Is a functional hierarchy fit for modern day businesses?

 

The functional hierarchy is not the only way to run a business.

The functional hierarchy is not the only way to run a business.

If what people do counts more than the function or department they belong to and if, for reasons of efficiency, you want to use people to best effect anywhere in your organisation, what is the role of the functions? You know that no change, which is significant to a whole business, can be made within a single function in an organisation. You generally require people from a number of areas contributing to the processes, activities and projects you are undertaking.

In the traditional hierarchy, each head of function decides not only the strategic direction of their function, but also what each and every one of his/her  employees will do and how it will be done. The danger, if functions are too dominant, is that they will drive the business as they see fit from their own perspective. This may not be in line with the drivers that the organisation’s leadership wants to effect. The outcome is that the organisation becomes out of balance.

For example, efficiency is often seen as a good goal. So is responsiveness to customer needs. However, the latter may require you to carry excess capacity in order to meet customer needs at short notice. If one function is driving ‘efficiency’ up by reducing capacity while another is creating a proposition around responsiveness there is likely to be a mismatch and dissatisfied customers.

The projects approach, like the trend towards cross-business processes, aligns all the required skills and capabilities around the attainment of a business objective. In the case of a process, the objective is better operations. In the case of a project, the objective is change for the better. Thus, the functions are not leaders in driving the business, but rather suppliers of people and expertise to projects and processes. The accountability of a head of function is to ensure that the right people are available in the right numbers to service the business needs. They will be accountable for pay, employee satisfaction and personal development. Other key roles will start to become apparent. There will need to be those, expert at particular disciplines, who will create strategy, develop and maintain technical architecture, manage projects, or manage people. However, they will not do this just in the context of a single function, but rather in the context of the complete organisation, working wherever needed across functional boundaries to achieve the business objectives . . . . and that is where project portfolio management (or what Project Workout calls “business programmes”) comes in.

 For more on resource management see The Project Workout chapter 16.

Getting (and holding onto) your resources

The University of Southern California analysed 165 teams in a number of successful organisations to assess the effectiveness of team-work. Two reasons for teams failing to deliver were found:

●  Project objectives were unclear.

●  The right people were not working on the project at the right time.

In looking for solutions to these two issues, they found that using a ‘projects approach’ gave significant benefits in clarifying objectives (which is just as well or it would conflict with the message in the Project Workout!). On the question  of resources, they found  that having  visibility  of available resources and obtaining commitment for the required resources was key. In other words, if you haven’t got the right people at the right time (numbers and skills) you can’t expect to complete your project. It’s all rather obvious, isn’t it?

You need ALL your resources to succeed.

You need ALL your resources to succeed.

As I suspect many of you know, obtaining resources and holding on to them can be very problematic, especially in functionally oriented organisations, where the balance of power  is  firmly held  by line  management. In  these circumstances, resources are often committed to projects on the basis of good intention, rather than on good information. Consequently, they can be withdrawn by the owning department, at whim,  if it believes that its own need is greater than that of the project. The result is that resource and skill shortages do not become apparent until they are a problem.

An effective method of resource allocation and commitment is needed, therefore, which meets three conditions:

  • Condition 1 – you have a clear view of how resources are being consumed on a project by project basis.
  • Condition 2 – you have visibility of the resources available, or soon to be available, within the forecasting horizon of your organisation.
  • Condition 3 – commitment of resources should be based on clear information and forms the basis of an ‘agreement’ between the departments providing the resources and the projects consuming the resource.

Meeting these conditions will enable you to anticipate potential resource conflicts before they become a problem. How do you do that? Well, it all relies on how the governance for your organsation is designed, the project manager cannot normally solve this one.  I’ll cover this in later blogs, but in the meantime, you can find out more about resourcing in Chapter 16 of the Project Workout.

Project management excellence is not enough

Beware of doing too many projects, even if they do fit your strategy and have a good business case.

Beware of doing too many projects, even if they do fit your strategy and have a good business case.

