For tomorrow belongs to the people who prepare for it today

successful preparation for post-recovery economy

Abstract

After two years of incredible growth, things have changed for the construction industry. The difficulties most of the contracting companies are facing in the recession jeopardize their survival during the slow return to a normal economy. They are struggling to continue their existence and will (hopefully) make a decent profit. But what about other companies, those that have gained stability and force to get through difficult times, are they only interested in surviving or do they have the wisdom to prepare for the post-recovery economy?

The paper describes the case of a major Romanian construction company that understood their need to exploit the slowdown and use the “respiro” to prepare their human capital and adapt their organizational structure for future projects. In order to be effective, they focused on processes, knowledge, and behavior: a project management office was defined and established, a project management methodology was developed, and project managers and team members were trained and supported in applying the new acquired knowledge and skills.

Introduction

“For tomorrow belongs to the people who prepare for it today,” says a well-known African proverb. In Romania, the saying is a little bit different: “Wise man buys sleigh during summer and carriage during winter.” No matter the language and country, the wisdom teaches the managers of companies to be proactive, informed, and open minded not only to lead their companies through more or less difficult times but also to prepare them for the future. This is the case of Bog’Art, a construction company in Romania that decided in 2009—when the number of contracts decreased and therefore the level of staff occupancy dropped significantly—to launch a project having the main objective of developing their organization as a project-oriented company does.

A project-oriented company uses projects and programs to fulfill complex and relatively unique business processes (Gareis, 2005, p. 25). For the professional management of these projects and programs, a project-oriented company considers three important dimensions: a specific strategy, a particular structure, and a project and program specific culture. These have to fit in order to provide good, quality services and to be cost effective and time efficient. (Gareis, 2004, p.124).

Requirement for an “organizational fit” in the project-oriented organization (Gareis, 2005, p. 26)

Exhibit 1: Requirement for an “organizational fit” in the project-oriented organization
(Gareis, 2005, p. 26).

According to Roland Gareis, the project-oriented organization has these characteristics:

  • management by projects is an explicit organizational strategy;
  • projects and programs are used as temporary organizations;
  • networks of projects, chains of projects, and project portfolios are objects of considerations for the management;
  • project management, program management, and project portfolio management are specific business processes;
  • know-how assurance takes place in expert pools;
  • project management competence is assured by a project management office and a project portfolio group; and
  • a “new management paradigm” is applied, which is characterized by team work, process orientation, and empowerment

The organizational competences of the project-oriented company can be analyzed with the model “project-oriented company mature” (Gareis & Fussinger, 2007, p. 15).

Spider web of the model “project-oriented company mature” (according to Roland Gareis Management of the Project-Oriented Company®)

Exhibit 2: Spider web of the model “project-oriented company mature”
(according to Roland Gareis Management of the Project-Oriented Company®)

These are the dimensions of this model:

  • Project management—considering the project management process (start, coordination, etc.), resolving a project discontinuity, management of small projects;
  • Program management—considering the program management process (start, coordination, etc.);
  • Assurance of management quality in project and programs—considering management consulting, management auditing;
  • Assignment of a project or program—considering methods and design for assigning a project;
  • Project portfolio coordination and networking of projects—considering methods and design for project portfolio coordination, management of chains of projects, networking of projects;
  • Organizational design—considering organizational structure, infrastructure, culture, and further development of a project-oriented company;
  • Personnel management—considering recruiting, leadership, incentive systems, development of project management personnel, project management competencies; and
  • Process management—considering definitions and types of processes, macro- and micro-process management, optimization of processes, IT infrastructure, organization, personnel management, and process management competencies.

The Company

The Bog’Art company, with its headquarters in Bucharest, Romania, is a private construction firm that was established in 1991. Since then, the company has had continuous growth—some of its civil and industrial buildings have become a unique symbol within the architectural landscape of different cities of Romania. Due to its modern management and high professional technical personnel, the firm has developed and today there are more than 10 companies within the Bog’Art Group, in Romania and Germany. The overall growth of the construction industry during 2006 to 2008 contributed to this spectacular development as well, assuring constantly new and interesting contracts, architectural challenges, and highly visible projects.

