Managing teams in complex project environments
Hans J. Thamhain
Effective teamwork is crucial to project performance. Although most organizations—from computer manufacturers to retailers to medical service providers—pay attention to teamwork, few managers know their organizations well enough to create team environments that are optimally conducive to the professional needs of their team members. Such a lack of understanding affects project performance and impacts the entire enterprise (Bhatnager, 1999; Howell, Shea, & Higgins, 2005; Keller, 2001; Nellore & Balachandra, 2001).
Many of today’s business activities cluster around projects that require team efforts that span across organizational lines involving a broad spectrum of personnel, support groups, subcontractors, vendors, partners, government agencies, and customer organizations. Organizing and managing these teams is an art and a science as well as a great challenge. Among those managing project teams it is the project managers working in complex and technology-intensive situations—those characterized by high speed, high change, and high uncertainty—who are the most challenged (Shim & Lee, 2001; Zhang, Keil, Rai, & Mann, 2003). It is this area of project management that this research study explores.
Teamwork a New Managerial Frontier.
The basic concepts of organizing and managing teams date back to biblical times. And although today’s business environment is more complex multinational and technologically sophisticated than ancient days, it is the group as project team that has re-emerged in importance (Fisher, 1993; Thamhain & Wilemon, 1998; Williams, 2002). Supported by modern information and communication technologies, and adhering to the concepts of stakeholder management (Newell, 2000; Norrie & Walker, 2004) and learning organizations (Senge & Carstedt, 2001), the roles and boundaries of teams are expanding toward self-direction, working within environments that are more open and under processes that are organizationally transparent.
Work teams play an important role on both traditional projects, such as new product development, systems design and construction, and on contemporary initiatives implementing organizational change, transferring technology concepts, and running election campaigns. No matter what the product and outcome—whether Yahoo creates a new search engine, Sony develops a new laptop computer, or the World Health Organization (WHO) rolls out a new information system—project success depends, to a large degree, on effective interactions among the team members responsible for the new development, among those who include support groups, subcontractors, vendors, partners, government agencies, customer organizations, and other project stakeholders (Armstrong, 2000; Barkema, Baum, & Mannix, 2002; Dillon, 2001; Dyer, 1977; Gray & Larson, 2000; Karlsen & Gottschalk, 2004; Oshri & Newell, 2005; Thamhain, 2003; Zanomi & Audy, 2004). Because globalization, privatization, digitization and rapidly changing technologies have transformed our economies into a hyper-competitive enterprise system where virtually every organization is under pressure to do more things faster, better, and cheaper, many organizations believe that effective teamwork is the key success factor in achieving competitive advantages from these developments (Oshri, & Newell, 2005; Strang, 2005). Concurrent with this realization is the understanding that the process of team building has become more complex and requires more sophisticated management skills as bureaucratic hierarchies and support systems decline.
Managers of these teams must deal not only with the technology but also with a wide spectrum of economic, political, social, and regulatory challenges1. As a result, managers have changed their leadership styles when working in technology-based team environments, placing an increased emphasis on the human side (Senge,, 1994; Senge & Carstedt, (2000). During the not-so-long-past days when organizations viewed project management as a management science, project leaders could successfully integrate most of their projects by properly defining the work, timing and resources, as well as by following established procedures for tracking and controlling projects.
Today, however, while these factors are still crucial, these are now perceived by organizations as threshold competencies, those factors that are critically important but unlikely to guaranty project success (Nurick & Thamhain, 2003). Because of this, project leaders must build fast, flexible project teams that can dynamically and creatively work toward established objectives in a changing environment (Bhatnager, 1999; Jassawalla & Sashittal, 1999; Thamhain, 2002). This requires effective networking and cooperation among people from different organizations, support groups, subcontractors, vendors, government agencies, and customer communities. It also requires that project managers possess carefully developed skills in leadership, administration, and organization as well as in technical expertise (Shenhar & Thamhain, 1994; Thamhain, 2003, 2004a, 2004b).
All of this has significant implications for organizational process and leadership. For one, traditional forms of hierarchical team structure and leadership are seldom effective; these are now often replaced by self-directed, self-managed team concepts (Barner, 1997; Thamhain & Wilemon, 1998). And frequently, the project manager becomes a social architect who understands the interaction of organizational and behavioral variables, one who facilitates the work process and provides overall project leadership for developing multidisciplinary task groups into unified teams in addition to fostering a climate conducive to involvement, commitment, and conflict resolution.
Objective, Scope, and Method
The objective of this paper is to improve the field’s understanding of team performance. I am attempting to accomplish this by exploring the influences that affect teams working in complex, technology-based project environments. Because this complex subject area lacks specific theories or constructs, I used an exploratory field research format for my investigation, one involving questionnaires and two qualitative methods: participant observation and in-depth retrospective interviewing. I captured data between 2000 and 2004 from 27 technology-based organizations, most of which are large Fortune 500 corporations2. I examined each of these organizations using a three-stage process. During the first stage, I interviewed project leaders and project team personnel—and obtained participant observations. This information helped me to understand the specific nature and challenges of the project work undertaken, prepare for the proper introduction of the questionnaire, and design the follow-up interviews.
