Selling Executives on Project Management

Executives of the 1990s are much more inquisitive about matrix implementation than their predecessors were, even though the advantages and disadvantages of matrix structures have been published extensively in the literature. This section deals with questions asked of the author by executives. Usually the executives questioned the author in a closed session, as quite often executives do not wish functional employees to hear either such questions or their answers. In each of these cases, the executive was contemplating a change to a matrix organizational structure. When reading the questions, it is important to understand that executives of the 1990s are operating under greater pressure and more risk and uncertainty than the executives of either the 1970s or the 1980s, and therefore must be "sold" on the project management approach.1

• Can our people be part-time project managers? The nature of the question suggests that the executives wanted to manage the projects within the existing resource base of the company. The answer to the question depends, of course, on the size, nature, and complexity of the project. It is generally better to have a full-time project manager responsible for several small projects than to have many part-time project managers. Executives, as well as functional personnel, will never be convinced that the matrix will work until they see it in action. Therefore, it is strongly recommended that the first few projects be "breakthrough" projects with full-time project managers. This implies that, initially, these project managers will be staff to a top-level manager rather than within a newly developed line group for project managers.

• If we go to project (matrix) management, must we increase resources, especially the number of project managers? The reason for this question is obvious, namely, that the executives do not wish to increase the manpower base or overhead rate. Matrix management is designed to get better control of functional resources such that more work can be completed

1 It should be noted that the conceptual phase of project management implementation begins with functional managers who identify the need for project management because of their problems with resource control. The next step, therefore, is to sell top management on the concept. This is usually best accomplished through outside consultants, whom executives trust to give an impartial view.

in less time, with less money, and with potentially fewer people. Unfortunately, these results may not become evident for a year or two.

Initially, executives prefer to select project managers from within the organization with the argument that project managers must know the people and the operation of the organization. Even today, some companies require that all project managers first spend at least eighteen months in the functional areas prior to becoming project managers. However, there are also good reasons for filling project management positions from outside the company. Sometimes newly transferred project managers still maintain loyal ties to their former functional department and impartial project decision making is not possible.

• Let's assume that we set up a separate staff function called project administration that is staff to one of our executives. Can we then use our functional people as part-time project managers who report vertically to a line manager and horizontally to project administration? With proper preparation and training, most employees can learn how to report effectively to multiple managers. However, the process is more complicated if the employee acts as a project manager and functional employee at the same time. When a conflict occurs over what is best for the horizontal or the vertical line, the employee will usually bend in the direction that will put more pay into his pocket. In other words, if the (part-time or perhaps even full-time) project manager always makes decisions in the best interest of his line manager, the project will suffer. The most practical way to solve this problem is to let the functional employee act as a part-time assistant project manager rather than as a part-time project manager because now the functional employee has someone else to plead his case for him, and he is no longer caught in the middle.

This question has serious impacts on how employees are treated. If an employee reports to multiple managers and some managers treat him as though he is Theory Y while others treat him as Theory X, decisions will almost always be made in favor of the Theory Y managers. People who report to multiple managers must understand that, even if they are Theory Y employees, in time of crisis they will be treated as though they are Theory X. This type of understanding and training must be given to all employees who perform in a project environment.

• Which vice president should be responsible for the project administration function? Assuming that the company does not want to create a separate position for a vice president of projects, we must find out whether there exists a dominant percentage of people (on all projects) who come from one major functional group. If, say, 60 to 70 percent of all project employees come from engineering, then the vice president for engineering should also control the project administration function because there now exists a common superior for the resolution of the majority of project conflicts. Having to go up two or three levels of management to find a common superior for conflict resolution can create a self-defeating attitude within the matrix.

The assignment will become more difficult if functional dominance does not exist. We must now decide who dominates the decision-making process of the company (i.e., is the company marketing-driven, engineering-driven, etc?). The project administrative function will then fall under the control of this line function. Without either of these degrees of dominance and assuming a project-driven organization, it is not uncommon to find all project managers reporting under marketing with the vice president for marketing acting as the project sponsor.

• Is it true that most project managers consider their next step to be that of a vice president? Most project managers view the organization of the company with the project managers on top and executives performing horizontally. Therefore, project managers already consider themselves to be executives on the project and naturally expect their next step to be as executives in the company.

However, we should mention that many project managers are so in love with their jobs that money is not an important factor, and they may wish to stay in project management. Project managers are self-motivated by work challenge and therefore many have refused top-level promotions because they did not consider the work to be as challenging at this level, in comparison with project management.

