Project Management Institute

Leading multinational project teams

Introduction

To succeed in our rapidly changing, interconnected business environment, companies are continuously searching for ways to improve effectiveness. They look for partners that can perform the needed work better, cheaper, and faster, which results in alliances across the globe, ranging from R&D to manufacturing, and from customer relations management to field services. Few managers would disagree that team leadership is critically important to project performance and essential for competing effectively in today’s global arena (Feranti, Green, & Foster 2006; Groysberg & Abrahams 2006; Nellore & Ballachandra 2001; Shim & Lee 2001). However, building and managing a work group as a fully integrated, unified team are daunting tasks with strong implications on business performance and it is challenging, even in its most basic form, involving intricately connected organizational systems, behavioral issues, and work processes (Bhatnager 1999; Cleland & Ireland 2006; Hilton 2008; Keller 2001). Adding the realities of today’s complex business environment makes teamwork a highly intricate process that is difficult to analyze and understand. By their very nature, teams must function dynamically in their multidisciplinary environments, interconnecting with people from different functional groups, support organizations, subcontractors, vendors, partners, government agencies, and customer organizations (Keller 2001; Manning, Massini & Lewin 2008; Newell & Rogers 2002; Thamhain 2009a). Teams also have to deal with technological, economical, political, social, and regulatory factors, which add considerable risks and uncertainties and further increase the challenges of organizing and managing project teams. All of these complexities have changed the dynamics of teamwork and forced management to expand their attention from the traditional trait-oriented focus to a broader spectrum of critical success factors that include the team ambience and overall enterprise environment. Visionary researchers, like Deborah Ancona, identified the importance of integrating project teamwork with the external enterprise environment, its stakeholders, support groups, and even competitors, which led to the well-known X-Teams concept (Ancona & Bresman 2007).

Seasoned managers have recognized these challenges to effective teamwork for many years, encouraging advanced research, which has resulted in a substantial body of knowledge. Scholars, such as Armstrong (2000), Barkema, Baum and Mannix (2002), Dillon, (2001), Hackman (2002), Hilton (2008), Kearney et al (2009), Sawhney (2002), Shim and Lee (2001), Sidle (2009), Thamhain and Wilemon (1999) have studied project teams extensively, root-causing their successes and failures, and identifying organizational conditions for effective teamwork (Ancona, Malone, Orlikowski & Senge, 2007; Hackman 2002, 2007; Kruglianskas & Thamhain, 2000). As a result, we have gained sophisticated knowledge and substantial insight into the effects and organizational dynamics of managing project teams. Yet, relatively little is known about the effectiveness of team leadership styles and the organizational conditions most conducive to team performance in project environments that are geographically dispersed across national borders, operating in technologically complex, culturally diverse, multinational environments, and this is the focus of this paper.

Characteristics and Challenges of Multinational Projects

As companies leverage their operations across national borders to take advantage of multinational sourcing, joint ventures, and alliances, their business practices must become more effective in managing cross-cultural issues and challenges. These concerns are being reflected in the large number of professional and executive education programs that have emerged in recent years to deal with these issues. Indeed, managing multinational operations is highly complex and difficult. From the senior management side, guidelines and unified direction toward project objectives, technology transfer and project integration must be “synthesized and orchestrated” centrally and translated across borders into the cultures of the local operations (Martinez 1995). Then, linkages among individual work components need to be developed and effectively “managed” across geographical areas and organizational cultures. Thus, multinational project teams need to be integrated not only across the miles, but also be unified among different business processes, management styles, operational support systems, and organizational cultures (Bahrami 1992, DeMaio 1994, McFarlin 2008). This is very difficult, and it is not surprising that team leaders who manage projects across international borders find it often frustrating to achieve their objectives.

A Simple Framework for Investigating Team Effectiveness

Based on my earlier research and the works of others (Ancona 2007; Barkema et al, 2002; Hackman 2002), four overlapping organizational subsystems seem to influence project team performance especially strongly, as shown in Exhibit 1, as part of the multinational environment (fifth subsystem):

Influences to team performance

Exhibit 1. Influences to team performance

SUBSYSTEM #1: Project Work and its Complexities

SUBSYSTEM #2: People and Team Culture

SUBSYSTEM #3: Business Process and Work Flow

SUBSYSTEM#4: Management Tools and Techniques

SUBSYSTEM#5: Multinational Enterprise Environment.

Although the five organizational subsystems shown in Exhibit 1 are not necessarily the only factors influencing project team performance in complex, multinational environments, they represent a simple and reasonably robust model to serve as a starting point for this exploratory field investigation.