During the second stage, I collected data as part of a management consulting or training assignment, using questionnaires, observations, and expert panels. And during the third stage, I relied mostly on in-depth retrospective interviewing, which provided me with perspectives and additional information for clarifying and leveraging the data captured during stages one and two. The data that I collected included relevant source material such as project progress reports, company reports, design review memos, committee action reports, financial statements, and information from the public media. These sources helped me design the questionnaires, prepare the interviews, and validate my observations.
I used this combined data collection method so as to leverage the information-gathering process and subsequently identify the drivers of—and the barriers to—innovative team performance. This process also enabled me to gain insight into the process of managing innovative teams. The combined method proved particularly useful for conducting new and exploratory investigations, such as the study reported here, one which is considerably outside the framework of established theories and constructs (Eisenhardt, 1989; Glaser & Strauss, 1967). The format and process of the specific questionnaires and the in-depth, semi-structured interviews that I used to conduct this study were developed and tested in previous field studies involving research and development (R&D) management, an area that is similar in context to the current investigation (Kruglianskas & Thamhain, 2000; Thamhain, 1996, 2002, 2003, 2004a; Thamhain & Wilemon, 1997, 1998).
The unit of analysis that I used in this study is the project. My field study, conducted between 2000 and 2004, yielded data from 80 project teams. This sample population totaled 895 professionals—engineers, scientists, and technicians as well as managers: 16 supervisors, 76 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 more than 180 projects in 27 companies. These projects involved mostly high-technology product/service developments, such as information systems (IS), computer and pharmaceutical products, and financial services. Project budgets averaged $1,200.00. All project teams saw themselves working in a high-technology environment. I obtained this data from three sources: questionnaires, participant observations, and in-depth retrospective interviewing.
I developed the questionnaire to measure the characteristics of the work environment, its leadership, and team performance. The performance measures included overall team performance, the ability of dealing with risk, effort, and commitment toward agreed-on objectives. These measures represent a selected but field-supported set of team performance indicators such as those summarized in the appendix of this paper. To minimize potential biases that might result from the use of social science jargon, I developed specific statements to describe each of the 14 variables of the work environment and each of the five team-performance measures. For the statement about characterizing the project environment, I asked team members to think about their work environment and indicate their agreement with a series of statements, recording their responses on a five-point Likert-type scale (1 = strongly disagree, 2 = disagree, 3 = neutral, 4 = agree, 5 = strongly agree). For example, to measure the perception of interesting, stimulating work, I asked team members to indicate their agreement with the statements such as “my job is interesting and professionally stimulating” and “I always enjoy my work.” I measured the perception of recognition and accomplishment using statements such as “my work leads to significant accomplishments” and “my efforts are being appreciated and properly recognized by the organization.” I similarly measured the team performance variables, again using a five-point scale (1 = poor, 2 = marginal, 3 = good, 4 = very good, 5 = excellent).
I then solicited performance judgments from senior management. From them I obtained an independent set of scores on each of the environmental and performance variables. This method allowed me to rank teams by the characteristics of their work environments in each of the 13 variables and by each of the three performance measures, which then became the input data for the rank-order correlation summarized in Table 1. I also captured data during my 138 interviews with team leaders and line managers. I designed my interviews--especially those with product managers, marketing directors and general management executives—to gain insight into the issues and challenges that are necessary to accomplish the cross-functional integration of technology transfer. (I have integrated my findings into the Implications and Discussion Section of this paper for additional perspective.)
I chose standard statistical methods—such as correlation analysis—to gain insight into the organizational influences of project team performance and to summarize the survey data shown in Table 1. I tested the agreement among the various populations surveyed using the Kruskal-Wallis analysis of variance by ranks. I also measured the association among the various sets of variables by using Kendall’s Tau rank-order correlation. Because the organizational and behavioral variables that I investigated do not necessarily follow normal distribution, I reasoned that non-parametric statistical methods are more robust and appropriate3. With this I also used content analysis in combination with action research to extract data from the interviews and my on-site observations, to validate my quantitative findings, to bring my findings into perspective, and to develop the 13 guidelines outlined in this paper.
Using the field data from the 80 project teams and their work environments, I organized the findings of this study into two sections. In the first, I analyze and document the influences of the team environment on project performance. In the second, I discuss the managerial implications together with the specific recommendations (13 guidelines) for effectively leading project teams working in complex project environments.
Influences of Team Environment on Project Performance
An organization’s culture consists of numerous complex and intricately linked variables. To summarize the association among the factors influencing organizational environments and project team performance shown in Table 1, I use Kendall’s Tau rank-order correlation. From the set of 40 variables that I investigated in this field study, I have listed the 13 strongest and 8 weakest influences in relation to statistical significance, in relation to overall team performance. I measured the presence and strength of these organizational variables on a five-point scale as a perception of project team members; I measured project performance as a perception of senior management, as discussed in this paper’s method section below. The two strongest correlations indicate that there are five factors which fulfill professional esteem that have a particularly favorable influence on project team performance.
- Professionally stimulating and challenging work environments [τ = .45].
- Opportunity for accomplishments and recognition [τ = .38]
- The ability to resolve conflict and problems [τ =37]
- Clearly defined organizational objectives relevant to the project [τ = .36].
- Job skills and expertise of the team members appropriate for the project work [τ = .36].
