the organization continually adapts to its environment at business unit level and deals with specific issues; it is therefore highly contextually interdependent. I have labelled the combination of intended and responsive strategies “distinction strategies”3: the conscious effort to distinguish yourself from your competitors.

In a relatively stable context, intended strategies are mostly realized as intended and most of the resources in the organization will be focused on rational analysis and control. As an example, in a position of market domination, Microsoft's strategy in the last 10 years had been relatively consistent and focused on product improvement and acquisitions, without questioning its fundamental organizational concepts. This stance often means a focus on minimising threats (acquisition of competing entities) rather than maximising opportunities (investment in the development of ground-breaking technologies), which can be damaging for sustained competitive advantage. Most large organisations have adopted a conservative context independent approach based on segregation of work and therefore have impaired their capability to respond quickly and effectively to emergent situations, which forces them to take bold disrupting steps when they are pushed in a crisis. Not unlike the recent Microsoft restructuring under pressure from competition by Apple, Sony, and Google, in particular, forcing them to move from “a collection of divisional strategies” to “a single strategy as one company,” labelled: “One Microsoft […] a far-reaching realignment of the company that will enable us to innovate with greater speed, efficiency and capability in a fast changing world” (Ballmer, 2013).

This is the organizational area where strategic decision-making and strategic leadership are key elements of success. Ireland and Hitt (2005) defined strategic leadership as the “ability to anticipate, envision, maintain flexibility, think strategically and work with others to initiate changes that will create a viable future for the organisation” (p. 63). In a complex and turbulent environment, both intended and responsive strategies have to be flexible and open to change. As part of strategic decision-making and strategic leadership, organisations have to manage governance activities, portfolio management, corporate and business strategy as well as value and program management. In a context where uncertainty and ambiguity are high, successful organisations will foster an innovation approach that enables them to stay competitive over time (Hamel, 2000; Ireland & Hitt, 2005; Moss-Kanter, 2006). “[Innovation] is among the essential processes for success, survival, and renewal of organisations, particularly for firms in either fast-paced or competitive markets” (Brown & Eisenhardt, 1998, p. 344)

In summary, current strategy planning and management, departmental policy development and application, resource allocation activities, reporting and governance processes and systems, based on continuity and rational analysis, are well-designed to respond to stable environment challenges where uncertainty and turbulence are low. In contrast, activities like: responsive and agile business strategies, creative research, original marketing efforts, new product development, major recruitment and training programs, mergers and acquisitions, and others, supported by strategic value management and program management are well suited to complex and turbulent environments. The objective for managers, in this high ambiguity area, is to create a strong interface between conservative (push) and adaptive (pull) strategic decisions and a balance between all four quadrants in order to maintain its competitive edge. This can only be achieved if they develop a flexible and agile decision management process that enables them to make enlightened decisions and to review them on a regular basis, based on the impact of results and a changing context; this is the concept of strategy formation.

Increasing Short-Term Advantage

Increasing short-term advantage is generally typified by a low ambiguity context: the lower part of Figure 2. This area concerns the implementation the strategy through projects and other change actions to create short-term value and the day-to-day operations necessary to maintain or improve performance. Strategy implementation becomes a realised strategy through a combination of intended strategies (change actions), and emergent strategies (adjustments required by operational performance and the transition of change outputs into the business).

Activities and processes in this area may include, for example, administration, operations and maintenance of organizational elements such as: IT/IS systems, manufacturing processes, administration systems, sales, accounting, ongoing personnel recruitment and training, facilities management and others; as well as: project and innovation activities such as: system upgrades, development and installation of new systems, new product design and delivery, new contract negotiations, new training programs, business expansion, building of new facilities and others. These activities and processes are generally well mastered; their day-to-day practice is habitually regulated internally or externally and well-documented in standards and practitioner literature. But they are currently mostly managed as context independent functions, linked only by the need to exercise control.