The opening plenary sessions of the 2013 Gartner PPM and IT Summit in London, set the tone for a mind-set shift in how Gartner looks at “IT management”.  To date they have focussed in on “IT” and the “CIO”, and, in my view, perpetuating the gap between what they term “IT” and the “Business” . This year, to my delight, they were starting to talk about “the business” and IT’s part in it. It’s a brave thing to do, but the right thing to do. Most organisations still have their IT split off as separate organisational units ,with a separate strategy and loads of money, which tries to work out what “the business” wants and then all too often fails to meet those expectations. What is guaranteed though, is if you give an IT department money, they will spend it all, even if the business need is unclear. . . . that’s the “business’” fault!

Mike Langley from PMI was a key note speaker and gave his view on the all important question of “how do we ensure our (IT) projects fit our strategy?”  Notice I put “IT” in brackets – the department is irrelevant as we want all our projects to align with strategy . . . don’t we?

Mike based his talk on PMI’s recent “Pulse of the profession” survey.

We are all familiar with “strategy” and “execution” (sorry for using the “e” word, but when at an American conference, you can’t get away from it!).  The story is that the business leaders set the strategy and then the “business” implements it. If it goes wrong, it’s usually the fault of the business and their dreadful requirements and poor implementation!  What new research for Harvard Business Review is now talking about is that implementation is part of strategy and we should not separate them. (look out McKinsey and Bain!.) After all, if your strategy doesn’t include how to implement itself, then it’s a poor strategy.  The new buzz words for making this happen is “portfolio management”. This is a discipline of making sure that the programmes, projects and other activities that a business decides to do are the rights ones in terms of strategic direction, fit and balance in terms of risk and skills use. It’s all about selecting the right projects.

Mike says his research shows that organisations which are good at portfolio management are more agile, and have better project outcomes. Portfolio management is integral to how the top level leaders want to manage their business; it’s an integral part of business planning. Traditional business planning adds up costs of departmental budgets, checks against revenue and makes sure there is “interlock” if different departments need to work together.  Usually this is done a year or so in advance and is therefore totally pointless for organisations in fast moving environments. It is however a neat and simplistic way to blame people when things go wrong or costs to much. Hence, getting portfolio management working right is as much to do with mind-set as having the processes, systems and operating model.

Getting this right, means organisations can continuously tune their plans, not be tied to outdated annual budgets and use their people and money where the benefit is most attractive.  The money will follow the business need, not the department doing the work. Now that is what I call true organisational agility and if you have read the Project Workout, it will be very familiar to you.

This isn’t new as a concept, but it is something many organisations struggle with.  Have a look at this article: Excellence is not enough from the Project Workout “articles” web page.

Whose success is it?

In my “enemies within” blog, we looked at how management get the project performance they deserve. In that blog we explored the important role of the programme and project sponsor in making sure that an organisation’s programmes and projects succeed. But what does “success” mean? Success is too often interpreted through the differing eyes of stakeholders.

Successful project management ensures the delivery of a specified scope, on time and to budget (PMI’s triple constraint). It is related to how efficiently a project is managed. This should be assessed during the project closure review, documented in a project closure report and measured by timeliness of delivery milestones, adherence to budgets and quality. This is commonly associated with the role of the project manager.

A successful project realises the business benefits it was set up to achieve as stated in a business case. It is related to the effectiveness of the project in meeting the objectives set. The post implementation review (post-project review) assesses this. Measures of success here must be indicative of the business objectives being achieved. This review therefore has to happen some time after the output of the project has been put into use. It is associated with the role of the project sponsor.

A successful organisation drives towards its strategic objectives while fulfilling expectations of shareholders, managers, employees and other stakeholders. Measures for this are at a corporate level and should be financial and non-financial, such as a balanced score card. This is associated with the role of the chief executive.

A project which has been successfully ‘project managed’, however, may actually deliver little of value to the organisation. Further, a ‘successful project’ may not further the strategic objectives of the organisation, as its objectives may be out of alignment organisations seeking to optimise their total portfolio of projects through the effective combination of project management, sponsorship and portfolio management. A failing company can be full of ‘successful project management’ and ‘successful projects’ all driving in different directions.

The PMI’s recent report, Pulse of the Profession 2013, has actually picked up the above themes, so may this will help senior business leaders realise the potential that effective and efficient project management has to drive their organisations.

Gartner goes one step further and state that organisations which grasp this first will have a enhanced competitive advantage over the others.

Whatever you do must help you move towards your strategic objective. Otherwise there's no point.

Whatever you do must help you move towards your strategic objective. Otherwise there’s no point.

