Scaling up

The principles of Organizational Project Management can guide a firm through the steps of scaling an organization.

Projects and project managers are the foundation of our industry. And good project management determines the success of our firms.

During the past 16 years in the consulting space, I’ve worked in firms ranging in size from 20 people to 20,000 people as a staff member, in project management, and at the management level, and I’ve witnessed periods of growth, stability, and decline. One thing I can tell you is that one of the most important responsibilities of AEC firm leadership is to intentionally design their firm’s organizational structure around excellent project delivery.

The Project Management Institute body of work explains the theory behind this. The basic drivers of Organizational Project Management can guide a firm through the steps of scaling an organization.

The PMI’s Project Management Body of Knowledge allowed me, as a longtime project manager, to articulate the concepts that we learn on the job in a more practical, catch-as-catch-can way. One of my favorite quotes from the PMBOK is:

“OPM advances organizational capability by linking project, program, and portfolio management principles and practices with organizational enablers (e.g., structural, cultural, technological, and human resources practices) to support strategic goals.”

I really like the term “organizational enablers,” and as a strategic planning advisor to AEC firms, I think it makes a lot of sense to look at things from the ground (i.e., project) up. Let’s unpack the structure part of this, because for a project to be successful, structure is one of our most influential organizational enablers. Structure is an organizational enabler that drives culture and influences technological and human resources practices. The following are some structures as defined by the PMBOK and some real-life observations of the results of those organizational enablers.

The PMBOK defines two structures that are not always readily applicable to the AEC space:

• Projectized organization. In projectized organizations, staff are grouped into project teams that only work together to deliver projects, with the personnel manager managing all the projects. For clients that have either very long-term projects or a few clients with very consistent scopes, I could see that working.
• Strong matrix organization. Project managers are all contained within one functional group, and supporting staff are in their own functional groups. I think it could work for large projects that require full-time project management and also need a lot of varied technical resources, but it could make it difficult for technical staff to advance to project management.

However, most organizational structures are more nuanced, and scaling patterns in AEC firm growth sometimes emerge in this way:

• Functional organization. In a smaller firm, or the smallest management unit of a large firm, you’ll see a functional structure – they are what they sound like, staff grouped by specialty. That can work well, if the functional manager performs all project management duties, and if functional managers collaborate. Sometimes when there is not intentional scaling, a functional structure can evolve into a weak matrix organization, where the leader becomes somewhat disconnected from project work, and when cross-functional collaboration with another department becomes challenging.
• Weak matrix organization. Project management happens at the functional manager level, and most project coordination is done at staff level. The issue here is that no one at the staff level really has the authority to make or enforce any decisions. How crazy can this get? In the past, I had a staff member in another department working on my project, who balked at my request for project documents their department was producing. They thought that “piece” of it was “their project.” Whoa, folks. It’s the client’s project, right? So, if organizational evolution is left unchecked, the eventual result is that the strongest personalities emerge as up-and-coming leaders.
• Balanced matrix organization. In the balanced matrix organization, the project manager is at staff level, as opposed to manager level, as in the weak matrix organization. If there is good organizational change management, an intentional plan would be in place to evolve a functional organization into a balanced matrix organization. In the PMBOK’s view, the balanced matrix doesn’t give the project manager full authority over the project and the project funding. From the AEC industry perspective, I disagree with that in at least one respect – I think that authority is conditional and dependent on cultural factors, including the importance placed on good project management as well as the importance placed on client experience.

This really all depends on the size of the organization, too. If you have an organization with a deep hierarchy, you may see these structures layered upon one another (the PMBOK calls this a composite structure). For example, you may see a set of functional management units that act as a “balanced matrix organization,” with the next management level being more “projectized” (think of this as locations, perhaps) overlying it, grouped into a “projectized” business units at the top. Understanding your organizational enablers, especially organizational structure evolution, and managing it intentionally, are key to designing around excellence in project delivery.

If you’re interested in learning more about improving project management, check out the following resources from Zweig Group:

• Advanced Project Management for AEC Professionals is a new virtual seminar that is ideal for people that have existing experience leading projects and teams. This advanced project management course is designed to take a project manager to the next level, with a focus on anticipating problems, communicating with leadership and other important stakeholders, and transitioning from managing to leading people and projects. It will focus on the nuances of different situations that commonly arise and how to adapt and optimize your responses to situations in order to maximize the impact of core PM skills.
• Zweig Group is currently collecting data in the Project Management Survey of AEC Firms for the 2021 Project Management Report. Participate and save 50 percent on this important resource.

Stephanie Warino is a strategic planning advisor with Zweig Group. Contact her at swarino@zweiggroup.com.