Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Day 3

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Copyright 2005 Prentice HallCh 1 -2 Agenda Questions? Assignment 1 Posted Case Study 1.1, Megatech Inc., and Case Study 1.2, The It Department at Hamelin Hospital. Due September 17 prior to class. Assignment 2 Posted Read Case Study 2.2, Paradise Lost: The Xerox Alto., and Case Study 2.3, Project Task Estimation and the Culture of "Gotcha!". Due September 24 prior to class. The Organizational Context

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Integrated Project Team 1st team group meeting and group assignment (pages 67- 68) will be part of next class period IP part one due Thursday, September 26 (two weeks)

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 2 Learning Objectives After completing this chapter, students will be able to: Understand how effective project management contributes to achieving strategic objectives. Recognize three components of the corporate strategy model: formulation, implementation, and evaluation. See the importance of identifying critical project stakeholders and managing them within the context of project development. Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects. 02-02

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Chapter 2 Learning Objectives After completing this chapter, students will be able to: Understand how companies can change their structure into a heavyweight project organization structure to facilitate effective project management practices. Identify the characteristics of three forms of project management office (PMO). Understand key concepts of corporate culture and how cultures are formed. Recognize the positive effects of a supportive organizational culture on project management practices versus those of a culture that works against project management. 02-03

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Projects and Organizational Strategy Strategic management the science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives. Consists of: Developing vision and mission statements Formulating, implementing and evaluating Making cross functional decisions Achieving objectives 02-08

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Projects Reflect Strategy A firm wishing tomay have a project redevelop products or processesto reengineer products or processes. changes strategic direction or product portfolio configuration to create new product lines. improve cross-organizational communication & efficiency to install an enterprise IT system. Projects are stepping stones of corporate strategy The firms strategic development is a driving force behind project development Some examples include: 02-09

02-07 the business of supplying system components to a world- wide nonresidential air conditioner market. Mission Objectives a.14.5% ROI b.Non-decreasing dividends c.Socially-conscious image Strategies a.Existing products in existing markets with image maintenance b.Existing products in new markets (foreign, restricted) c.New products in existing markets (significantly improve image) Goals Year 1: 8% ROI, $1 dividend, maintain image, unit cost down 5% Year 2: 9% ROI, $1 dividend, improve image Year 3: 12% ROI, $1 dividend, improve image Year 4: 14% ROI, $1.10 dividend Programs (Projects) 1. Product Cost Improvement Program (PCIP) 2. Image Assessment Program (IAP) 3. Product Redesign Program (PRP) 4. Product Development Program (PDP) FIGURE 2.3 Illustrating Alignment Between Strategic Elements and Projects Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall

Stakeholder Management Stakeholders are all individuals or groups who have an active stake in the project and can potentially impact, either positively or negatively, its development. Sets of project stakeholders include: Internal Stakeholders Top management Accountant Other functional managers Project team members External Stakeholders Clients Competitors Suppliers Environmental, political, consumer, and other intervener groups 02-012

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Managing Stakeholders 1. Assess the environment 2. Identify the goals of the principal actors 3. Assess your own capabilities 4. Define the problem 5. Develop solutions 6. Test and refine the solutions 02-14

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Project Stakeholder Management Cycle 2. Gather information on stakeholders 7. Implement stakeholder management strategy 4. Determine stakeholder strengths and weaknesses 5. Identify stakeholder strategy 6. Predict stakeholder behavior 3. Identify stakeholders mission 1. Identify Stakeholders Figure 2.5 02-15

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Organizational Structure Consists of three key elements: 1. Designates formal reporting relationships number of levels in the hierarchy span of control 2. Identifies groupings of: individuals into departments departments into the total organization 3. Design of systems for effective communication coordination integration across departments 02-16

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Forms of Organization Structure Functional organizations group people performing similar activities into departments Project organizations group people into project teams on temporary assignments Matrix organizations create a dual hierarchy in which functions and projects have equal prominence 02-18

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Functional Structures StrengthsWeaknesses 1.Firms design maintained 2.Fosters development of in-depth knowledge 3.Standard career paths 4.Project team members remain connected with their functional group 1.Functional siloing 2.Lack of customer focus 3.Projects may take longer 4.Projects may be sub- optimized 02-21

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Project Structures StrengthsWeaknesses 1.Project manager sole authority 2.Improved communication 3.Effective decision-making 4.Creation of project management experts 5.Rapid response 1.Expensive to set up and maintain teams 2.Chance of loyalty to the project rather than the firm 3.No pool of specific knowledge 4.Workers unassigned at project end 02-23