In 2009, the pace of new contracts slowed down. Similar companies started the cost-cutting process that affected first the training provided to employees. Bog’Art took a deep breath and reconsidered their vision: What do they want to become? The answer was, an empowered, professional project-oriented company with autonomous projects based on an appropriate governance structures. Bog’Art wanted successful contract performances, long-term client relations, and offer to their employees, with the support of a professional, sustainable management, an attractive work place with long-term employee relationships. In order to achieve this ambitious objective, Bog’Art asked for Roland Gareis Consulting supports and, in October 2009, the project development of Bog’Art as a project-oriented company (PrO Bog’Art Project) was launched.

The PrO Bog’Art Project

To define all the required measures for the further development of the organization, Bog’Art decided to assess their existing situation. An internal moderated workshop was conducted in April 2009 that performed a comprehensive analysis of the maturity of Bog’Art as a project-oriented company.
The model “project-oriented company mature” was applied. It was based on the project management approach: Roland Gareis Management of the Project-Oriented Company®. The analysis allowed a benchmarking with results of a research program project orientation [international] conducted by PROJEKTMANAGEMENT GROUP, Austria.

Maturity of Bog’Art as a project-oriented company

Exhibit 3: Maturity of Bog’Art as a project-oriented company

Based on the results of the analysis and the recommendations for the further development of the company, the objectives for the PrO Bog’Art project were identified and agreed on:

  • Project management guideline and templates developed

This objective includes defining the project and project types as performed by Bog’Art as well as the description of the project management processes considered in their projects: project start, project coordination, project controlling, and project close down. Role descriptions are planned to be developed for project manager, project team member, and project owner. Based on a set of generic templates, Bog’Art-specific templates are planned to be developed as well.

  • Project management office (PMO) established

The objective includes the definition of the services to be provided by the PMO as well as its tools: guidelines, templates, checklists, database. The PMO is designed and integrated into the Bog’Art organization chart and role descriptions are developed for the newly designated personnel of the PMO. The pilot operation is included as well.

  • Project portfolio management guideline, templates, and database developed

This objective includes the definition of the portfolio management processes: project assignment and project portfolio coordination, as they will be performed in Bog’Art. The project portfolio group is established: role descriptions are developed and the required personnel are designated. Tools are defined for the proper operation of the project portfolio group: specific templates for Bog’Art, database structure, project portfolio reports. The pilot operation is included as well

  • Training prepared and delivered

Two training sessions for process and project management and different target groups are included. For the experienced project managers of Bog’Art, a comprehensive training program (project and program management training program [PM2 program] with 10 modules) is developed.

  • Coaching delivered

The coaching sessions are included in order to support project managers and project teams to develop the project plans according the new project management guideline and templates.

  • Organizational development planned

The project-oriented company needs to adapt its structure and culture to the new strategy that requires a more flexible, networked organizational structure. The PrO Bog’Art project objective was to propose this new structure by analyzing the existing organizational structure and culture of Bog`Art, developing the new organization chart and role descriptions, and describing the required communication structures, values, and rules. A plan for the implementation of the new organization and culture is also included.

An assignment document was issued, describing the project justification and objectives, the expected timeframe (October 2009–June 2010), and costs and nominating the project team members. The assignment document was signed by the project owner, the general manager of Bog’Art, and by the newly assigned project manager. The consultants of Roland Gareis Consulting were part of the project team.

Project organization for the PrO Bog'Art project

Exhibit 4: – Project organization for the PrO Bog'Art project.

The project team started its activities by formally defining a project management plan that was presented to the project owner and the stakeholders. The work breakdown structure (WBS) was one of the communication instruments used in order to show the scope of the project (for communication purposes, the numbering was removed).

Work breakdown structure for the PrO Bog'Art project

Exhibit 5: Work breakdown structure for the PrO Bog'Art project

The Project Management Office

One of the most important objectives of the PrO Bog’Art project was the definition and establishment of the PMO and the project portfolio group. In order to integrate these new organizational structures, all the activities required by their establishment were performed with permanent input from the organization. Workshops were organized in order to identify the needs of the organization, the existing documents and processes were analyzed, and the recommendations of the project team were finally submitted to the relevant stakeholders for approval.

The PMO Organization Chart

The agreed structure of the PMO is presented in the Exhibit 6.

