Developing a project-driven organization

INTRODUCTION

Competitive organizations in the ’90s share some common characteristics. They tend to be lean, flat and focused, and innovate through constant experimentation [1]. They bring quality products to market faster [2]. And they bring people together from different groups so that they focus on solving specific problems [3]. One way of making all this happen is to establish projects and make the company into a project-driven organization.

Project-driven organizations are structured to facilitate the planning and management of projects. They focus on making changes to the organization's products and services through the successful completion of these projects.

Although organizations might know what is needed, determining how to get there is more difficult. Particularly for large companies, it is a challenge to make the sweeping changes that are necessary to move from a functionally-driven organization to a project-driven one. These changes may require a significant shift in the organization's power base. It may be easier in small companies, although they often do not have the internal expertise needed to make significant changes and funds may not be available to get outside help.

… it is a challenge to make the sweeping changes that are necessary to move from a functionally-driven organization to a project-driven one.

LONG-TERM PROCESS

So, how can organizations be expected to make the changes necessary to become project-driven? How can the long-term benefits and lasting improvements provided by such changes be realized?

First, it helps to think of this type of far-reaching organizational change as a series of small, incremental changes that take place over an extended period of time. Changes, especially ones that require a significant restructuring of the power base within an organization tend to take time and dedication. In some companies it has even been said that “change occurs funeral by funeral” [4].

Initiating a steady stream of small, incremental changes overtime works to counter the status quo. This approach lessens the impact on the organization's culture, and allows time for adjustment. As the organization matures through the acceptance of these incremental changes, they build upon them to create even greater changes. Implementing small changes also enables each group within the organization to advance at its own pace, working within its own group culture.

INCREMENTAL CHANGES

The incremental changes can be grouped into steps, or “Maturity” levels [5], as shown in Figure 1. The total of all the incremental changes implemented in each level provides the foundation for the next level.

For example, in Level 1 an organization focuses on developing planning skills and processes. These skills and processes then provide a foundation for the implementation of a systematic tracking process when the organization has progressed to Level 2. As the organization matures through the levels, it becomes more project-driven. At the last level (Level 5), the organization has implemented a full range of project management skills and processes, all of which are focused on defining, planning and managing projects effectively.

Figure 1. Organization Maturity Levels

With project management skills and processes organized into specific levels of maturity, intermediate goals can be identified for the organization. These intermediate goals are a key to the organization's success. People may find it difficult to actively support changes if the goal is too far removed. By breaking the changes into manageable steps, intermediate, short-range goals can be clearly defined and communicated.

SYSTEM FOCUS

A “system focus” is called for when planning and implementing changes. The organization is really a system of processes, procedures, and cultural norms. A change in any one of these usually requires adjustments in the others. In project management this is particularly true, since it spans across groups, specialties and responsibilities. Project management is often at odds with the established functional organization structure.

Fortunately, the Project Management Institute (PMI) has made the systems focus a little easier by subdividing project management into eight distinct, interrelated functions (scope, quality, time, cost, communications, contracting/procurement, risk and human resources) [6]. Each of these functions works in concert with the others to define the entire “system” that must mature to improve the overall organization. This approach is important for two reasons.

The Maturity Map provides the organization with a road map for implementing project management skill and process improvements.

First, people may prefer to work on what they already know rather than maintain the system focus required for meaningful improvement. When asked to make improvements, they may avoid issues that are outside their experience. For example, someone who is particularly good at schedule planning may tend to focus on getting better at it, rather than broadening their focus and gaining skills in other areas, like cost planning or quality management.

Second, skills and processes from one function form the basis for the advancement of skills and processes in another function. A systematic project tracking system (scope, quality, schedule, and cost functions) is required in order to implement a project-based performance recognition and reward system (human resource function), for example.

Just as a person may strive to balance their growth physically, artistically, academically and socially in order to mature into a “well-rounded” individual, so too must the growth, or maturity, of an organization be balanced. Coordinated improvements aimed at all eight project management functions helps ensure that no function becomes out of balance with the others.

ORGANIZATIONAL MATURITY

How does an organization approach such a monumental task, balancing the breadth of functions, the depth of skills and processes and the rate of change? The most effective answer that we have found is in the application of an organizational Project Management Maturity Map [7], like the one shown in Figure 2.

Each project management function is organized into a continuum of individual skills and processes. These skills and processes have been arranged along each functional continuum in order of progressing complexity, with the most basic ones placed on the far left and the most complex on the far right. To the left of each functional continuum shown in Figure 2, organizations utilize ad hoc processes.

The Maturity Map reflects the inter-dependencies between functions. These interdependencies are between individual skills and processes within each function. Consequently, each functional continuum begins at a different point and matures at a different rate. For example, it makes sense for an organization to focus attention on scope definition prior to attempting a schedule planning process.

The Maturity Map also balances the effort required by the organization with the benefits obtained. Those skills and processes that provide the greatest immediate return are moved up to the earliest possible maturity level, while still maintaining functional interdependence.

