Creating value by building an intra-organizational common frame of reference for project management

EVA RIIS, MSC(ENG)
Research Fellow, University of Southern Denmark

Introduction

The authors of this paper are involved in an international research project that aims to determine the value for an organization of implementing project management (Thomas & Mulally, 2004, 2007). The research project is funded by the Project Management Institute and co-led by Dr. Janice Thomas, Athabasca University, and Mark Mullaly, President of Interthink Consulting Incorporated. The project includes in-depth case studies in more than 70 companies all over the world, carried out by a network of more than 30 experienced researchers in the field of project management.

This paper reports on case studies of four Danish corporations carried out in 2007 by the authors. A common finding across the case studies was that the informants emphasized the need of having a uniform approach to the processes, methods, instruments, attitudes, and behavior for managing their projects. A project manager stated:

[A specific value of project management] is to be able to carry out change in a large organization in a structured way and with a well defined process, which both [the project team and the customer] have accepted as basis. (project manager, Company B)

Such a uniform approach was called a common frame of reference by Korsvold and Sletbakk Ramstad (2004), who work with construction projects. In their definition,

a common frame of reference [is] providing an understanding for “why/for whom to do it?” This is a shared understanding of the whole of the parts and the relationships of the processes in actual collective work practice of the construction project (p. 304)

In all four case companies, efforts were made to establish a common frame of reference. However, the initiatives varied across the organizations, and so did the perceived values of the initiatives.

The aim of the paper is to shed light on how a common frame of reference for project management can be established, and which kind of values it can create. Research (Thomas & Mulally, 2007) has shown that the project management research community does not agree on how to determine and measure values related to project management. Both quantitative metrics, like return on investments, and intangible non-monetary benefits have been taken into consideration in previous studies. Still, a thorough understanding of value is missing. We believe that such an understanding can only be developed if in-depth empirical studies are accomplished, studies that aim to hear the voices of companies on what they actually do and what they value and perceive as important. Therefore, we especially address the following questions:

  • In which ways have the case companies tried to establish a common frame of reference for project management?
  • Which values (if any) can, according to the informants, be attributed to the common frame of reference for project management?
  • What are the differences and similarities across the cases?

In the next section, we briefly introduce the four case study companies and the research method used. Thereafter, we summarize our findings concerning the first two questions. In the last section, we discuss the findings and look at similarities and differences across the cases.

Method

The Cases

Four case corporations were selected for the research. The corporations were all known from the media and project management networks as having been engaged in developing competence in project management over the last years.

In all four companies, a specific department was c hosen as unit of analysis for the research project. Key data of the four case companies and the units of analysis are summarized in Table 1.

Table 1: Case Corporations

Corporation Type of Corporation Unit of Analysis Total Number of Employees of Corporation Number of Staff in Unit of Analysis Number of Poject Managers Number of Projects Carried Out Annually
Company A IT Company Sales Department 3,000 150 43 130
Company B Financial services Corporate IT 30,000 1,000 126 200
Company C Manufacturing Corporate IT 20,000 400 16 50
Company D Consulting engineers Regional Office 5,000 100 42 500

Research Approach

A broad range of research approaches has been applied (Thomas & Mullaly, 2004), starting with desk research about the organization and the history of the project management implementation in the case companies. Surveys have been undertaken in a sample of organizational stakeholders, including project team members, project managers, project customers, and suppliers/subcontractors, where appropriate. Furthermore, the research team reviewed all relevant company documentation, including defined project management practices and procedures; HR policies with respect to project management; and key data on strategically significant projects during the last ten years. Finally, one completed project file was analyzed in detail to understand actual project management practices, assess the evidence of compliance with set policies and processes, and to check on the results of both for project performance.

Against this background, a minimum of seven interviews of key stakeholders were conducted in each case company, including senior management, project sponsors, project management champions, project management office or project management support staff, project managers, and HR representatives. Lastly, the research team observed one project status meeting.

The interviews were taped and transcribed. Afterwards, meta-matrices for each corporation were developed for comparisons across the informants. Findings from the interviews were compared with data from the surveys and other collected data.

Results

Findings From the Case Studies

In the following, we summarize the efforts undertaken by each case corporation to establish a common frame of reference for project management. Each presentation is initiated by a brief introduction to the context of the project management initiatives. Further, we present the informants’ perceived values of the initiatives.

