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 type Technology type

Functional Large capital investment

In-depth

Matrix Integration of functional areas

Reasonably complex

Pure Project Many 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 processes2. Assess/improve organizations

project management maturity3. Acquire enterprise project

management system4. Train and certify PMs5. Cultivate competent PMs

PMO Tasks (II)6. Consulting services for company PMs7. Help PMs with administrative details8. Risk evaluation9. Product “fit” for organization10. Monitor market changes and alert PMs

of potentially needed scope changes11. Review and limit organizations

OVERALL project risk portfolio

PMO Tasks (III)12. Audits and project reviews13. Keep project management database14. Help launch new projects15. Recognize and reward project

management excellence16. “Home” for PMs17. Disseminate project management

knowledge

Timetable for Implementing PMO Tasks

Timeframe PMO tasks

First few months

1., 7., 16.

First year 2., 3., 5., 8., 9., 14., 15.

Long term 4., 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