Abstract: This article illustrates one aspect of the concept of “fit” between an organization’s implementation of project management and its organizational context by exploring how the underlying drivers of an organization’s strategy might influence not only the nature of the projects that it undertakes, but also the appropriateness of the arrangements that it makes to manage those projects. Using a model conceptualized from the literature on strategic management, an analysis of four organizations that have made significant investments in project management over the past 5 years supports the hypothesis that the degree of “fit” between an organization’s strategic drivers of value and the configuration of its project management system influences the value it obtains from project management.
Reference: Project Management Journal, March 2009, Volume 40, Number 1
Authors: Terence J. Cooke-Davies, Lynn H. Crawford, Thomas G. Lechler
This article, though primarily theoretical, is nevertheless fascinating. The primary purpose is to explore the extent to which value is created or destroyed depending on the level of “fit” or “misfit” between the organization’s Project Management System (or PMS) and its strategic drivers of value. In order to get there, they explore each topic.
A PMS is defined as system of management structures, standards, and procedures. The characteristics of a PMS are grouped, as derived from the previous work “Value of Project Management (Thomas & Mullaly, 2008), into 4 groups: Policy, People, Structure, and Processes. Strategic drivers are derived from Porter’s (1985) work and are hereby simplified into two axes: the degree to which differentiation is required, and the need to improve process efficiency in order to create a quadrant:
Context 1: Low process economics driver, low differentiation driver (ad hoc)
Context 2: High process economics driver, low differentiation driver (classic project management)
Context 3: Low process economics driver, high differentiation driver (innovation)
Context 4: High process economics driver, high differentiation driver (entrepreneurship, intrapreneurship)
I have to admit that context 4 was most interesting to me, not the least because the word “intrapreneurship” was new to me. Project managers in organizations in this context need to act like business leaders, and need to be empowered to be entrepreneurial in exploiting market opportunities. The paper claims this is not easily done, and in fact I have known only a couple project managers who were successful in this context, and they were not generally popular with their subordinates. An important source of tension is (it is better to quote here):
Firms need both diversity and structure so that there is an inevitable tension between individual initiative and corporate attempts to impose uniformity
Well said. The paper raises more questions than answers, and although it discusses 4 specific firms within their respective strategic contexts, it does not seriously answer many questions about what specific PMS characteristics are suitable to organizations in each quadrant. Nevertheless the paper is an interesting read.