• Can we give our employees (especially engineers) a rotation period of six to eighteen months in the project office and then return them to the functional departments, where they should be more well-rounded individuals with a better appreciation and understanding of project management? On paper, this technique looks good and may have some merit. But in the real world, the results may be disastrous. There are four detrimental effects of this arrangement. First, employees who know that they will be returning to their line function will not be dedicated to project management and will still try to maintain a strong allegiance to their line function. The result, of course, will be that the project will suffer. Second, when the employee knows that his assignment is temporary and brief, he usually walks the straight and narrow path and avoids risk whenever possible. Risky decisions are left to other project office personnel or even his replacement. Third, depending on the rate at which technology changes, the employee may find himself technically obsolete when he returns to his functional group. The fourth and last point is the most serious. The employee may find himself so attracted to the project management function that he wants to stay. If the company forces him to return to his functional department, there is always the risk that the employee will update his resume and begin reading the job-market section of the Tuesday Wall Street

Journal. Simply stated, a company should not place people in project management unless the company is willing to offer these people a career path there.

• How much control should a project manager have over costs and budgets? Executives in the areas of accounting and finance are very reluctant to delegate total cost control to project managers. Project managers cannot be effective unless they have the right to control costs by opening and closing work orders in accordance with the established project plan. However, if the project manager redirects the project activities in a manner that causes a major deviation in the cash flow position of the project, then he must coordinate his activities with top management in order to prevent a potential company cash flow problem.

• What role should a project manager have in strategic and operational planning? First of all, project managers are concerned primarily with the immediate execution of an operational plan. Therefore, they are operational planners. However, because of the company-wide knowledge that the project manager obtains on functional operations and integration, he becomes an invaluable asset to executives during strategic planning, but primarily as a resource person. Project managers are not known for their corporate strategic planning posture, but for their strategic project planning capability.

• What working relationships should exist between executives and the project manager? The answer to this question involves two things: internal meddling and customer communications. Executives are expected to work closely with the project manager and take an active role during the conceptual and planning stages of a project. However, after the project enters the implementation phase, active participation by executives equates to executive meddling and can do more harm than good. After planning is completed, executives should step back and let the project manager run the show. There will still be structured feedback from the project office to the executive, and the executive will still be actively involved in priority-setting and conflict resolution. The exception to this occurs when the executive is required to act as the project sponsor. In this case, the client wants to be sure that his project is receiving executive attention and feels confident when he sees one of the contractor's executives looking over the project. The project sponsor exists primarily as the executive-client contact link but can also serve as an invaluable staff resource.

Executives must not be blinded by the partial success they may achieve with executive meddling during the early days of matrix implementation. The overall, long-term effect on the company could be disastrous if executives feel that they can effectively control vertical and horizontal resources at the same time.

• Where do we find good project managers? First of all, project management is both an art and a science. The science aspect includes the quan-

titative tools and techniques for planning, scheduling, and controlling. The art aspect involves dealing with a wide variety of people. The science portion can be learned in the classroom, whereas the art portion can come only from on-the-job experience. Perhaps the most important characteristics are interpersonal skills and communicative skills.

Most companies have qualified people within the organization, and often they produce disastrous results by "forcing" such people to unwillingly accept a project management assignment. Project management generally works best if it is a voluntary assignment, which usually brings with it loyalty and dedication. Unfortunately, many people enter project management without fully understanding the job description of the project manager. If employees are promoted into project management and then "want out" or fail, the company may have no place for them at their new salary. Sometimes it is better to transfer employees to project management laterally, under the stipulation that rewards will follow if they produce.

• What percentage of a total project budget should be available for project management and administrative support? The answer to this question depends upon the nature of the project. Management support may run from a low of 2 percent to a high of 15 percent.

• My company has fifty projects going on at once. The project managers handle multiple projects, each with a different priority, and can report to anyone in the company. Will a matrix give better control? The matrix will alleviate a lot of these problems, provided that all of the project managers report to one line group. This will give uniform control of projects and will make it easier to establish priorities. If it becomes necessary to get better control over the project managers, then the projects should be grouped according to the customer or to similar technologies, not necessarily dollar value.

•In a matrix, people are often assigned full-time to a project. What happens if a functional manager complains that pulling a good employee out of his department will leave a large gap? In a matrix the employee is still physically and administratively attached to his functional group. And even with a full-time project assignment, the employee will probably still find sufficient slack time to assist in another project, even if only in a consultant capacity.

• On some of our projects the first step is a cost-benefit analysis to see if the project is a feasible undertaking. Who will do this in a matrix? On some projects, the job-related characteristics are more important than the project manager's personal characteristics. In this case, it may be better to have project managers who are trained in this area rather than having the cost-benefit analysis performed by another group. Project managers should be actively involved in any planning or decision making that may be bottom-line oriented.

• How do we make sure that everyone in the company knows what the priorities are? Priorities should be transmitted to both the project and functional departments through the traditional structure within the matrix. Even with the establishment of priorities, project managers will still fight for what they believe to be in the best interest of their project. This is to be expected. Initially, during the implementation of the matrix, it may be necessary to have all priorities documented.

