Location of the Project Manager

The success of project management could easily depend on the location of the project manager within the organization. Two questions must be answered:

• What salary should the project manager earn?

• To whom should the project manager report?

Figure 1-17 shows a typical organizational hierarchy (the numbers represent pay grades). Ideally, the project manager should be at the same pay grade as the

PRESIDENT

VICE PRESIDENT

DIRECTOR

DlVI

3ION

DEPARTMENT

SECTION

PfiOJECr-DWEN

NON-PROJtC'l -DRIVEN

Figure 1-17. Organizational hierarchy.

individuals with whom he must negotiate on a daily basis. Using this criterion, and assuming that the project manager interfaces at the department manager level, the project manager should earn a salary between grades 20 and 25. A project manager earning substantially more or less money than the line manager will usually create conflict.

The ultimate reporting location of the project manager (and perhaps his salary) is heavily dependent on whether the organization is project- or non-project-driven, and whether the project manager is responsible for profit or loss. In addition, Martin has shown other good reasons for having project managers report either high or low: 5

Projects should be located wherever in the organization they can function most effectively. Several reasons for having the project manager report directly to a high level in the organization may be mentioned:

• The project manager is charged with getting results from the coordinated efforts of many functions. He should, therefore, report to the man who directs all those functions.

• The project manager must have adequate organizational status to do his job effectively.

• To get adequate and timely assistance in solving problems that inevitably appear in any important project, the project manager needs direct and specific access to an upper echelon of management.

• The customer, particularly in a competitive environment, will be favorably impressed if his project manager reports to a high organizational echelon.

Good reasons may also exist for having the project manager report to a lower echelon:

• It is organizationally and operationally inefficient to have too many projects, especially small ones, diverting senior executives from more vital concerns.

• Although giving a small project a high place in the organization may create the illusion of executive attention, its real result is to foster executive neglect of the project.

• Placing a junior project manager too high in the organization will alienate senior functional executives on whom he must rely for support.

Project managers can end up reporting both high and low in an organization during the life cycle of the project. During the planning phase of the project, the project manager may report high, whereas during implementation, he may report low. Likewise, the positioning of the project manager may be dependent on the risk of the project, the size of the project, or the customer.

5 Reprinted, with permission of the publisher, from Charles Martin, Project Management: How to Make It Work (p. 80). Copyright © 1976 AMACOM, a division of the American Management Association. All rights reserved.

Figure 1-18.

The organizational hierarchy: for planning and/or approval.

Figure 1-18.

The organizational hierarchy: for planning and/or approval.

Finally, it should be noted that even if the project manager reports low, he should still have the right to interface with top executives during project planning although there may be two or more reporting levels between the project manager and executives. At the opposite end of the spectrum, the project manager should have the right to go directly into the depths of the organization instead of having to follow the chain of command downward, especially during planning. As an example, see Figure 1-18. The project manager had two weeks to plan and price out a small project. Most of the work was to be accomplished within one section. The project manager was told that all requests for work, even estimating, had to follow the chain of command from the executive down through the section supervisor. By the time the request was received by the section supervisor, twelve of the fourteen days were gone, and only an order-of-magnitude estimate was possible. The lesson to be learned here is:

The chain of command should be used ^ for approving projects, not planning them.

Forcing the project manager to use the chain of command (in either direction) for project planning can result in a great deal of unproductive time and idle time cost.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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