Company A

Initiatives Implemented to Establish a Common Frame of Reference

The company is one of Denmark's major information technology providers. According to its mission statement, its aim is to enhance the efficiency of the public sector and thus improve its service to the public.

A few years ago, the company was facing a situation in which it should carry out a major program comprising more than 60 individual customer projects. To cope with the challenge the company carried out a number of initiatives. A central project management office was established, and a high amount of formal authority was delegated to the office. The office developed and implemented a common project management model in 2004, together with the project managers and other parties in the unit of analysis. The model consisted of standard milestones and deliverables. Further, several templates were included.

Developing the model and other preparations for undertaking the program took more than a year. To achieve a common understanding and to make the project managers develop an ownership attitude towards the model, all project managers were asked to participate in creating the model. Some were appointed to take part in a development team. Others acted as reviewers. The model was developed and implemented in stages. It was revised when the developers received feedback and suggestions after the project managers had started using the model.

While using the model, all project managers were asked to deliver best practice examples, and many complied with the request. Furthermore, questions and answers about project management challenges and about the use of the project management model, as well as the related tools and methods, were posted on the corporate intranet.

Another part of the model was the establishment of a parallel project organization in each of the 60 customers’ organizations. Further, a common steering committee for each customer project was established. The case company was eager to ensure that the two project organizations mirrored each other and that the members of the steering committees possessed sufficient formal authority to make various decisions.

To supplement the organizational solution and improve the decision-making capability, the project management office developed a formal escalation procedure so that everybody knew what to do if something went wrong. Further, the department established a detailed follow-up system with green, yellow, and red symbols to track progress and identify issues that needed to be resolved. The status was published on the intranet and on electronic posters in the cafeteria and other places in the company, so that everybody would get a common understanding of the status.

Use of the project management model was mandatory. Not all project managers appreciated that they were forced to use the model and its very detailed follow-up procedures. Some of them felt that their wings were clipped in relation to creativity and personal management style. However, the central PMO and top management insisted that the company would only profit from the common approach if everybody complied. In the end, the project managers agreed that the mandatory approach was beneficial for this specific program, as the interdependence of the project activities was big and the deadlines tight. Further, it helped a lot that the project managers were involved in developing the model. However, in the future they would prefer a more flexible approach.

Another approach to establish a common frame of reference was to make heavy investments in project management training and certification. In the whole corporation, more than 130 project managers (out of 3,000 employees) have been certified since 2002. All project managers in the unit of analysis were required to participate in a certification program in project management (IPMA levels D and C). Further, all project managers received specific mandatory training. When the research project was finalized, all the project managers started on a mandatory PRINCE2 training course.

To supplement the common project management model, and the project management education and certification, the corporation had established formal temporary knowledge sharing groups. People were assigned to the knowledge sharing teams on a mandatory basis. Besides regular meetings, the project managers had video-supported meetings. Finally, every new project manager was assigned a mentor for a while.

To sum up: This company had several mandatory elements to enhance the development of a common frame of reference for project management.

Perceived Value of the Common Frame of Reference

Company A managed to deliver the results agreed upon in all projects included in the program on time. Further, the quality of the project results was so high that the company did not need the three months it had planned for rework and could spend the resources on other activities. The informants agreed that especially the project management model, the project organizing, the follow-up procedure, and the escalation procedure were beneficial. The common framework made everybody focused on progress and on solving conflicts and problems immediately.

The very well integrated implementation of the many projects made it a lot easier to take advantage of the knowledge sharing groups established, as the participants could more easily give each other relevant ideas and feedback due to the common approach. One project manager said, “... by running this model, we colleagues could much better discuss, [because] we were in the same phases and through the same processes.”

The value for the company included a high rate of customer satisfaction. Further, the success with the program and the extensive training/certification has made the department very attractive in the eyes of other stakeholders. The result was that more people from outside the department have shown interest in a project manager job in the department, while other organizations (customers and independent companies) want company A to help them develop their own project management skills or even hire one of the department's project managers on a temporary basis. Therefore, an unexpected value of the well-integrated project management approach is the development of a new business area, namely selling project management knowledge: “We have sharpened our competencies in project management with, among other things, certification of the project managers. That means we now have bigger contracts for both private and public organizations” (Managing Director, Company A, in Bjerregaard, 2007, from a profession magazine for engineers).

