Abstract
The paper presents the decisional path and choices made by the 6300 employees top IT Services Italian Company Engineering (www.eng.it) in order to enforce the value of already having 200 Project Management Professional (PMP®) certified Project Managers and try to answer the top management pressing request of delivering quality in Project Management..
It illustrates the different alternatives taken into consideration from (a) building a PMO as a centralized Physical Unit that should support all projects in the organization to (b) launching a structured and virtually led Community without taking away Project Management competencies from the field but instead keeping attention high on motivation of Project Managers to perform adequately where they are. The Resource-Based View theory and a deep analysis of the enterprise context led to deciding in favour of a Centre of Excellence of Project Management that aggregates all the PMPs and acts as a virtual organizational unit: we have called this virtual unit PMNET for Project Management NETwork.
The paper explains to readers the reasons for the decisions taken and recaps some important lessons learned should they intend following the authors' ideas, and illustrates the most important actions performed until April 2010: the project is not yet completed and it will probably last a couple of years more.
This work is dedicated to friend and mentor, Carlo Notari, the former President of the Northern Italy Chapter who unexpectedly passed away last January.
Reasons for the Choice
Background
The last four years Project Management training Program
In June 2006, Engineering Group, decided to revisit its Project Management training program aiming to standardize and emphasize Project Management knowledge inside the organization. Internationally recognized standards, methodologies, and best practices available at that date were considered, mainly Project Management Institute (PMI®), Prince2 and IPMA, and the decision to comply with PMI was taken: in fact, PMI standards resulted as they are both better recognized and well supported in Italy.
Hence, in accordance with A Guide to the Project Management Body of Knowledge (PMOBK® Guide) of PMI, Engineering designed classes where both project management and internal processes and procedure knowledge objectives have been mixed in order to offer Project Managers an overall “tool-box” to carry out their profession and serve Engineering's customers in the best way. Today, May 2010, Engineering PMPs are 210 and they will become 280 by the end of the year. Classes, delivered at Ferentino (60KM from Rome where Engineering runs its Corporate School) originated a strong network of most of those professionals.
Something about the authors
Giuseppina and I met each other three years ago: I was the author of Project Management class contents and she had the responsibility of integration of these contents with corporate processes and procedures. Both of us have been trainers of these classes for several editions. We shared ideas and concerns for months and worked hard to optimize the selection process and the delivery of both the path to the PMP certification and other basic Project Management classes.
One step backward: Nexen Business Consultants (www.nexen.it) has been the consulting company of Engineering since 2005 and I used to support Engineering projects in all industries with my Project Management consultants team. Throughout this effort I had the chance to rough out basic best practices in Project Management taking inspiration from real situations and could shape main Project Management processes and some simple tools and first templates that still work.
At the beginning of 2009, last year, our main strengths were (a) Giuseppina's consolidated knowledge of Engineering internal processes and procedure over years, (b) Nexen's consultants team's ability in supporting projects and applying PMBOK Guide® principles with perceptible improvement of company's relationships with customers, and (c) active contacts with all company's PMPs.
Our main point of attention was the fact that without having the chance of applying Project Management best practices to projects in the real world, Project Management training courses would not be enough to improve quality in Project Management: PMP certified Project Managers might, on returning to their projects, progressively fall back into their previous habits. There was the risk that investment in education and training would lose its value.
Something about Engineering and its Business Divisions
Engineering is a 6000 employee company with €750Mil Revenue. It is organized into Divisions which serve different industries. Some Competence Centres support the offer and the delivery together with the Research & Innovation Division which continually gives ear to the market and technology evolutions. Project Managers and all PMPs act within these Divisions and Competence Centres. Exhibit 1 shows the company structure. Two cross units not visible in Exhibit 1 ensures the first ISO9000 and CMMIL3 compliance of the organizational structure and operations, the second that of communications and marketing.
Exhibit 1 – Engineering Organizational Structure
Each Division has a Director - there are nine to date - who report to the CEO: once interviewed they manifested a strong demand for good Project Management practices as a success factor for improving both their businesses and customer satisfaction: at the beginning of 2009 they had the needs, they had strong expectations from PMPs, some of them were trying by themselves to find a way out of the problem
Main concerns at the beginning of 2009
In summary, last year's main concerns were:
- 150 PMPs at that date were not exploiting Project Management tools and techniques acquired to obtain the certification and the training effort seemed not to be enough to ensure a tangible change action
- Demand for quality in Project Management was easing off and consequences could have been unexpected
- PMPs wanted to perform better and were looking and asking for templates and examples to support their day-by-day work: they used to address these requests to their teachers because Engineering was not yet ready with a structured answer
Looking for opportunities
Some kind of PMO
It was clear that Engineering was, unconsciously, looking for some kind of PMO. “Project Management Office is an organizational body or entity assigned various responsibilities related to the centralized and coordinated management of those projects under its domain. The responsibilities of a PMO can range from providing Project Management support functions to actually being responsible for the direct management of a project” (PMI, 2008, p. 25). A PMO can provide administrative support, training, project support, resource alignment, and centralized communications among project managers (p. 26).
