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Wednesday, July 19, 2006

Towards a "project managementization" of organizations

Project Management is, in my opinion, the single most important skill people willing to work in for-profit or not companies should acquire.

The corporate world is not complicated, it is complex i.e. difficult to represent graphically. Therefore, people should learn how to deal with all the departments of a company. The widely spread word to explain such a trend is "transversality".

Project Management doesn´t necessarily mean "to manage a project" but to integrate best within a specific teamworking environment supposed to deliver a defined service or product before a deadline, provided resources constraints.

Project Management is still a young discipline (although the Project Management Institute I´ve just subscribed to is everyday more and more recognized), primarily born in the construction industry, and structured in the IT spheres during the last decade.

Look at these frightening figures: "According to Maxfield, 74% [of all projects] come in over budget, 82% miss deadlines, 79% fail to meet quality or functional specifications, and 67% result in damaged team morale." (source: ComputerWorld) As I see it, projects mainly fail for political reasons or lack of resources.

You must probably be thinking "Jeremy´s fool. Why would companies switch to project structures if project management gives such crappy results?". Well, projects fail because organizations are not project management-focused.

See the chart on the right (sorry, it´s in Spanish. I live in Spain, think in Spanish,..). This is how most companies operate, through departmental and divisional structures. Marketing and Finance spend their time fighting instead of working towards improving business processes; Sales and Production departments can´t be blamed for not getting along well: when sales go up, production people work harder; when sales go down, production people need to justify increased inventories and hence a higher working capital, etc. Examples are countless!

I believe the traditional way to organize a company should die. And the quicker the better. Today, young and less young professionals want to get the big picture of the organization they work hard for. People want to interact with people that are different: different cultures (look at Microsoft, the United Nations, or INSEAD, three successful organizations. it´s the zoo there; different people, colors, backgrounds, etc.), & most of all different domains of expertise. Bring purchase, supply chain, IT, finance, marketing & sales people all together in one team; give them responsibilities, a well-defined deliverable, flexible deadline & budget, make sure someone takes leadership of the group. Monitor the advancement of the project and check regularly that a corporate mentor (a senior executive) visit them and provides relevant advice. See the results for yourself: your team will feel empowered, since all its team members will be learning from each other.

In the short-run, everything won´t be perfect, but you´ll notice the difference after a few years: less turnover, better people that their organization is a learning one (provided that executive management set up the right Knowledge Management tools eg Intranet, Virtual Experiences Exchange platform, Feedbacks, etc.).

The best way to learn about the best project management practices is certainly to benefit from IT people´s numerous insights - IT people suffer from most organization´s lack of Project Management acumen. Most of today´s best organizations in Project Management are technology-driven (Cegelec, Microsoft, HP, IBM, Business Objects, GE - to name a few. But I´d be glad if my readership could provide us with more insights about the best PM organizations). I wish companies from other industries start taking to Project Management-oriented organizational structures; one gateway to such a change could be e-Business implementation, that implies having different corporate departments working together. I wish...


  • As a project manger in the IT projects unit, I can tell you this is really hard. When rest of the departments and the company where most IT is outsourced are doing business as usual the old way, it's really hard to develop or push new stuff to the line organization. Not only that, but it's nearly impossible to manage your resources, who, in their and their superior's view, you're only borrowing once in a while from their "real" work. Project manager's work is hell with no authority over your resources, but with all the responsibility for their actions. "I never work after 3pm", "Is this project prioritized as I have other stuff to do. Have you talked with my boss?", "Lead-time with IT issues is around 3 days".
    Jeremy, your utopia probably works with young professionals, but at least where I'm working now, these guys are pretty much on 9-to-5 mentality. They don't have any deadlines and are really against anything new.
    Unsuprsingly, the Maxfield number's you cited, are pretty much standard here too.

    By Blogger Kari, at 7/20/2006 11:23:00 AM  

  • Dear Kari,

    Many thanks for your valuable, operational input. Your experience as an IT Project Manager in an established, traditional but well-performing company is extremely relevant when it comes to confronting my initial post. Indeed, your organization implements projects, hires Project Managers, but IS NOT Project Management oriented. When I mean Project Management oriented, I mean that people with different interests, skills & expertise stop working for departments and become integrated into one and only one project. You´d all share a common interest in the success of the project.