Typically, projects are short to medium-term and limited in time, they are reasonably predictable and focus on organisational efficiency. But Buijs (2010) argues that project management's tendency is to minimize interactions with the environment to protect its scope and circumstances, and Crawford and Cooke-Davies (2010) argue that “Recognition of project management as an organisational capability has been a more recent development” (p. 1). Organisations invest large amounts of resources in an effort to improve capabilities through project and innovation activities, but these do not always generate the expected business benefits, and often these benefits are not measured (Thiry, 2002c; National Audit Office [NAO], 2008). These two studies, as well as others, conclude that, in order to improve competitive advantage, managers need to focus more on contextual interdependencies. As early as 1998, Porter (2004 [1998]), stated, “A strategy is an internally consistent configuration of activities that distinguishes a firm from its rivals” (p. xvi). Whereas departmental or less organisationally significant projects and innovation activities could be considered as single projects, larger scale or multi-department initiatives would be part of a program and therefore link with the upper right and lower left quadrants of the model displayed in Figure 2.

In summary, administration and operations are functions well designed to address a low ambiguity-low uncertainty context and innovation activities and projects are designed to tackle low ambiguity-high uncertainty situations, where the objectives are defined, but the way to get there needs planning and risk management.

Reconstructing a Dynamic and Contextualized Project Organization

The Context

It is well documented that the turbulence of the general business environment has increased in the last two decades. In his 1995 book Crisis and Renewal, Hurst argues that organisations are continually subjected to external or internal pressures that force change on them and that the aim of their managers is to create stability. He has derived his model of organisational change, represented as an infinity curve, from the study of the evolution of complex systems in nature. He argues that organisations display two types of behaviours under the pressure of change:

  1. – Following a crisis, the organisation displays a learning behaviour, which is characterised by confusion, charismatic leadership and creative networking behaviours;
  2. – Once a choice is made and a direction chosen, the organisation enters into a performing behaviour characterised by entrepreneurial action, strategic management and finally conservation behaviour…until the next crisis.

Many cycles can run in parallel in an organisation, affecting different areas and functions of the business.

The Change Eco-cycle (adapted from Hurst, 1995, p.103)

Figure 3: The Change Eco-cycle (adapted from Hurst, 1995, p.103)

In a context independent perspective, organisational context and behaviour can be unrelated as culture is mostly driven by the function; in a contextually interdependent perspective, the context drives the behaviour. Managers, and by default organisations, typically aim to stabilise a turbulent context, moving from high uncertainty and high ambiguity towards low uncertainty and low ambiguity, and from a learning stance towards a performing stance (Hurst, 1995; Gillier, Hooge, & Piat, 2013).

In 1978, Mintzberg was the first to advocate the concept of strategy “formation”, in which strategy formulation is entwined with implementation in an ongoing, mutually constructive process; this view is now upheld by a number of other writers (e.g. De Wit & Meyer, 2004; Hambrick & Fredrickson, 2005). This integrated view positions top managers as active participants in the unfolding strategy process (Mintzberg & Waters, 1985; Ireland & Hitt, 2005).

In the same vein of thinking, in 1985, Porter (2004 [1985]), stated that: “The sustainability of a generic strategy requires that a firm […] offer a moving target to its competitors by investing in order to continually improve its position” (p. 20). In order to achieve this, Porter suggested the adoption of the “value chain” to counter the silo effect that was restricting organisations’ agility. Other authors have also confirmed a “failure of synergy” through lack of understanding of the interrelationships between different business areas, or functions (e.g., Zollo & Winter, 2002; Thompson, 2003; Sanchez & Worren, 2005).

Integration of functions require that organisations move from a mechanistic model to a networked organic model aimed at delivering results, as advocated by Burns and Stalker (1961), Mintzberg (1979-1998), Porter (1985-2004), Hurst (1995-2012) and others. In such an organisation, functions are typically described in terms of their utility to the organisation rather than their technical area. Most organisations are still siloed vertically and horizontally. Strategies are repeatedly segregated from execution, because they are seen as intended or deliberate, and managers do not extend their involvement beyond the strategy formulation (KPMG, 2005; NAO, 2008). This situation creates a number of missed opportunities, including that of terminating unproductive initiatives to re-assign their resources to better use.