References:

Enemies within – why it doesn’t work

Far too many projects fail.

Far too many projects fail.

Project management, in the modern sense, has been with us a long time now. Some people have spent most, if not all their careers engaged in it in one form or another. Research and anecdotal evidence, however, seems to indicate that we still don’t “get it”. Reports continue to be written on “causes of project failure”. Eminent committees are set up to “get to the root of the problem”, international and national standards are created and yet:

  • we still see failure.
  • we still see organisations which ignore the benefits.

Why is this? If I could answer that, then I would be able to charge massive consulting fees! The question is rather like that posed in “Hitchhikers guide to the galaxy” asking, “What is the meaning of life?”  As we all know, the answer is “42” – which doesn’t help us one jot. If I ever came across anyone who knew the solution to stopping “project failure”, I would be very skeptical.

So why can’t people grasp the significance and advantages of business-led project management? We have:

  • lots of good books – like the Project Workout!
  • National and international standards such as BS6079 and ISO21500
  • Leaned societies, like the APM and PMI
  • Conferences galore

Actually, when the Project Workout came out in 1997 it was probably the first to put project management in a business context; earlier books were focused on project management techniques.

Cover all four basesBack to the topic! Having good methods and process supported by good tools and systems with clear accountabilities is necessary but not enough. The critical difference comes from an organisation’s culture; how they behave and their values. Give me the right culture and mediocre process over poor culture and brilliant process, any day. Organisations where project management “doesn’t work”, are likely to have a culture which actively prevents it from working. For example, for project management to be effective, we need more than just good project managers; for example:

  • project sponsorship is vital if the projects are to be linked to strategy
  • portfolio management (called business programme management in the Project Workout) is necessary to balance risk and choose those projects which will get you towards your strategic intent faster
  • finance systems, which enable project sponsors, managers and teams to see, their operational figures “live”
  • resource management so you can take account of constraints in choosing and implementing your projects.

Hunter Thompson, in 1970, said “In a democracy, people usually get the kind of government they deserve and they deserve what they get.” In this he blames the people in a democracy. Organisations, however are not democracies and so I would turn that quotation on its head:

Senior teams get the project management performance they deserve“.

The CEO sets the culture and “the way they want to run their business” and the following list indicates where the culture and values promote failure, rather than success. Running a project is difficult enough, but we often make it more arduous than it need be by creating problems for ourselves. Here are a few examples:

  1. Reorganising – either the company or a part of it. Tinkering with your structure is usually NOT the solution to your problems, it just confuses people. If you are a senior executive, however, reorganising is a great way to hide non-delivery!
  2. Functional thinking – not taking the helicopter, the organisation-wide view. This often happens when executives’ or individuals’ bonuses are based on targets which are at odds with the organisation’s needs, e.g. sales bonus rewarded on revenue, regardless of profit or contribution.
  3. Having too many rules – the more rules you have, the more sinners you create and the less happy your people become. Have you ever met a happy bureaucrat?
  4. Disappearing and changing sponsors – without a sponsor there should be no project. Continual changing of the ‘driver’ will cause you to lose focus and forget WHY you are undertaking the project. Consider terminating such a project to see who really wants it!
  5. Ignoring the risks – risks don’t go away, so acknowledge them and manage them. If I said that a certain aeroplane is likely to crash, would you fly on it? And yet, every day executives approve projects when a simple risk analysis shows they are highly likely to fail.
  6. Dash in and get on with it! – if a project is that important, you haven’t the time NOT to plan your way ahead. High activity levels do not necessarily mean action or progress.
  7. Analysis paralysis – you need to investigate, but only enough to gain the confidence to move on. This is the opposite to dash in and ignore the risks. It is also a ploy used to delay projects: ‘. . . I haven’t quite enough information to make a decision, just do some more study work.’
  8. Untested assumptions – all assumptions are risks; treat them as such.
  9. Forgetting what the project is for – if this happens, terminate the project. If it is that useful, someone will scream and remember why it is being done.
  10. Executive’s ‘pet projects’ – have no exceptions. If an executive’s idea is really so good, it should stand up to the scrutiny that all the others go through. He or she may have a helicopter view, but might also have their head in the clouds.

I’m sure you can add to that list, so please do, by adding a comment. Over the next few months, I’ll investigate a number of the above symptoms.

