COMPETENCIES IN THE PROJECT-ORIENTED ORGANIZATION

ROLAND GAREIS (PROJEKTMANAGEMENT GROUP) 1. INTRODUCTION

In this chapter the model of the project-oriented organization (POO) is introduced. The advantages of management by projects as an organizational strategy are analyzed, the application of a new management paradigm in the POO is described, and specific organizational structures, such as expert pools, project portfolio groups and a peojwct management office, are described. A process model with processes, which are specific for the POO, is presented. For the performance of these processes, specific competencies are required by individuals, teams, and the POO overall. It is the objective of this research and chapter to differentiate between the project management process and other specific processes of the POO, to operationalize the model of the POO, and to differentiate between individual, team and organizational competencies in the POO. 2. THE MODEL OF THE PROJECT-ORIENTED ORGANIZATION

A POO can be defined as an organization that: Defines Management by Projects as an organizational strategy. Applies temporary organizations for the performance of complex processes. Manages a project portfolio of different project types. Has specific permanent organization structures to provide integrative functions. Applies a new management paradigm Has an explicit project management culture. Perceives itself as being project-oriented. The POO considers projects not only as tools to perform complex processes, but also as a strategic option for the organizational design of the company, the division, or the profit center. By applying management by projects the following organizational objectives are pursued: Organizational differentiation and decentralization of management responsibility Quality assurance by project work and holistic project definitions Goal orientation Organizational learning. For processes of different complexities, different organizations are adequate. The POO perceives projects and programs as temporary organizations for the performance of complex processes. For unique processes of medium to high complexity and short to medium duration (three months to twelve months), projects are the appropriate organization form. Projects can be defined for contracts for external clients as well as for product developments, marketing campaigns, or reengineering activities for internal clients. A program (of projects) is a temporary organization for the performance of a process of high complexity. The projects of a program are closely coupled by overall program objectives, overall strategies, and common processes and methods. A program has a time limit and is medium or long term (six months to thirty-six months) in duration. Typical programs are the development of a product family (and not of a single product), the implementation of a comprehensive information technology (IT) solution (such as SAP software), the reorganization of a group of companies in a holding structure, and large investments, such as an oil platform. The more different project types a POO holds in its project portfolio, the more differentiated it becomes and the higher its management complexity becomes. In order to support the successful performance of the single projects as well as to ensure the compliance of the project objectives with the overall strategies, specific integrative structures, such as expert pools, a project management office, and project portfolio groups, are required. Some of these permanent organizations might be virtual (Figure 1).

Management Board

Project Portfolio Group

Business Unit A
Department Department Expert Pool 1 Expert Pool 2

Business Unit B
Department Department Expert Pool 3 Expert Pool 4

Services
Department Department PM Office

Program 1

FIGURE 1: ORGANIZATION CHART OF A POO The POO is characterized by the existence of an explicit project management culture, i.e., by a set of project management-related values and norms. In the POO project management is considered as a business process, for which there exist specific procedures along with a common understanding of the project roles involved and the project management methods applied . Further, in the POO the application of a new management paradigm is required. Traditional management approaches are emphasizing detailed planning methods, focusing on the assignment of clear defined work packages to individuals, relying on contractual agreements with clients and suppliers, and using the hierarchy as a central integration instrument. Compared with this traditional management approach the central features of the new management paradigm are: Consideration of organization as competitive advantage Empowerment of employees Process orientation Teamwork in flat organizations Continuous and discontinuous organizational change Customer orientation Networking with clients and suppliers. The POO has dynamic boundaries and contexts (Figure 2). On the one hand the number and the sizes of the projects and programs are constantly changing, permanent and temporary resources are employed, and cooperation is organized in virtual teams. On the other hand varying strategic alliances are established and relationships to the different social environments of the different projects and programs are managed.

Context
Project P ro je ct-o rien te d O rg a n iza tio n Project

Project

Context
FIGURE 2: DYNAMIC BOUNDARIES OF THE POO

In order to manage the dynamics of the POO, besides activities that reflect the corporate identity, such as strategic controlling, clusters of projects such as chains of projects, a project portfolio, and networks of projects can be applied as new integrative structures. Considering the timing in which sequential projects are performed, a chain of projects results. By relating a set of projects to each other according to a specific criterion, such as the technology applied or a geographic region, a network of projects results, and by considering all projects performed by an organization, the project portfolio results. A project portfolio is defined as a set of all projects the POO holds at a given point in time and the relationships between these projects. In comparison to a progam a project portfolio is not an organization. 3. PROCESSES OF THE PROJECT-ORIENTED ORGANIZATION

The POO is characterized by specific business processes. A process model of the POO can be visualized in a spider web (Figure 3). The axes represent the specific processes of the POO. These processes are briefly described.
Assignment of Projects and Programs Organizational Design of the POO
100 80 60 40

