Project Management Institute

Potential for greatness

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BY KAREN J. BANNAN

In the same way that technical skills and experience enable single project performance, strong project management skills contribute to organizational maturity, according to a recent study, “Boosting Business Performance through Programme and Project Management” from Pricewater-houseCoopers (PwC), Stevens-Woluwe, Belgium.

EXECUTIVE SUMMARY

Most organizations would like to reach a higher maturity level, but imbalanced organizational structures hold them back.

Change management can help an organization excel.

Staff development and certification increases overall project performance.

The more consistently an organization runs its business, the more “mature” it is. Many models, including PMI‘s Organizational Project Management Maturity Model (OPM3®), have been developed to assess, benchmark and improve organizational maturity. PwC‘s model takes into account four core elements: processes, structure, people and systems.

Because the successful organization employs project management as a strategic tool, an organization that excels at project management becomes an agile organization that deals with and drives change, according to Antonio Nieto-Rodriguez, PwC senior manager. Leading organizations use project management to consistently position themselves ahead of change.

HIGH PROFILE

The PwC survey was designed to assess project management performance and maturity level, outlining which project managers succeed and why. The 200 respondents, who hold senior management and project management titles, hail from 30 countries in small-to-medium companies with differing business. For example, 33 percent are in top management positions, such as managing directors and chief financial officers. Senior managers, such as line managers and quality managers, make up 32 percent of respondents, and project managers, who encompass 28 percent, round out the respondents.

The vast majority of responses came from European and American professionals, says PwC‘s Antonio Nieto-Rodriguez. Only 13 percent have reached level five. The highest maturity levels were found in Asia, where the average maturity level is 3.1, followed by the Americas, with an average maturity level of 2.8. European companies trail with an average level of 2.5. Combined, these companies have 3,488 project managers who work on a total of 10,640 projects each year.

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“The biggest difference between a level-five [PwC‘s highest maturity rating] and a level one is that you can talk to a level-five CEO and they know what project management is all about,” Mr. Nieto-Rodriguez says. “They will tell you, ‘I have a career path for my project managers. They can potentially become the CEO, too.’ Project management is part of the company's culture. Project managers have all the means, tools, certifications and procedures that will help them succeed.”

Yet, even with proven results, project managers don't often receive the executive-level buy-in they need to institute enterprisewide consistent best practices. Although all of the 200 survey respondents have many hands-on project managers, the average maturity score was much lower than one might expect—just 2.5, a score that denotes informal processes that are not yet institutionalized.

Not surprisingly, more than 60 percent of respondents wish to increase their maturity level; 71 percent of companies want to increase their level by more than one step. Although the report provides touch points that detail how to do just that, Mr. Nieto-Rodriguez stresses that the process is not simple.

Up the Ladder

The report concludes that more than half of projects fail because of imbalances within an organization, one of the most difficult organizational issues to fix, Mr. Nieto-Rodriguez says. “Your biggest problems come when you don't have the right organizational structure,” he says. “It all goes back to communication and transparency. If your organizational structure is functional, there's less of a chance to get executive buy-in and support.”

Companies that utilize a weak matrix are the worst performers, according to the study. In these instances, project managers are relegated to negotiators—constantly bargaining for resources, staff and budget. Every time a department's priorities change, the project manager is left scrambling. The best performing companies have a projectized, or strong matrix structure. In this functional type, projects are part of a company's main focus and are recognized as key drivers of a company's business. Organizational structures are reviewed every year.

 

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OUT OF 25 COMPANIES THAT REACHED MATURITY LEVEL FIVE, 24 ALWAYS OR OFTEN USE CHANGE MANAGEMENT.

Antonio Nieto-Rodriguez,
Senior Manager, PricewaterhouseCoopers,
Stevens-Woluwe, Belgium

Siemens Business Services, which is at the top of the maturity scale, is successful because project managers are empowered; they are concerned with more than just project delivery, says Singapore-based Pee Yee Koo, Siemens senior project manager.

“While most organizations have focus on project delivery, our matrix organization structure has helped during the pre-sale phase, in managing the tender or bid, and also in the post-project phase where the resources have to be managed, assigned and redeployed to another project,” Ms. Koo says. “Involvement of project managers in the pre-sale stage also has helped to give the project managers a broader view and accountability in terms of scope, budget and resources.”

