ProjectDay3

Report
Day 3
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
Agenda
 Questions?
 Assignment 1 Posted
 Case Study 1.1, Megatech Inc., and Case Study 1.2, The It
Department at Hamelin Hospital. Due September 17 prior to class.
 Assignment 2 Posted
 Read Case Study 2.2, Paradise Lost: The Xerox Alto., and Case Study
2.3, Project Task Estimation and the Culture of "Gotcha!". Due
September 24 prior to class.
 The Organizational Context
Copyright 2005 Prentice Hall
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
Ch 1 -2
Integrated Project Team
 1st team group meeting and group assignment (pages 67-
68) will be part of next class period
 IP part one due Thursday, September 26 (two weeks)
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The Organizational Context:
Strategy, Structure, and
Culture
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02-04
Chapter 2 Learning Objectives
After completing this chapter, students will be able to:
 Understand how effective project management contributes
to achieving strategic objectives.
 Recognize three components of the corporate strategy
model: formulation, implementation, and evaluation.
 See the importance of identifying critical project
stakeholders and managing them within the context of
project development.
 Recognize the strengths and weaknesses of three basic
forms of organizational structure and their implications for
managing projects.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
02-02
Chapter 2 Learning Objectives
After completing this chapter, students will be able to:
 Understand how companies can change their structure into
a “heavyweight project organization” structure to facilitate
effective project management practices.
 Identify the characteristics of three forms of project
management office (PMO).
 Understand key concepts of corporate culture and how
cultures are formed.
 Recognize the positive effects of a supportive
organizational culture on project management practices
versus those of a culture that works against project
management.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
02-03
US Army LEMV
http://www.northropgrumman.com/Capabilities/lemv/Pages/default.aspx
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7
Projects and Organizational Strategy
Strategic management – the science of formulating,
implementing and evaluating cross-functional
decisions that enable an organization to achieve its
objectives.
Consists of:
 Developing vision and mission statements
 Formulating, implementing and evaluating
 Making cross functional decisions
 Achieving objectives
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02-08
Projects Reflect Strategy
Projects are stepping stones of corporate strategy
The firm’s strategic development is a driving force
behind project development
Some examples include:
A firm wishing to…
…may have a project
redevelop products or processes
to reengineer products or processes.
changes strategic direction or product
portfolio configuration
to create new product lines.
improve cross-organizational
communication & efficiency
to install an enterprise IT system.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
02-09
Relationship of Strategic Elements
Mission
Objectives
Strategy
Goals
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
Programs
Figure 2.2
02-010
FIGURE 2.3 Illustrating
Alignment Between
Strategic Elements and
Projects
Mission
“… the business of
supplying system
components to a worldwide nonresidential
air conditioner market.”
Objectives
a.
b.
c.
Strategies
a.
b.
c.
Existing products in existing
markets with image
maintenance
Existing products in new
markets (foreign, restricted)
New products in existing
markets (significantly improve
image)
14.5% ROI
Non-decreasing dividends
Socially-conscious image
Goals
Programs (Projects)
Year 1: 8% ROI, $1 dividend,
maintain image, unit cost
down 5%
Year 2: 9% ROI, $1 dividend,
improve image
Year 3: 12% ROI, $1 dividend,
improve image
Year 4: 14% ROI, $1.10 dividend
1. Product Cost Improvement
Program (PCIP)
2. Image Assessment Program
(IAP)
3. Product Redesign Program
(PRP)
4. Product Development Program
(PDP)
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02-07
Stakeholder Management
Stakeholders are all individuals or groups who have an active
stake in the project and can potentially impact, either
positively or negatively, its development. Sets of project
stakeholders include:
Internal Stakeholders
• Top management
• Accountant
• Other functional
managers
• Project team members
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
External Stakeholders
• Clients
• Competitors
• Suppliers
• Environmental,
political, consumer,
and other intervener
groups
02-012
Project Stakeholder Relationships
Figure 2.4
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02-013
Managing Stakeholders
1.
Assess the environment
2. Identify the goals of the principal actors
3. Assess your own capabilities
4. Define the problem
5. Develop solutions
6. Test and refine the solutions
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02-14
Project Stakeholder Management Cycle
1. Identify
Stakeholders
7. Implement
stakeholder
management
strategy
2. Gather information
on stakeholders
6. Predict
stakeholder
behavior
3. Identify
stakeholders’
mission
5. Identify
stakeholder
strategy
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
4. Determine
stakeholder
strengths and
weaknesses
Figure 2.5
02-15
Organizational Structure
Consists of three key elements:
1. Designates formal reporting relationships
 number of levels in the hierarchy
 span of control
2. Identifies groupings of:
 individuals into departments
 departments into the total organization
3. Design of systems for
 effective communication
 coordination
 integration across departments
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
02-16
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O p s te ch
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2-17
Forms of Organization Structure
 Functional organizations – group people performing
similar activities into departments
 Project organizations – group people into project
teams on temporary assignments
 Matrix organizations – create a dual hierarchy in
which functions and projects have equal
prominence
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02-18
Functional Organizational Structure
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
Figure 2.6 02-19
Silo Effect Found in Functional
Structures
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Figure 2.7
02-20
Functional Structures
Strengths
Weaknesses
1. Firm’s design maintained 1. Functional siloing
2. Fosters development of
in-depth knowledge
2. Lack of customer focus
3. Standard career paths
3. Projects may take longer
4. Project team members
remain connected with
their functional group
4. Projects may be suboptimized
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
02-21
Project Organizational Structure
Figure 2.8
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02-22
Project Structures
Strengths
1. Project manager sole
authority
Weaknesses
1. Expensive to set up and
maintain teams
2. Improved communication 2. Chance of loyalty to the
project rather than the
firm
3. Effective decision-making
4. Creation of project
management experts
3. No pool of specific
knowledge
5. Rapid response
4. Workers unassigned at
project end
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02-23
Matrix Organizational Structure
Figure 2.9
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02-24
Matrix Organization
 Cross-functional & Project teams
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2-25
Matrix Structures
Strengths
Weaknesses
1. Suited to dynamic
1. Dual hierarchies mean
environments
two bosses
2. Equal emphasis on
2. Negotiation required in
project management and
order to share resources
functional efficiency
3. Workers caught between
3. Promotes coordination
competing project &
across functional units
functional demands
4. Maximizes scarce
resources
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02-26
Heavyweight Project Organizations
Organizations can sometimes gain tremendous benefit from
creating a fully-dedicated project organization
Lockheed Corporation’s “Skunkworks”
 Project manager authority expanded
 Functional alignment abandoned in favor of market
opportunism
 Focus on external customer
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02-27
http://www.lockheedmartin.com/us/aeronautics/skunkworks.html
28
Manager’s Perceptions of Effectiveness of
Various Structures on Project Success
Figure 2.10
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02-29
Project Management Offices
Centralized units that oversee or improve the
management of projects
Resource centers for:
 Technical details
 Expertise
 Repository
 Center for excellence
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02-30
Forms of PMOs
 Weather station – monitoring and tracking
 Control tower – project management is a skill to be
protected and supported
 Resource pool – maintain and provide a cadre of
skilled project professionals
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02-31
PMO Control Tower
 Performs four functions:
 Establishes standards for managing projects
 Consults on how to follow these standards
 Enforces the standards
 Improves the standards
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02-32
Alternative Levels of Project Offices
Figure 2.11
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02-33
Organizational Culture
The unwritten rules of behavior, or norms that are used to
shape and guide behavior, is shared by some subset of
organization members and is taught to all new members
of the company.
 Unwritten
 Rules of behavior
 Held by some subset of the organization
 Taught to all new members
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02-34
Key Factors That Affect Culture
Development
 Technology
 Environment
 Geographical location
 Reward systems
 Rules and procedures
 Key organizational members
 Critical incidents
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02-35
Culture Affects Project Management
 Departmental interaction
 Employee commitment to goals
 Project planning
 Performance evaluation
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
02-36
Summary
 Understand how effective project management contributes
to achieving strategic objectives.
 Recognize three components of the corporate strategy
model: formulation, implementation, and evaluation.
 See the importance of identifying critical project
stakeholders and managing them within the context of
project development.
 Recognize the strengths and weaknesses of three basic
forms of organizational structure and their implications for
managing projects.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
02-37
Summary
 Understand how companies can change their structure into
a “heavyweight project organization” structure to facilitate
effective project management practices.
 Identify the characteristics of three forms of project
management office (PMO).
 Understand key concepts of corporate culture and how
cultures are formed.
 Recognize the positive effects of a supportive
organizational culture on project management practices
versus those of a culture that works against project
management.
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
02-38
Why?
What do you as a Project Manager do about it?
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2-39
Seth Godin (Fast Company)
 “Competent people are quite proud of the status and
success that they get out of being competent. They like
being competent. They guard their competence, and they
work hard to maintain it. “
 “Competent people resist change”
 “ Why? Because change threatens to make them less competent.
And competent people like being competent. That's who they are,
and sometimes that's all they've got. No wonder they're not in a
hurry to rock the boat.”
 In fact, competence is the enemy of change!
Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
2-40
External forces that drive Change
 Environmental
 Economics
 Competition
 Interest rate
 Distribution channels
 Labor
 Availability of raw materials
 PROJECTS !
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2-41
Reaction to change
 Behavior is manifested in company culture
 “what people do when no one is telling then what to do”