Organization chart for Bog'Art project management office

Exhibit 6: Organization chart for Bog'Art project management office

The PMO Objectives

The objectives of the PMO were defined structured on different dimensions, as listed in the following:

  • Project management objectives
    • Professionalizing project management (also for internal projects)
  • Project portfolio management objectives
    • Defining new project types
    • Extending the project portfolio database
    • Providing new project portfolio reports
  • Organizational design objectives
    • Implementing project management and project portfolio management guidelines
  • Personnel management objectives
    • Cooperating with HR

The PMO Services

The services of the PMO were defined in two categories: services for immediate implementation and services proposed for implementation in 2010–2011, allowing natural growth of the PMO and preparing the environment for the acceptance of the change. The same dimensions were considered:

Project Management Services

  • Suggested structure (until January 2010)
    • Short term: Supporting the close-down of two large projects, the project starts
    • Assistance in the tendering process and in the project management process (temporary)
    • Coaching of project managers, project teams (temporary)
    • Establishing and maintaining a PMO homepage (Intranet)
    • Pool: Providing “planners” for tendering, scheduling, and resource planning, risk analysis (existing services of the planning department)
    • Pool: Providing “project manager assistants”
    • Pool: Providing “project managers”
  • Possible further development (until 2012)
    • Organizing the project management learning (e.g., close-down reports)
    • Consulting, auditing
    • Organizing events, e.g., project vernissages, pm day
  • Not project controlling

Project Portfolio Management Services

  • Suggested structure (until January 2010)
    • Supporting project assignment process (quality assurance)
    • Maintaining the project portfolio database
    • Providing project portfolio reports
    • Organizing and participating in meetings of the project portfolio group
    • Promoting networking between projects
  • Possible further development (until 2012)
    • Facilitating workshops for networking between projects

Organizational Design Services

  • Suggested structure (until January 2010)
    • Providing guidelines for project management, project portfolio management
    • Providing software for project management, project portfolio management
  • Possible further development (until 2012)
    • Providing standard project plans
    • Providing guidelines for project consulting and auditing
    • Benchmarking management of projects

Personnel Management Services

  • Suggested structure (until January 2010)
    • Cooperating with HR for defining the competencies for the different project roles, defining a project management career path, organizing training and coaching for project personnel
  • Possible further development (until 2012)
    • Cooperating with HR for organizing certifications of project personnel, developing an evaluation procedure for project managers, evaluating project managers

Expert Pool Services (pool types: planners, project manager assistants, project managers)

  • Planning the demand for pool members
  • Recruiting pool members by HR, approval by pool manager
  • Exchange of experiences, supervision of pool members
  • Evaluating pool members by pool manager in cooperation with HR
  • Disposing pool members into the projects

As soon as the structure, services, and roles were defined and agreed on, the personnel for the PMO were designated and the PMO started its operations. During the whole process of establishing the PMO, the decisions regarding its operations and the progress was communicated within the organization and the expectations carefully set.

The Project Management Guideline and Templates

One of the primary functions of a PMO is to identify and develop project management methodology, best practices, and standards (Project Management Institute, 2008, p. 11). In our case, the responsibility for the development of Bog’Art project management guideline (PMG) fell to the project team especially due to the high level of project management knowledge and expertise of the team members. The role of the newly established PMO was to get it accepted by the organization, especially by the project managers and their teams, to reinforce it, and to follow up on its application in all the ongoing projects of Bog’Art. An integrative approach was the key to the success of this difficult endeavor:

  • The Bog’Art PMG and the templates—after their validation by the project team and the project owner —were presented to the relevant stakeholders and their comments and suggestions were considered and included (if required).
  • The Bog’Art PMG and the templates were included in all the trainings as support documentation, all the examples, case studies, and all the group works were adapted according to their specifications.
  • The Bog’Art PMG and the templates were integrated into the business processes of the organization, becoming part of the Bog’Art Integrated Management Manual.
  • The coaching sessions focused on applying the Bog’Art PMG and the templates to the ongoing projects through workshops organized with the project managers and core team members.
  • The first activities of the newly established PMO focused on offering support for the new and ongoing projects in applying the PMG and templates.

The transition was not easy and a significant role in its success was the commitment of the Bog’Art management. Their presence in trainings, workshops, and their message to all the employees made the difference.

The Training Sessions

The training sessions were important for three main reasons. First, they prepared Bog’Art management for the organizational change. Second, they prepared the project managers and project team members to understand the project management concepts and to recognize the value of its structured application for their ongoing and future projects. Finally, they promoted and explained the role of the new structures, the PMG, and templates and the way the company will benefit from the implementation.

A powerful driver was the PM2 program with its 10 modules scheduled from the very beginning of the project until its completion; it allowed continuous contact with the most experienced project managers of the company and transformed them into promoters of the new concepts within the organization. Of course, there was some resistance in the beginning but this was overcome by persistence, argumentation, and support from management.