Lastly, the project managers in the department stated that they have developed higher self-esteem due to the fact they see that they have been successful in delivering the project objectives and that this is recognized inside and outside the company.

Company B

Initiatives Implemented to Establish a Common Frame of Reference

Company B is an international bank that provides financial services to customers in four countries. The bank is the result of a merger between smaller banks. The employees of the bank are located in the four countries.

After the merger, the company experienced some major difficulties carrying out cross-national projects, as each of the former banks had their own ways of dealing with projects.

To ease the accomplishment of cross-national projects, the company implemented a project management model with external assistance. It was built on the PMBOK® Guide, but was adapted to meet specific corporate requirements. Project management processes were formalized to a high degree for larger projects. Adaptation was achieved by internal working groups and with experienced project managers as reviewers. Application of the model is mandatory for cross-national projects.

Recently, the company has also established a central project management unit to promote the integration of cross-organizational projects. To build up and maintain a common frame of reference, the unit is holding two-day conferences for all project managers once a year. Further, the unit has introduced other integrative functions (including using English as the company language) to support a common frame of reference and a common understanding across the distributed organization.

The central project management unit offers PMI and IPMA certification to its project managers, but it is not emphasized very much. Further, internal project management education on a basic level is offered.

Perceived Value of the Common Frame of Reference

The common project management model is perceived by the informants as the main cause for a much smoother accomplishment of cross-national projects. Previously, project managers had to introduce new tools and techniques on their own, and several project models were in use. The number of misunderstandings is reduced and communication has become much easier now due to the common understanding. In the words of the project managers:

Suddenly we speak the same language [because of the project management model]. It makes the communication easier.. That we have this model contributes absolutely to the fact that we have a common understanding. This is especially important because of the Nordic dimension, where all have their own background. (project manager, Company B)

The most important part [when developing the common project management model] was to get common terms and a common language about accomplishing projects established … It was not the templates which gave the greatest benefit. (project manager, Company B)

More people than the project managers, also on the business side, have been through training activities. The result has been good and made our job easier because we use the same terms as the core persons we meet. (project manager, Company B)

In addition, sponsors are very satisfied with the common model: “The world has become easier for me, when all project managers use the same template for monthly reports. Now I know what I have to read. It saves time” (sponsor, Company B.

Further, the two-day conferences and other integrative efforts have made it much easier for the project managers to share knowledge across the projects and countries.

Company C

Initiatives Implemented to Establish a Common Frame of Reference

Company C is a leader in development and production of certain types of mechanical and electronic products. The group, which is one of the largest industrial groups in Denmark, consists of 53 factories in 21 countries. It has 110 sales companies and 110 agents and distributors all over the world.

Company C implemented its project management model in 1997 and has been continuously improving it since then. If a given project has a certain size (e.g., more than 100 workdays in the IT department) or is of strategic importance, using the model is mandatory.

Similarly, project management training for new project managers is mandatory. Training includes, in particular, instruction on using the corporate project management model. General project management training is mandatory too, and is held internally. Terminology and management concepts used are the same for all training efforts. For each project manager in the unit of analysis, a mandatory personal leadership program will be carried out in 2007/2008. Project managers are coached by a psychologist.

The training modules of Company C end with an in-company exam. Certification is not being offered.

Company C gathers all project managers every second week for meetings to discuss lessons learned in the projects since last meeting and related matters. In addition, an annual conference is held for all project managers.

Furthermore, a tutoring activity takes place in which the project manager is being evaluated and given feedback by his or her tutor.

Perceived Value of the Common Frame of Reference

The greatest value of the project management model and the common training in applying the model is that the clarification phase is carried out in such a way that customer expectations and the expectations of the project team are aligned as early as possible. The structured way of discussing ideas and scope is perceived to be especially helpful. The result of a good clarification phase is that the department is able to accomplish projects within time and budget, and that stakeholders are satisfied with the deliverables.

Because the model has shown its value, the project managers do not have to discuss the model when starting a project in one of the company's business units. The business unit has realized that the model is helpful. This saves a lot of time.