There is a risk within the matrix that the slippage of as little as one project could cause reestablishment of all other project priorities. Even though some project managers may control their project so closely that they can obtain daily status reports, continually changing priorities on a daily or even weekly basis can destroy the functioning of the matrix because the functional managers may now be forced to continually shift resources from project to project.

• We have had an explosion of operations support systems (the minicomputer era). How do we manage these projects? Can we use matrix management? Matrix management works best for projects that cut across more than one functional group. Multifunctional MIS and database packages can be very effectively managed using a matrix. Banks are a prime example of industries where matrix management may exist primarily for such projects.

One major risk should be considered. There is always controversy over whether the programmers or the users should be the project managers. The usual arguments are that the programmers don't understand the user's needs and the user doesn't understand why it takes so long to write a program. Many companies have established a project management group to handle such conflicts. Each project is headed by a project manager and two assistant project managers, one from programming and one to represent the users. Conflicts and problems are now resolved horizontally rather than vertically. In this situation, it is possible for one project manager to handle several projects at once.

• How does top management control the responsibilities that each person will have on a project? Neither top management nor project management controls the responsibilities. The functional managers still control their own people. Project managers can fill out a linear responsibility chart (LRC) to make sure that every work breakdown structure element is accounted for. However, the functional managers should still approve the amount of authority and responsibility that the project manager wishes to delegate to functional employees. The reason for this is that the project manager should not be able to upgrade functional employees without the consent of the functional manager. The exception would be the project office personnel, who may report full-time to the project manager and also be evaluated by him. During the implementation phase of a matrix, the executives may wish to be actively involved in the LRC establishment, since, in fact, it is part of the planning process, and executives are expected to be closely associated with the project at this time.

• How do we ensure effective and timely communications to all levels? The project manager, being the focal point for all project activities, should be able to provide timely project information to everyone, including executives, at a faster rate than the traditional structure itself. The ability to provide effective and timely communications should be part of every project manager's job description.

• How do we get top management committed to project management? Regardless of how much literature exists in the area of effective project management, executives will not become committed until they see the system operating effectively and producing the expected dollar value of profit on the bottom line of the project. In order to effectively observe and comprehend the problems, executives must understand their new role in a project management environment and should attend the same ''therapy" training sessions as middle management.

• We need an awful lot offront-end work (i.e., planning) on projects. We are living in a world of limited resources. We need commitments from our people, not just promises. How do we get that? When the functional managers realize that project management is designed for them, and not for executives or project managers, then the functional managers will start giving commitments that they will live up to. The functional managers must be convinced that the matrix is not simply an attempt on the part of the project manager to control the functional manager's empire, but that in fact the project manager and matrix exist to support the functional managers in getting better control over their own resources such that future commitments can be kept.

• How do we resolve problems in which there is a lack of knowledge ofproject team members concerning their own rules? The responsibility here rests on the shoulders of both the project and functional managers. Planning tools, such as the linear responsibility charts, can be used, but the bottom line is still effective communications. This is why one of the major prerequisites for a project manager is to be an effective communicator and integrator.

• How do we convince people to disclose problems and not bury them? In a matrix organization, the critical point is the project-functional interface. Both the project and functional managers must be willing to disclose problems and ask for help, especially on the horizontal line. When the project manager gets into trouble, he goes first to the functional manager to discuss project resources. When the functional manager gets into trouble, he goes to the project manager seeking additional time, additional funding, or a change in specifications. Project personnel must realize that the project is a team effort, and everyone should pitch in when problems occur.

Many people refuse to reveal problems for fear that the identification of the problem will be reflected in their evaluation for promotion. The matrix structure is designed not only to put forth the best team for accomplishing the objectives, but also to resolve problems. Because the matrix approach encourages the sharing of key people, employees may find that the best corporate resources are now available to assist them temporarily.

Executives and functional managers must encourage people to bring forth problems, especially during matrix implementations. This encouragement should probably be done orally, with personal contact, rather than through memos.

• Is it true that if we go to a matrix, many of our functional people will start communicating directly with our customers? When you have a matrix structure, customers are very reluctant to have all information flow from your project office to their project office for fear that your project office is filtering the information. Therefore, the customer may request (or even demand) that his technical people be permitted to talk to your technical people on a one-on-one basis. This should be permitted as long as the customer fully understands that:

• Functional employees reflect their own personal opinion. Official company position can come only through the project office or through the project sponsor.

• Functional employees cannot commit to additional work that may be beyond the scope of the contract. Any changes in work must be approved by the project office.

Functionally, employees should contact the project office after each communication and relate to the project office what was discussed. The project office will then consider whether a memo should be written to document the results of the discussion.