Project Management

Personnel Management in the POC

20 0

Program Management

Networking between Projects Project Portfolio Coordination

Consulting and Auditing Projects and Programs

FIGURE 3: SPECIFIC PROCESSES OF THE POO Each process of the POO model is described in a POO questionnaire. In Table 1 an example of a question for the project management process is shown. B 4.1) Which project organization documents result from the project start-process? always=1, often=2, sometimes=3, seldom=4 or never=5 Project assignment Project organization chart Project role descriptions Project responsibility matrix Project communication structures Project related incentive systems Others (please state: .........................................) TABLE 1: EXAMPLE QUESTION OF THE PROJECT MANAGEMENT PROCESS The questionnaire of the POO process model can be applied for assessing the maturity of the POO and for benchmarking it. Project management is the core business process of the POO. The project management process starts with the formal project project assignment and ends with the project acceptance by the project owner. It consists of the subprocesses project start, project coordination, project controlling, project discontinuity management, and project close down (Figure 4). The project management process is performed in addition to the contents-related processes to achieve the project results. Examples for contents-related processes of an engineering project are engineering, procurement, logistics, and construction.

Objects of consideration in the project management process are the project objectives, the scope of work, the project schedule, and the project costs, as well as the project organization, the project culture, and the project context (project environment relationships, relationships to the company strategies, relationships to other projects, and so on).
Project Assignment

Project Start Project Controlling Management of a Project Discontinuity Project Close Down Continuous Project Coordination

Project Acceptance

FIGURE 4: PROJECT MANAGEMENT PROCESS Program management has to be performed in addition to the management of the single projects of a program. The program management methods are similar to the project management methods, i.e. there is a program work breakdown structure, a program bar chart, a program environment analysis, and so forth. The program organization has to be designed in addition to the organizations of the single projects. Specific roles in a program are program owner, program manager and program office (Figure 5).
Program Programme Owner Owner

Program Team

Program Programme Manager Manager

Program Programme Office Office

Project Y Project Y

Project 1 Project 1

Project 2 Project 2

Project X Project X

Program Organization

FIGURE 5: PROGRAM ORGANIZATION CHART The advantages of designing program organizations instead of defining a mega-project with several subprojects are as follows: A less hierarchial organization Clear structures and a clear terminology (a program manager and several project managers instead of one project manager and project managers of the sub-projects) Empowerment of the projects of the program by allowing for specific project cultures, specific relationships to environments, specific project organizations, and so on

 Differentiation between program ownership and different ownerships for the projects. Consulting and auditing of projects and programs are important instruments to ensure project and program quality. The objectives of the project portfolio coordination are: Optimizing the results of the project portfolio (and not of the single projects) Selection of projects to be started Definition of project priorities Coordination of internal and external resources Organization of learning of and between projects. The basis for the coordination of the project portfolio is a project portfolio database, which allows the development of project portfolio reports. Typical project portfolio reports are the bar chart of projects, the projects profit versus risk graph, the progress chart of projects, and so forth. Networking between projects in an ad-hoc process, where a set of coupled projects cooperate, in order to create synergies. Personnel management processes in the POO are recruitment, disposition, and development of project personnel. In the POO a project management career path includes the roles junior project manager, project manager, and senior project manager (Figure 6).

Competence

Qualification

Role

Management Knowledge Management Experience

Certified PM Executive

Head of the PM Office Program Manager Project Portfolio Group Member Senior Project Manager Project Coach

Expert PM Knowledge PM Experience

Certified Senior Project Manager

Special PM Knowledge PM Experience

Certified Project Manager

Project Manager Member of the PM Office J unior Project Manager PM Assistant Project Controller

PM Knowledge Project Experience

Certified J unior Project Manager

FIGURE 6: PROJECT MANAGEMENT CAREER PATH The organizational design of a POO is characterized by specific integrative structures such as a project management office, a project portfolio group, and expert pools and specific tools, such as project management procedures and standard project plans. 4. PROJECT MANAGEMENT COMPETENCIES IN THE PROJECT-ORIENTED ORGANIZATION

Competence can be defined as knowledge and experience for the performance of a business process. The specific competencies a POO requires relate to the performance of the previously described processes. Next the individual, team, and organizational competencies to perform the project management process will be analyzed in detail. 5. PROJECT MANAGEMENT COMPETENCIES OF INDIVIDUALS

The project management competencies required by individuals differ according to the project roles to be fulfilled. The following project roles can be performed by individuals: project owner, project manager, project management assistant, project team member, and project contributor. The specific project management functions to be performed by a project manager can be described in a role description.

From the role description (Table 2) it is obvious that the project manager requires knowledge and experience not just to apply project management methods, but also to creatively design the project management process. This ability relates to The selection of the project management methods appropriate for a given project The selection of the appropriate communication structures The facilitation of the different workshops and meetings The selection of the participants for the different workshops and meetings The decision to involve a project consultant The definition of the appropriate form for the project management documentations.

