Four Drivers of Project Management Growth Speed to market Complexity and uniqueness of new inventions Disturbances/expansions of the enterprise Accountability of non-routine tasks

Presentation Sections Hybrid project/functional organization Pure project organization Matrix organization Choosing an organizational form The project team Human factors and the project

Hybrid Project / Functional Organization University of Cincinnati organization chart

Advantages of Hybrid Organization Highly flexible staff use Ease of switching experts among projects in same functional division Specialist pooling in functional division Technological continuity Quicker career advancement of specialists

Disadvantages of Hybrid Organization Project not client focused Different goals between functional parent division and project PM competes with FM for role of central project responsibility Slow response to client needs Sub-optimization along parent functional division needs Weaker project team motivation than in pure project organization Not a holistic approach to project management

Pure Project Organization

Advantages of Pure Project Organization PM with full project authority Team directly responsible to PM Shorter communication lines than hybrid organization Skill pools of technical experts Higher project commitment of team Faster decision making Unity of command makes life easier for staff Organization is structurally simple and flexible Holistic approach to project management

Disadvantages of Pure Project Organization Duplication of staff among projects Stockpiling of expertise and equipment to assure critical state never reached Experts develop too much depth --- not enough breath Inconsistency in carrying out policies and procedures Projectitis: excessive attachment of team to project Team worries of “life after the project ends”

The Matrix Organization

Matrix Organization Advantages PM sole responsible for project managing Access to entire technology of firm No worry about “life after project” Rapid response to client need Consistent with policies, procedures of parent firm Company wide sharing of resources Flexible between “weak” and “strong” matrix organization

Matrix Organization Disadvantages Political infighting: PM against FM Political infighting: PM against PM Projects resist shutdown Over reliance on negotiating skills of PM No unity of command

Ch. 4.4: Mixed Organizational Systems (I) Coexistence of pure project and functional organization to form a mixed system

Ch. 4.4: Mixed Organizational Systems (II) Addition of Project staff office to form a mixed system

Choosing an Organizational Form Organizational form Project typeTechnology type FunctionalLarge capital investment In-depth MatrixIntegration of functional areas Reasonably complex Pure ProjectMany similar projects Routine or highly unique

Choosing an Organizational Form Define outcome (goals) of project Find “functional home” closest associated with key tasks Sequence and decompose key tasks into “work packages” Assign appropriate organizational units to “work packages” Consider any special project characteristics or assumptions Choose a project structure

Risk Management Sub- processes Risk management planning Risk identification Qualitative risk analysis Quantitative risk analysis Risk response planning Risk monitoring and control

Makeup of Sample Risk Management Group (RMG) for New Product Development Scientist familiar with new product Market specialist Manufacturing specialist Product safety expert Patent attorney Manager (program and/or HR) Government relations expert

Reasons for Initiating PMOs 65%: need for consistent project management 50%: avoid project delays and help with planning 40%: contain cost, improve project performance 25%: improve customer satidfaction

PMO Level of Service Offered 78% follow standard project processes 64% consulting help on projects 58% training and mentoring 50% project tracking 50% risk portfolio management 28% maintain pool of PMs

Strategic Reasons for Establishing PMOs Alignment of project goals with organizational goals Gradual assimilation of good project management practices Cultural change from functionally managed organization to project oriented organization

Why Organizations Establish PMO’s To establish and keep good project management processes To distribute project management expertise through organization To improve project success rate To reduce project lead times To consolidate project data To own an “enterprise project management” system

PMO Tasks (I) 1. Establish and enforce good project management processes 2. Assess/improve organizations project management maturity 3. Acquire enterprise project management system 4. Train and certify PMs 5. Cultivate competent PMs

PMO Tasks (II) 6. Consulting services for company PMs 7. Help PMs with administrative details 8. Risk evaluation 9. Product “fit” for organization 10. Monitor market changes and alert PMs of potentially needed scope changes 11. Review and limit organizations OVERALL project risk portfolio

PMO Tasks (III) 12. Audits and project reviews 13. Keep project management database 14. Help launch new projects 15. Recognize and reward project management excellence 16. “Home” for PMs 17. Disseminate project management knowledge

Timetable for Implementing PMO Tasks TimeframePMO tasks First few months1., 7., 16. First year2., 3., 5., 8., 9., 14., 15. Long term4., 6., 10., 11., 12., 13., 17.

How to Build a PMO Get backing and sponsorship from senior management (VP or at least FM) Pilot project in VP/fm’s area of control In second iteration, expand PMO to cover the whole organization PMO will self propagate due to it’s usefulness

Potential PMO Problems Unrealistic expectations: PMO may not save a project already in trouble PMO cannot correct upper management failures such as: Inflated project goals Insufficient project support Inadequate resource availability

Project Team Key Staff Project engineer (design / analysis) Manufacturing engineer (production) Field manager (at customer site) Contract administrator (paperwork) Project controller (cost) Support services manager (subcontracts)

: Typical Organization for Engineering Projects

How to Staff a Project Team Break down work structure into tasks Assess skills needed for each task Recruit skilled workers from functional departments Negotiate with employee AND FM to get worker for project If no local skill available  subcontract!

Team Members Who Report to PM or Deputy PM Project engineer (often the deputy PM) Senior project team members Members who require close communication with PM Members with essential, rare skills

Human Factors in Meeting Deadlines Delivering adequate – not perfectionist - work quality saves time Team members motivated by: Recognition Achievement Work itself Responsibility Advancement Chance to learn new skill

Recently Popular Project Management Styles Management By Objective (MBO) workers take responsibility for tasks Continuous Improvement Teams (CIT) Total Quality Management (TQM) Self Directed Teams (SDT)

Empowerment of Project Teams - Advantages Lets team members manipulate tasks so objectives can be met Avoids micromanagement Team members accept responsibility May result in synergistic solutions Timely feedback on performance Empowerment is a tool for PM to evaluate team performance

Pillars of Team Building Action plan: also acts as control mechanism Mutual dependency: team members hold each other accountable for reaching goals

Essential Company Support for Team Building Effective rewards Individual and team performance feedback Individual and team goal setting

Conflict Management PM encourages openness PM sets role model in conflict resolution PM harnesses energy of conflict When outside pressure too high, avoid face-to-face meetings