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Changing a company's organizational structure doesn't happen overnight, and there's no right or wrong way to do it. However, you can start by implementing good communication channels and by increasing transparency, Mr. Nieto-Rodriguez says. “You can't just say, ‘We're going to stop all the projects until the imbalanced are balanced.’ A strong project management office has a lot to do with changing things,” he says. “Start with informing your entire company what the top 10 projects you're working on this year are. When people know that you are working on something that will affect the entire organization, they won't bother you when you're working on it.”

This directive should come from the CEO, but if your colleagues know the organizational importance of what you're working on and how it aligns with company goals, you'll be able to focus resources.

Welcome Change

Strategic communication falls into the change management category, another important variable in the study. Often, Mr. Nieto-Rodriguez says, change management is an afterthought; a process that many companies completely ignore.

He directly correlated the success of a project with how often a company employed change management systematically, which includes communication as well as stakeholder engagement, organizational culture and leadership. The companies that employed change management most often were the same ones that had the highest project performance. Conversely, those who rarely or never engaged in change management saw lower performance levels.

It's no mistake that only 40 percent of level-one companies say they “always or often” engage in change management, while 100 percent of level-five companies say the same. “Out of the 27 companies that score the highest in performance, 26 always or often use a standard change management and communication approach for their projects,” Mr. Nieto-Rodriguez says. “The same goes for those companies that reached the highest maturity levels. Out of 25 companies that reached maturity level five, 24 always or often use change management.”

Siemens Business Services always uses formalized change management processes, Ms. Koo says. “Change management is equally important within our organization and to our customers,” she says. “It is important because it is a systematic way of engaging the users and ensuring that the users buy-in to the changes. It is a balancing act in managing the project scope and requirements and the expectation of the users through consistent communication—for example, dissemination of information and proper user training.”

 

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INVOLVEMENT OF PROJECT MANAGERS IN THE PRE-SALE STAGE ALSO HAS HELPED TO GIVE THE PROJECT MANAGERS A BROADER VIEW AND ACCOUNTABILITY IN TERMS OF SCOPE, BUDGET AND RESOURCES.

Pee Yee Koo,
Senior Project Manager, Siemens Business Services,
Singapore

Not Just a Piece of Paper

Overwhelmingly, study respondents report their companies’ maturity levels are positively affected by training and certification, which is relatively simple to implement. Dallas, Texas, USA-based JP Morgan Chase & Co. requires its employees to complete 40 hours of training each year, according to Elba Stevenson, risk and control analyst. In addition, Mr. Stevenson's department has its own specific interest group (SIG) that meets weekly to discuss project and risk management. As a result, his team develops and implements fresh ideas and avoids many of the most common project management mistakes. “We have business owners join us in the SIG,” he says. “By partnering business and technology, they can come to us with clearer requirements because they know what we have to do to get back to them with a clear timeline and budget.”

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Similarly, Proximus-Belgacom Mobile N.V., a Belgian telecom company, asks anyone involved in a project—more than half of the company's employees— to follow some type of project training. “At the introduction of PMI‘s project management principles within the Proximus organization, every member involved in projects received specific training for his role in the project,” says Wim Vandermeersch, manager of Proximus-Belgacom's project management office. “Line managers, project board members, architects, analysts and test teams all received training adapted to their needs. In the months after, coaching was offered through a consultancy firm, and in-depth courses were organized for specific profiles.”

The strategy is paying off. Proximus-Belgacom reports a maturity level between three and four, based on the PwC study, which stresses that more successful companies are active about disclosing the value of certification. “Those companies that score high in terms of maturity level do have certified staff—more than 80 percent for level five,” says Mr. Nieto-Rodriguez. “Those companies that have a lower maturity levels rarely certify staff.” PM

Karen J. Bannan is a freelance journalist based in New York, N.Y., USA. She writes for The New York Times, Crain's Chicago Business, MyBusiness, CFO and Robb Report.

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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.

PM NETWORK | MAY 2005 | WWW.PMI.ORG

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