Project Management 101: Organizational Structure

The power and influence of a project manager is different depending on the organizational structure of the company. Based upon the organizational structure the characteristics of the project manager’s authority, role, budget management, resource availability, and staff will vary. Organizational structures range from functional to matrix to projectized.

A functional structure follows the traditional company structure. Employees report to a single supervisor and are grouped by specific functions into departments i.e. public affairs, information technology, marketing, accounting. Project work within a department occurs independently of other departments. Project managers have little influence and are primarily responsible for coordinating project efforts through functional managers. Project resources, budget, and staff are provided at the discretion of functional managers and staff provided often assist with projects as supplemental tasks while maintaining functional area primary responsibility. The functional manager is at the top of the hierarchy in the functional organizational structure.

A projectized structure is at the other extreme of organizational structures. While employees within the company may still be grouped into departments, the employees may have primary responsibilities of providing support services to projects or report directly to the project manager. Project teams are often colocated (often in the same department) or virtual collaboration techniques are frequently used to maximize efficiency of project work. The project manager has significant authority and independence over project resources, budget, and staff. The project manager is at the top of the hierarchy in the projectized organizational structure.

A matrix structure combines properties of both functional and projectized structures and can be categorized as weak, balanced or strong based on how closely the structure aligns with a functional or projectized structure. Influence and power over project resources, budget, and staff vary depending on the type of matrix organizational structure. A weak matrix is more similar to a functional structure, while a strong matrix is more similar to a projectized structure. A balanced matrix is when the project manager and functional manager share equal or near equal influence on the project.

Organizations may have one type or a mix of organizational structures. One organizational structure may make sense for one department, while a different one may make sense for another department. Understanding the type of organizational structure dictating a project will allow the project manager and project team to better coordinate project efforts. If additional resources are needed on a project, will the request need to be approved by a functional manager or does the project manager have the authority to obtain the resources? In a functional structure, the functional manager would have the authority while a project manager would not. In a projectized structure, the project manager would have the authority while the functional manager would not necessarily need to be consulted. Knowing the format of the organizational structure will allow the project manager and project team to take full advantage of project opportunities or be aware of project drawbacks.

Disclaimer: The views and opinions expressed are those of the blogger and are not necessarily those of the Federal Reserve Bank of Dallas or the Federal Reserve System.

Project Management 101: The Project Manager

More and more work is project based in organizations leading to more and more demand for project managers. What is a project manager and what is the role of a project manager? As defined by the Project Management Body of Knowledge (PMBOK) standard published by the Project Management Institute (PMI), a project manager is the person assigned by the performing organization to lead the team that is responsible for achieving the project objectives. A project manager can be assigned to be over only one project or several different projects and try to lead several teams to accomplish the objectives of the different projects. To effectively accomplish project objectives, project managers must possess several competencies: knowledge, performance, and personal.

Knowledge of project management methodologies and tools. Project management knowledge allows the project manager to know which and what methods or tools best facilitate achieving the objective of a project. As an example, the PMBOK outlines ten different knowledge areas with 47 different processes that fit into five different process groups. These processes are guidelines to standard projects but may not necessarily be used in every project. A project manager’s knowledge determines the tools and methods available for application to a project.

Performance is the project manager’s outcome from applying his or her project management knowledge. What is the consequence of the application of the project manager’s knowledge? Did the project successfully achieve its objectives as a result? Or did the project overrun its budget or cost? How effective was the project manager at working with the project team? A project manager needs to be equipped with the right knowledge and personal competencies to result in strong performance.

Personal or emotional and social intelligence is key to a project manager’s success. A project manager work with many people including the project team and other stakeholders. Effective guidance and interaction with those associated with the project by the project manager directly impacts project success. Some of the key skills of project managers are communication, leadership, decision making, political and cultural awareness, negotiation, conflict management, team building, influencing, motivation, coaching and trust building.

A project manager can best achieve project objectives by building knowledge and personal competencies which will result in sound or even outstanding performance. Even equipped with all the knowledge and personal skills, a project manager will still sometimes experience negative performance. Sometimes project failure is unavoidable (the organization changes its strategic direction, project resources become unavailable, the project objective is no longer relevant to the current course of business). Building competencies will improve the likelihood of accomplishing project objectives leading to increased success of the project manager and organization.

Disclaimer: The views and opinions expressed are those of the blogger and are not necessarily those of the Federal Reserve Bank of Dallas or the Federal Reserve System.

Project Management 101: The Project Management Office (PMO)

The work landscape is changing. Significant percentages of work within organizations are shifting from operational work to project based efforts. To effectively manage the changing work scope, many organizations have established project management offices or are considering establishing project management offices. Sounds great, but what exactly is a project management office?

As defined by the Project Management Institute (PMI), a project management office is a management structure that standardizes the project-related governance processes andfacilitates the sharing of resources, methodologies, tools, and techniques. PMOs can perform a range of functions for an organization from directly managing projects to providing support in the form of best practices and templates. PMOs can be categorized in three broad categories based on the amount of control and influence held by the PMO within the organization.

• Directive: High level of control and influence held by the PMO. The PMO has direct oversight over projects and manages projects directly

• Controlling: Moderate level of control and influence held by the PMO. The PMO provides general support to the organization’s projects and requires compliance with standard methodologies or governance dictated by the PMO i.e. specific templates, reporting requirements, identified tools

• Supportive: Low level of control and influence held by the PMO. The PMO offers consultative services in the form of best practices, training, templates, lessons learned, and project management information

The control and influence of the PMO varies across a broad spectrum based on the needs of the organization from the authority to make key decisions i.e. terminate or fund projects and management of project resource allocation to simply providing a group to provide information on project management and templates. An organization may even have multiple PMOs serving the needs of various departments or different functions i.e. one office’s role may be to provide training while another office’s may be to formally manage projects.

PMOs can provide support to project managers in various ways i.e. mentoring, training, monitoring compliance, managing policies, developing templates, coordinating communication across projects, managing shared resources across projects, identifying best practices, or maintaining project records. PMOs and project managers serve different roles related to projects. PMOs optimize resource allocation across all projects while project managers optimize assigned resources to meet the needs of their projects. PMOs manage enterprise level project structure including methodology, templates, standards, metrics, interdependencies, while project managers manage individual project constraints. PMOs are concerned with program or portfolio scope changes focusing on the achievement of organizational objectives, while project managers focus on achieving the objectives of their projects.

If an organization desires increased standardization, central oversight, or project management knowledge, then the organization may benefit from establishing a PMO. Organizations should be clear in communicating the purpose and function of any PMO established to ensure that the scope of work performed by the PMO is understood. A PMO’s customers are the organization and its constituents. Customers are much more likely to seek or follow a PMO if the role of that PMO is clearly established.

Disclaimer: The views and opinions expressed are those of the blogger and are not necessarily those of the Federal Reserve Bank of Dallas or the Federal Reserve System.