Company C starts new businesses all over the world on a regular basis. It is very important that the IT platform and infrastructure work from Day 1. Because of the common project management approach, it is very easy for the IT department to help establish a new business.

A common frame of reference is very helpful for top management because progress can be easily monitored.

Company D

Initiatives Implemented to Establish a Common Frame of Reference

Company D is one of the largest and oldest consultancy companies in the field of engineering in Denmark. The company has realized that to stay competitive, it is not enough to have skilled engineers. Other companies may hire good staff as well. Instead, the company wants to develop a competitive advantage by being better in project management than the competitors are. The company's top management is convinced that this will bring high value to the company.

Company D has implemented a common project management model as a part of the quality management efforts in the company. Using the model is optional. The company has a substantial internal project management training program, but no mandatory instruction in the use of the corporate project management model.

The company offers certification to project managers who have completed 10 days of basic or advanced project management training. Further, participants in the project management training were organized in action learning groups.

Company D has based its competence development drive on internal best practices for two out of three regional offices. A sample of six to seven of the most successful project managers have been interviewed to determine why they are so successful. Together with internal consultants, they have developed seven values related to project management.

Some of the project managers are invited to meet in a best practice program, and other action learning groups were established.

Perceived Value of the Common Frame of Reference

Until now, only a few elements of a common reference frame have been introduced as mandatory. Nevertheless, the present initiative to gather project managers to discuss best practices has opened the eyes of both management and project managers, who found that it has great value to listen to others’ experiences.

The benefits are perceived to be so high, that the initiative will be implemented in the remaining regional (and larger) office. Both management and the project managers find that the common frame of reference makes them appear more professional towards their customers, and therefore is valuable. The company is convinced that more value will be added as they become more mature in their project management approach.

Discussion

In this section, comparisons between the case companies are offered. First, elements for establishing a common frame of reference across the cases are identified. Secondly, values obtained according to the informants are analyzed.

All four studied corporations worked on establishing some form of a common frame of reference for project management. Typically, it included four different elements:

  • All four corporations had implemented a common project management model, including tools and methods, requiring a common approach to project management. (A project management model is valid for all projects carried out in the organization regardless of type. Thus, it differs from a project model that applies to a specific type of projects—and specifies the required process model, structuring of tasks, organization, tools, and so on. (Association of Danish Project Management et.al., 2005). The extent of the models varied and covered most of the spectrum, from very light to heavy (Saers, 2003; Cockburn, 1998).
  • All had established company wide generic project management training programs, providing a common terminology and understanding of concepts, project management methods and tools.
  • All had introduced either tailor-made internal examination or external certification of project managers as part of their career development.
  • All encouraged knowledge sharing activities among project managers to enhance common approaches. However, these activities appeared to be less formal and systematic than, for example, the training and examining efforts.

The elements are consistent with recent studies of systematic competence development such as presented by Suikkia, Tromstedta, and Haapasalob (2006). However, differences in the relative weight of the elements exist. In our case study companies, a special importance was given to a common project management model. Thus, we consider the project management model as an element in its own right and not, as Suikkia et al., as a part of training programs.

The case study corporations differ in the extent to which the elements or manifestations of the common frame are mandatory or just options for the project managers to apply. Table 2 summarizes the details.

Table 2: Mandatory and optional elements

Elements of a Common Frame of Reference Use in Company
A B C D
Use of a common project management model Mandatory Mandatory Mandatory Optional
Project management/ leadership training Mandatory Mandatory Mandatory Optional
Examination/certification of project managers Mandatory Optional Optional Optional
Formal project management knowledge sharing Mandatory Optional Optional Optional

We elaborate on the consequences later in this section.

Further, perceived values, related to a common frame of reference stated by the informants, differed to some extent across the cases. In Table 3, all obtained values as presented by the informants are presented. The letters in the brackets refer to the single-case companies.