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. The other favorable factors in Table 1 relate to overall directions and team leadership [τ = .35], to trust, respect, and credibility among team members and their leaders [τ = .30], and to business process, as reflected by cross-functional cooperation and support [τ = .27], communications [τ = .27], clear project plans [τ = .25], clearly defined authority relations, and sufficient autonomy and freedom of actions in line with the managerial expectations and accountabilities [τ = .23].
To a lesser degree, opportunities for career development and advancement [τ = .12], as well as job security [τ = .12], seem to have a positive influence. All associations are significant at p = .1 or better, with the most significant correlations of p = .01 or stronger shown in bold italics. It is interesting to note that the same conditions, which are conducive to overall team performance, also lead to (1) a higher ability of dealing with risks and uncertainties and (2) a stronger personal effort and commitment to established objectives, and their team members, as shown in the correlation table. The field data analysis moreover supports the expectation that project teams that are perceived as effective by their management, are also seen as (3) creative problem solvers who can (4) effectively utilize time and resources. In fact, a high degree of cross-correlation exists among the set of four of variables, as measured via Kruskal-Wallis analysis of variance by rank.4 The test shows that managers agree on the ranking of team performance factors in Table 1 at a confidence level of 98%. That is, managers who rate the team performance high in one category are likely to give high ratings also to the other three categories.
Table 1. Most and least significant drivers toward project team performance (Kendall’s Tau Rank-Order Correlation)
In addition to the thirteen most significant factors reported in Table 1, it is interesting to note the many other characteristics of the work environment that managers perceived as important to effective team performance but that did not correlate significantly to performance as measured by a p-level threshold of .10. Specifically, the characteristics include variables 14 through 21 in Table 1, those representing factors of lesser influence to project team performance:
- Project visibility and popularity
- Maturity of the project team, measured in terms of time worked together as a team
- Project duration
- Stable project requirements with minimum changes
- Stable organizational structures and business processes which result in minimal organizational changes, such as caused by mergers, acquisitions and reorganization
- Project size and project complexity, arguing that project scope, size, and implementation challenges do not necessarily translate into lower team or project performance.
It is also interesting to see that several of the weaker influences shown in Table 1 seem to have opposite effects to those popularly held by managers. For example, the negative correlation between “requirements changes” and “team performance” indicates that stable project requirements are potentially unfavorably associated with overall team performance. Although this correlation is non-significant from a statistical point of view, it might explain strong team performance in complex project environments that create a professional ambience of excitement and challenge because of their dynamics and often-changing requirements. Hence, looking at the field data carefully can stimulate critical thinking and can shed some additional light on the subtle and intricate nature of project team performance in technology-intensive environments. From a different perspective, it is interesting to observe that influences that support intrinsic professional needs show a strong favorable performance correlation, while the findings give only weak support to the benefit of extrinsic influences/motivators, such as those involving salary increases, bonuses, time-off, and metrics-related factors including team tenure, project duration, and changes as well as complexity and technology factors (cf. Table 1). This is in spite of the fact that all influences in Table 1 were perceived by most managers as critically important to team performance5. This finding suggests that managers are more accurate in their perception of the team’s intrinsic rather than extrinsic needs. It also appears more difficult to assess the impact of project parameters (size, duration, or complexity) than the impact of human needs on project work performance.
Another insight yielded from the correlation among variables of the team environment is that conditions such as professionally interesting and stimulating work, clearly articulated plans and objectives, project visibility, and stable, user-friendly organizational processes all seem to have a favorable influence on a team’s ability to resolve problems, obtain cross-functional cooperation and support, gain trust and respect among team members, and to enhance communications effectiveness. The significance of this finding is twofold: First, because all of these factors are favorably associated with team performance, project managers should welcome the presence of these conditions. Second, this cross-correlation suggests that certain conditions are mutually supportive of each other and gain momentum as the team environment becomes more favorable.
Implications and Discussion
The empirical results presented in this article show that in spite of the complexities, technologies, and differences among companies, it is specific organizational conditions that appear most favorably associated with team performance. These conditions serve as bridging mechanisms and enhance team performance in technology-based organizations, as summarized in Table 1.
Because of this study’s exploratory nature, I have attempted to go beyond the obvious results of the statistical data: I have attempted to integrate some of the lessons learned from the broader context of the action research. I found the interviews, observations, and follow-up discussions of the action research especially useful in gleaning additional insight into the processes and challenges of teamwork and the implications for effective project management. To focus this discussion, I have divided this section into five parts, a division consistent with the five sets of performance influences: people, work, organizational process, tools and techniques, and leadership. All five parts are affected by the four elements comprising the project environment: project complexity, organizational support, managerial support, and the general socio-economic business environment.
Factors that satisfy personal and professional needs seem to have the strongest effect on project team performance. The statistically most significant drivers are derived from the work itself, including personal interest, pride and satisfaction with the work, professional work challenge, accomplishments and recognition (τ1 = .45 & τ2 = .38). Other important influences that were noticed from the correlation analysis and observed during the action research include effective support and communications across organizational lines (τ5 = .27), good team spirit, mutual trust and respect, low interpersonal conflict, opportunities for career development and advancement, and to some degree, job security. All of these factors help in building a unified project team that can effectively leverage the organizational strengths and competencies and produce integrated results that support the organization’s mission. These factors seem to foster a work environment conducive to open dialogue and an ability to deal with ambiguities, risks, complexities, and organizational conflict, and ultimately, in helping to transform collective team efforts into innovative business results.