    In your case, imagine all the people telling you that you´re N.17 on their To-Do-List have you and only you as a tasks and responsibilities manager. Bonuses would be indexed on delivery upon budget, time, quality and functionalities respect of the request for proposal - so that they wouldn´t all live at 3pm.

    I perfectly understand that established companies don´t turn around their whole organization because an unlikely 23-years old petty blogger said they should. What I intend to tell you is that if I had either to manage or to set up and run a company, I would make sure people work in projects and forget about departments that divide the company´s talent resources.

    By Blogger Jeremy Fain, at 7/20/2006 11:59:00 AM  

  • Hi Jeremy,
    great post about such an important issue. Few things to be said, hoping to be able to add more later on:

    _ as I am in the consulting business, we do work according to project management orientation. We actually even give great care about it, have developped specific assets (which come from the ITIL standards), and pursue innovation towards that goal. I don't believe however that the Maxfield figures are from another planet to us, as like every consulting firm our projects come off up to 3 times short to meeting expected time or costs limits. Fact is project management requires perfect combination et coordination from the people on the customer side, which is hardly achieved. There's probably a lot to be said on why projects fail to meet expectations, probably it could be summed up that the chaos theory lies somewhere and that most projects are too complex to be able to have them all planned out.

    Theory actually I believe grants credibility for project management organizational structures for only some specific companies, for instance the work of Chandler and Woodward. The 2 researchers actually come up with numerous organizational matrices each for a specific type of organization.

    But probably the most important point, if this is what you are trying to show Jeremy, is that organizational structure may not be the only factor that can address motivation. Hence, I believe here we are with the critical factor, in this case management. I do believe that a good manager's task is to make the people who work for him stop focusing on where they stand in the organization and start focusing on their task or achievement they're here to do. In this way and with a coment on kari's opinion, probably organization is not efficient enough to push employees into meeting great achievements.

    Eventually, it's maybe all about management (which does not mean organization isn't important). I that were to be true, that's actually a great opportunity to place back human talent over artificial architectures. Just a point of vue though...

    By Anonymous Hadrien, at 7/20/2006 07:49:00 PM  

  • Thanks for your compliment about the post. Your comment is not bad too));

    Firstly, just a question you might find too basic, but could you please elaborate on ITIL standards? I hear a lot about them without ever getting clear explanations about their reach, influence and content.

    Secondly, I enjoy a lot your point about people management. I totally agree. But big corporations have a hard time coping with managerial and scalability issues. Good managers are a rare and expensive commodity. And big corporations usually quickly find themselves short of managerial talent since promotion´s often based on operational results, not ability to lead people to do their best on projects.
    Therefore, organizational structure becomes crucial, probably more than human, one-to-one, customized management.

    Hence my post about the necessary switch from rigid technostructure-based organizational charts to more flexible, adaptable to fast-changing environments projects-, talents-, and diversity-oriented structures.

    I hope I made a point you´ll feel free to challenge!

    By Blogger Jeremy Fain, at 7/21/2006 01:16:00 PM  

  • Hi Jeremy,

    I'm so sorry to have been away from this post so long, so I'm gonna try to explicit ITIL standards.

    Developped in the 80s by the British office of government commerce, and I think by 2 guys inside that organisation, it really started off in the 90s when adopted by big companies like AA, E&Y. However, the purpose was to agregate all the best practices (in terms of processes) of any given IT project to develop standards for IT management. I believe it can be compared to some sort of Six Sigma or Iso norm for the IT inside an organisation.

    So it's used by a lot of high tech firms, even if they develop around it specific practices. Very basically, it helps people inside my company for instance not to start from scratch once having to manage a new IT project. I could say a bit more but first of all my knowledge of this topic is very limited and I think these links will help out more than my lousy explanations.

    wikipedia article which is very good.

    By Anonymous Hadrien, at 8/02/2006 03:27:00 PM  

  • Looks like the first link didn't get through:

    By Anonymous Hadrien, at 8/02/2006 03:29:00 PM  

  • Many thanks Hadrien for your help regarding my past question. I´m going to carefully read all this stuff.

    By Blogger Jeremy Fain, at 8/02/2006 03:38:00 PM  

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