The purpose of the question-answer session is to convince the executives that a change might be for the better. With matrix management styles, the following are the most common arguments that executives give for avoiding change:2

• I must be doing something right to get where I am. I may have to start working differently. Can

1 succeed?

• Balance of power

• I understand the balance of power and my role within top management. Why change it? I might lose my present power.

• I presently generate change on projects and in policy areas. Why change it? I won't be able to control recommended changes.

• Need for contact with projects

• I will lose my ability to perceive appropriate adjustments in organization policies when I lose detail involvement in projects. Why change it?

2 Adapted from John M. Tettemer, "Keeping Your Boss Happy While Implementing Project Management—A Management View," Proceedings of the Tenth Annual Seminar/Symposium of the Project Management Institute, Los Angeles, October 8-11, 1978, pp. IA-1 through 1A-4.

• Excessive delegation

• It is not good practice to have key decisions delegated below the top men. Why change?

• Coordination

• Coordination responsibility is a key management job. Why delegate it to project managers?

If the executives are willing to accept change, then the next step is to discuss the methods for implementation. The executives must understand the following strategies and tactics for implementation to be effective:

• Top management must delegate authority and responsibility to the project manager.

• Top management must delegate total cost control to the project manager.

• Top management must rely on the project manager for total project planning and scheduling.

• Only the project managers must fully understand advanced scheduling techniques such as PERT/CPM. This may require additional training. Functional managers may use other scheduling techniques for resource control.

• Top management must encourage functional managers to resolve problems and conflicts at the lowest organizational levels and not always run "upstairs."

• Top management must not consider functional departments as merely support groups for a project. Functional departments still control the company resources, and, contrary to popular belief, the project managers actually work for the functional managers, not vice versa.

• Top management must provide sufficient training for functional employees on how to report to and interact with multiple project managers.

• Top management must take an interest in how project management should work.

• Top management must not fight among themselves as to who should control the project management function.

The project manager also has strategies and tactics that should be understood during implementation. The following key points should be carefully considered by the project manager:3

• Breakthrough project

• Start with a breakthrough project that the administration can keep pace with in the new project management format.

3 Adapted from John M. Tettemer, "Keeping Your Boss Happy While Implementing Project Management—A Management View," Proceedings of the Tenth Annual Seminar/Symposium of the Project Management Institute, Los Angeles, October 8-11, 1978, pp. IA-1 through IA-4.

• Traditional information for top management

• The new project manager must be sure that traditional types of functional and project information are available to top management for traditional problem solving. He should take this information forward voluntarily, ahead of top-management's knowledge of the problem, preferably more quickly than the traditional line of communication.

• Retention of power

• Allow every administrator to retain his traditional power within the hierarchy during the implementation phase.

• Policy recommendations

• Project managers should carefully and thoughtfully develop only policy recommendations that can be easily accepted by the administration as being in concert with the organization's goals and objectives, and that are easy to implement and readily accepted by those outside the organization.

• It is necessary for project managers to push for change but not at a rate that in itself builds opposition.

• Schedules aren't the end of the world

• Project managers should keep schedules and other tools in the background of their involvement with top management. (The tools of project management are of far less interest to top management than the results obtained through them.)

• Decode all information

• It is extremely important that project managers decode all their reporting documents to meet the style of the executive with whom they are trying to communicate.

• Use broad perspective

• Project managers should be sure to recommend as general policy changes only those items that are applicable to a broad range of projects. Exceptions should be clearly indicated as exceptions to meet clearly defined project objectives.

It should be readily apparent from these key points that during implementation the project managers could easily frighten executives to such a degree that all thoughts of matrix implementation will be forgotten.

The last point that should be emphasized is that some executives face "blockages" even after the implementation phase is completed. These executive blockages may be avoided as follows:

• Top management directly interfaces a project only during its idea development and planning phases. Once the project is initiated, the executives should maintain a monitoring perspective via structured feedback from the project manager.

• Top management still establishes corporate direction and must make sure that the project managers fully understand its meaning.

• Top management must try to control environmental factors that may be beyond the control of the project manager. These factors include such items as external communications, joint-venture relationships, providing internal support, and providing environmental ongoing intelligence.

• Top management must have confidence in project managers and must be willing to give them both difficult and easy projects.

• Top management must understand that in order for work to flow horizontally in a company, a "dynamic" organizational structure is necessary. Not all activities can flow in parallel with the main activities of the company.

• Upper-level management must not want to take an active role in this "new" concept called project management.

• Upper-level management must be familiar with its new responsibilities and interface relationships in a project environment.

There is no surefire method today for the successful acceptance and implementation of matrix management. The best approach appears to be an early education process (including questions and answers) whereby executives, project managers, and functional personnel will be willing at least to give the system a chance. This type of early educational approach may be acceptable to all types of companies and in all industries where the matrix is applicable.

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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