In the meantime, you can find out more about these from The Project Workout (4th edition):

  • lessons on what works: Chapter 2
  • enemies within – page 41
  • sponsorship: Chapter 4
  • portfolio management: Chapters 14 and 15
  • resource management: Chapter 16
  • finances: Chapter 17

More on meetings

Are your meetings a bit like this?

Are your meetings a bit like this?

I did a blog on meetings last year, called I hate (some) meetings and one of the comments asked for some advice on conducting meetings. I suppose meetings are so common place that few people give any thought to making them run effectively. As a consequence, we find far too many meetings are an inedible waste of time. So, here we is some advice to take us back to the basics.

Firstly, do not hold a meeting at all if there is a better way of achieving the objective. The time taken during the meeting should typically represent only 10% to 20% of the total time needed to prepare for and follow up the meeting; use your time appropriately.

Before the meeting, the person calling the meeting should:

  • fix the objective, venue, date, time and attendance well in advance; keep numbers to a minimum
  • ensure all required parties are invited and have authority/knowledge to take decisions and/or make a valid contribution
  • set accountability and time limits for each agenda item, taking into account the participants’ different interest levels for each item
  • send out agenda and written submissions in time to allow participants to prepare.
    Those invited should accept the invitation, decline or provide a substitute attendee, as appropriate.

At the meeting:
The Chair should:

  • confirm who the note taker is
  • confirm the objective of the meeting
  • start and finish the meeting on time: censure late arrivals.
  • stick to the agenda and timetable.
  • ensure there is an agreed approach for undertaking each agenda item.
  • keep the meeting focused.
  • ensure full, participative discussion takes place.
  • guillotine “knotty” issues for resolution outside the meeting.
  • summarise each agenda item at the end and ensure agreements and actions are recorded .
  • agree and fix date for next meeting, if needed.
  • seek meeting participants’ feedback on the effectiveness of the meeting.

The Note taker should:

  •   act as the Chair’s right hand person.
  •   ensure all decisions and agreements are noted.
  •   take brief, relevant, action oriented notes.

Meeting participants should:

  • keep to the point and be brief.
  • listen to others and should not hold private meetings.
  • be constructive, adopting a “can do” approach
  • agree realistic plans/actions.
  • make a note of their own actions (including recipient and date).

After the meeting:
The Chair should:

  • review the effectiveness of the meeting and note improvement points for the next meeting.

The Note taker should:

  • publish the notes or minutes to the participants and those who need them within 1 day. What is the point of “old minutes”, they are no good to anyone. It takes the same time to do them straight away as to do them a month later – it’s just a matter of you organizing yourself.

Participants should:

  • assess their own effectiveness at the meeting and note areas for improvement; make suggestions to the Chair if appropriate.
  • read the minutes and address all actions and note those actions where they are the “recipient”.

HINTS
If you use a collaboration tool such as SharePoint or Livelink, use a task list to record the meeting’s actions. In this way, no actions are lost and those accountable for each action can readily find them.

Place “Review of Previous Minutes” towards the end of the meeting agenda, rather than at the beginning. This will encourage the meeting to go forward rather than starting by dwelling on what happened last time. If important, many of these items will be dealt with in the main agenda items.

If the notes are not for a formal meeting then consider the use of hand-written notes or as a photocopied page in your work book:

  •  record actions, in hand-writing at the meeting,
  • photocopy the sheet(s) just before the end of the meeting,
  • distribute to participants before they leave.
  • scan and file the handwritten note if you need a record.

. . . and make sure you all behave well at the meeting:

  • Start on time
  • Switch off or silence mobile devices
  • Keep to the agenda – Stick to the point
  • No private meetings
  • No interruptions or walk-outs
  • Be constructive
  • Speak out during the meeting – not afterwards
  • Be polite
  • LISTEN!
  • Agree conclusions and actions
  • FINISH ON TIME

Be a nut, be a leader!

Leadership

A leaders on his or her own is useless. There must be followers and the “first follower” is the most important, if change is to happen.

Do you think leadership is glorious? Is change totally dependent on the
leader? Do you think if a person looks ridiculous, they aren’t a leader?
Have a look at this video from Derek Sivers, I think you’ll enjoy it . . . and you might change your views on leadership:

See the Dancing Guy video.