Work- and Task-related Influences
Team performance also has its locus in the work itself. Highlighted by the correlations in Table 1, my analysis shows that the variables associated with the personal aspects of work—interest, ability to solve problems, job skills, experience—significantly drive team performance. On the other side, many work– related variables from the structural side (project size, work complexity, work process) had little statistical significance on influencing team performance. The importance of this finding is twofold. First, managers must attract and hold people with the right skill sets that are appropriate for the work to be performed. They must also invest in maintaining and upgrading team member job skills and their support systems. Secondly, managers must effectively assign work and leverage their control over work partitioning and subsequent results. That is, while the total task structure and the development process are fixed and difficult to change, the way managers distribute, assign, and present the work is flexible. This is an important finding with managerial implications: Promoting a climate of high interest, involvement, and support might be easier to achieve than redefining organizational structure or reengineering the work process, yet it might have an equal or higher impact on project team performance.
Organizational Process-related Influences
These influences include the processes of organizational structure and technology transfer, those processes that rely on modern project management techniques. While the research did not favor specific project structures or processes, it did point to specific work-process-related variables as important to team performance. Influences such as cross-functional cooperation (τ8 = .27), effective communications (τ9 = .27), and effective project planning and support systems (τ10 = .25) all appear important to achieving high team performance. An effective project management system also maintains organizational processes for obtaining effective functional support, including joint reviews and performance appraisals, in addition to processes for ensuring the availability of necessary resources, skills, and facilities. Other crucial components that affect the work process are team structure, managerial power, command and control, power sharing among team members and organizational units, autonomy and freedom, and most important, technical direction and leadership. These findings provide food for critical thought to top management.
Many of these organizational process variables have their locus outside the project team organization. These variables are often a derivative of the company’s business strategy, developed and controlled by senior management. It is important for management to recognize that these variables can directly affect the quality of the work environment, as shown in Table 1, in ways that include the perception of organizational stability, availability of resources, management involvement and support, personal rewards, and the stability of organizational goals, objectives, and priorities. Since all of these influences are images of personal perception, it is important for management to understand the personal and professional needs of their team members and to foster an organizational environment conducive to these needs. Proper communications of organizational vision and perspective is especially important. For example, team members might perceive a company merger as an opportunity or threat, as a stabilizer or destabilizer, depending on how such management communicates such change. The relationship between managers and the people in their organizations—mutual trust, respect, and credibility—are critical factors in effectively influencing team performance, as discussed in the previous section. Specifically, the overall team ambience and work process—support to problem solving, communication, and technology transfer—is strongly affected by management tools and techniques which support the essential organizational systems such as budgeting, scheduling, and reviews. It can therefore help in running the team efforts smoothly.
As one interviewee explained, “We really don’t have time to come to all the meetings and to provide all the paperwork required by management, but we hope that it will stabilize the funding for this project and help in the cross-functional integration.” With the increasing complexity of project work and business environments, project management tools and techniques become more extensive and highly sophisticated, requiring more team member involvement. At the same time, modern project management moves further toward self-directed teams, high market responsiveness, less formal structure, and controls that are based— to a large extend—on commitment, motivation, and team leadership. This has specific implications for managers. Successful project leaders make an effort to apply these management tools as an overlay to the project organization with minimal interference to their teams and operations. To work effectively and garner project team members’ support, these the people who use these management tools must perceive these as helpful in supporting and facilitating team activities toward desired results.
Leadership as an Important Influence
Leadership is an essential component of project teamwork. It is the art of creating a supportive work environment. Many of the influences to project team performance are derived from organizational processes and systems that have their locus outside the team. Examples of these influence range from the functional support units to work transfer processes and the project management system itself with its specialized tools and techniques. Organizational stability, availability of resources, management involvement and support, personal rewards, stability of organizational goals, and objectives and priorities are all influences to team performance, yet these are controlled—by-and-large—by general management. Therefore, it is important that a team leader works with their senior management to ensure an organizational ambience conducive to their team’s needs. In addition, a team leader can both influence these organizational systems via their management and create their own team environment through their leadership actions. While project support or work transfer processes might be defined in terms of procedures and management directives, the way team leaders organize their plans, involve support function personnel, run meetings, track projects, or recognize team performance is under their control. Hence, team leaders create the team environment through their own actions by building a favorable image of their projects and a team-friendly project environment, one that is supportive to teamwork and well integrated with the overall enterprise system. In 10 summarizing the criteria of effective team management, there are three propositions can be stated to highlight the organizational environment and managerial style conducive to high project team performance:
- Driving Forces. The degree of project success seems to be primarily determined by the strength of specific driving forces related to leadership, job content, personal needs, and the general work environment, as shown in Table 1.
- Team Environment. The strongest single driver of team performance and project success is a professionally stimulating team environment, characterized by interesting and challenging work, visibility and recognition of achievements, growth potential, and good project leadership.
