20 August 2015 | 8:39
Reinhard Wagner

Different stages of organisational development during projectification

The increasing number of projects (“projectification”) has great impact on organisations, they transform. This transformation can be observed through six stages, which I will explain shortly.

– Stage 0: This might be the starting point for a transformation. No projects being performed. The organisation is a typical line organisation, shaped by functional departments running the business in a “business as usual” mode.

– Stage 1: During this stage an organisation is performing some projects. Those projects are aimed at supporting the line organisations (e.g. through R&D projects) to fulfil its mission. Projects are performed out of the line functions, no specific roles are assigned yet. People coordinating the projects do this part-time. They are no experts in project management; the understanding and culture regarding project management is very limited.

– Stage 2: The organisation is now performing many projects in different areas, but projects are still the minority of the activities performed. Different organisational setting could be observed, e.g. projects performed out of the line functions like in the previous stage, as special assignments or even a first, even weak matrix may be established. Some project managers are part-time, some may have a full-time assignment as project managers. The latter are front-runners of a specific PM-role. A project-friendly culture starts to build-up.

– Stage 3: At a certain point in time an organisation is reaching the tipping point. Often this happens unconsciously. Now the majority of activities is performed in form of a project. The matrix is the normal organisational setting, but this time there is a better balance between the line and the project organisation. A steering committee may be part of the balancing, taking decisions (e.g. setting priorities and allocating the resources accordingly). There are specific PM roles, support functions such as project or project management offices [http://blog.ipma.ch/pmos-are-focussed-on-operations-and-less-on-strategy/]. Some, yet not all project managers are full-time deployed into projects, a pool of competent project managers may be the source for the top management to draw from. The project managers are specifically trained, a career path is making specific careers possible. The increasing number of projects shapes a project-oriented culture.

– Stage 4: At this stage, nearly all of the activities are performed through projects. A line organisation would be dysfunctional. Functional departments, such as R&D, support projects with know-how and resources. This organisational setting may be seen as inverse matrix, the power / priority is with the project organisation. A strong multiple-projects or portfolio management needs to coordinate all the projects and programmes. This already needs to start at stage 2 but is a key factor at this stage. Project managers are acting full-time, based on professional roles and competence models. There is a specific career path available (rather “hybrid”). Projects are what the organisation is all about. This shapes a project-friendly culture.

– Stage 5: All the other stages are concerned with the organisation itself. At this stage an organisation tries to optimize its external linkages towards clients, suppliers, and other partners with relevance in regards to projects in order to form a high-performing project network. Projects in that network need to be based on a mutually agreed (legal and) organisational framework with defined process, structures and a project-friendly culture. A project manager is rather a network manager, focussing more on forming, coordinating and also terminating a network formed for a specific project. This networking happens already from Stage 2 on, but this is something the organisation needs to start from an own solid basis.

The transformation does not happen in a linear and prescriptive way, it is rather a dynamic process. Stages as described above may overlap, even falling back to one of the previous stages may occur in an organisation (e.g. when a part of an organisation was sold during an M&A process or the business significantly changed). It is not possible to elaborate on all the aspects addressed in this single blogpost, but I will pick up some of them later.

Further reading:

Written by
Reinhard Wagner

Reinhard Wagner has been active for more than 30 years in the field of project- related leadership, in such diverse sectors as Air Defense, Automotive Engineering, and Machinery, as well as various not-for-profit organizations. As a Certified Projects Director (IPMA Level A), he has proven experience in managing projects, programmes and project portfolios in complex and dynamic contexts. He is also an IPMA Certified Programme and Portfolio Management Consultant, and as such supports senior executives in developing and improving their organizational competence in managing projects. For more than 15 years, he has been actively involved in the development of project, programme and portfolio management standards, for example as Convenor of the ISO 21500 “Guidance on Project Management” and the ISO 21503 “Guidance on Programme Management”. Reinhard Wagner is Past President of IPMA and Chairman of the Council, Honorary Chairman of GPM (the German Project Management Association), as well as Managing Director of Tiba Managementberatung GmbH.

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