Organizational structures and their impact on stakeholder management

Organizational structures can be broadly classified into;

  • Functional organization
  • Matrix organization
    • Strong matrix
    • Weak matrix
    • Balanced matrix
  • Projectized organization
  • Composite organization

Functional organization

Most of the manufacturing / service organizations are divided functionally. Each function will have a head, who in turn reports to the CEO. For example an automobile manufacturer will have functions  like;

  • Manufacturing
  • Sales & Marketing
  • Research and development
  • Procurement
  • Finance
  • Human resources etc..

Each of these functions are headed by a senior manager (functional managers), who in turn report to the CEO.

Matrix Organization 

In matrix organizations, the team members report to more than one boss. Team members may report to the project manager for the project related activities, and to the functional manager for specific function related activities. For example, a technical architect in a project may report to the project manager for project related activities and at the same time report to the Chief Technology officer (CTO) for technology related stuff. Most of the product companies, which calls for multi-disciplinary skills to develop the product of the project falls into this category.  Matrix organizations are further subdivided into;

  • Strong matrix (Project managers have more authority than the functional managers)
  • Weak matrix (Functional managers have more authority than the project managers)
  • Balanced matrix (Both the functional manager and the project manager have the same authority levels.

Projectized organizations

In projectized organizations, whatever they do is a project. For example; I.T projects companies, Civil projects companies etc. They perform projects after projects. Project manager and the teams are the breadwinners of the organization. Project managers have maximum authority levels in projectized organizations. In projectized organizations, all other functions play the support role to the project.

Composite organizations 

Composite organizations have a combination of functional, matrix and projectized structure.

A through understanding of the stakeholder’s (customers, suppliers and your own organization) organizational structures will help in accurate mapping of the stakeholders into;

  • High power – high interest
  • High power – low interest
  • Low power –  high interest
  • Low power – low interest

Examples

  • Project managers in functional organizations have very low authority levels
  • Functional managers have more authority than the project managers in functional organizations
  • Project managers have maximum authority in projectized organizations
  • In matrix organizations, the power of the project manager and the functional manager varies based on whether it is a ;
    • Strong matrix
    • Weak matrix
    • Balanced matrix

This knowledge will help us to go beyond what is drafted in the contractual documents and manage key stakeholders very effectively.

The following videos explains this further

Why proper stakeholder identification is a critical success factor for your project?

Anybody who is affected positively or negatively, by doing a project or by delaying a project is a stakeholder. Identifying the key stakeholders upfront helps to capture and manage their expectations proactively. For any given project the direct stakeholders are;

  • Sponsor (customer) of the project
  • Project manager
  • Delivery head
  • Team
  • End users of the product of the project
  • Business analysts
  • Product owner

The indirect stakeholders list can be very vast, and at the same time identifying and managing the indirect stakeholders is key to the project’s success.  It is very difficult to come out with a universal list of indirect stakeholders. Here is a sample;

  • Families of team members (If they are unhappy, most probably the team member may resign her job soon)
  • Competitors (They can recruit some of your key team members)
  • End users of competitors products (Customer complaints, especially against your competitor’s products is very useful)
  • Intellectual property bodies (do not violate them knowingly or unknowingly)
  • Government agencies (must manage well)
  • Trade unions (be careful, if your product is going to disrupt an existing market. Online taxi operators like Uber, Ola  Vs traditional taxi operators, Amazon Vs traditional shops)
  • Product review groups (social media) (Most of them are paid reviewers. Do not forget to budget for them)
  • Any other groups (Even the name of your project / product should not harm anyone’s culture, religion etc…)
  • Any citizen (farmers, drivers, pedestrians, vehicle owners…anyone) who is affected negatively during or after the project.

It is worth spending time to identify the key stakeholders and their impact on your project / product individually and collectively, at the beginning of the project and throughout the project.

Once the stakeholder list is prepared, the next logical step is to group them into;

  • High power, high interest group
  • High power, low interest group
  • Low power, high interest group
  • Low power, low interest group

and develop strategies to maintain a high degree of stakeholder interest in your project / product (stakeholder engagement). If all the key stakeholders are happy during and after the project, your project is a success story.

Reference stakeholder mapping 

Project management – On the job training

I am delighted to announce PM-OJT (on the job) training. We invite individuals and groups to this on the job learning experience.