Method

This three-phase field study includes fifty-two technology-intensive product developments in twenty-seven organizations. Each organization is part of a large, “Fortune-500” type enterprise, operating in multinational environments. For each of these organizations, the research was conducted in three stages, between 2005 and 2009. In the first stage, on-site observations and interviews with project leaders and project team personnel were conducted. This helped to (1) understand the specific nature and challenges of the project work undertaken, (2) prepare for the proper introduction of the questionnaire, and (3) design the follow-up interviews. During the second stage, data were collected as parts of the management consulting and training assignments, using questionnaires, observations, and expert panels. The third stage relied mostly on in-depth retrospective interviewing, providing additional information for clarifying and leveraging the data captured in stages one and two. A summary of the stage two results, with its quantitative focus, is shown in the Appendix of this paper.

The study yielded data from 42 project teams with a total sample population of 495 project professionals, such as engineers, scientists, and technicians, plus their managers, including 16 functional resource managers, 42 project team leaders, 18 product managers, 8 directors of R&D, 7 directors of marketing, and 11 general management executives at the vice-presidential level. Together, the data covered over 122 projects in 27 companies, spanning a total of 18 countries. The projects observed in this study involved mostly high-technology product and/or service-oriented developments and roll-outs, such as information system, financial services, automotive, airplane, computer, and pharmaceutical products. Project budgets averaged $1.2 million and project life cycles averaged 18 months.

The three-stage data collection method, with a combination of questionnaires and in-depth semi-structured interviews, was developed and previously tested, especially for exploratory studies, which are outside the framework of well-established theories and constructs (Glaser & Strauss, 1967; Eisenhardt, 1989). Specifically, in stage three, 138 interviews were held with team leaders, line managers, product managers, marketing directors, and general management executives.

Data Analysis. Because many of the organizational and behavioral variables investigated contain ordinal measurements, which do not follow normal distribution, distribution-free non-parametric methods, such as Kendall’s Tau rank-order correlation (n.d.) and the Kruskal-Wallis (n.d.) analysis of variance by ranks, have been chosen to evaluate the survey data of stage two.

Results

Some of the most striking findings from the quantitative analysis (see Appendix) point at the need for increasing involvement of all project stakeholders throughout the organization and its external partners. During the follow-up to stage two, in stage three of this field study, managers emphasized that for today’s technology-based projects, success is no longer the result of a few geniuses, experts, and skilled leaders. Rather, project success depends on effective multidisciplinary efforts, involving teams of people and support organizations interacting in a highly complex, intricate, and sometimes even chaotic way. Especially for multinational efforts, the process requires experiential learning, trial-and-error, risk taking, as well as the cross-functional coordination and integration of technical knowledge, information, and components. Many managers view the execution of their multinational projects as parts of a fuzzy process that cannot always be described linearly or planned perfectly, nor can results be predicted with certainty. Yet, in spite of all these challenges, many project teams work highly effectively across international borders, producing great results within agreed-on budget and schedule constraints. This suggests that multinational projects can be managed, given the right team environment and leadership, an observation supported by the statistical analysis summarized in the Appendix. Together with the retrospective interviews and on-site observations from the action research of Stage-2, the field results are synthesized, providing the basis for specific suggestions to project managers leading culturally diverse project teams.

Guidelines for Effective Team Management

The specific suggestions that emerged from this study for managing multi-cultural teams effectively have been organized into ten guidelines. These guidelines have been sequenced (approximately) in a chronological order, which is typical for managing a project through its life cycle, from start-up through execution. While these guidelines emphasize the importance of conditioning the project environment for cooperation, connectivity and unification during the early stages of project formation and start-up, management must pay continuous attention to these conditions and critical success factors throughout the project’s life cycle. The suggestions offered below provide an overall framework for managerial actions and leadership, conditioning the multinational project environment for effective teamwork.

1. Define the Team Structure, Work Process, and Communication Channels. Management must provide an infrastructure conducive to effective cross-functional teamwork and technology transfer. This includes properly defined interfaces, task responsibilities, reporting relations, communication channels, and work transfer protocols. Most of the tools for systematically describing the work process and team structure come from the conventional project management system and include project charters, mission statements, performance measures, project organization chart, responsibility matrix or task roster; project interface chart (i.e. N-Squared Chart, job descriptions, and gate criteria). All of these tools can help project managers develop cross-functional linkages, facilitate interdisciplinary cooperation, establish alliances, and improve communications. They have been used by project managers for many years; however, to be effective, especially in multinational project environments, they need to be fine-tuned and calibrated to the specific situation and carefully integrated with the overall business process and its multicultural environment.