- Work Challenge Dividend. A professionally stimulating team environment is also favorably associated with low conflict, high commitment, high work and team involvement, effective risk management, good communications, innovation, and overall team performance.
To be effective in organizing and directing a project team, the leader must not only recognize the potential drivers and barriers but also know when these are most likely to occur during the project’s life cycle. Effective project leaders take preventive actions early in the project life cycle and foster a work environment that is conducive to team building as an ongoing process.
The effective team leader is a social architect who understands the interaction of organizational and behavioral variables and who can foster a climate of active participation and minimal dysfunctional conflict. This requires carefully developed skills in leadership, administration, organization, and technical expertise. This also requires an ability to involve top management and to ensure organizational visibility, resource availability, and overall support for the new project throughout its life cycle.
Recommendations for Effective Team Management
From this study, I have derived thirteen specific recommendations for effectively managing teams working in complex project environments6. I developed these recommendations—or guidelines—as a result of the field data analysis, augmented by interviews and observations conducted as part of the action research, as discussed earlier in this paper. I have organized these guidelines in the chronological order of a typical project life cycle.
Guideline 1. Ensure Team Involvement during the Early Phases of the Project Life Cycle.
For most projects, effective project planning and early team involvement is crucial to subsequent high project team performance. This is especially important for technology-based project work, where high levels of complexity, uncertainty, risk, and need for innovation make it virtually impossible for the project leader to work out a project plan that team members perceive as realistic unless it is the result of a collective effort involving all stakeholders, including support departments, subcontractors, and management. Modern project management techniques (phased project planning and stage-gate concepts) and established standards— PMBOK® Guide (Project Management Institute, 2004)—provide project managers with the conceptual framework and tools they need to effectively implement cross-functional planning and organize project work toward effective execution. Team involvement during the early phases of the project life cycle has a favorable impact on the team environment, building enthusiasm toward the assignment as well as team morale and team commitment toward achieving desirable results.
Guideline 2. Define the Work Process and Team Structure.
To successfully manage a project team, project managers need an infrastructure conducive to cross-functional teamwork and technology transfer (cf. correlations shown in Table 1). This includes properly defined interfaces, task responsibilities, reporting relations, communication channels, and work transfer protocols. The five tools for systematically describing the work process and team structure come from the 11 conventional project management system: Project charter, defining the mission and overall responsibilities of the project organization, including performance measures and key interfaces; project organization chart, defining the major reporting and authority relationships; responsibility matrix or task roster; project interface chart, such as the N-Squared Chart discussed earlier; and job descriptions.
Guideline 3. Develop Organizational Interfaces and Communication Channels.
Because it is related to the work process, a project team’s overall success depends on effective cross-functional support and integration (cf. τ8 in Table 1). All team members should clearly understand their task inputs and outputs, work interfaces, and transfer mechanisms. Management can facilitate the flow of information, both horizontally and vertically, via workspace design, regular meetings, reviews, and information sessions. In addition, modern technology—voice mail, e-mail, electronic bulletin boards, and video conferencing—can greatly enhance communications, especially in complex organizational settings. In addition, team-based reward systems can promote cooperation with cross-functional partners Tools such as Quality Function Deployment (QFD) concepts, n-square charting, and well-defined phase-gate criteria can help project managers develop cross-functional linkages, facilitate interdisciplinary cooperation, establish alliances, and improve communications.
Guideline 4. Staff and Organize the Project Team Properly.
Project staffing, usually conducted during the project formation phase, significantly influences project success. But time pressures and budget constraints often force project managers to shortcut the staffing process. Such hastily organized teams are staffed with people who are poorly matched to the job requirements. As a result, such teams are frequently in conflict, display low morale, lack optimal decision-making, and ultimately deliver poor project performance. While staffing deficiencies will cause problems for any project, it is especially damaging for high-technology environments, where project success is only achieved through a heavy reliance on cross-functional teamwork and shared decision making as well as a mutual trust, respect, and credibility among all stakeholders. To achieve best results, project leaders should negotiate the work assignment with their team members one-on-one—at the outset of the project. These negotiations should outline the overall task, detailing the project’s scope, objectives, and performance measures. Through such personal involvement on the front-end—via requirements analysis, bid proposals, project planning, interface definition, and overall product planning—project managers can establish with their team a thorough understanding of the task requirements. Such early involvement can also help project managers obtain each team member’s commitment to the project’s objectives, plan, and team.
Guideline 5. Build a High-Performance Image.
Project teams that have a clear sense of purpose and confidence in their mission, perform better7. This statement may seem to counter the correlation shown in Table 1, that “project visibility and popularity (τ16)” are statistically not significant to team performance. However, a high-performance image is different from visibility and popularity. This image stimulates the team’s interest, pride of participation, and sense of ownership (higher performance correlate, τ1). It also builds professional confidence and encourages team members to reach out and to think “outside the box.” To build such a high-performance image, team members must have a clear sense of the significance of their contributions. All stakeholders should clearly understand the organization’s goals and its mission objectives. By establishing a favorable project image, project managers unify their team, build commitment toward accomplishing the project’s objectives, and establish high project priority. 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 its success realization offers. These factors promote project ownership among team members and encourage each individual’s desire to succeed.
Guideline 6. Stimulate Enthusiasm, Excitement, and Professional Interests.