More and more, flexible and responsive organisations promote contextually interdependent actions, where strategies include both the initial low uncertainty decision-making process (intended and deliberate strategies) and the decisions leading to realignment in a high uncertainty context, if required by results or circumstances (responsive and emergent strategies) (Hamel, 2000; Hambrick & Fredrickson, 2005; Hurst, 2012). In this perspective, strategy formation and strategy execution are not two distinct organizational activities, but one single loop where strategies are decided and executed and results are regularly analysed to re-align the strategy in regards of an evolving context. Some authors even go as far as challenging the basic concept of sustaining competitive advantage in favour of exploiting short-term opportunities, and relying on developing organizational capabilities like pace and decisiveness (Gunther McGrath, 2013). But, to be sustainable, this option still requires that strategies be an “integrated, mutually reinforcing set of choices […] that form a coherent whole” (Hambrick & Fredrickson, 2005, p. 57).

Whereas with emergent strategies, there is no choice but to deal with them; responsive strategies are a conscious choice to tackle combined turbulence and complexity. It is the area with which traditional managers experience the most difficulty because they must balance speed of decision with search for alternate solutions and an unpredictable final outcome (Siggelkow and Rivkin, 2005). It is characterised by both high uncertainty and high ambiguity. In these high uncertainty and ambiguity situations, traditional mechanistic organisations often waste time and effort on data collection and rational analysis, which may render the decision redundant because of the time required and increase confusion by adding additional data to an already complex issue (Weick, 1995). Mintzberg (1990) and others (Mintzberg, Ahlstrand & Lampel, 1998) recommend that, in this situation, managers implement actions based on intuition and learn as they go, reformulating decisions as required; a typically agile concept which is counter intuitive to traditional project management approaches.

The Model

It is a combination of those concepts that I have used to support the development of a dynamic and responsive organizational model that includes and integrates all the project disciplines as organizational capabilities.

In order to achieve this objective, the four quadrants discussed earlier should form a loop of highly linked organizational functions that enable the organization to focus on specific actions and behaviours according to informed contextual conditions. Figure 4 outlines this model by combining the behaviours outlined by Hurst (1995) for the rational and emergent actions with the elements described in Figure 2. For example, a traditional organization that finds itself losing ground to its competitors would need to invest more resources in change/emergent actions in order to develop new ways of doing things and stay competitive. On the other hand, a start-up that sees its market developing rapidly and needs to increase production may need to invest more in ongoing/rational actions to support the growing demand and deliver quality consistently.

If we now take a project organization under pressure to change (typical of complex and turbulent environments), the leadership behaviour would be the area where both external and internal data are analysed and decisions are made about resource allocation to different business initiatives in line with the corporate strategy (finance and portfolio management); networking is then required to respond to a changing context by engaging stakeholders, eliciting their needs and expectations and, based on those, validate the strategic objectives and make decisions concerning the implementation of business initiatives (strategy development and value management, as well as program definition). Once strategic decisions are made, organisations require managers who can exercise entrepreneurship to execute those decisions through program benefits delivery, projects and innovation activities and effectively deliver results to the organization. Finally, management behaviour is needed to transition these results into business as usual and ensure continuity of performance (program transition). This is the area where actual business results produce wealth and can be measured to feed the analytical decision-making process (portfolio definition). The loop described previously shows the importance to gain an understanding of this process as a whole, because, individually, a successful resource allocation or successful strategic decision process or even successful projects cannot guarantee organisational success.

The Organization as a Dynamic Model

Figure 4: The Organization as a Dynamic Model

Leadership behaviour, as described by Hurst (1995), is typical of low uncertainty and high ambiguity (LU-HA) areas; because turbulence is low, data is generally available in time to make a decision. It is the area where managers manage “the organisation's ability to change […] rather than change itself” (p. 136). In this highly political area and, “leadership […] develops loosely connected creative networks from which new activities can emerge” (p. 104). This is typical behaviour of finance and portfolio management and governance activities.

Creative networking behaviour is representative of an area where both uncertainty and ambiguity are high (HA-HU). Decisions have to be made repeatedly without access to reliable data. It requires a sensemaking and value-based approach. It is an area where “groups of individuals will begin to gel around a variety of opportunities and projects and start to take entrepreneurial action” (Hurst, 1995, p. 114). This behaviour is congruent with business strategy, value management and program management definition.

