Implementing Project Management at a Functional Organization. Part 1.

The Phone Call

About six months ago I was contacted by a senior manager of a large company who proceeded to tell me: “Listen, we know that you have a project management course and we are interested in it … But would you be able to come in and just assess what it is that we are doing wrong with projects and maybe customize your course according to the findings?” Obviously I agreed to get together with him and we arranged for a meeting.

Study Background

It turned out that his company was in the real estate development industry with strong ties to federal, provincial and municipal governments.

The organization had recently been created through a merger of several other smaller firms. Consequently, the company has experienced a significant growth in the number and size of their projects (the largest ones hovering at around $500 million). At the time, a typical company project portfolio consisted of approximately fifty ongoing projects, twenty of which were “cross-departmental” (i.e. required the involvement of five to ten or more different departments).

As a result of the above-mentioned events the company started experiencing problems in the areas of resource planning, resource allocation and project management. For example, while the employees of the company were complaining that they were too busy to fulfill all of their project and functional duties, the senior management was concerned that a lot of projects were late and the quality of final product was subpar. Furthermore, there were certain issues with proper planning of the projects, adequate project control and performance reporting. Many of the company’s flagship megaprojects were over budget by almost 50% and some of them were close to a year late.

The bottom line expressed by one of the executives was:

“There is something horribly wrong with our projects . . . we are not entirely sure what it is and where to start since there seem to be too many problems.”

Study Methodology

I suggested that we start by interviewing the cross-section of organization’s employees starting all the way at the top of the company (i.e. C-level executives) down to department heads, project specialists (the company did not have any designated project managers) and even some outsiders, including customers and suppliers.

The idea behind this suggestion was that it would be more appropriate to collect and understand people’s issues with projects and propose solutions that address these problems directly rather than come up with an “off-the-shelf”, best-practices solution. Also we believed that there is a better chance of people accepting our solutions if you can map them directly to problems mentioned by the employees. We also concluded that an informal approach to information gathering would be more appropriate for this exercise. As a result, all of the data presented in this article was collected mainly through one-on-one interviews.

Thinktank Consulting did not initially impose any standardized questions on the interviewees, but after a certain number of meetings several key issues started emerging repeatedly and therefore the rest of participants were asked to provide their opinions on these issues.

In total, thirteen department heads, seven executives, six project leads and four external people – both customers and subcontractors – were interviewed.

Study Results

The overall results of the assessment stage are summarized in Figure 1.

Summary of Results	Percentage of Interviewees Who Mentioned This Problem
Lack of communications between the departments	98%
Lack of uniformity in project management approach across the departments	92%
Lack of accountability for cost and time overruns and poor quality	83%
Lack of feasibility analysis in project selection	79%
Projects are not prioritized properly	74%
Underestimation is an issue at our company	69%
Projects are frequently over budget or late (either underestimated or due to lack of skills)	66%

 

Figure 1

Communications

Coordination

We can see right away that an overwhelming number of people interviewed agreed that communication channels are not working properly – especially on large, strategic projects.

MEMORABLE QUOTES  “One department makes a commitment, and another has to fulfill it”, “Department A does its part on the project and then throws it over the fence to Department B” “We do not recognize the interdependency of projects” “I can’t speak for the entire organization, but it never happens in my department”

 

 

 

 

Analysis of the freeform comments from the interview participants suggests that there is a specific lack of project communications on large strategic projects especially during the initial stages when the scope and potential impacts of the project are being defined.

Commonality of the Project Management Approach

Also, an overwhelming majority of interviewees thought that there was a lack of commonality in training and methodology with respect to project management in the organization.

MEMORABLE QUOTES “Most of the templates are department-specific” “I had to use templates from my previous company” “There is a uniformity when you have to get the money, but not when running projects” “There is a lack of understanding on the role of a project manager”

 

 

 

A review of comments from the participants in the survey shows that running projects properly, and especially handover of the projects from one department to another, appears to be the key concerns of company employees.  

Project Accountability

Feasibility and Justification

Many of the people interviewed raised concerns about the feasibility of projects undertaken by the company in the first place. “Sometimes it seems that we take on projects just to prove that we can, and sometimes the projects are initiated by a simple ‘Wouldn’t it be cool if we could do this . . .’ ” mentioned one of the department directors during an interview.