2. Build a High-Performance Image. Project teams that have a clear sense of purpose and confidence in their mission, perform better. This is true for any environment. A high-performance image stimulates the team’s interest, pride of participation, and sense of ownership. It serves as a bridging mechanism, helping to unify the team across miles and cultures. It also builds professional confidence and encourages team members to reach out to think outside-the-box and to resolve issues “locally” with a minimum of administrative support. Project leaders and senior managers can build a favorable project image by making the project visible and stressing its importance via media exposure, management involvement, and budgetary actions as well as by emphasizing its critical success factors and the professional opportunities and rewards associated with the project. These factors promote project ownership among team members and encourage each individual’s desire to succeed.

3. Stimulate Enthusiasm, Excitement, and Professional Interests. Factors that satisfy personal and professional needs of individuals have the strongest effect on team unification and overall project performance. The quantitative analysis clearly shows that the most significant drivers to team performance are derived from the work itself— personal interest, pride and satisfaction with the work, professional work challenge, accomplishments, and recognition. Whenever possible, managers should try to accommodate the professional interests and desires of their personnel. Interesting and challenging work is a perception that can be enhanced by the visibility of the work, management attention and support, priority image, and the alignment of personnel values with organizational objectives. Interesting work also leads to increased involvement, better communication, lower conflict, higher commitment, stronger work effort, and higher levels of creativity, as shown by the correlation analysis summarized in the Appendix of this paper

4. Adapt Project Management Tools, Techniques, and Leadership to Local Culture. In multinational project environments, success depends the effective use of managerial tools across different geographical regions, often with great differences in organizational cultures and values. For many companies, defining and implementing an effective work process for multinational programs, amounts to managing organizational change with all of its dynamics, complexities, risks, and challenges. Adapting management tools, techniques, and leadership style to local cultures and organizational values without losing consistency, purpose, and managerial integrity, is a great challenge. Focus group meetings, task teams, and retreats are effective tools for developing integrated work processes that connect geographically and culturally dispersed teams. The best time for setting up these connected work processes is during the project formation phase, at the beginning of the project life cycle when both the people and the organizational processes are most flexible and open to collaboration.

5. Unify Management Process. Successful project integration and delivery require a unified managerial process, which is especially challenging and complex in project organizations that operate across national borders, hence mixing different cultures, management styles, and work processes. The policies, procedures, and protocols that define the management process, and the communication tools that link the technology transfer, must have both (1) mutual acceptability by all stakeholders throughout the multinational project organization and (2) enough flexibility to adapt to local leadership. The specific challenge is to create a management process that functions consistently and reliably as a unified “command and control system,” for the total project, without disturbing the “local” norms and cultures that have deep roots and long timelines at each local organization.

6. Ensure Senior Management Support. Team perception of strong senior management support is critically important to project performance. It is a catalyst that helps in unifying the team and its work processes. It also promotes effective working relationships among resource managers, project leaders, and all stakeholders across the project organization, and favorably affects the credibility, visibility, and priority of the team. Ideally, such support should be driven by senior management assuring clear objectives and visibility of the project, stable priorities, and in helping to build the project organization and its interfaces. However, project managers and team leaders can also reach out to senior management by keeping them informed and involved in the project execution and by recognizing their support via the project reporting process. They should also escalate issues and ask for specific help when needed.

7. Promote Self-Direction and Commitment. By their very nature, geographically dispersed teams rely to a large extend on their local leadership for executing the project at the local level. Combining this reality with the general shift of management practice toward more self-directed teams, more flexible and less hierarchical organizations, much of management control must rely on commitment, motivation and the individual desire to succeed. This was also confirmed in the correlation analysis of this field study, which shows a statistically significant, favorable linkage of team commitment and self-direction to most of the project performance variables such as responsiveness to customer needs, innovation, cross-disciplinary communication, and overall project performance and success.

8. Share Managerial Power and Influence. Given the political nature of organizations, and the diversity of organizational culture and possible regional differences in managerial style, examined in this multinational study, it appears that power is often shared between managers of the local organization and the project integrators at the project management office (PMOThis separation can also lead to a power vacuum in some areas; that is, jurisdiction, authority or responsibility over certain issues and decisions may not be clear. This provides an opportunity for managers to enlarge their sphere of power and influence. While such shifts in organizational power and influence are natural and predictable, they do not necessarily enhance cooperation and commitment. Usually, such shifts in power and influence are predictable by-products of new multi-organizational project startups. They can also be warning signs that the managerial process is changing and requires fine-tuning. Either way, these changes should be monitored, examined, and dealt with to avoid the risk of organizational tension, mistrust, conflict, and power struggle. The same conditions that help to ensure senior management support and promote self-direction and control, also foster an environment of power sharing and cross-functional cooperation.

