A lot of people are talking about the shift to a project-based organization, but what does it really take to get there? BY MICHEL THIRY, PMP, PMI FELLOW, CONTRIBUTING EDITOR
It seems like we're hearing more and more about project-based organizations. To get beyond the buzz and consistently deliver results, a project-based organization must first develop strong integration and effective communication channels. In my next few columns, I will examine different aspects of the project-based organization that help enhance the link between executives, portfolios, programs and projects.
Within the last 10 years, I have worked with several organizations as they have moved from a function-based or matrix model to a project-based one. Through that experience, I‘ve learned a few important lessons:
1. The shift is an organizational change. And it must be addressed from a holistic point of view, not in discrete and loosely coupled components.
2. Organizations must create synergy between all their operational and project components. They also must develop consistent means of prioritizing resources and investments across all these components.
3. Organizations must pay as much attention to cultural issues as structural ones. The focus must be on people first, then processes and finally tools; unfortunately, many organizations start with the tools and then try to fit people in.
The first step in structuring the project-based organization is to identify the roles and responsibilities of the management team and their business areas in regards to the overall strategic objectives of the enterprise. I call this the functions focus.
Once these roles have been clarified and agreed upon, there needs to be consensus on the relationships between these functions—who will lead, who will support, etc.
The next step is to clarify how these business units will work in teams. For example, typical teams in IT might include a strategic management team, an innovation management team, a project/program management team and a product management team. Each team is comprised of more than one unit and there are overlaps between the teams. The objective of this structure is to create team accountability.
Finally, the last point concerns governance. This is not just about top-down control; it is also about leadership and policies and the way to ensure they're implemented. Governance should reflect the structure and be based on the concept of overlapping teams:
∎ Corporate governance ensures the vision and the mission of the organization are implemented.
∎ Change governance addresses all the change actions of the organization: programs, projects, innovations and their successful implementation.
∎ Service governance is concerned with maintenance of the service level to customers, conformance and risk management.
∎ Stakeholder governance deals with demand and service; this role is usually shared between the business development unit and service management.
Typically, in an integrated project-based organization, program management ensures the delivery of strategic decisions through projects; portfolio management ensures resources invested in projects are aligned with the corporate objectives and that achievability is taken into account; and, finally, the project management office structures the governance process.
Taking these steps will bring your organization from a functional or process-based organizational model to a project-based one. The journey will sometimes be difficult and require exceptional change-management skills during the turbulent transition period. And even so, the end of the transition only marks the beginning, as the newly created organization needs to be effective and dynamic, as well as highly competitive. But to sustain this state, it will also require organizations to continue to be flexible and adaptable to a very fluid market and environment. PM
Michel Thiry, PMP, PMI Fellow, is managing partner of Valense Ltd. He has more than 30 years of experience in project-based organizations.
DECEMBER 2007 | PM NETWORK