Results and Lessons Learned

The PrO Bog’Art project was successfully completed, meaning that the project owner was satisfied with the achievements and accepted its results. However, not all the objectives were completed as initially expected:

  • Project management: The project management guideline and templates were developed and successfully implemented
  • PMO: The Bog’Art PMO was established and implemented. The pilot operations showed that the new structure is stable and viable.
  • Project portfolio management: The project portfolio procedures, templates, and database were developed but only partially implemented.
  • Trainings: All the training and coaching sessions were successfully completed.
  • Communication structures were established and implemented.
  • Organizational development was planned: Project OrgaDe was proposed for implementation.

The project portfolio management procedures were developed and were accepted with no comments; however, the reporting was not understood. The issue was the reduced number of projects in their portfolio for which the advantages of using structured portfolio management procedures were not completely understood and accepted. The company continues to use the reporting based on strict financial figures; these are still the most important indicators for their project. We expect that, as soon the number of projects increases, the database and the reports are going to be reconsidered.

Some additional activities were performed during the project. They were not planned from the beginning but they were accepted as required changes for the benefits they could bring:

  • A new role was defined within Bog’Art: the project owner. Even though the description of the role was communicated and understood, the nominated project owners had difficulties in performing their role. As a result, project owner training was proposed with the objective to prepare the Bog`Art personnel for the performance of the project owner role.
  • The Bog’Art PMO needed a structured way to disseminate documents and information regarding their services and the ongoing projects of the company. They added to the project the development of their website in order to allow easy access to any employee to project information.

There are, of course, lessons learned from this project. These are the most important:

  • Involve top management and identify decision makers—Being an organizational change project, the support of top management is indispensable. No matter the goodwill of the employees, there is always a resistance to change that needs to be overcome and for this clear message and commitment of the management is required.
  • Train the involved personnel—It is of utmost important to speak the same language within the project team. In our case, we had highly educated team members who were able to promote the project and its results throughout the organization. However, the responsiveness regarding project portfolio management was not as expected, and we consider that a specific training on this topic would have helped.
  • Integrate training and consulting—The integrative approach used in this project was the key to its success. Using all the procedures and templates developed in the consulting activities as supporting documents in training and later on in coaching activities contributed to their acceptance and deployment.
  • Support operationally and assure quick wins—Despite the fact that in all communications the role of the PMO was clearly expressed as support for projects and project managers, and not as an instrument for control. The first impression was that this is the real purpose. Offer concrete support to the newly started projects immediately. Also, contribute to the development of their project management plans and to the closing of projects. Support the organization of the closing workshop and the knowledge transfer. These are the real purposes of the PMO.

Today, Bog’Art Group continues the development of their organizations as empowered, project-oriented companies by further developing their organization structures, culture, and processes and by redefining their relations to relevant environments and documenting the organization in the Bog’Art Integrated Management manual. There is a continuous concern for further developing the Bog’Art personnel by training and coaching, and most of these activities are performed internally under the supervision of the Bog’Art PMO.

Bourne, L., & Tuffley, A. (2007). Comparing maturity models CMMI, OPM3®, and P3M3 [Electronic version]. Retrieved from www.mosaicprojects.com.au

Cameron, E., & Green, M. (2009). Making sense of change management. A complete guide to the models, tools, & techniques of organizational change (2nd ed.). London, England, and Philadelphia, PA: Kogan Page.

Gareis, R. (2004). Management of the project-oriented company. In P. W. G. Morris & J. K. Pinto (Eds.), The Wiley guide to managing projects (pp.123–143). Hoboken, NJ: John Wiley & Sons, Inc.

Gareis, R. (2005). Happy projects! Vienna, Austria: Manz.

Gareis, R., & Fussinger, E. (2007, June). Final report: Analysis and benchmarking of the maturities of project-oriented nations. Paper presented at IPMA World Congress, Krakow, Poland

Gareis, R., & Huemann, M. (2007). Maturity models for the project-oriented company. In J. R. Turner (Ed.), The Gower handbook of project management (pp. 183–207). Aldershot, UK: Gower.

Project Management Institute. (2004). An executive guide to OPM3® [Electronic version]. Retrieved from www.pmi.org

Project Management Institute. (2008). A guide to the project management body of knowledge (PMBOK® Guide) (4th ed.). Newtown Square, PA: Project Management Institute.

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.

© 2010, Simona Bonghez
Originally published as a part of 2011 PMI Global Congress – Dublin, Ireland

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