Organizational effectiveness
in a multi-project organization
Eric Lorentzon
Department of Industrial Management and Logistics, Lund University, Faculty of Engineering
SE-221 00 Lund, Sweden
This article is based on a master thesis written in 2011 at Lund Institute of Technology in cooperation with a multi-project organization. The main purpose of this thesis was to seek understanding of what factors that affects the effectiveness in the project activities in a multi-project organization. The work is based on a case study at a multi-project organization.
Background
The things that characterize a multi-project organization are that several projects are always carried out simultaneously, the projects integrate with each other and they affect the environment around them. To get a deeper understanding of how the project staff in a multi-project organization are working and what affects the effectiveness when the projects are executed, I contacted a multi-project organization.
The company in this study has two functional divisions called market and production. At the company the project managers are, together with project members from these two divisions, executing projects that are based on commissions from external clients. The employees only work with tasks that somehow are related to the project activities. The company continuously undertakes new projects and the work environment is very project intensive, which means that both the project managers and the project members often are involved in several projects simultaneously. The company therefore can be described as multi-project organization with a matrix structure.
Purpose and scope
The main purpose of this thesis was to seek understanding of what factors that affects the effectiveness in the project activities in a multi-project organization. The main purpose was parted
into two partial purposes in which the first one was to examine what factors the project staff perceived as particularly relevant and how these factors were linked together in the understanding of the organizational effectiveness. The second partial purpose was to examine what the main strategic considerations were and what the possible actions a management board can take to improve the organizational effectiveness in a multi-project organization.
The study was delimited to the employees at the company that were directly involved in the project activities. The main focus was on the work of the project staff and the relationship between the project managers and the customers wasn’t analyzed in depth.
Methodology
The thesis was based on studies of descriptive and exploratory nature since the purpose was to seek understanding of what factors that affects the effectiveness in the project activities at the company. The final stage of the thesis also included problem- solving since the purpose was to provide suggestions on possible actions that the management board could take, which was considered to have a major impact on the organizational effectiveness.
The choice of inquiry approach was a case study and a consistent abductive research approach has been taken, since the author wanted to fulfill the
purpose both through the case study at the company and by applying existing theory. Qualitative primary data was in the initial stage gathered through meetings with the supervisor at the company. The next step in the data gathering was literature studies. The purpose of the literature studies was to identify factors that were considered to affect the effectiveness of the project activities in a multi-project organization.
Additional qualitative primary data were then collected through two group discussions with employees from the company's two divisions. The information from the group discussions was then used to conduct a survey study, in order to increase the understanding of to which extent different factors may influence the effectiveness of the project activities. Quantitative primary data was collected through this survey that included all the employees at the company that was considered to be directly involved in the project activities.
Results and conclusions
Through the abductive research approach five main factors were identified that can be considered particularly relevant for the project staff to be able to execute the projects effectively. The author chose to call these; resource availability, commitment from the management board, administration and documentation, a clear communication policy and insight of the core business processes.
The study shows that the management board is faced with strategic considerations regarding the integration between the projects. This primarily is about achieving high efficiency and productivity when the company's resources are allocated between the different projects. The management board is also faced with strategic considerations regarding the project portfolio, which primarily concerns the selection of the projects, i.e. which projects that will be executed, which should be prioritized and which should be closed down. These decisions are very important so that the number and the sizes of the active projects are consistent with the company’s available resources. Resource
availability in the organizations various parts is a
prerequisite to maintain high quality and efficiency in the project executions. This means a permanent organizational balance act so the company won’t suffer from project overload, which requires a high degree of flexibility both from the management board and the project staff. Lack of resources lead
to sloppy performed quality controls and caused delays in the projects, but the delays was also considered to have a negative impact on the communication and the interaction between the project staff. Many of the employees therefore felt that the management board should involve them more regarding conditions and resources for future projects, which also was considered important to be motivated to work toward the company’s goals. The management board also has a responsibility to motivate and engage the employees to work actively with the company's quality management system, which is an important tool to achieve efficiency and quality in the project executions. Many of the employees felt that the quality management system wasn’t used as intended and that parts of the system weren’t consistent with how they really worked. The quality management system also means that the employees should report arisen deviations in their work, which should be used to work towards continuous improvements. But many of the employees showed lack of trust for the deviation reporting system and it therefore wasn’t entirely used for its original purpose. The lack of commitment from the management board can be seen as a contributing factor to the employees' attitude towards quality management system. It is therefore important that the employees is provided with clear directives from the management board to be motivated and engaged to work with the system. This so it can be developed, more visible and more actively used in the daily work, and thus contribute to increase the quality and effectiveness in the project processes.