This course is for those who want to really master professional project management as defined by PMI (Project Management Institute, USA)  , and then go for PMP certification.   The participant chooses a real project from his/her work environment, and under the guidance of the coach, applies the professional project management concepts in a real life environment.  If the participant is unable to identify a project from their work environment, they will work on a hypothetical project case provided to them.

Who should attend?

  • Team leads
  • Fresh project managers
  • Experienced project managers who want to learn project management as per the project management body of knowledge
  • Those who are preparing for the PMP certification

Course outline

Iteration#1 – Master project initiation

Iteration#2 – Master project scope definition

  • Tools and techniques for scope elaboration,base lining, estimation and tracking
    • Product breakdown structure
    • Work breakdown structure
    • Estimation of effort using the work breakdown structure
      • Analogous estimation
      • Parametric estimation
      • Three point estimation
      • Application of wide band delphi technique in estimation
  • Assignment#2

Iteration#3 – Learn to develop the schedule

  • Decomposing the work packages into activities
  • Performing bottom up estimation
  • Sequencing the activities
  • Critical path
  • Optimizing the schedule
    • Crashing
    • Fast tracking
    • Leads and lags
  • Assignment#3

Iteration#4 – Learn to develop the subsidiary plans

  • Integration management plan
  • Scope management plan
  • Schedule management plan
  • Cost management plan
  • Quality management plan
  • Human resource management plan
  • Communications management plan
  • Risk management plan
  • Procurement management plan
  • Stakeholder engagement plan
  • Assignment#4

Iteration#5 – Master Project execution

  • Acquire resources
  • Execute work
  • Manage project knowledge
  • Manage quality
  • Manage communications
  • Implement risk responses
  • Conduct procurements
  • Manage stakeholder engagement
  • Assignment#5

Iteration#6 – Learn to Monitor and control project work

  • Monitor and control project work
  • Perform integrated change control
  • Validate scope
  • Control scope
  • Control schedule
  • Control costs
  • Control quality
  • Control resources
  • Monitor communications
  • Monitor risks
  • Control procurements
  • Monitor stakeholder engagement
  • Assignment#6

Iteration#7 – Learn to formally close project / phases 

  • Close project or phase
  • Assignment#7

Interation#8 – Get an introduction to agile project management

Iteration#9 – Things we did not discuss so far which are very important for the PMP exam preparation

Iteration#10 – Exam practice

For more information, contact us 

 

 

The benefits of project chartering and project charter

If someone assigns me as the project manager of a project, the first document I will refer to understand the overall details of the project is the project charter, which is one of the key outputs of the project initiation process. If it is not available, I will work along with the sponsor (senior management representative who is in charge of the project) to define one and get his approval.

A typical project charter contains;

  1. High level scope of the project
  2. Business case of the project
  3. Key milestones with dates
  4. Major risks
  5. Major assumptions and dependencies including the flexibility matrix
  6. Key stakeholders names, roles and responsibilities towards the project
  7. Project managers name, roles and responsibilities

The project charter is approved by the sponsor. This is the formal document which appoints the project manager to the project officially. Project charter gives authority to the project manager. Any changes to the project charter must be re-approved by the sponsor.

 

Project charter brings in lot of clarity into the project, and is a good basis for planning the project.

Work breakdown structure

Projects fail at the beginning. Two of the main reasons for project failures are inaccurate estimates and scope creep / deficit. Of these two major causes, Scope creep is easy to manage, as most of the clients are willing to pay for extra scope than planned, where as scope deficit results in not meeting the customer’s must have feature list, and will result in customer dissatisfaction.

The best remedy is to;

  • Spend enough time on requirements collection
  • Proper scope definition
  • Scope decomposition into a work breakdown structure
    • 8-80 rule for work package sizing
  • Estimating the effort of the work packages using;
    • Expert judgment
    • Brainstorming
    • Delphi technique
    • Three point estimates
    • Analogous estimation
    • Parametric estimation
  • Following the change management procedure for scope updation

The following video of mine explains most of the concepts discussed so far in this blog post.

Master precedence diagramming

Agile is not scrum

Very often people use the terms agile and scrum interchangeably and that can be quite confusing for those who are new to the agile world. Agile is the umbrella under which there are several frameworks like;

As we can see from the above list, agile is the common terminology used for the iterative and incremental models. Of these, scrum is the easiest to understand, hence it is the right starting point to bring in the agile culture to the organization, and then to be open to the good practices of all the available frameworks to solve the specific issues challenging agility or to simply enhance your agility.