Those factors that satisfy an individual’s personal and professional needs have the strongest effect on team performance and overall project results. As shown in Table 1, the statistically most significant performance drivers 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 leads also to increased involvement, better communication, lower conflict, higher commitment, stronger work effort, and higher levels of creativity. While a project’s overall scope and workload are fixed, project leaders usually have considerable freedom in partitioning and assigning the work packages. Well-established practices— front-end involvement of team members during the project planning or proposal phase, one-on-one discussions—are effective tools for matching team member interests and project needs. These practices also help managers sell the project’s benefits while simultaneously addressing concerns, anxieties, and potential problems.
Guideline 7. Create Proper Reward Systems.
Although salary itself seems to have no significant impact on team performance (as shown by the relatively low correlation τ14 in Table 1), recognition, accomplishments, career opportunities, and job security are strongly associated with team/project performance (cf. Table 1). Therefore, it is important that the organization develop and implement an evaluation-and-reward system, one that is designed to recognize both individual and team performance. Creating such a system, and developing its metrics, is a great challenge, especially when the system must demonstrate that organization desires a sharing of responsibility and power. Yet, several models—the Integrated Performance Index (Pillai, Joshi, & Raoi, 2002) and the Quality Function Deployment (QFD) concept, where everyone recognizes the immediate customer— provide some framework for designing a reward system that balances both individual and team rewards.
Guideline 8. Ensure Senior Management Support.
The team’s perception of senior management support is critically important to project performance (Prasad 1998, 2002). At the outset of a new project, the responsible manager needs to negotiate the required resources with the sponsor and support organizations and obtain from management their commitment that these resources will be available. An effective working relationship among resource managers, project leaders, and senior management also favorably affects the credibility, visibility, and priority of the team, all of which ultimately affects project performance. This area also supports the suggestions described in Guideline 5.
Guideline 9. Build Commitment.
Managers must ensure that team members are committed to implementing the project’s plans, accomplishing its objectives, and delivering the expected results. If such commitments appear weak, managers should identify the reasons causing the lack of commitment and attempt to modify possible negative views. Because anxieties and fear of the unknown are often a major reason for low commitment (Stum, 2001; Thamhain, 2002), managers should investigate the potential for insecurities, determine the cause, and work with team members to reduce the anxieties created by their negative perceptions. Conflict with other team members and lack of interest in the project may be additional reasons why an individual lacks a commitment to a project.
Guideline 10. Manage Conflict and Problems.
Because project management activities are highly disruptive to organizations, conflicts are inevitable. Project managers should focus their efforts on problem avoidance. That is, managers and team leaders, through experience, should recognize potential problems and conflicts at their onset and deal with these before such disturbances become big and interpersonal, before the effort needed to resolve the disturbance consumes much time and effort (Haque, 2003; Thamhain, 2004a).
Guideline 11. Conduct Team-Building Sessions.
To develop work groups into effective, fully integrated, and unified project teams, project managers can mix several team building approaches: focus-team sessions, brainstorming, experience exchanges, and social gatherings (Thamhain & Wilemon, 1998). Although such efforts are especially needed during the formation stage of a new project, project managers should conduct such organized team-building efforts throughout the project life cycle.. Formally defined, team-building sessions are often conducted in an informal and relaxed atmosphere to discuss several critical questions: How well is the work group working as a team? What are the team’s critical success factors? What is the team’s strength? How can it improve? What support does it and its members need? What challenges and problems are members likely to face? What actions should they take?
Guideline 12. Provide Proper Direction and Leadership.
Successful project managers focus on people behavior and their roles within the project itself. Effective project organizations have developed cultures that support multidisciplinary work. They also have project managers who, by their own actions, influence the attitude and commitment of people toward the project objectives. These project managers also demonstrate a concern for the project team members and an enthusiasm for the project. They promote a climate of high motivation, engage the project and its management, and communicate with stakeholders. They also willingly work with others to accomplish the desired results.
Guideline 13. Foster a Culture of Continuous Support and Improvement.
Effective organizations adapt to changing environments. By continually updating and fine-tuning established project management processes—as well as developing project personnel—organizations ensure they have the capability to resolve today’s business challenges. It is important for these organizations to establish listening posts—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. This information is the basis for continuous improvement initiatives. Tools such as the project maturity model and the Six Sigma project management process can provide organizations with a useful framework for analyzing and developing their project teams and their management processes.
Two primary conditions seem to be critically important for high team performance in complex project environments: professional interest and work support. Both conditions are influenced by the organizational environment and team leadership. While I don’t believe in any panacea that will guarantee high team performance for today’s dynamic, technology-intensive projects, success is not random! A better understanding of the criteria and organizational dynamics that drive project team performance can help managers develop more meaningful insight into the organizational process and critical success factors that drive project team performance.
To achieve project success in our hyper-competitive world of business, project leaders must understand all of the facets comprising the project management system and its organizational environment. This includes not only the latest tools and techniques but also the people, business processes, cultures, and value systems collectively defining the organization. One of the most consistent and striking findings from this field study is the need for project stakeholders to increase their involvement within the organization and with its external partners. Managers point out that for today’s technology-based undertakings, project success is no longer the result of a few expert contributors and skilled project leaders. Rather, project success depends on effective multidisciplinary efforts involving teams of people and support organizations interacting in a highly complex and intricate way.