Administration and documentation is important to
facilitate an effective steering of the projects, but also so that information easily can be transferred between the project members. All of the projects that are carried out at the company are gathered in a project database. The project database is used both to administrate and document all the information for the ongoing projects and it’s therefore important that this information is correct. As a consequence the project database design, many of the employees felt that they were forced to enter incorrect information in the project database when a new project was registered. The dependency between the projects in a multi-project organization means that incorrect information for one project easily can affect the other active projects.It was also clear that there were some shortcomings regarding how the
information of the projects was transferred between project members. A prerequisite to achieve higher efficiency in project work and to avoid uncertainty is that the project database is designed in way that correct information more easily can be entered and then automatically transferred to the project members.
A clear communication policy is important to create conditions for an effective communication, but also to avoid misunderstandings between the project staff. Project-related e-mails that were missing the project number and e-mails, in which none of the recipients was appointed to do the specific task, were likely to cause confusion, uncertainty and unnecessary work. It is therefore important that this part of the communications policy is being clarified. The communications policy also should contain clear provisions concerning feedback, as this is important both for the individual but also to create solidarity throughout the whole organization. Several of the employees at the production division felt that they didn’t get enough positive feedback from the project managers during and after the projects. The project team was virtually only gathered when the execution of a project had gone wrong. If the project managers spare some of their time to discuss successful projects with project members, it could be way to improve the interaction between the employees. Continuous feedback to the project members is also important to avoid previous arisen errors to be repeated. A formal company education is necessary for new employees to be able to execute their duties, but is also important so they get an introduction of the organization's business and culture. The study shows that the majority of employees agreed that the company didn’t have a proper company education for new employees. New project managers therefore got poor knowledge and insight
of the core business processes. One consequence of
this was that these project managers showed too little interest in the project members’ work, but also that they could use methods that differed from the company standard procedures. To introduce a proper company education is therefore seen as an opportunity to increase the employees’ knowledge and understanding of each other's work, which could improve the cooperation and the communication and thus increase the efficiency in the project executions.
The study also shows that many of the employees has a need for education related to their work areas, but due to the intensity of the work with the projects these needs are hampered. Since education should correspond with the goals the company set up in stages, this has a longer-term impact on the effectiveness of the projects. But individual development requires constant knowledge providing and that can be made in the form of education. Knowledge providing is also an important factor for the company since it creates opportunities to keep up with future developments. The management board is therefore faced with additional strategic considerations of making decisions about financial losses in the short term and the development of the employees and the organization over the long-term.
The study also shows that many of the employees are affected by stress in the workplace. Causes of stress included time pressure, high work pace, organizational uncertainty and dependence of resources that are beyond the employee's control. Consequences of stress were both a lower quality and that the number of errors increased, but many of the employees were also affected negatively by the stress after they left the workplace. A prerequisite to achieve high quality and efficiency in the project executions is that the workload and the demands of the employees are consistent with what they can handle. Since the individual's personality to a large extent determine how a person will react to different kinds of stress, it is therefore important that the employees are given the chance to tell the management board their own stories of how they are affected by stress in the workplace. Since the employees are forced to work with multiple projects simultaneously, another consequence of the time pressure they experience is that many of the employees do not have time to reflect on and evaluate their work between the projects. This also reduces the possibility to utilize the knowledge and experience from previous projects, which increases the risk for previous arisen errors to be repeated in future projects. Stress preemptive actions can be introduced, such as stress inventories and stress training. It is also important that the employees in periods are given time to gather their thoughts to contemplate the work of previous projects.
