Projectification of the organisational world has resulted in apparent agreement that projects and project management are an efficient means of implementing organisational strategy. By way of a literature critique, discuss this statement exploring the content, limitation and inherent problems of the strategic alignment of projects.
Organisations in contemporary times face an increasingly volatile and fast changing business environment. Customer choices are becoming ever more fickle, and by extension, difficult to address. This scenario has led to a focus on ‘customisation’ that challenges the traditional focus on standardised offerings (Lampel, 2001; Beaume et al., 2009). The often referred to silo form of organisational functions and work processes has been replaced by a network or matrix form to gear organisations towards such customisation. This has had serious implications for how organisations leverage and develop their resources and capabilities (Gareis and Hueman, 2000; Beaume and Midler, 2010).
Such an orientation can permit organisations to deliver better value. However, there are diverse combinations of variables that shape product and service choices to orient what organisations offer to their customers (Cooke-Davies and Arzymanow2003). Projectification, or working through projects allows clustering relevant attributes that a particular client may require, as distinct from another client’s requirements. Such projectification has also come to be known as a ‘competence’ of organisations to deliver their strategy through the “vehicle of projects” (Lampel, 2001:273; Frederickson and Davies, 2008: 295). This paper examines projectification of organisations using assertions from extant literature (Gareis, 1992). In doing so it elucidates issues in, and nature of, strategic alignment of projects in organisations.
Projects and the organisation
Projects are micro-organisms embedded within the going concern that is understood as an organisation. They are unique by virtue of the resources and capabilities they deploy and by way of their requirements, processes and deliverables (Shenhar et al., 2002). From a ‘management of projects’ perspective there are several variables that relate to the approach of top management towards doing projects (Morris, 1987). Essentially these are about the nature of project portfolio, the way projects are resourced, the relative influence projects exercise on functional areas, and strategic choices that organisations make (Raz et al., 2002). Such choices could relate to technologies, operating practices, personnel, or even organisational growth strategies (Cooke-Davies and Arzymanow, 2003).
The idea of “best practices in project management” can be used as an illustration to show the influence of top management “sensemaking of the control and support” requirements that projects have (Lampel, 2001: 278; Gareis and Hueman, 2000: 716). When the organisation tends to prescribe best practices for its portfolio, or for certain types of projects in its portfolio, it seeks to provide some standardisation based on performance reflections from past, and also address the need augment future project performance. On the other hand, when an organisation is flexible and is looking at ‘good practices’ instead, it is being more liberal about how ‘projects emerge’ in terms of how they choose to adapt guidelines in the way they see fit to achieve project objectives (Leroy, 2002). Both sides have their pros and cons. In case of the former- overt control will affect the unique nature of projects that work towards customised solutions, and in the case of the latter, too much flexibility can cause chaos that may put organisational identity itself at risk (Spender and Grant, 1996; D’Adderio, 2001; Chatterjee and Wernerfelt, 1991). We develop this idea further in this paper as we discuss projectification, extent of project orientation, and the consequent issues and challenges organisations encounter.
The nature of strategic configuration ‘by’ projects
Strategic configuration of an organisation is but a set of strategic choices it makes to achieve its goals, or alternatively, increase congruence with business environment (Beaume et al., 2009). The mushrooming of extant research that sees organisations as less predictable, and unbounded ‘entities’ has led to development of thought on what is known as the ‘contingency’ approach (Cohen and Levinthal, 1990; Connor and Prahalad, 1996). Such an approach speaks of dynamism in the strategic configuration, but under an overall direction delivered by the higher order strategic choice organisations have been forced to make – in this case that of ‘projectification’. The challenges of such dynamism include the ability to understand and deliver the scope of change, the ability to synthesise experiential knowledge, constructively align power structures, and also, examine organisational identity issues that come with a project-based approach (Lampel, 2001; Lampel and Jha, 2004). In recent times, it is the idea of a project-based organisation that remains central to such emergence in strategic orientation. A project-based entity is understood as one where functions, architecture, role descriptions and resource allocation aspects are heavily geared towards the needs to delivering projects (Turner and Peyami, 1996).
The extent of project orientation
Not all organisations emphasise doing projects with the same scope and centrality. This is because of the process difficulties and resource commitments required for doing so from a ‘management of projects’ perspective (Morris, 1987). Top management orientation owing to still other factors, and also the nature of business an organisation is in matters greatly. This relative context has delivered the idea of extent of ‘project orientation’ (Lampel and Jha, 2004). The key variables defining such orientation are “project autonomy, scoping and programming” of projects (Lampel and Jha, 2004:361, Wheelright and Clark, 1992).
In essence project orientation is about the extent to which organisations are oriented towards supporting versus controlling the projects they do. For instance, an organisation can choose to support projects extensively and gear its functional areas towards projects, but on the same hand, also exercise a lot of control on project level strategy and operations. In contrast, the organisation can allow a high degree of flexibility in how projects strategies and work towards customised deliverables (Lewis et al., 2002). The latter clearly calls for greater autonomy, and is often a challenge for ‘management of leadership’ and ‘power structures’ in organisations (Lampel and Jha, 2004).
