February 16, 2021

Projects and Organisational structure: a shift in power


Puños chocando que causan explosión
Projects are being increasingly used to deliver innovative products and services, to perform change and transformation and – in general – to get work done in organisations. As such, a growing number of organisations perform a considerable part of their processes and activities as projects.

However, according to the International Project Management Association (IPMA), in terms of organisation structure and company leadership, most organisations continue to be organised based on the principle of dividing the work in functional activities that are organised in specialized functional departments1 (such as Sales, Human Resources, Finance, Marketing, Productions, etc.), and tend to follow a top-down, command and control hierarchy.

Performing projects within such an organisation structure and leadership hierarchy is not ideal for project delivery and success. Surprisingly, projects can all too frequently be seen as a source of additional ‘burden’ to the teams engaged in projects (who are mobilised from across functional departments), as well as to the heads of the functional departments being ‘disturbed’ by the project (who have their teams and resources dedicated to a project). Moreover, it is not always clear the command hierarchy between the Project Manager and these departmental heads.

The bottom line is that the more projects a traditionally set up organisation performs, the more ‘burden’ it needs to cope with.

IPMA points to an opportunity to optimise efficiencies, delivery and increase the likelihood of project success by enabling the creation of a Project Based Organisation (PBO) that can be mobilised and empowered within the existing traditional structure. The interesting features of a PBO are that it is a temporary structure (i.e. in place for the duration of the project), and it is flexible and adaptable to the specific circumstances of the project and its context for the business. A key consideration within such a structure, is the fostering of a symbiotic interaction between the PBO and the enabling or supporting functions in the organisation1 (Sales, HR, R&D, etc.); the functional departments are in a supporting not a controlling role.

Here is where the role of the Project Manager becomes crucial. In a PBO, the Project Manager is no longer an individual who is merely competent in the technicalities of Project Management processes, methods and tools1. The Project Manager needs to be competent in leadership and should possess the authority to engage and direct the support of the heads of the functional departments. In addition, the Project Manager should have the skills to establish strategic direction, mobilise and facilitate collaboration between all teams involved, and steer the project towards a successful outcome in line with the organisational goals.

The ability for project-oriented businesses to harmoniously create and run temporary PBO structures embedded within the traditional organisation structure opens the opportunity to increase project efficiencies, reduce the burden of projects on the organisation, and ultimately lead to greater chances of project success and the overall contribution to organisational goals. A key figure becomes the Project Manager with a strong leadership skillset.

1 https://www.ipma.world/will-project-based-organisations-new-normal/