The world is rapidly moving towards projectization, and more and more organizations in the private sector are becoming fully projectized. They are breaking with functionalism, overcoming the matrix compromise, and embracing the idea that the world moves too fast for functional organizations. Everything has become a project, encapsulating human and organization potential, establishing clear lines of accountability and ultimately, progress.
The drive to projectization, which is too strong to resist, has transformed how organizations solve business problems. Each business problem is considered on its merit, but ultimately, connecting the dots and the ability to see the big picture are what make projectized organizations successful. It is this ability to see the big picture that differentiates a good project manager from a mediocre one. It is so easy to get lost in the weeds and lose sight of what is important, when deadlines, budgets, and management expectations hang over your head.
Transformation to a projectized structure requires fluid compromise and the ability to question established dogmas and structures. There are several resistance points that make projectized structures intimidating for managers and employees.
First, the way jobs are classified and employees rewarded is still focused on specialization. Instead of rewarding and promoting employees based on competencies, many employers focus on functional requirements for specific jobs. Organizations are busy creating the Business Analyst and Programmer position descriptions, when instead, what they truly need are programmers who think like business analysts. Is it just easier to squeeze employees into functional niches instead of encouraging multidisciplinary development? Despite talking about the merits of teamwork and spirit, we reward individual achievements. Compensation and promotion systems are designed to bring the selected few to the top. This approach is destructive in projectized organizations because productive cycles are much shorter, making individual distinction a necessity and undermining teamwork. Let’s pay employees based on competencies; this will encourage continuous professional development. Let’s make the ability to work in a team a core competency and associate tangible rewards and promotions with this. It’s not a new idea, but many organizations still struggle with it.
The second hurdle is the organizational fiscal cycle. Every year, organizations create a bucket budget, and only after that do they try to figure out how various projects fit into it. Project teams are required to adjust their contracting and billing rhythms to this cycle, making projects very inflexible and, ultimately, less productive. To some degree, this cycle is driven by tax reporting timelines, but there might be a better way to do financial planning. For example, transferring project funds between fiscal years could be more flexible. A management reserve should be established that is truly accessible to project teams, not just a source of firefighting funds and pet project funding.
Finally, organizations need to put checks and balances in place to prevent the internal “monopolization” of projectized organizations. Organizational business units naturally strive towards internal monopoly because this helps reduce administrative overheads and improve access to resources. Projects amalgamate, and bigger projects consume smaller ones and eventually convert projectized organizations back into functional. I believe this reduces teams’ ability to innovate and evolve. Growing organizational units become comfortable, entrenched, and bureaucratic. Real innovation is in competition, and this is not a new concept by any means. Several project teams will solve one business problem faster and better than one team. As they compete for resources and recognition, they are incentivized to innovate constantly and evolve.