IAPM International Association of Project Managers

You are here:  News & Events » PM Article

Project-oriented work: How can we adapt organisational structures in order to make the best use of resources?

If a company changes its structures from a functional organisation to a projectised organisation, far-reaching organisational and also cultural change go along with it. These changes are noticeable in many areas of the company.
Working methods, hierarchical levels and careers change fundamentally in a projectised organisation. These changes are accompanied by new opportunities and possibilities, but also new responsibilities and requirements. Not only technical issues are changing, but also disciplinary conditions:
For instance, reporting structures are shifting considerably, which leads to a new and possibly a larger number of contact persons than previously. In order to make powers and responsibilities transparent for each employee, the management must exactly define beforehand what is to happen to the individual job positions after the restructuring process. The crux of the matter is therefore often to determine how existing career stages are transferred to the new system and which structures can be retained. One practical option is to define completely new job positions, remunerate them accordingly and integrate them firmly into the personnel development system.
The transition from a functional to a projectised organisation can create many opportunities. But it also involves some challenges.
The transition from a functional to a projectised organisation can create many opportunities. But it also involves some challenges.

Crucial: a working interface management

Pure project organisations are rather rare. There are pure functional organisations, but project-oriented companies are usually mixed forms or matrix organisations. Departments such as IT, accounting or HR are usually line-oriented, and alongside there is a project division with its own structures. The danger: if the transitions and interfaces are not clearly defined and the associated new positions and reporting paths are not coherently solved, confusion quickly arises among those involved and instead of the expected increase in productivity, there is a loss of efficiency. Many employees initially find it difficult to adapt to the new situation and the old structures cannot be got out of their heads so quickly. Work packages are mixed up between project and day-to-day business, communication channels are lacking and information does not reach the intended recipient in the project structure.

Solution: New hierarchies and responsibilities have to be conscientiously respected, even if it is unfamiliar at first. This requires a great degree of discipline from everyone involved and patience from management if things do not work out as expected. But also the tenacity to enforce new rules is needed. Project-related issues are discussed in project meetings, line-related issues in departmental meetings. If a team member is asked about the project status by his superior, he refers to the project manager.
If the participants deviate from this approach, the project manager or moderator must intervene and guide the course of the discussion back to the defined topics. In order to be able to do so, he must have a very good understanding of the respective work packages – i.e. the tasks and schedules defined at the beginning – and be aware of them. The new roles, authorities, competencies and responsibilities must be clearly described and defined at the beginning of the changeover so that all persons involved are aware of their competencies and responsibilities. A large part of the later success is therefore based on the clean preparation.

Establishing the project career as an alternative

For a project career to be successful, the image of the project manager with all his tasks and perspectives must be focused and sharpened. These tasks must be solved within the framework of personnel development. Questions that management and the HR department must ask themselves are: What levels of success do we need to define for a project career? How do we evaluate performance and assess potential? And what does the appropriate remuneration model look like?

Solution: A practicable basis for this is provided by preliminary training courses that are completed by employees and are particularly important when little experience in project management (PM) is available - even if an external consultant accompanies the introduction of project management processes and organisational development.
In these trainings the potentials of the employees can be assessed and assigned well, for example by setting and evaluating different levels of difficulty. Therefor, international certifications can be helpful. 
The possibilities for evaluating performance also need to be reconsidered at this point.  It is common practice to evaluate performance based on the type and rank of the projects carried out.  After completion, the project manager receives a performance evaluation and then a new project follows. For a project manager, this means that the size and importance of his project is decisive for his career path within the company.
If, for example, his project enjoys great public interest, it is usually given high priority and a lot of attention in the company. If the performance is right, the project manager can therefore climb up the career ladder quickly and take on larger tasks. Due to the fact that projects are limited in time, his individual potential can be identified quite quickly.

Check maturity level of project portfolio management

During the transition from a functional to a projectised structure, the entire project management must be analysed: According to which criteria projects are selected, prioritised, implemented and finally evaluated? Within a company there can be very different projects, sometimes competing for attention and resources. It is necessary to systematically calculate the available resources (personnel, budget, time) and measure success in order to make project-oriented work efficient and sustainable. If employees are to be deployed individually in projects, there must be a way to classify the projects and measure the potential of the employees.

Solution: A sufficiently mature project portfolio management (PPM) is essential to ensure that current and prospective projects can be professionally classified and coordinated, and that the classification of projects also allows the performance of the relevant project employees to be assessed.

Making career advantages transparent

It is important for the employees in the company to identify clear benefits from the introduction of the project organisation and also to be able to determine the attractiveness for their own career development. The new career models and development opportunities - such as the project career - must therefore be actively presented and supported within the company. Faster promotion opportunities and new career paths are attractive for many and they accept the challenges. However, not everyone likes the innovations and there can also be people who lose out in a change that involves completely new structures. Those who manage the change process must be prepared for resistance to be formed.

Solution: It is important to be responsive to skeptics or critics and to involve them before they transfer their frustration to others. Their attitude, fears and objections should be taken seriously: After all, criticism can also be justified and constructive. For complex structural changes, critical voices are thus quite useful for uncovering errors in planning. Addressing fears, taking them seriously and providing clear support are good methods of taking the staff along on the big project.


These mistakes must be avoided

If the following eight procedures are followed, the restructuring will almost certainly result in
a disaster
  • Don’t show any interest in the restructuring project: Let things run, don’t ask questions and don’t worry about budding problems.
  • Leave your employees on their own: Just hand over the project management manual or the PM guide and say "Well, just do it now!
  • Don’t include your employees in the decision-making process: Draw up a plan at management level and delegate the work packages to your employees.
  • Choose unsuitable team compositions: Put together people who don’t work well together or who don’t have enough experience for the job.
  • Don’t calculate resources properly: Schedule employees 100 % on more than one project, or schedule employees on several projects at the same time, each with a small percentage (less than 20 %).
  • Neglect budget planning: No reporting, no cost control, no budget requests.
  • Try to achieve too many things at once: Tackle too many different projects at the same time and increase the degree of complexity.
  • Make bad sponsor decisions: Choose sponsors who are not interested in the topic and the project.
Author the author: The House of PM GmbH, based in Hamburg, is specialised in services, consulting and qualification in all areas of professional project management for medium-sized and large companies. The aim of the project management experts is to successfully complete demanding projects even in critical situations and to enable their customers to achieve repeatable project success. With distinctive methodological competence, extensive project experience and an entrepreneurial attitude, they actively support their customers both in the operative project business and in the sustainable development of a professional project management system and internal resources. Their approach is characterised by their systemic understanding of organisations as functional units. The House of PM works cross-sectorally with references focusing on the IT/telecommunications, medical technology, energy industry, printing and publishing houses, mechanical engineering, public administration and trade sectors.

Keywords: Project Organisation, Project Management, Tip
IAPM Partners