The authors decided to conduct a quick benchmark among large well known Italian vendor and customer organizations and found out that implementation of a PMO is usually tailored to organizational specific needs and structure. In any case, in most organizations, a PMO is a centralized physical unit where the definition physical unit (in this context) is a unit with a position in the organizational structure with a head of operations who interacts and serves other organizational units giving directions in Project Management and supplying resources when required with an implicit cost allocation to requesters.
However, in other organizations, especially where Project Management has already been perceived for years as a core competence, such as in the oil & gas industry or in international no-profit organizations, project managers are senior resources with managerial responsibilities. They are distributed throughout the organization and form a network of excellence. Please refer to Exhibit 2 to see an overview of main factors that drive alternative configuration.
Exhibit 2 – Opposite characteristics to build a PMO
At this point, the main question was: “Which PMO can we suggest to Engineering top management?”
The Resource-Based View (RBV) Theory
“The RBV's underlying premise is that firms differ in fundamental ways because each firm possesses a unique bundle of resources – tangible and intangible assets and organizational capabilities to make use of those assets. Each firm develops competencies from these resources and, when developed especially well, these become the source of the firm's competitive advantages” (Pearce-Robinson, Strategic Management 9th Edition, p 150).
The RBV theory suggests that a company should identify and evaluate its resources to find those that provide the basis for future competitive advantage and the four guidelines to follow are: (a) disaggregate resources, (b) utilize a functional perspective, (c) look at organizational processes, and (d) use the value chain approach.
Considering that Project Managers are a company's resources, each company should analyze whether they are actually providing competitive advantages: in fact, each case must be carefully analyzed because the situation is different in different contexts. For Engineering, from interviews and from perceptions we captured from top and middle management, we realized that Project Managers are a precious resource for each of its Divisions. They know better than anyone else customers' organizations and ought not to be taken away from their context: we were not in a condition of building a centralized structure supplied with Project Managers coming directly from the field and so we had to find another way to keep together and capitalize the competencies of Project Management the company already had.
Where did we start?
The first step was taken in May 2009 when we decided to raise a question directly with the CEO. After investing so much money in Project Management training – there were already 150 PMPs! - he had to be made aware of not wasting the value built. Other than that, we knew that his attention was often correctly directed at doing well in projects especially since the 2008 incorporation of nearly 2000 employees from another Italian IT Services company.
We simply proposed to him the different alternatives we were working on and we suggested he do something to preserve and possibly enhance the company's value added by all the Project Managers.
His recommendations were very important for the development of the PMNET project: he suggested carefully avoiding the boost of a centralized body and wanted to underline the importance of the PMP certification asking to include only the certified Project Managers in PMNET: “if they are not yet certified, they must do it” – he said. He also suggested that a community of Project Managers could be a first experiment of a structured community in a lateral project of reviewing Engineering internal portal basing it on Web2.0 technology.
On getting his firm sponsorship, we could plan the initiative that we originally called Project Management Center of Excellence and that now goes under the name of PMNET.
The PMNET Project
Chartering the PMNET Project
Sponsorship, objectives and constraints
Objectives stated for the projects were:
- Keeping all the PMP certified Project Managers in contact with each other: measured against the fact that each PMP should feel to be part of the PMNET community and have contact with someone specific inside the community
- Building and enforcing a Project Management Engineering style: measured against the fact that 80% of Project Managers adopt PMBOK Guide® guidelines, attain to organization processes and procedures, and can chose among shared tools and techniques, Giuseppina's support in this case will be particularly important
- Giving Division Directors information on how projects are going and why: measured against the ability of Project Managers to produce a common report to inform their management on how projects are going
- Spreading Project Management knowledge and skills among those who are not Project Managers: measured against the fact that Project Managers have leadership skills good enough to be able to coach and mentor others
Sponsorship from the CEO, although vital, was not enough. Sponsorship of the initiative had to be obtained even from all the Division Directors: in fact, in a hierarchical organization, as all organizations mainly are, we could not entertain the idea of reaching each Project Manager without approval from middle management first.
One important constraint had to be considered carefully: there was no money from the CEO and the time to dedicate to this Project had to be obtained on a voluntary basis. “PMNET is a community, it is a virtual body, and there is no one to pay who acts as head of operations: where is the problem then?” it was said and this position was understandable: nowadays no one invests real money in initiatives like this one. Therefore, the leadership of the project had to be very strong in order to obtain support to the community even without hardly any economical coverage.
Risks and opportunities
Were we going to be involved in a highly risky project? From the point of view of the Project Manager, that was and is my position. I can say, without a doubt, that consequences of the initiative being a flop would be undesirable for my career and my position. But luckily I am part of another company in the group and I felt I could take this risk: I am acutely aware of not involving other colleagues, my boss and CEO too much.