MEMORABLE QUOTES “There is resistance to the fair assessment of project feasibility” “Unlikely to get $100K to conduct a feasibility study of a $100 mil project” “We are very quick to jump to solutions” “Sometimes an executive pet project will inexplicably go ahead” “When approving projects, power should not equal approval. This kills good ideas”

 

 

 

 

Budgets and Timelines

MEMORABLE QUOTES “Cost overruns are typically not viewed as too much of an issue” (Accountability) “If you don’t have a plan, it is very difficult to be accountable” (Accountability) “How can you know whether you are on time or not if we don’t document anything?” (Budgets and Timelines) “We have historical data, but unrealistic timelines are still imposed” (Estimation) “We artificially decrease/hide costs in order to get approval” (Estimation) “Sometimes we have to hide costs in contingency” (Estimation) “I can’t speak for the entire organization, but it never happens in my department”

 

 

 

Another interesting aspect was discovered during the assessment phase: the perceptions of whether the projects were on time and on budget were quite different between the senior management and the general project team members. Specifically, both department heads and executives had trouble answering the following question: “Do you feel that your projects are mostly delivered on time and on budget?” Analysis of freestyle comments, however, allowed us to understand the reasons behind this. It appears that since cost and time commitments were typically not properly recorded or tracked, it was very difficult for people not involved in the projects directly (i.e. department directors and senior executives) to be aware of their status.

We also discovered that underestimation was an issue at the company due either to direct pressure applied from above, or overly optimistic forecasts created sometimes to please the management of the company, or to obtain approval on projects that would not have been approved otherwise.

Recommendations

Guiding Principles

The following guiding principles were used for this project in general and in the process of generating the recommendations:

• The main focus of our improvement efforts were larger, strategic interdepartmental projects, since they seemed to be presenting the most problems to the company and we wanted to “go after the big fish” first rather than scatter our efforts on trying to address all of the project-related issues at once.
• The exact definition of what specifically constitutes a large, strategic interdepartmental project would be determined at a later stage of the overall initiative, but we definitely had an understanding that a $500 million endeavor involving ten departments of the company would most definitely fall in the “flagship project” category.
• Major importance will be given to simplicity and user-friendliness of the processes proposed since the concept of project management was so foreign to most of people at the company. Therefore, “dropping” a full-scale PMBOK-type project management framework on the organization would probably have scared and turned-off most of the employees.
• All proposals generated by Thinktank Consulting have to be screened, analyzed, verified and, if necessary, updated by the “focus group” of company employees with previous project management experience. This step was necessary in order to fine-tune a fairly generic set of project management processes and documents to the company’s realities.

Action Items

The following action items were given to the company based on the issues identified in the first stage:

1. Develop a simple and user-friendly project management methodology and apply it to one or several pilot projects. 
2. Develop a minimal number of project management templates and make their use mandatory on one or several pilot projects
   1. Project Charte
   2. Project Plan
   3. Status Repor
   4. Meeting Minute
   5. Change Request
   6. Lessons Learned
3. Put all potential project stakeholders (including department heads and executives) through a two-day project management workshop.
4. Introduce department-independent project managers to larger interdepartmental projects (initially to pilot project only).
5. If the pilot projects succeed, then decide to which projects the new methodology should apply.
6. In phases 2 and 3 move into program management/strategic resource planning and ultimately towards project portfolio management (see Figure 3)

Note: Although a “Business Case” document should initiate the project management methodology chain, it was decided to postpone the implementation of this step until Phase 3 – Portfolio Management implementation. This was because the organization already had a project selection procedure, albeit somewhat deficient.

Look for Part 2 of this article in an upcoming Project Times

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Jamal Moustafaev, MBA, PMP – president and founder of Thinktank Consulting, is an internationally acclaimed expert in the areas of project/portfolio management, scope definition, requirements analysis, process improvement and corporate training. Mr. Moustafaev is author of “Delivering Exceptional Project Results: A Practical Guide to Project Selection, Scoping, Estimation and Management” (released by J. Ross Publishing in September 2010). He is also the author of various project management and business analysis webinars delivered in partnership with Project Times:

•   Why and How Should You Manage Scope and Customer Expectations?
•   Are We Supposed To Negotiate On Projects?
•   Top Ten Things You (Probably) Did Not Know About Estimation

In addition to teaching a highly acclaimed “Project Management Essentials” course at British Columbia Institute of Technology, Mr. Moustafaev also offers the following corporate seminars through his company:

“Practical Portfolio Management – Selecting & Managing The Right Projects”
“Successful Hands-On Management of IT and Software Projects” 
“Successful Hands-On Management of Modern-Day Projects” 
“From Waterfall to Agile – Practical Requirements Engineering”  

For further information, please contact: Mr. Moustafaev Phone: 778-995-4396 

E-mail::[email protected]  Website: www.thinktankconsulting.ca