By Hans J. Thamhain

Management Department, Bentley University, Waltham, USA.









Forces that Shape the Project Environment

We have seen major changes in the business environment, most pronounced over the past two decades that have shaped the competitive landscape and shifted the paradigm of project management, the way we organize, charter and lead our project teams today.

1. Shift from Linear Processes to Dynamic Systems.

Traditionally, management concepts were based predominately on linear models, typically exemplified by production lines, sequential product developments, scheduled services, and discovery-oriented R & D. Today’s more complex projects and dynamic business environment requires a much more interactive management style to deal with complex sets of interrelated, nonlinear, and often difficult-to-define processes. To be effective, project leadership has become more sophisticated, relying strongly on group interaction, resource and power sharing, individual accountability, commitment, self-direction, and control. That is, contemporary management relies to a considerable extent on member-generated performance norms and evaluations, rather than on hierarchical guidelines, policies, and procedures. While this paradigm shift is driven by changing organizational complexities, capabilities, demands, and cultures, it also leads to a radical departures from traditional management philosophy on organizational structure, motivation, leadership, and project control. As a result, traditional “hardwired” organizations and processes are replaced by more flexible and nimble networks that are usually derivatives of the conventional matrix organization. However, these networks have more permeable boundaries, more power and resource sharing, and more concurrent operational processes.

2. Shift from Efficiency toward Effectiveness

Many companies have broadened their focus from efficient execution of their operations and projects—emphasizing job skills, teamwork, communications, and resource optimization at the operational level—to include organizational effectiveness. This shift responds to the need for better integration of ongoing activities and projects into the overall enterprise, making sure that “we are doing the right thing”. As an example, companies are leveraging project management as a core competency, integrating project-oriented activities closely with other functions, such as marketing, R & D, field services, and strategic business planning. While this shift is enhancing the status and value of certain business functions within the enterprise, it raises the overall level of responsibility and accountability, and puts higher demands on previously more autonomous functions, such as R & D and product development, to perform as a full partner within the integrated enterprise system.

3. Shift from Executing Projects to Enterprise-Wide Project Management

Many companies use project management extensively today for far more than just implementing specific projects. These companies leverage the full capabilities of project management, enterprise-wide, as a core competency, achieving accelerated product developments, higher levels of innovation, better quality, and better overall resource utilization. To achieve this level of competency, project operations must be integrated with the strategic planning system and business processes across the total enterprise. Managerial focus has shifted from the mechanics of controlling projects according to established schedules and budgets to optimizing desired results across a wide spectrum of performance measures that span the total enterprise.

4. Shift from Managing Information to Fully Utilizing Information Technology

Today’s technology provides managers in any part of the enterprise with push-button access to critical information on operational status and performance. The availability and promise of technology has led to the development of an enormous variety of powerful IT-based tools and techniques, and the acquisition of these tools by managers at all levels. With the powerful promise for increasing operational effectiveness managers are eager to use these tools in support of their activities, ranging from resource estimating, to scheduling, risk analysis, and decision support.

5. Shift from Managerial Control to Self-Direction and Accountability

With increasing business complexities, advances in information technology, changing organizational cultures, and new market structures, companies look beyond traditional managerial control for effective execution of their projects, operations, and missions. Especially top-down controls, based on centralized command and communications, while critically important, are no longer sufficient for generating satisfactory results. Organizational activities are increasing project-oriented, relying on technology, innovation, cross-functional teamwork, and decision making, intricate multi-company alliances and highly complex forms of work integration. The dynamics of these environments create pressures toward member generated performance norms and work processes, and a shift toward more team ownership, empowerment, and self-control. All of this has a profound impact on the way managers must manage and lead, and analyze the work environment for effective intervention. The methods of communication, decision making, soliciting commitment, and risk sharing are constantly shifting away from a centralized, autocratic management style to a team-centered, more self-directed form of control.

A complex environment? Yes! But it is just the beginning of understanding the great challenges that managers face in our global businesses environment. It is a starting point understanding the interaction of organizational, behavioral, technical, and social variables that create the dynamics of this continuously changing landscape.





Source: American Journal of Industrial and Business Management