9. Recognize Differences in Management Style and Philosophy. Based on the field observations and interviews, we can glean from the field study some insight into the diverse managerial thoughts and leadership styles of culturally different regions, which explains in part the difficulties of managers in establishing a unified project management process and framework for direction and leadership in a multinational environment. The implication of these findings is for managerial skill development and organizational support, both seen by managers as crucial for effective managerial role performance, and for resource decisions on training and organizational development issues.

10. Foster a Culture of Continuous Support and Improvement. Culturally diverse teams are intrinsically complex, highly dynamic and continuously changing. By involving team members in the assessment of changing working conditions, and in the development, fine-tuning and updating of established project management processes, team members feel empowered and unified. Management can establish ”listening posts,” such as discussion groups, action teams, and suggestion systems, that enable them to capture the voice of the customer as well as the lessons learned from past projects, which is the basis for continuous organizational improvement. Tools such as the project maturity model and the Six Sigma project management process can provide a useful framework for analyzing, developing, and unifying project teams and their management processes.

Conclusions

The empirical results presented in this paper show that effective management of globally dispersed project teams involves a complex set of variables that relate to the organizational structure, business process, managerial tools, and most importantly, to the people in the organization and to the work itself. While many of the challenges show up as technical problems, most of their root causes can be tracked to social, psychological, and organizational issues. In fact, we find consistently and measurably that people issues have the strongest impact on project performance. They affect many of the secondary performance variables, such as work process and managerial tools, because people are an intricate part of these subsystems, and issues affecting people eventually impact the broader enterprise. In particular, the field study shows that certain conditions relating to the people side, such as personal interest, pride, and satisfaction with the work, professional work challenge, accomplishments, and recognition, appear most favorable toward unifying culturally diverse project teams and their work processes. These conditions serve as a bridging mechanism between organizational goals and personal interests, between central control and local management norms, and between following a project plan and adaptive problem solving. These are some of the conditions crucial to project success in complex multicultural organizations. Creating these conditions requires both management and leadership. On the management side, information technology, such as conference calls, e-mail, groupware, and web-based project monitoring, provides a powerful tool set for supporting multinational projects. However, management cannot expect to create a unified project team, working seamlessly across borders and cultures, by simply issuing work orders, project summary plans or management guidelines. Emphasis must be on common values and goals, rather than on differences, to focus and unify the team. By recognizing the greater autonomy of all international partners as well as their cultural differences, management can build a true partnership among all the contributing organizations with strong linkages for communication, decision making, and technology transfer. Such a partnership is more likely to evolve if all team members throughout the project organization share the same objectives and commitments to the desired results. To be sustainable, these multinational alliances must not only be built at the beginning of the project’s life cycle, but be refueled and maintained continuously over the lifetime of the project. To function effectively, these managers need to build alliances and develop collaborative ventures. All of this requires intense focus on cross-boundary relationships, negotiations, delegation and commitment, in addition to establishing formal command and control systems at the local level.

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Appendix

Table AX1.

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Table AX1 correlation of the team team highlights importance factors and management performance. of the team listed in importance performance. strength of summarizes the between variables environment and performance the critical of both human traditional project techniques to team The presence and these organizational variables was measured on a five-point scale as a perception of project team members, while team performance as a judgment perception of senior management.

High-Performance Team Environment. It is interesting to note that the same conditions, which are conducive to overall team performance, also lead to (1) innovation and creative problem solving, (2) change orientation and high response rate of the team, (3) self-directed teams with minimum supervision, (4) effective customer and client interface, (5) effective conflict resolution among team members, (6) ability to deal with risk and uncertainty, (7) stronger personal effort and commitment to established objectives, (8) more effective communications within the team and its interfaces, and (9) favorable schedule and budget performance.

The most significant associations point to the importance of professional esteem needs and managerial leadership as particularly favorable influences on project team performance. While many of these factors, such as clear objectives, skill sets, and effective business process deal with conventional project management practices, they also relate to the human side, conditioning the work environment for success. Hence, in a complex project environment that relies on commitment, buy-in, and personal drive for success, these influences appear to deal effectively with the integration of goals and needs between the team member and the organization. In this context, the more subtle factors seem to become catalysts for cross-functional communication, information sharing, and ultimate integration of the project team with focus on desired results. All associations are significant at p =.1 or better, with the most significant correlations (p = .01 or stronger) shown in bold.

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©2010 Hans J. Thamhain
Originally published as part of Proceedings, PMI Global Congress 2010 – North America

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