Two factors driving high project performance are cooperation and commitment. These factors are greatly enhanced when project leaders foster a work environment where people see the purpose and significance of their projects. And one of the strongest catalysts for improving team performance is the professional pride and excitement of team members, feelings that are fueled by visibility and recognition. Such a professionally stimulating environment seems to lower anxieties over organizational change and reduces communication barriers and conflict, while enhancing the desire of those involved to cooperate and to succeed.
Effective project leaders are social architects who can encourage people throughout an organization to participate in project planning, formation, and execution. They can also build alliances with support organizations and upper management to assure organizational visibility, priority, and resource availability as well as provide the overall support teams need to sustain their efforts beyond the project’s start-up phase. Such an ability requires carefully developed skills in leadership, administration, organization, and technical expertise. It also requires the ability to involve top management, to ensure organizational visibility and resource availability, and to generate overall support for the project throughout its life cycle.
Taken together, complex projects can be managed toward desired results, given the right team environment. This is the important lesson from this field study, one that shows project teams can deliver highly effective performance under the right conditions. These teams can produce great results, in spite of tough requirements, high project complexities, and difficult budget and schedule constraints.
Anderson, N. H. (1961). Scales and statistics: Parametric and non-parametric. Psychological Bulletin, 58, 305–316.
Armstrong, D. (2000). Building teams across boarders. Executive Excellence, 17(3), 10.
Barkema, H., Baum, J., & Mannix, E. (2002). Management challenges in a new time. Academy of Management Journal, 45(5), 916–930.
Barner, R. (1997). The new millennium workplace. Engineering Management Review, 25(3), 114–119.
Belassi, W., & Tukel, O. (1996). A new framework for determining critical success/failure factors in projects. International Journal of Project Management, 14(3), 141–151.
Bhatnager, A. (1999). Great teams. The Academy of Management Executive, 13(3), 50–63.
Dillon, P. (2001, September 10). A global challenge. Forbes Magazine, 168, 73–83.
Dyer, W. G. (1977). Team building: Issues and alternatives. Reading, MA: Addison-Wesley.
Eisenhardt, K. M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532– 550.
Fisher, K. (1993). Leading self-directed work teams. New York: McGraw-Hill.
Glaser, B. G., & Strauss, A. L. (1967). The discovery of grounded theory: Strategies for qualitative research. Chicago: Aldine.
Gray, C., & Larson, E. (2000). Project management. New York: Irwin McGraw-Hill.
Haque B, Pawar K & Barson R , (2003). The application of business process modeling to organizational analysis of concurrent engineering environments, Technovation, 23(2), pp.147-162.
Hartman, F., & Ashrafi, R. (2002). Project management in the information systems and technologies industries. Project Management Journal, 33(3), 5–15.
Howell, J., Shea, C., & Higgins, C. (2005). Champions of product innovations: Defining, developing, and validating a measure of champion behavior. Journal of Business Venturing, 20(5), 641–661.
Jassawalla, A. R., & Sashittal, H. C. (1998). An examination of collaboration in high-technology new product development processes. Journal of New Product Innovation Management, 15(3), 237–254.
Jassawalla, A. R., & Sashittal, H. C. (1999). Building collaborate cross-functional new product teams. The Academy of Management Executive, 13(3), 50–63.
Karlsen, J., & Gottschalk, P. (2004). Factors affecting knowledge transfer in IT projects. Engineering Management Journal, 16(1), 3–11.
Keller, R. (2001). Cross-functional project groups in research and new product development. Academy of Management Journal, 44(3), 547–556.
Kruglianskas, I., & Thamhain, H. (2000). Managing technology-based projects in multinational environments. IEEE Transactions on Engineering Management, 47(1), 55–64.
Nellore, R., & Balachandra, R. (2001). Factors influencing success in integrated product development (IPD) projects. IEEE Transactions on Engineering Management, 48(2), 164–173.
Newell, F. (2000). loyalty.com: Relationship management in the era of Internet marketing. New York: McGraw-Hill.
Norrie, J., & Walker, D. (2004). A balanced scorecard approach to project management leadership. Project Management Journal, 35(4), 47–56.
Nurick, A. J., & Thamhain, H. J. (2006). Team leadership in global project environments. In” (2006). in D. Cleland (ed) Global project management handbook (Ed.), New York: McGraw-Hill, pp. 5-01 thru 5-19.
Oshri, I., & Newell, S. (2005). Component sharing in complex products and systems. IEEE Transactions on Engineering Management, 52(2), 509–521.
Pillai, A., Joshi, A., & Raoi, K. (2002). Performance measurement of R&D projects in a multi-project, concurrent engineering environment. International Journal of Project Management, 20(2), 165–172.
Prasad, B. (2002). Toward life-cycle measures and metrics for concurrent product development. International Journal of Computer Applications in Technology, 15(1/3), 1–8.
Prasad, B. (1998). Decentralized cooperation: A distributed approach to team design in a concurrent engineering organization. Team Performance Management, 4(4), 138–146.
Project Management Institute. (2004). A guide to the project management body of knowledge (3rd ed.). Newtown Square, PA: Author.
