Project Management Institute

The best of both worlds

When implementing project management, companies often frame the question of whether to use in-house personnel or outside consultants as an either/or decision. Why not captialize on the differing strengths of both approaches?

by Richard Dancause

MORE AND MORE companies are embracing professional project management as the best way to achieve their goals in an era of stiff competition and rapid change. But once executives decide to adopt a project management approach, they must face the question of whether to hire a permanent project manager or turn to an outside firm. There are good arguments on both sides of the issue and the right answer will depend on the characteristics of the company as well as the volume and type of projects it wants to achieve.

For example, a project manager who is an employee will obviously have a better understanding of the corporate culture than a consultant who is working at a business for the first time. on the other hand, an outside firm may bring a fresh approach to problems and stand above company politics that might otherwise hinder the successful completion of a project.

Although I am the president of a firm that manages projects for manufacturing companies, I believe that businesses often don't have to make a stark choice between hiring staff project managers or going to an outside project management firm. Rather, they can have the best of both worlds by using the complementary strengths of inside personnel and an outside firm to enhance their project results.

In-House Project Managers. One significant advantage that an in-house project manager has over a consultant is an intimate understanding of tiie values, preferences, and taboos that have developed over time in a company. The inside project manager will also know the talents, faults, and personalities of company staff and should have a good grasp of internal politics. Is Bill, the vice president of marketing, at war with charlie, the vice president of engineering? The project manager knows the score and can make allowances before the conflict gets in the way of a successful project.

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It will also be easier for an in-house project manager to quickly identify stakeholders and understand their expectations for a project. For example, in the case of a project to develop a new product, the head of finance obviously wants the project to come in on budget while the vice president of sales may be more interested in ensuring the product is ready for the upcoming launch campaign. An in-house project manager will be in a better position to determine who has what on the line in a given project.

When recruiting the project team, the inside project manager will have an easier time pulling together the right people from various departments for the project team and, as we know, the composition of the team is a key factor in the success of a project. Who has analytical abilities? Who is an informal leader? Who is a good researcher? The insider will be able to identify employees with complementary talents and personalities and will have an easier time persuading them to participate in the project. It's harder to say “No” to a workplace colleague than to a consultant one has never met before. However, collegial relationships among team members can be a double-edged sword: it's also easier to make excuses to a project manager who is a co-worker than it would be to an outside project manager. Thus it may be more difficult for an inside project manager to ensure that other company employees fulfill their obligations once they have joined the project team.

An in-house project manager will also be quicker to identify collateral opportunities that flow out of a project. An internal project manager is better placed to see how the project might benefit other departments or lead naturally to other improvements because he or she is more familiar with the business.

Outside Project Managers. A consultant project manager operates on a business-to-business basis rather than on an employer-employee basis. This is a key advantage because a project manager should never be in the position of being the subordinate of a senior executive. An executive may initiate a project but he or she then becomes the client; the project manager is sovereign over the project, since his or her responsibility is to ensure its successful completion. The senior executive could quite conceivably end up working for the project manager as part of the project team and clearly that relationship will be easier for someone from outside the company than for an employee who occupies a lower rung on the organizational ladder.

It could also be easier for an outside project management consultant, who is removed from the company's hierarchy and is working on a business-client basis, to make suggestions to management. For example, an outside project manager may be in a better position to tell an executive who wants a project completed on a tight deadline to consider the option of outsourcing the design work. The consultant will also be more likely to challenge the basic management assumptions that lay behind the original decision to proceed with the project: Why do you want to increase production volume? Could other strategies be considered?

An outside project manager will also frequently be more successful in building consensus and achieving cooperation between departments as well as between employees and outside experts because the consultant stands apart from company politics. An in-house project manager may rule out approaching the production and engineering departments to cooperate on a project because he or she knows they fight like cats and dogs. But the outside project manager, who stands apart from internal political issues, may succeed in getting the two departments to cooperate simply by asking. A good consultant must also keep on top of the latest developments in project management if he or she is going to create the added value a company demands and succeed in attracting customer loyalty and repeat business.

Another area where outside project managers may have an edge is in championing innovation. To survive in today's highly competitive business environment companies must be able to innovate and implement change rapidly. Since a company can't be content to only match what the competition is doing, but must find ways to outperform the competition, it needs to look further afield for inspiration. An outside project management firm can play an invaluable role in this process by bringing fresh ideas, breaking down outdated paradigms, and suggesting new ways of approaching problems. Since a consultant works for several different businesses he or she is exposed to a wide variety of technologies, business methods and corporate cultures, and can offer that experience, within the bounds of confidentiality, to his or her clients.

A consultant also brings to a company a network of outside experts that he or she has watched working for other clients, evaluated and built relationships with over the years. Those experts have to be champions in their own fields and they too see many different companies and bring ideas with them. For example, our firm often calls upon an industrial engineer who used to be a foreman and a production director before returning to a university to get his engineering degree. His unique mix of experience makes him one of the best industrial engineers I‘ve seen in my 20-year career. It's a project manager's responsibility to know people like that, and an outside project manager is in a better position to find them because he or she is working on a wide variety of projects that require many types of expertise. As well, those top experts will be more willing to work for an outside project manager because they have built a working relationship that doesn't exist when they are approached by someone to do a one-time job.

Using an outside project manager also allows a company to better manage the fluctuation in the volume of projects it has ongoing. The outside firm can be called on to manage several projects at the same time during busy periods but is not on the company payroll during slow times when there are no projects on the drawing board. This provides a company with increased flexibility and better cost control.

Avoiding Accidents. What is not a viable solution in the search for project management expertise is what is often called the “accidental project manager.” The accidental project manager is an employee who, with no special training, is thrust into the breach of overseeing a project. Worse yet is the president of a small to mid-sized company who puts on the project manager hat in an effort to maintain total control or simply to escape the boredom of day-to-day routine. Companies must make a commitment to professional project management; if they don't have the volume of projects to justify hiring a staff project manager, they should use an outside firm for their needs.

In a company with a sufficient volume of projects to justify one or more full-time project managers, the ideal approach to achieving top results may be to partner an outside project manager with an in-house project manager. The outside project manager can maintain overall responsibility for the project while the inside project manager acts as the company's representative and shepherds in-house resources. This approach allows a company to benefit from the advantages of both in-house and outside expertise. The in-house project manager brings to the project his or her understanding of the corporate culture, ability to identify stakeholders, and invaluable personal relationships with other employees. The outside project manager, as a non-employee, stands above internal politics, brings fresh ideas from other companies, and offers a ready-made network of qualified outside experts.

An added advantage is that in-house project managers gain training, mentoring, and professional development from their interaction with the outside project manager, who is likely to have more wide-ranging experience and will often be a veteran of the profession. This should be a key consideration in the building of a company's project management capability, especially since the project management department should stand alone and not be subordinated to the head of another department.

EVERY PROJECT IS UNIQUE and therefore there is no one answer to the question of whether to rely on in-house expertise, turn to an outside firm, or chose a combination of the two. The decision comes down to a judgment about which approach will best meet project goals and produce maximum value. ∎

Richard Dancause is president and founder of Cabinet Conseil Développement (CCDI) Inc., a project management firm based in Québec City, Canada. CCDI specializes in project management for manufacturing companies. He can be reached at richard@ccdi.ca.

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.

PM Network • March 1997

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