THE UNTAPPED POTENTIAL IN YOUR ORGANIZATION

by Janet Wilcox

 Organizations are seeking solutions. Solutions to deal with the pains of economic downturns, stiff competition, or scarcity of skilled workers. Solutions to respond to the potential of increasing market share, product enhancements, or new technology. Solutions that will allow them to answer these challenges in the most effective, efficient way possible and enhance their potential for growth.

 In the search for solutions, however, most organizations overlook an untapped potential they already possess. A potential solution lies within their own organization that, once recognized, developed and harnessed, will provide quantum, exponential growth. That potential lies in the organization’s projects and its project management.

 First let’s look at……

 To understand the potential of projects, a look at how they fit within a fundamental business model is first necessary.  With this clarified, the steps an organization can take to harness this potential become apparent – the solution is within.  

   The Fundamental Business Model                

Every business, from the smallest to the largest, has the same fundamental business model, as shown in Figure 1.  It provides products and/or

  services to its clients (customers) and receives money in return. [1]  

 Figure 1 Fundamental Business Model

 

 Within the organization, there are two fundamental types of activities going on: operations and projects.

  1.      Operations are the clearly defined, ongoing, repetitive activities that the organization performs to achieve its business objectives. The products of ongoing operations are essentially established and stable.  Operations can be continuously improved for effectiveness or efficiency, but changes are usually incremental.  

2.      Projects are one-time or periodic initiatives, each with a beginning and an end, undertaken by the organization to create a unique end result. The end result may be a new product or service, an event, or new process.  The end result of implementation creates a significant, transformational change in the organization’s offerings, capability or operations.  

While business activities have always included both operations and projects,  “management” (operational or general management) has only emerged as a recognized profession and discipline within the last 80 years.  Project management has only emerged within the past 50.  Almost all companies today, even the very smallest; recognize the need for operations and general management.

  However, project management is just now coming into widespread use outside  its traditional strongholds (aerospace, defence, construction, and IT).  

The slow rate of adoption reflects the fact that until recently, in most industries, projects were a minor part of a company’s activities. 

 Figure 2 Traditional Organization Split                                             

Projects	Operations
Campaigns Financial Software Payroll Systems	Payroll    Resourcing         Customer Service            Production Support

  Now, with the rapid rate of change, projects are growing in frequency, number and importance.  Even activities that used to be treated as periodic operations, like the annual budgeting cycle, or sales and marketing campaigns, are now being handled as projects. 

Figure 3 Contemporary Organization Split  

Projects	Operations
Merger      Customer Programs           Data Warehousing                  Strategic Planning                         Acquissions                                 E-commerce	Payroll Resourcing Production Support

 As projects in an organization proliferate, it becomes clear that effective management is essential to ensure success on a consistent basis.  General, or operations management, is not enough.  Projects need project management. Consequently, organizations now recognize the need for project management capabilities in addition to their other competencies.  Their challenge is how to achieve that capability and use it to its full potential?

Establishing Capability in an Organization     

Performance, or organizational capability, is established through three mechanisms:

1.      Vision

The organization sets up an ideal, or vision, of how it wants to operate and the results it wants to achieve.  It determines its objectives and sets its strategic direction. 

2.      Functions
The organization creates structures (departments, roles, positions, physical spaces) that are devoted to achieving specific functions (aspects of the vision or strategy).

3.      Processes
The organization creates processes or systems (defined steps or tasks carried out in specified orders) to carry out the function.  

Figure 4 Capability Mechanisms  

For example, a company has a corporate vision and strategy that includes the definition of its clients, market niche, products and services, sales channels, and so on.  It then organizes itself into structures and functions  – departments, positions and roles – each with defined accountabilities to perform portions of the vision.  Those departments and individuals then carry out defined processes or tasks to execute their responsibilities and produce the desired end results.  The sum total of the end results should add up to achievement of the overall corporate strategy.  

Installing Project Management Capability     

Creating project management capability within the organization follows the same pattern.  The organization needs to implement project management on at least two, and possibly three, levels:  

Figure 5 Capability Mechanisms for  Project Management  

1.      As part of its corporate vision or strategy.

2.      If warranted, as a specific corporate function in the form of a department or person accountable for the adoption and use of project management throughout the organization.

3.      As a set of organizational processes and practices.

1.      Corporate Vision for Project Management

The key to success in adopting project management within the organization is corporate awareness, support, and vision.

 The organization’s management must be aware of projects as a distinct form of corporate activity, requiring separate management skills for everyone involved.  Project activities are not limited only to the project mangers and teams involved. The organization mangers who select, define and ultimately control both individual projects and the overall project portfolio have by far the greatest influence on project success.  This success is influenced directly, in their project-related decisions and actions and indirectly, in their support for project management by their staff.   

At the vision level, the organization’s managers need to:

§         Understand the importance of projects in their organization.

§         Understand project management and its benefits.

§         Identify the extent to which they need or want to adopt project management processes and practices within the organization.

§         Determine what structures, if any, are necessary to support the project management function; define the mission, scope and implementation plan for those structures.

§         Determine what project management processes to implement and define a plan for doing so.

§         Assess what knowledge, skills, techniques, and tools the organization needs to carry out the project management processes.

§         Understand their roles in projects and in the adoption of project management, and be willing to carry out their part to make projects, and project management, successful.  

2.      PM Functional Area                                  

Some organizations – but not all  – - need to set up a specialized function to lead and oversee the implementation of project management capability.  (This function is often called the Project Management Office, or PMO.)  Setting up a PMO is a project in itself, requiring a PMO strategy, organization plan, and the development and implementation of its own internal processes.     

Because PMOs are a relatively new organizational function, they require more management planning and support than well-understood operational functions like finance, or HR.  Few organizations have the required skills and experience to implement this function on their own.

3.      PM Processes and Practices

Project management processes and practices exist on two levels: 

§         For managing individual projects.  These processes affect everyone involved in the defining, planning, executing, and monitoring individual projects, from senior management and project sponsors to individual team members.