From the point of view of Engineering the risk was lower and not concentrated on a specific role or person: if it didn't work, they were still in the same position and had time to reshape the initiative that, all said and done, is only a community; nothing more.
But if it should work, as we hope and believe so, there is the opportunity – really a great opportunity – that Project Management becomes the style of working within the organization; that when we present a project to our customers they feel confident we can lead it; that when customers are looking for companies which are able to carry out good Project Management, they think of calling us.
This brings readers to an interesting consideration about building a virtual community against running a physical unit: the negative risks are lower while positive risks are always there. At least, if the community does not work significantly less money is wasted.
Change Management Methodology and Techniques
The PMNET project is a project in the area of the organizational change management. For this reason we decided to adopt an appropriate methodology we felt confident with: we took inspiration from the text Leading Change by John P. Kotter where the author suggests eight steps to follow to lead any organizational change.
The work done until now and the steps planned for this year
The work done
Establish a sense of urgency was the first step. It took three months, from July to October, in order to obtain a face-to-face appointment with each Division Director. In that meeting we had the chance to put forward the idea and to understand needs and expectations. Directors showed a positive attitude probably because they had heard or experimented by themselves that we knew what managing projects meant. Furthermore, we had familiarity with the profession. The contract sounded like an agreement where on their side they would support the initiative and be aware of obtained results and on our side PMNET would be a way to locate where strong or weak Project Management was carried out within their Divisions.
To prepare the next step, which was to form a powerful guiding coalition team, they were asked to search for a PMP whom they could rely on and who had enough leadership to allow other PMPs of the division to trust them. I tracked (some/all?) conversations and meetings in a stakeholder register that I shared periodically with the CEO
We met with the guiding coalition team, which we called Leadership Team, in November for the first time. The meeting had been prepared carefully and each participant had their role to play: in that first meeting they were free to accept or leave the proposed role to be a member of PMNET who had to stay in contact with the PMPs of their own Division. All of them accepted and we worked hard to maintain a close communication between ourselves.
We worked to create a clear vision expressed simply which was in the text of an email the CEO sent to all PMPs at the beginning of January to announce the initiative called PMNET. He told them he was expecting good project management from them and adherence to processes and procedures the company centrally suggests. Exhibit 3 shows the e-mail sent to all PMPs.
Exhibit 3 – Announcement of the PMNET Initiative
To communicate the vision and empower others to act on the vision each member of the Leadership Team had to meet personally with each of their PMPs. We tracked this work. We wanted each PMP to feel the responsibility to be a PMP and to share any question of Project Management with their contact within the Division. We gave them some consistent examples of Project Management deliverables from other projects and asked them to provide us with their examples of Project Management deliverables: if validated by the Leadership Team we would publish them with guidelines to use them within the community.
We also encouraged the collection of all the CVs to be published and keep updated within the community. Each PMP is not forced to participate in PMNET: if they do not want to participate or do not have time or they are no longer acting as Project Managers, they can leave and communicate their decision: this will not be held against them in their carriers, but we must know. It is a community after all, and forcing actions of any kind could penalize others and put the success of the whole initiative at stake.
Next steps
While we are speaking we are working on collecting and validating Project Management deliverable examples and templates. We've proposed some changes in the Project Management Plan template published by the Quality Function and we are waiting for answers. Above all, we are supporting and communicating with everyone and at every level of the company. With the Quality Function we are working on the idea that PMNET validates all quality system documents which may have a connection with Project Management.
Lessons Learned
This section is dedicated to an important part of the paper and we believe that readers will be interested in listening to lessons we learned during this experience with PMNET. We'll try to recap them in the following list.
- Virtual is good
- For an organization that wants to start a PMO today and for which Project Managers are relevant resources (RBV theory) of its Value Chain the traditional physical organizational body the PMBOK Guide® shapes has an alternative: the virtual community
- Virtual community is a good idea, but must be communicated as a part of the organization – Virtual community alone may be misunderstood and confused with a group of friends or colleagues who want to talk on the net; involving top management is necessarily required and once the decision is made by each member or PMP to adhere to the community, objectives and rules must be shared. To enforce the idea that the community is a structure (even though virtual) we insist on working on tangible and useful things such as forms, texts to use in answering bids, templates, subsidiary management plans
- Knowing the enterprise environmental factors – Involve all the organizational structures that shape the company behaviours through publishing of rules and procedures (ISO9000, CMMI if applicable, and other standards to comply with). The Leadership Team must understand the enterprise environment
- External leadership in the community – PMNET has no head of operations. If you want to build a PMO based on a virtual community chose a Project Manager who comes from outside the main organization, for example, a consultant or anyone who is not looking for a role within the organization. They should have the chance to build trust around them first.
- Competence, competence, competence – Who shapes a virtual organization must be extremely competent and have a strong leadership based on trust: it is the only way for the hierarchical organization to accept an intrusion.