So what’s the bottom line?

  1. If you are a version of the shirtless dancing guy, all alone, remember the importance of nurturing your first few followers as equals, making everything clearly about the movement, not you.
  2. Be public. Be easy to follow!
  3. But the biggest lesson here – did you catch it? – Leadership is over-glorified
  4. It started with the shirtless nut, and he’ll get all the credit, but it was the first follower who transformed a lone nut into a leader.
  5. There is no movement without the first follower.

We’re told we all need to be leaders, but that would be really ineffective. The best way to make a movement, if you really care, is to courageously follow and show others how to follow. So, when you find a lone nut doing something great . . . .

Have the guts to be the first person to stand up and join in.

Source: Derek Sivers; www.sivers.org

I thought you were doing that!

If you haven't got accountability right, you could look pretty stupid.

If you haven’t got accountability right, you could look pretty stupid.

Whenever I am called into a conversation on who’s accountable for this or responsible for that, things soon get out of hand as everyone starts to argue what “RACI” means and forgets about why they are there. By the way, it should be “ARCI”, but that doesn’t sound very nice.

Putting that aside, let’s look at this from a different angle, which looks at mind-set and behaviour. I came across this approach from a New Jersey company called London Peret Roche.

Accountable: what a person is accountable for; it includes WHO they are accountable to. If they aren’t accountable to anyone, they won’t be held to account and no-one will be counting on them.

Responsible: As a “grown-up”, I act responsibly. If I see a banana skin on the floor, I pick it up and put it in the bin, so no-one slips and breaks their neck. I wasn’t “accountable” for the banana skin; I merely acted responsibly i.e. as if I was the cause.

We all need to work together in programme and project teams and often are “counting on each other” to deliver or do certain things. If I spot something wrong in someone else’s area, I shouldn’t just ignore it, just because I’m not accountable. I should let the “accountable person” know and even offer to help them solve it, if I have the knowledge and skills needed. In programme and project teams we all succeed or fail together.

So let’s look at this in the context of a programme or project and see how this works.

The person who is accountable is not necessarily the person who does the work, but the one who sees that it is done. This is useful in planning projects. You should be familiar with the accountabilities of the project sponsor and project manager. The project manager is accountable to the project sponsor for managing the work on a day-to-day basis, ensuring the deliverables are in place at the required time, quality and cost. He or she cannot do it all, or in many cases manage it all. We all should also know how a project should deconstructed into life cycle stages. This decomposition can be followed through with major packages of work being made the accountability of a particular, named, team manager. These work packages may be divided into smaller work packages and ultimately into individual activities and tasks. This deconstruction is called a work breakdown structure. It is fundamental to good governance and planning and also forms the basis of reporting and escalations. So you see, accountability starts at the top and trckles down. If you aren’t clear on accountability, you have no governance in place.

In practice, single point accountability means every task, activity and work package at any level in the work breakdown structure has a person named as accountable for it. This has four advantages:
– It is clear what is expected of each person.
– Overlaps should be eliminated as no deliverable can be created within two different work packages.
– If a gap in accountability appears (due to loss of a team member, for example or a plain error), the next person up the tree is accountable to fix it.
– If scope, cost or time proves to be inadequate to create the deliverables, it is clear who is accountable for raising these issues.

In practice, accountability is shown in the way that project plans (bar charts) are designed. The examples given in the planning chapter (21) in the Project Workout, clearly show accountability.

In programmes and projects it is essential that accountabilities are clearly stated and are unambiguous so everyone knows who is called to account and who they are accountable to. Similarly, team commitment should be fostered, which promotes responsible and open behaviour by all team members. Knowing who is accountable is not about placing blame (blame games seldom achieve anything but angst), it should be about clarity over who is doing what and knowing who to talk to.

For more on tis see The Project Workout, Chapter 18, page 286.

Business change through effective sponsorship

Is leading from the front always right?