Entrepreneurship behaviour is likely to be observed in high uncertainty and low ambiguity (HU-LA) (clear scope and parameters) settings where requirements revolve around risk analysis and problem solving. In this context, “more regular pattern of interactions begin to emerge as the contacts and events become linked into coherent flows and better articulated routines.” (Hurst, 1995, p. 114). It is consistent with program benefits delivery, projects, and innovation activities.

Management behaviour is the typical approach in low uncertainty and low ambiguity (LU-LA) areas, where the purpose is to “restrict activities to those that have proved to work [and where] considerable effort and capital will be invested in describing these activities and embedding them in technology and formal organisational procedures to perpetuate their performance” (Hurst, 1995, p. 104). It is characteristic of program transition, operations (maintenance, updating and incremental improvements).

The Project Organization as an Ecologically Balanced Forest

In 2010, Couto, Ribeiro, and Tipping stated, “To navigate [the current] rocky landscape, companies [must] institutionalize the capacity to alter strategies again and again — as business conditions require. But few companies are competent at doing this” (p. 1). In a context of high complexity and turbulence, organisations need to be responsive and fluid; Table 2 shows how each of the conceptual areas identified in Figure 1 are supported by the different organisational functions in different contextual areas.

Conceptual Areas Functional Areas: Public works Structure (see above)
Organisational context Complexity and turbulence
Organisational purpose Sustain competitive advantage
  (Strategic decision management)
Strategy formation Maintain competitive edge (Distinction strategy)
  – Maximise long-term value (Intended strategy)
  – Maintain high comparative value (Responsive strategy)
Strategy implementation Increase short-term advantage (Realised strategy)
  – Create short-term value (Deliberate strategy)
  – Maintain/improve performance (Emergent strategy)
Organisational behaviour Maintain competitive edge (Learning Behaviour-main stance)
  (Leadership and Networking Behaviour)
  Increase short-term advantage (Performing Behaviour-main stance)
  (Entrepreneurship and Management Behaviour)

Table 2: Correspondence Between Organisational Functions and Conceptual Areas

I have further structured these elements in a cyclic model (Figure 5) and developed it at a more detailed level to apply the theoretical concepts illustrated in this paper more specifically to project organizations (Figure 6). This organizational model supports Teece, Pisano, and Shuen's (1997) view of dynamic capability as “the firm's ability to integrate, build, and reconfigure internal and external competence to address rapidly changing environment” (p. 516).

Conceptualisation of the Organisation's Functions

Figure 5: Conceptualisation of the Organisation's Functions

A Contextualised Project Organisation Model

Figure 6: A Contextualised Project Organisation Model

This organizational model, because it is based on value creation and realisation and on a dynamic multilogue between organizational components can help organisations remain competitive in the long-term. This model integrates projects as true business capabilities rather than as single ventures with a bounded beginning and end; and finally, outline the necessity for organisations to encompass the project approach as a whole rather than as discrete functions independent from the rest of the business.

Further research and testing is needed to develop more layers in the model. There is a need to empirically verify the behavioural aspect of the model as well as develop competence models and structural relationships for the model to be fully applicable. There is also a need to test the model in different contexts in order to clearly establish its practical validity. But it is my hope that this new vision of the organisation as a dynamic and responsive whole can help resolve some of the issues that plague our current business environment.

References

Anbari, F. T., Cioffi, D. F., & Forman, E. H. (2010). Integrating performance measures to exert effective leadership in managing project portfolios. Proceedings of PMI Research Conference (2010), Washington, DC. Newtown Square, PA: Project Management Institute.

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1 In the last 10 years, a number of terms have sprouted in the literature increasing the confusion in meaning. I have decided to follow the convention originally established by Middleton (1967) and simply use “project organisation” (PO).

2 An alternative approach could be to use the uncertainty taxonomy model proposed by Tannert, Elvers, and Jandrig (2007) and associate uncertainty, as defined in this paper, to “objective uncertainty” and ambiguity to “subjective uncertainty.”

3 I would have used differentiation strategies, but Porter (2004 [1985]) gives it a different meaning.

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.

©2013 Michel Thiry
Originally published as a part of 2013 PMI Global Congress Proceedings – New Orleans, Louisiana

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