MOST COMPANIES ARE EITHER DRIVEN BY PROCESS OR PROJECTS—AND THAT BEGS THE QUESTION OF WHICH PHILOSOPHY IS BETTER.
BY PETER FRETTY
When well-established businesses have a distinguishable market niche, they can usually find success, at least in the short-term, with any number of assorted operational philosophies. Within the most progressive firms, however, two proven approaches—process and project—tend to battle it out. Understanding where each methodology fits and how to capitalize on the advantages can make the difference between long-term success and mediocrity.
Before leadership chooses a side, it should understand the primary differences between the two philosophies. Organizations with a pure process focus rely entirely on repetitive, recurring and ongoing operations. This approach has proven successful for many “business-as-usual” organizations, especially when they don't have to roll out new products or services. In contrast, project-centric firms operate with the philosophy that tasks and operations have a distinct beginning, end and deliverable.
The main distinguishing factor between process- and project-driven approaches is the degree of repetition in organizational activities, says Ivan Watermeyer, PMP, senior project management consultant at MetaPM, Melbourne, Australia. Where a given set of activities is repeated regularly with a very high degree of similarity between successive renditions, a process orientation is most suitable. “This seeks to refine and enhance the pre-defined steps followed with the primary objective of promoting efficiency of execution,” he explains. “In contrast, a project orientation is most appropriate where endeavors tend to be unique, with very low similarity between successive cases. Here, a focus on rigorous planning, control and governance is aimed at minimizing the inherent risk in attempting new things.”
The project philosophy first gained success in construction, software and other research-and-development driven industries that thrive on individual deliveries. These days, more companies outside of those areas are adopting the approach, though.
If a company's goal is to be highly competitive, “it needs to move to a results mindset, which means moving away from the process trap,” says Leslie G. Ungar, president of Electric Impulse Communications Inc., a leadership performance and executive coaching firm in Akron, Ohio, USA. “The rewards do not go to those who do the process better. Instead, they go to those that get results.”
ATTENTION TO DETAIL
If executive management opts to make a philosophical shift, it should watch out for these potential pitfalls.
SINGLE SHOT SYNDROME. Companies must avoid producing one-time products or deliverables. “Even though tailor-made solutions are a great niche and are well-suited to the project mentality, businesses need to look for compounding learning experiences from each activity,” says Danny Peeters of Eurinpro. “This is where processes still benefit organizations.”
CULTURE CATASTROPHES. Understand how a change will blend in with the existing culture. If the ensuing activities are something that the customer notices, it may be important to hold back slightly on the implementation.
DOWNPLAYING DIFFERENCES. Organizations shouldn't ignore the necessary change in mindset that a philosophical shift dictates and should understand it's not always something that everyone can accommodate.
FUTILE FORCEFULNESS. Seeing success in one area through project adoption does not necessarily mean that it will work in every instance. Organizations must pay attention to where change makes sense and determine if it actually benefits the company before forcing an implementation, says Wilhelm K. Kross, Ph.D., Value & Risk AG.
WE BRING TO THE MARKET TAILOR-MADE SOLUTIONS, BUT WE DO NOT APPROACH EACH PROJECT FROM SCRATCH. WE KNOW THAT WE NEED TO BE ABLE TO PACKAGE PROCESSES, WHICH ULTIMATELY IMPROVE FUTURE PROJECTS.
—DANNY PEETERS, EURINPRO, STROMBEEK-BEVER, BELGIUM
Embracing a projects-oriented approach forces management to seriously examine the end-result. “Having that clear target and clear view of what you are accomplishing and delivering makes you automatically think about what the user wants,” says Danny Peeters, CEO of Eurinpro, a logistics real-estate investor and developer in Strombeek-Bever, Belgium. “When focusing on the processes and efficiencies it is common for people to ignore or forget the importance of the customers who are actually evaluating what the company is doing.”
And it's those customers who can determine bottom-line success. “If you are in a process-driven organization you need to make sure that you add more of a project approach,” he says. “Typically, operating day-to-day or week-to-week does not allow you to ‘think out of the box’ and spread ideas into operations.”