All organisations have to change at some time, some more frequently than others. Something, somewhere always needs to be created or improved. Many leading organisations are now directing and managing change by using business-led, programme and project management techniques. As organisations have become more integrated through the use of complex systems and processes, the effectiveness of managing change through the traditional functional hierarchy has diminished. Programmes and projects, in the modern sense, are now strategic management tools, ideally suited to the complex organisations of today. Business leaders ignore the newly reborn discipline of enterprise-wide programme and project management at their peril. It is no longer the preserve of specialists in the engineering or IT sectors, but something every director and manager should have in their ‘tool box’. Well directed and managed programmes and projects enable an organisation to react and adapt speedily to meet the challenges of the competitive environment, ensuring the organisation drives towards attainable and visible corporate goals. Effective business-led programme and project management will increase the likelihood of business success by ensuring visibility, accountability and control over business change activities. In particular by:

  • linking business needs directly to visible actions plans;
  • enabling you to manage across every department in your organisation;
  • ensuring accountability can be assigned, safe in the knowledge any gaps are covered;
  • providing a flexible and responsive method to respond to changing needs;
  • focusing on priorities;
  • enabling you to track progress toward your business objectives.

It is not just the “project geeks” saying this now, but also strategy consultants, like McKinsey & Co. All senior executives should be leaders of change within the organisation. For some this may be a new experience. They will be in the position of advocating a new order, acting in the interest of the wider company needs rather than those of the department or line director they serve. For the first time, they may be operating outside their own departmental or functional structure. They will have to work with people they don’t have direct authority over and this may require all their influencing and leadership skills if they are to achieve their aims.

To summarise, the sponsor is the business advocate accountable for directing a programme or project to ensure the business objectives are met and benefits realised. In simple terms the sponsor role can be referred, exactly as that:

  • Programme sponsor
  • Project sponsor.

The UK public sector calls the roles “Project Executive”, for a project and “Senior Responsible Owner” for a programme. These are derived from the MSP and PRINCE2 methodologies respectively.

If I am a programme or project manager, what can I expect of my sponsor?  And what can I do if he or she doesn’t meet those expectations? You should expect your sponsor to:

  • Take an interest – their interest! It’s their programme or project!
  • Communicate their vision;
  • Be clear on what outcomes they need;
  • Agree the governance;
  • Keep you informed of the business context;
  • Challenge you;
  • Be realistic;
  • Make decisions and give you direction; and
  • Accept that all risks are their risks!

If you don’t get what you need, try acting as if they are the perfect sponsor:

Remember it’s “their project”, not yours;

  • Make your “personal contract” with them;
  • Assume they want to undertake their role;
  • Make requests for direction and decisions;
  • Look at the world through their eyes – outcomes and benefits;
  • Make the risks plain – their risks;
  • Report the world through their eyes;
  • Don’t assume or expect them to understand your “jargon”; and
  • Don’t try to take over their role.

You can read the full article from the Project Workout Community, articles section. In the meantime, who do you think is accountable for “making change happen”? Is there a simple answer? Is a project manager a change manager? Is a change manager a project manager? I suspect it all depends on how you views those words.

Leaders influence success. What a surprise!

In PMI’s latest annual survey on trends in programme and project management there are a number of messages but I’ll draw out just one, which they describe as “interesting” and which they say has the greatest correlation to project success.

In programmes and projects, sponsorship is not like sponsoring Tom to run a Marathon.

Those organisations which have active project/programme sponsors on at least 80% of their projects have a success rate of 75%, eleven percentage points higher than the average.

Their survey sample included over 1000 PPM professionals with a wide range of experience and from many industries. This mirrors work by McKinsey & Co, who also point out that sponsors have an extraordinary influence on success.

So, the PMI is saying is that if we have programme and project sponsors, who do their role properly, the business is much more likely to succeed! Calling that “interesting” is rather understating it importance. This is a finding which we should be making “loud and clear” . . . . too many organisations are so tied to their functional hierarchies, that this “end to end”, leadership role is under-valued or even forgotten.

This finding mirrors my work in The Project Workout since 1997 and more recent findings from the UK’s Cabinet Office and National Audit Office. It does make you wonder that if this role is so vital, why it is outside the scope of PMBok and the latest ISO21500? However, it is very much integrated within BS6079 Part 1, MSP (equivalent to SRO) and PRINCE2 (equivalent to Executive), so we have some good foundations to build on. By the way, don’t get confused with sponsoring in the form of “sponsoring Tom to run a marathon”; that is an entirely different use of the word.

To find out more on leadership and sponsorship, look at Chapter 4 of The Project Workout; you’ll also find some articles in the Community section of my web site.

What is your experience? Let me know.