What objectives and tasks projects are trusted with matters as well, and this is not always visible by their ‘resource loadings’ alone (Chatterjee and Wernerfelt, 1991). For example, setting up a new manufacturing unit maybe very resource intensive, and it may be aligned to organisational aspirations of growth. However, another project leveraged to communicate and embed new technologies may be less resource intensive, but more important in terms of affecting the core of organisational capabilities (Grant, 1996).
Popular literature has shown that organisations can be classified based on the extent of their projectification or importance they give to projects in informing the ‘delivery of their strategy’ (Wheelright and Clark, 1992). Higher the projectification or project orientation, higher is the value generated, albeit only if the interface between projects and organisations is managed well (Turner and Peyami, 1996). The ‘projectivity’ model by Gareis (1992) below provides a pictorial representation of this interface. The figure clearly indicates a need for synergy between project and organisational goals. It also puts across several issues in management of this interface. These are about how and to what extent project systems, operations, and organisational support and control mechanisms, are configured towards deriving value from projectification.
Figure 1: (Gareis, 1992)
This brings us to discussing a perspective on typology of organisations with respect to the extent of projectification or project orientation (Lampel and Jha, 2004). A truly project based organisation is one where all organisational functions service projects, and by extension, project leadership profile and autonomy related variables score very high. There is a lesser degree of project orientation in cases where- though projects are supported extensively and comprise a majority of the organisational turnover, but they are also geared to deliver internal change and operational uplift initiatives (Shenhar et al., 2001; Shenhar et al., 2002). In this sense, they also support needs of functional areas. The design, resourcing and reporting configuration is thus of a lower order and partly under the control of functional areas that are in effect internal clients. Both these types are in contrast with ‘core operations led’ organisations where projects are unequivocally (and if delivered at all) only support mechanisms to inform functional and operational silos that deliver generic products and services. Arguably there is reducing number of organisations in this bracket (Lampel and Jha, 2004; Raz, et al., 2002)
As mentioned, this variation is often due to aspects such as nature of business and also organisational culture (Lapre and Van Wassenhove., 2001). Thus, these need to be contextualised when speaking of performance improvements from projectification. Several aspects to do with practices, routines, and technologies need to be considered. A crucial one for instance, is knowledge that is embedded in individuals that work on projects, but the context of the knowledge is lost with the end of the project. This is unless the individual moves to a very similar project and/or the knowledge is harnessed to inform project management systems in general. Strategising for ‘management of projects’ is thus crucial for informing effective ‘project management’. (Wenger, 1998; Connor and Prahalad, 1996)
Issues and concerns for strategy in projectification
As aforementioned, it is the shift towards networked and matrix forms has delivered research in the context of project orientation and project-based organisations (D’Adderio, 2001; Morris and Hough, 1987). In order to derive value from such an orientation it is crucial to be able to synthesise and operationalise the experience and knowledge from working on projects, and understand project performance for informing future projects. Since projects are unique entities such an objective is difficult to achieve and presents a crucial challenge for the ‘management of projects’ (Morris, 1987). This can be for instance, in the form of requiring novel ‘en-cultured’ knowledge management and learning systems like ‘communities of practice’, moving the right kind of people around, and spotting emerging project level competencies (Wenger, 1998; Grant, 1996). The role of project leadership becomes crucial, and also, by the same token, shapes a new power and control sharing strand in the organisation (Leroy, 2002). Motivational aspects to do with sharing knowledge with peers in highly competitive times, and also cultural issues that call for more collaboration despite such competition -are some of the challenges to reckon with (Drew and Coulson-T, 1996; Grant, 1996; Beaume and Midler, 2010).
There is a dominant argument to favour the assertion that there is a very visible difference between project management and management of projects (Morris,1987). While the first aspect is about tools and techniques, and to some extent the practices and processes that are used in execution of projects, the second one is about how organisations do projects and choose to relate to them, in terms of support and control mechanisms that they deploy. The latter is what dominates extant research on projectification. The issues it brings out as in this review paper, relate to a host of challenges organisations face. This is when they seek to become projectified, or aspire to derive value from projectification. The first and foremost is the extent of monitoring of projects by way of control through standardised procedures; the second is the harnessing of knowledge and expertise that emerges doing projects, and the third is about autonomy given to projects that determines their resourcing patterns and power quotients within organisations that host them (Shenhar et al., 2002; Cookie and Arzymanow, 2003).
The project environment and the corporate environment can be in synergetic tension or in a disruptive interface. This is likely to be determined by the extent to which organisations are able to manage disruptive challenges brought by projectification, and are able to be balanced in creating and modifying “cellular resource and capability pools” within projects (Connor and Prahalad, 1996: 481). These ‘pools’ also need to be integrated with the organisation, and provide feedback and experiential knowledge to the organisation. The choice about the extent of projectification is also a function of organisational confidence and past experiences with projectification. That it yields value is irrefutable, but the risks of not doing projectification properly, or overdoing it given organisational experience, readiness and nature of business are also very real (Cooke-Davies and Arzymanow 2003).
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