Table 3: Obtained Values in the Case Companies According to the Informants

Values obtained Because a common frame of reference enhanced, so that:
Better communication The number of misunderstandings is reduced (B)
Communication has become much easier due to a common understanding (B)
People speak the same language/share common terms (B)
Efficient use of resources Less rework is required due to high quality of the project results (A)
Smoother accomplishment of cross-national projects takes place (B)
It is easier for the project sponsor/top management to monitor progress (due to the use of standard templates, common terminology, etc.) (B, C)
A structured way of discussing ideas and scope exists (C)
Discussions are shorter due to the fact that the model is generally accepted (C)
Better time management Projects are delivered on time (A, B,C)
It is easier to help customers quickly because long preparation is not needed (C)
Better project progress Increased focus on progress develops (A)
Increased focus on solving conflicts and problems immediately exists (A)
Customer expectations and project team expectations are aligned early in the project course (C)
Better financial management Projects are accomplished within budget (C)
Better customer satisfaction Customers are more satisfied (A)
Stakeholders are satisfied with the project deliverables (C)
The project team appears more professional towards the customers (D)
Easier knowledge sharing Knowledge sharing is easier due to a common understanding (A)
Knowledge sharing is easier due to integration efforts (B)
Listening to others experiences takes place (D)
Higher self-esteem Project managers develop higher self-esteem (A)
Improved future possibilities A new business area (selling project management competencies) has developed (A)
The company obtains bigger contracts from both private and public organizations (A)

As shown in Table 3, the case companies stated a number of obtained values due to the development of a common frame of reference concerning project management. Companies A, B, and C pointed to a considerably higher number of valuable outcomes than did Company D. A major difference between D and the other companies (see Table 2) is that in D, application of the four elements identified in relation to creating a common frame of reference is optional, whereas at least two of the elements are mandatory in the other companies.

Advantages of mandatory elements seem to be that everybody in the organization will get to know the project management approach within the company. Many informants reported that the common approach is very helpful, for the reasons summarized in Table 3. The advantages appear to be much more important than the potential disadvantage: that employees might feel forced to spend time and efforts on something that is not immediately useful. In the interviews, only a few such skeptical stakeholders were found. For example, some of the project managers in Company A said that they found some parts of the project management model too cumbersome, bureaucratic, and inflexible.

No one in the case companies seems to think that too many resources have been spent on developing a common frame of reference when the benefits are taken into account. Furthermore, they state that the frame of reference must be continually developed.

Another observation is that the case companies use a range of technical tools that allow project management teams to apply their frame of reference, including corporate intranets. However, by themselves, such tools cannot ensure a productive application of the framework. A more conducive atmosphere must be created and there must be incentives to use the tools. As a minimum, corporate management must demonstrate their commitment to the common frame of reference.

Based on the analysis results, we propose the following three hypotheses:

  • H1: A common frame of reference is more easily created if more elements are put into use simultaneously, such as a common project management model, common project management training, certification or examination, and knowledge sharing activities.
  • H2: A common frame of reference is more easily created and maintained if the elements concerning project management are mandatory.
  • H3: Mandatory elements concerning project management are more likely to bring a number of values to the company at hand than are optional elements.

The authors of this paper invite more research on the above hypotheses.

References

Association of Danish Project Management, Norwegian Association of Project Management and Swedish Project Management Society (2005). Competencies in Project Management - National Competence Baseline for Scandinavia. Hillerod: Association of Danish Project Management.

Bjerregaard, T. R. (2007). Rent fokus på projektledelse (Pure focus on project management). Ingeniøren August 30, 2007 www.ing.dk. (in Danish).

Cockburn, A. (1998). Methodology space. Central Bank of Norway. http://alistair.cockburn.us/index.php/Methodology_space (retrieved 060408)

Korsvold, T., & Sletbakk Ramstad, L. (2004). A generic model for creating organizational change and innovation in the building process. Facilities, 22(11/12), 303-310.

Saers, N. (2003). A project model for the FreeBSD Project. Department of Informatics, Faculty of Mathematics and Natural Sciences, University of Oslo, master thesis.

Suikkia, R., Tromstedta, R., & Haapasalob, H. (2006). Project management competence development framework in turbulent business environment. Technovation, 26, 723-738.

Thomas, J., & Mullaly, M. (2004). Understanding the value of project management. Research Proposal Submitted to the Project Management Institute in answer to the 2004 RFP Quantifying the Value of Project Management (unpublished).

Thomas, J., & Mullaly, M. (2007). Understanding the value of project management: First steps on an international investigation in search of value. Project Management Journal, 38(3), 74-89.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2008 Project Management Institute

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