The concept of “organizational strategy” is neat in theory, suggesting as it does a unified front moving toward a common goal. In reality, most organizations have multiple business units, each with their own goals that often conflict with other units. This is a natural roadblock for projects, which require interaction across business units, and is a challenge for project managers needing cooperation from functional managers.
Collaboration goes a long way toward creating the ideal of a true organizational strategy, which in turn provides benefits across the portfolio. PMI‘s Pulse of the Profession™ In-Depth Report: Portfolio Management found that organizations at which managers focus on achieving strategic goals see their projects meet expected ROI 70 percent of the time, compared with just 50 percent at organizations where managers aren't focused on those goals.
“Project goals and business-unit goals must be aligned with the organizational goals to encourage cooperation,” says Shailendra Kadre, PMP, technology consultant at HP, Bengaluru, India.
Getting to that point, however, is easier said than done.
PwC‘s 2012 Insights and Trends study showed that in addition to meeting project performance targets, strategic alignment led to higher stakeholder satisfaction. Sometimes, poor alignment on cross-functional projects can be blamed on organizational inefficiencies and lack of standards. Other times it simply comes down to bad chemistry between a project manager and functional managers. And a number of more subtle factors can derail cooperation, too, including:
- ▪ Organizational politics: If top management doesn't give full support to a project, it's unlikely that functional managers will provide the required support, says Mr. Kadre.
- ▪ Competition for resources: Functional managers may feel that projects are taking valuable resources, including personnel, from their business units.
- ▪ Fear of change: Some functional managers are afraid of change, or feel that a project is a costly distraction. They may worry about what a project is doing to them, rather than for them.
- ▪ Lack of communication: If the culture is not transparent, business unit leaders may have no information about the benefits of a project, or have no input into its planning.
- ▪ Differing performance measurements: “Functional managers are not usually measured on the outcome of the project,” whereas project managers are, says Hannes van den Berg, PMP, director at ProjectLink Consulting Ltd. in Pretoria, South Africa.
Project managers and functional managers know how to cooperate, but what all of these derailing factors have in common is the ambivalence of functional managers—and a lack of understanding as to why they should cooperate. “They do not see the benefit of spending their already constrained time and effort on something that is not contributing to their success,” adds Mr. van den Berg.
Surmounting these obstacles requires a project manager who can set up projects so that they're fully in sync with the company's goals. “A cross-functional team demands a very high level of leadership skills from the project manager,” says Mr. Kadre.
GETTING EVERYONE INVOLVED
Securing buy-in toward a common cause from all stakeholders, from functional managers to the organization's leadership, is the first step.
Even before the functional managers get involved, the project manager should administer an exhaustive and confidential analysis with the project sponsor, suggests Alexander Matthey, PMP, vice president in the program management office at the Abu Dhabi Ports Company, Abu Dhabi, United Arab Emirates. “See which functional managers are potentially impacted by the project; then determine their level of potential influence,” he says. With this early analysis, the project manager and sponsor can determine what management strategy will work with each functional manager.
“Project goals and business-unit goals must be aligned with the organizational goals to encourage cooperation.”
Organizations at which managers
focus on achieving strategic goals see
their projects meet expected ROI
of the time, compared with just
50 percent at organizations where
managers aren't focused on those goals.
Source: Pulse of the Profession™ In-Depth Report: Portfolio Management, PMI
After that plan is set, involve the functional managers in early decision-making, and keep them informed throughout the project. Mr. Matthey takes this a step further, assigning project team members to act as liaisons with functional managers and to periodically hold informal meetings to solicit feedback. This dialogue tends to be repaid in increased interest and cooperation from the business unit. “Accept some concessions, especially when they make sense,” he says. “The motivational gains often outweigh the burden of the concession.”
A formal, standardized process that includes functional managers early in a project promotes a shared vision of success. For example, Mr. van den Berg helped establish a strategic portfolio management office (SPMO), which spanned across all business units of a mining company. The project was a success in part due to the decision to include all of the business units at a preliminary strategy session, which enabled them to share ownership of the process. “They all participated in the definition of the vision, mission, values and objectives of the SPMO,” he says.
HOW A PMO CAN HELP
Not only are project management offices (PMOs) tasked with guaranteeing that projects meet organizational goals—a key component to building cooperation—they're also charged with managing resources and ensuring strategic alignment.
“A PMO provides project management competency to an organization,” says Shailendra Kadre, PMP, HP, Bengaluru, India. “In this endeavor, the project managers have to work very closely with the business managers, and the PMO provides the basic framework for these interactions.”
Here are four ways PMOs can help project managers and business units align their goals with the organization's.
| 1 | Holistic viewpoint: “One role of PMOs is to regularly perform a project portfolio analysis,” says Mr. Kadre. “Periodically, all projects are closely examined for their alignment with the organization's goals and strategies.” PMOs do this with a holistic view, looking at all aspects of the organization. |
| 2 | Standardization: PMOs define and maintain an organization's management procedures, policies and resources, reducing the chance that project managers and functional managers waste time disagreeing about how to get things done. This helps keep all parties focused on one goal, rather than getting hung up in procedural details. |
| 3 | Resource allocation: Where-as functional managers are focused on the health of their business units and project managers are motivated by schedule and budget, PMOs act as neutral entities and are primarily concerned that information and resources are made available to support investment decisions. By keeping track of resources across the portfolio, PMOs can move all teams toward organizationwide goals. |
| 4 | Facilitation: In many organizations, PMOs are independent of functional managers and have access to stakeholders and executives. In this role, they can assist project managers with resolving conflicts between business units. |
SHARED BENEFITS
Each project has a significant role in driving a company's organizational goals toward realization. But functional managers are often expected to provide resources without being given insight into how they're contributing to the organization's strategy. This can cause them to be uncooperative simply because they don't understand what a project's true benefits will be, not because they're spiteful. “Cooperation between different business units and functional departments can only really be achieved if there is a shared benefit,” says Mr. van den Berg.
Functional managers will only take genuine ownership of their project-related responsibilities if they know how the project is going to positively affect their business units. To that end, a project's metrics should include information to show business units about not only their contributions to the effort, but also its overall progress and benefits.
Functional managers should be measured on how well they contribute to the overall effort, and that should be included as part of their performance appraisals and determination of bonus, says Mr. van den Berg.
Project managers need business unit leaders on board; they simply cannot deliver successful projects without the buy-in and cooperation of those from whom they're using resources.
“A project means change,” says Mr. van den Berg. “If you understand that the change might improve the status quo, then it becomes easier to embrace.” And from that comes cooperation. PM
“Cooperation between different business units and functional departments can only really be achieved if there is a shared benefit.”