Functions in the project start process Know-how transfer from the pre-project phase into the project Development of adequate project plans Design of an adequate project organization Performance of risk management Design of project-context-relations etc. Functions in the project controlling process Determination of the project status Redefinition of project objectives Development of project progress reports etc. Functions in the project discontinuing management process Analysis of the situation and definition of ad-hoc measures Development of project scenarios Definition of strategies and further measures Communication of the project discontinuity to relevant project environments etc.

Functions in the project close-down process Coordination of the final contents work Transfer of know-how into the base organization Dissolution of project-environment relations etc.

TABLE 2: DESCRIPTION OF THE ROLE PROJECT MANAGER The project management competence of a project manager is the capability to fulfill all functions specified in the role description. Besides the project management knowledge and experience for a given project type, a project manager needs, to a certain degree, knowledge about the product and the organizations involved in the project. In international projects cultural awareness and language knowledge are prerequisites also. 6. PROJECT MANAGEMENT COMPETENCIES OF PROJECT TEAMS

In order to perform a project successfully, a project team requires competencies. The competencies of a project team can be defined as the project management competencies of the project team members plus the social knowledge and experience of the team to commonly create the big project picture, to produce synergies, to solve conflicts, and to ensure learning in the team. A project team cooperates in workshops and meetings. The application of project plans, such as a work breakdown structure, a schedule, a project environment analysis, and so forth, have to be understood as tools to support the communication in the project team. 7. PROJECT MANAGEMENT COMPETENCIES OF THE PROJECT-ORIENTED ORGANIZATION

Not just individuals, but also organizations have the capability to acquire knowledge and experience and to store it in a collective mind (Senge 1994, Weik and Roberts 1993). Willke (1998) describes organizational knowledge as hidden in organizational principles that define the way organizations work. Such organizational

principles, which define the way projects are managed, are project management procedures, project management templates, and standard project plans. Further, the organizational project management competence can be analyzed by observing the project management practices applied in specific projects. The project management documentations resulting from the project management subprocesses, the quality of project team meetings, the form of project marketing, and so on can be evaluated. Project management is subject to quality, too. The project management competence of the POO can be described and assessed with a project management competence model (Gareis and Huemann, 1998). The project management competence can be presented in the POO spider web model (Figure 7).
Assignment of Projects and Programs
100

Organizational Design of the POO Personnel Management in the POO Networking between Projects

80 60 40 20 0

Project Management Program Management

Consulting and Auditing of Projects and Programs Project Portfolio Coordination

FIGURE 7: POO SPIDER WEB The overall competence of a POO is presented by the area resulting from the connection of the competence points at the spider web axes. The competence of a POO cannot only be shown in a spider web model but also a POO maturity ratio can be calculated. The POO ratio is the weighted sum of the competencies for the performance of the specific processes. 8. DEVELOPMENT OF THE PROJECT MANAGEMENT COMPETENCE IN THE PROJECTORIENTED ORGANIZATION

Project management can be perceived as a core competence of the POO, as it creates a competitive advantage. To ensure this competitiveness, permanent further development of the project management competence is necessary. Project management competencies of organizations, teams and individuals have to be developed. The relationships between individual, team, and organizational learning in the POO are shown in Figure 8.
Organizational Learning

Individual Learning

Team

Individual
Team Learning Team Learning

Organization

Individual Learning

FIGURE 8: RELATIONSHIPS BETWEEN INDIVIDUAL, TEAM, AND ORGANIZATIONAL LEARNING IN THE POO Instruments to develop the project management competencies of individuals are (self-) assessments, trainings (classroom and on the job), and coaching combined with training. Instruments to develop the project

management competencies of teams are (self-) assessment, training and coaching, reflection, and supervision. Instruments to develop the project management competence of the POO are project management benchmarking and organizational development projects. 9. CONCLUSION

Even project management is an important business process competence, for the other specific processes of the POO have to be analyzed and further developed also. The spider web model of the POO, showing these processes, can be applied as a maturity model for the POO. 10. REFERENCES 1. Gareis, R., and Huemann, M. 1998. A Process-Oriented PM-Approach, IRNOP III: Conference of the International Research Network on Organizing by Projects, July 6-8, University of Calgary: 365 372. 2. Senge, P. 1994. The Fifth Discipline Fieldbook: Strategies and Tools for Building a Learning Organization, New York: Doubleday. 3. Weik, A., and Roberts, K. 1993. Collective Mind in Organizations Heedful Interrelating on Flight Decks. Administrative Quaterly 38: 357 381. 4. Willke, H. 1998. Systemisches Wissensmanagement (Systemic Knowledge Management), Stuttgart: Lucius & Lucius.