The Maturity Map provides the organization with a road map for implementing project management skill and process improvements. It helps the organization mature with a minimum of wasted effort and false starts.

The Maturity Map is based on incremental changes implemented over aperiod of time. It embodies the concept of a constantly maturing and improving organization; Some concepts and techniques can be implemented by an organization immediately, with real, tangible benefits derived. Others require the organization to mature somewhat before they will likely succeed. For example, it would not be advantageous for an organization at Level 1 to expend resources trying to implement a detailed cost tracking system. The infrastructure required for the system's success would not be in place until the organization had matured to Level 3. It is through this maturing process that the organization makes significant, meaningful changes to the way it approaches work.

LEVEL ASSESSMENT

To utilize the Maturity Map, an organization needs to know its baseline level. A structured assessment may be necessary to fully understand the organization's baseline level. This assessment includes the skills and processes in place in the organization. (It is important not to use just one project as a baseline since any one project may represent any level of maturity. It is the maturity level of the organization as a whole that is important.)

This baseline provides the organization with a point from which it can systematically improve. Once the organization's baseline maturity level is known, the map is used to focus on improvements that make the most sense. As it matures, the organization continually moves closer to its project-driven ideal. In this way, the organization makes significant strides while maximizing its return on investment.

RETURN ON INVESTMENT

With any proposed investment of time and/or money, management may wish to quantify the benefits of the efforts. The Maturity Map provides a framework for isolating and quantifying these benefits. This makes it possible to calculate the incremental benefits derived from advancing to the next level. These benefits are then measured against the costs of various processes and programs designed to move the organization. If it makes economic sense to continue the organization's project management maturity, then program continuity is justified.

Figure 2. Organizational Project Management Maturity Map

QUALITY

The steady emphasis on quality is reflected in the publicity received by the Software Engineering Institute (SEI) Maturity Model [8], ISO 9000 [9], and the Malcom Baldrige National Quality Award, to name just a few.

The good news for those actively involved in project work is that the implementation of quality processes in many cases relies heavily on project management. SEI, for example, requires that an organization implement a systematic project management process as part of an overall software development effort. The bad news is that for companies not traditionally associated with project management, the organizational changes may require fundamental changes in the way they do business. Implementing the required project management processes may be difficult for these organizations.

CONCLUSION

The Project Management Maturity Map provides a systematic way of implementing the needed changes. It supports and integrates well with all of the aforementioned quality measures. A well-defined Project Management Maturity Map provides the overall structure for addressing the project management related portions of these and other quality programs.

REFERENCES

1. Peters, Tom. 1987. Thriving on Chaos, Handbook for a Management Revolution. New York Alfred Knopf.

2. Smith, Preston G. and Reinertsen, Donald G. 1991. Developing Products in Half the Time. New York Van Nostrand Reinhold.

3. Szakonyi, Robert. 1992. Technology Management, Case Studies in Innovation. Boston: Auerbach Publications.

4. Landers, David. 1991. Implementing Quality Management in a Changing Environment. Presented at the PMI Seminar and Symposium, Dallas, Texas.

5. Crosby, Philip B. 1980. Adapted from the Quality Management Maturity Grid presented in Quality is Free. New York: McGraw-Hill.

6. Project Management Institute. 1987. Project Management Body of Knowledge (PMBOK). Drexel Hill, Pennsylvania.

7. McCauley, Michael. 1992. Project Management Process Implementation: An Approach That Works. Presented at ProjExpo ’92.

8. Software Engineering Institute. 1993. Technical Report: Capability Maturity Model for Software, Version 1.1. Carnegie-Mellon University, Pennsylvania.

9. American National Standards Institute. Quality Management and Quality Assurance Standards (ISO 9000). 1987-1993. New York.

Michael McCauley is a principal with Integrated Project Systems (IPS), a project management training and consulting firm located in Belmont, California. IPS focuses on providing tools and services to firms competing in the high-tech market. Michael holds a B.S.C.E. and an M.B.A. in management. He is a licensed Civil Engineer and certified Project Management Professional. Working over the past year, he and others at IPS have combined their knowledge to create and define the Project Management Maturity Map. It is now being applied to improve the project management capabilities of several organizations.

Corrections

The following names were inadvertently left out of our listing of certified Project Management Professionals in the May PMNETwork.

Region I
Southern Ontario Chapter
Gary J. Scott

Region II
Midwest Chapter
William Dries

Southwest Ohio Chapter
Rodney J. Hiestand

Washington, DC Chapter
Jack Madsen

Region III
Los Angeles Chapter
Raymond L. Miller

Northern California Chapter
Dan McClory

1993 Seminar/Symposium

Attendees

On page 21 of the PMI ’93 Announcement you received separately, the phone number for the San Diego Sheraton Harbor Island Hotel is listed twice, once in error. The correct number is 619-692-2265. Sorry for the inconvenience.

The PMI ’93 Team