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Matrix Structures StrengthsWeaknesses 1.Suited to dynamic environments 2.Equal emphasis on project management and functional efficiency 3.Promotes coordination across functional units 4.Maximizes scarce resources 1.Dual hierarchies mean two bosses 2.Negotiation required in order to share resources 3.Workers caught between competing project & functional demands 02-26

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Heavyweight Project Organizations Organizations can sometimes gain tremendous benefit from creating a fully-dedicated project organization Lockheed Corporations Skunkworks Project manager authority expanded Functional alignment abandoned in favor of market opportunism Focus on external customer 02-27

28 http://www.lockheedmartin.com/us/aeronautics/skunkworks.html

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Project Management Offices Centralized units that oversee or improve the management of projects Resource centers for: Technical details Expertise Repository Center for excellence 02-30

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Forms of PMOs Weather station monitoring and tracking Control tower project management is a skill to be protected and supported Resource pool maintain and provide a cadre of skilled project professionals 02-31

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall PMO Control Tower Performs four functions: Establishes standards for managing projects Consults on how to follow these standards Enforces the standards Improves the standards 02-32

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Organizational Culture The unwritten rules of behavior, or norms that are used to shape and guide behavior, is shared by some subset of organization members and is taught to all new members of the company. Unwritten Rules of behavior Held by some subset of the organization Taught to all new members 02-34

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Key Factors That Affect Culture Development Technology Environment Geographical location Reward systems Rules and procedures Key organizational members Critical incidents 02-35

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Culture Affects Project Management Departmental interaction Employee commitment to goals Project planning Performance evaluation 02-36

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Summary Understand how effective project management contributes to achieving strategic objectives. Recognize three components of the corporate strategy model: formulation, implementation, and evaluation. See the importance of identifying critical project stakeholders and managing them within the context of project development. Recognize the strengths and weaknesses of three basic forms of organizational structure and their implications for managing projects. 02-37

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Summary Understand how companies can change their structure into a heavyweight project organization structure to facilitate effective project management practices. Identify the characteristics of three forms of project management office (PMO). Understand key concepts of corporate culture and how cultures are formed. Recognize the positive effects of a supportive organizational culture on project management practices versus those of a culture that works against project management. 02-38

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Seth Godin (Fast Company) Competent people are quite proud of the status and success that they get out of being competent. They like being competent. They guard their competence, and they work hard to maintain it. Competent people resist change Why? Because change threatens to make them less competent. And competent people like being competent. That's who they are, and sometimes that's all they've got. No wonder they're not in a hurry to rock the boat. In fact, competence is the enemy of change! 2-40

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall External forces that drive Change Environmental Economics Competition Interest rate Distribution channels Labor Availability of raw materials PROJECTS ! 2-41

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Reaction to change Behavior is manifested in company culture what people do when no one is telling then what to do Peter Bijur, CEO of Texaco, Inc 2-42

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Organizations must adapt For sustainable competitive advantage, you have to change the culture Peter Bijur Company culture must see change as a positive Raising to a challenge 2-43

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Effect of Change on the project manager Projects Manager deal with change on a daily basis Schedules Specifications Supplies Labor Project manger are Change Agents Seth Godin http://www.sethgodin.com/sg/ 2-44

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Individual responses to change People responds differently to change depending on past experience with change Tolerance of ambiguity Novelty Complexity Insolubility Project mangers must display a positive response to all change 2-45

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall 3 Possible reactions Negative reactions Employees stop being cooperative Accepting change but not embracing change We do it because we have to Grudging acceptance Passive resistance Inciting change Change for changes sake 2-46

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Professional Survival in the face of change Adopt the following behaviors Develop awareness for external conditions that drive company success Recognize cause and effect relationships in the workplace Take creative actions View change as positive Read Who Moved My Cheese?Who Moved My Cheese? 2-47

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Organizational approaches to change 3 Common approaches Slash and burn Support and nurture Inspire and motivate Project managers do not make large change decisions but are responsible for implementation of those decisions. 2-48

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Urgent Change Problems are aggravated when change is URGENT Challenge #1 Bailout Provide real information Set priorities and get commitments for on high Challenge #2 Poor Morale Remain realistically positive Get the facts Move to the new agenda ASAP 2-49

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Ways to speed Change Acceptance Explains reasons for change Project positive outcomes Hold a wake for old ways Create group memories Get change implementation ideas for departments affected Ask employees to drive the change process 2-50

Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall Ongoing Change Managament A project manager is a facilitator Set an example Behave consistently Recognize employees for embracing change Nurture growth in employees Involve employees min goal setting 2-51

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Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall Day 3