Senge, P., & Carstedt, G. (2001). Innovating our way to the next industrial revolution. Sloan Management Review, 42(2), 24–38.
Senge, P. (1994). The fifth discipline: The art and practice of the learning organization. New York: Doubleday/Currency.
Shenhar, A., & Thamhain, H. (1994). A new mixture of project management skills: Meeting the high-technology challenge. Human Systems Management Journal, 13(1), 27–40.
Shim, D. & Lee, M. (2001). Upward influence styles of R&D project leaders. IEEE Transactions on Engineering Management, 48(4), 394–413.
Strang, K. D. (2005). Examining effective and ineffective transformational project leadership. Team Performance Management, 11(3/4), 68–103.
Stum, D. (2001). Maslow revisited: Building the employee commitment pyramid. Strategy and Leadership, 29(4), 4–9.
Thamhain, H. (1996). Managing self-directed teams toward innovative results. Engineering Management Journal, 8(3), 31–39.
Thamhain, H. (2002). Criteria for effective leadership in technology-oriented project teams. In D. Slevin, D. Cleland, & J. Pinto (Eds.), The frontiers of project management research (pp. 259-270). Newtown Square, PA: Project Management Institute.
Thamhain, H. (2003). Managing innovative R&D teams. R&D Management, 33(3), 297–312.
Thamhain, H. (2004a). Leading technology teams. Project Management Journal, 35(4), 35–47.
Thamhain, H. (2004b). Linkages of project environment to performance: lessons for team leadership. International Journal of Project Management, 22(7), 90–102.
Thamhain, H. & Wilemon, D. (1997). Building high performing engineering project teams. In R. Katz (Ed.), The human side of managing technological innovation (pp. 122–136). New York: Oxford University Press.
Thamhain, H. J., & Wilemon, D. L. (1998). Building effective teams in complex project environments. Technology Management, 5(2), 203–212.
Whitten, N. (1995). Managing software development projects (2nd ed.). New York: John Wiley & Sons.
Williams, J. (2002). Team development for high-tech project managers. Norwood, MA: Artech House.
Zanoni, R., & Audy, J. (2004). Project management model for physically distributed software development environment. Engineering Management Journal, 16(1), 28–34.
Zhang P., Keil, M., Rai, A., & Mann, J. (2003). Predicting information technology project escalation. Journal of Operations Research, 146(1), 115–129.
1 Field research shows that the managerial challenges are dominated by behavioral and organizational issues, rather than technical difficulties (Belassi & Tukel, 1996; Hartman & Ashrafi, 2002; Whitten, 1995).
2 Sixty-five percent of the companies in the sample fall within the Fortune 500 classification; twenty-three percent are Fortune 1000 companies. The remainder are smaller firms. None of the companies in the sample can be classified as small or medium size.
3 Many of the variables investigated as part of this study contain ordinal measurements, such as strong agreement, agreement, and disagreement. Although these measures can be rank-ordered, these do not necessarily follow a normal distribution. Therefore, parametric statistical methods are appropriate. Instead, I selected distribution-free, non-parametric methods. I recognize that the limitations of non-parametric methods involve extracting less information in exchange for more flexibility. The issues of methodological choice have been discussed extensively elsewhere (Anderson, 1961).
4 The Kruskal-Wallis One-Way Analysis of Variance by Rank is a test for deciding whether k independent samples are from different populations. When I used this test in this field study, it verified that managers perceive the same parameters in judging high team performance.
5 The influence factors shown in Table 1 were determined during the exploratory phase of this field study, during interviews and discussions with over 100 managers, during which I asked them: “What factors and conditions are seen to be important to high team performance and ultimately high project performance?” These discussions resulted in over 500 factors, variables, and conditions seen as very important to high team performance. Using content analysis of the 500 factor statements, I developed 22 categorical factors. In addition to the correlation analysis (shown in tables 1 and 2), I tested the 22 factors with 75 managers and project leaders: I asked each person to rank the criticality of these 22 factors to project team performance in regards to a Likert-type scale (1 = highly important, 2 = important, 3= somewhat important, 4 = little important, and 5 = not important). In averaging all of the factors and all of the judges, I found that 87% of the factors in Table 1 and 69% of Table 2 were rated as important or higher (managerial perception).
6 The field study shows that in spite of cultural differences among organizations, a general agreement exist among managers and project leaders on the type of factors that are critical to effectively organizing and managing technology-based project teams in today’s business environments. These agreements were qualitatively confirmed during my interview discussions with managers as well as quantitatively validated (including the factors shown in Tables 1) via the Komogorov-Smirnov analysis of variance by ranks, at a confidence level of 95% or better.
7 The fact that people with a mission and a high esteem of accomplishment perform better has long been known. One study investigated this behavior specifically in regards to project teams (Thamhain & Wilemon, 1998). It found a strong correlation between the can-do image of a team and its actual performance. The study also found that the team’s self-esteem is a perception that can be enhanced by the visibility of the work, frequent recognition of accomplishments, management attention and support, and the overlap of personnel values and perceived benefits with organizational objectives. Creating such a high-esteem image also leads to increased involvement, better communication, lower conflict, higher commitment, stronger work effort, and higher levels of creativity.
©2006 Project Management Institute