A project-based environment also caters to strong individuals drawn to careers in which they are both accountable and rewarded for what they do. “This is something that is easy to accomplish in a project structure since the short-term outcome creates a structure for success,” Mr. Peeters says.
Supervising the Shift
For an organization that has always been strictly process-driven, adopting a project approach means a significant shift. While most individuals are familiar with ongoing processes, internalizing the concept of having a defined start and end— demanded within the project architecture—can be a monumental obstacle.
The business-as-usual philosophy will continue in many cases because most of the operational or process endeavors have been refined, revised and implemented, says Joan Knutson, PMP, author of Succeeding in Project-Driven Organizations [Wiley & Sons, 2001]. She is also lead adjunct faculty in the master's degree program in project management at the University of San Francisco, San Francisco, Calif., USA.
“However, what will ensure growth and competitive advantage are those project-related endeavors,” Ms. Knutson says. “Operational processes allow organizations to survive, whereas projects allow organizations to grow and to be competitive in the marketplace.”
Such a massive shift requires executives to fully embrace the new culture. “After management accepts the reality, taking accountability for orchestrating the change is the next step,” she says. “This dictates devoting resources needed to create a project management office and a project portfolio management system. In addition, the firm must pay attention to the demands of publicizing the change and the impact on the culture so that people are prepared for the shift.”
Projects present definite and documented advantages, but a full shift with reckless abandon is highly unadvisable. “We need to be careful not to oversell the project perspective,” says Wilhelm K. Kross, Ph.D., director, Value & Risk AG, Bad Homburg, Germany. “Projects are and can be an important organizational structure, and it makes a lot of sense to integrate and harmonize projects with organizational hierarchies and processes. However, project structures and project management frameworks do have inherent limitations. This is why organizations should not be blindly converted to circumstances with the potential to become counterproductive.”
Instead, leaders always need to look at what each side offers, says Mr. Peeters, who firmly believes most businesses need both management structures in place to succeed. “Even in the context of markets that are primarily project-driven, it is important to be able to transfer the know-how and competence in a process manner so that each realization is a learning experience,” he says. “You need to be able to capture this data to continue adding value to the company.”
Eurinpro's real-estate operations, for example, operate in a very project-oriented industry, but management has opted to embrace a blended philosophy. “We bring to the market tailor-made solutions, but we do not approach each project from scratch. We know that we need to be able to package processes, which ultimately improve future projects,” Mr. Peeters says. “While we are outwardly very project-driven, we strive to keep everything very process-driven. The consistency that processes provide helps the organization achieve success project after project.”
The smartest organizations are realizing the value that each methodology brings to the table and devoting resources as necessary to capitalize on the opportunities. Many firms employ a process-based focus to “keep the lights on” while using a project-driven focus to move the organization forward. In many product-based organizations, for example, the implementation of a new project is structured as a set of projects or a program. Once it's time to launch, the company switches to a process-oriented organizational structure for ongoing efficiency.
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The hybrid approach makes sense because the two methodologies can be complementary, says Phil Gilbert, chief technology officer at Lombardi Software Inc., Austin, Texas, USA. “Process-driven is a management and operational strategy that is focused around how you run your business, measure your business and improve your business,” he says. “Project-driven is focused around how you implement those practices in a continuous fashion.” The key here is to have cross-functional teams charged with the responsibility and given the authority to implement improvements.
“Simply running routine processes is obviously not a good thing, but doing everything on an ad hoc basis— just spinning up a project for every initiative—isn't going to scale well or drive efficiencies, either,” Mr. Gilbert says. The project-driven approach needs to be wedded to a process-driven culture so “global common processes and common steps can be used and re-used,” he says.
Despite the great debate over whether it's best to use a project or a process focus, there need not be a battle over which one works best. What works best for one company does not always fit at another. In the end, the best option may be for project and process philosophies to live in peaceful coexistence. PM
Peter Fretty is a freelance writer based in Whitehall, Mich., USA. He has written for a variety of publications, including Minority Business News and Advanced Manufacturing.
PM NETWORK | OCTOBER 2006 | WWW.PMI.ORG
OCTOBER 2006 | PM NETWORK