Peter Bijur, CEO of Texaco, Inc
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2-42
Organizations must adapt
 “For sustainable competitive advantage, you have to
change the culture”

Peter Bijur
 Company culture must see change as a positive
 Raising to a challenge
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2-43
Effect of Change on the project manager
 Projects Manager deal with change on a daily basis
 Schedules
 Specifications
 Supplies
 Labor
 Project manger are “Change Agents”


Seth Godin
http://www.sethgodin.com/sg/
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2-44
Individual responses to change
 People responds differently to change depending on past
experience with change
 Tolerance of ambiguity
 Novelty
 Complexity
 Insolubility
 Project mangers must display a positive response to all
change
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2-45
3 Possible reactions
 Negative reactions
 Employees stop being cooperative
 Accepting change but not embracing change
 We do it because we have to
 Grudging acceptance
 Passive resistance
 Inciting change
 Change for change’s sake
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2-46
Professional Survival in the face of change
 Adopt the following behaviors
 Develop awareness for external conditions that drive
company success
 Recognize cause and effect relationships in the
workplace
 Take creative actions
 View change as positive
 Read “Who Moved My Cheese?”
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2-47
Organizational approaches to change
 3 Common approaches
 Slash and burn
 Support and nurture
 Inspire and motivate
 Project managers do not make large change decisions
but are responsible for implementation of those
decisions.
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2-48
Urgent Change
 Problems are aggravated when change is “URGENT”
 Challenge #1 Bailout


Provide real information
Set priorities and get commitments for “on high”
 Challenge #2 Poor Morale



Remain realistically positive
Get the facts
Move to the new agenda ASAP
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2-49
Ways to speed Change Acceptance





Explains reasons for change
Project positive outcomes
Hold a “wake” for old ways
Create group “memories”
Get change implementation ideas for departments
affected
 Ask employees to drive the change process
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2-50
Ongoing Change Managament
 A project manager is a facilitator
 Set an example
 Behave consistently
 Recognize employees for embracing change
 Nurture growth in employees
 Involve employees min goal setting
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2-51
02-52

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