Organisational Planning & Structures

What is an Organisation?

In the business world, an organization is a group of people working together to achieve common goals. An important part of every organization is its management structure, which defines roles and responsibilities and how they are assigned and supervised.

Where do projects fit in?

Projects play a crucial role in serving an organization's strategic goals, whether they do so directly or indirectly. They are instrumental in bringing about the outcomes outlined in strategic plans. Since strategic plans are frequently aimed at driving significant changes, they often cannot be effectively carried out through standard operational management practices. As a result, in order to be deemed successful, all projects must ultimately contribute to one or more of the organization's strategic objectives.

Organisational Planning

Planning and Goal Setting

To achieve the organization's most important strategic goals and determine how to reach them, organizational planning is necessary. Planning and goal setting should take place at all levels of the organization. The following model illustrates planning within a five-level organizational hierarchy.

• Level 1: Corporate Management
• Level 2: Divisional Management
• Level 3: Departmental Plans
• Level 4: Team Management
• Level 5: Individual Planning Self-Management

Level 1: Corporate Management

Corporate Management at Level 1 involves creating 5-10 year plans that align with the organization's vision and mission. This includes,

1. developing strategic business directions,
2. setting organizational goals and objectives, and
3. overseeing major programs.

These three elements are fundamental for any organization:

1. the mission (reason for being),
2. vision (defining the organization's aspirations), and
3. strategic plan (outlining how the organization will achieve its vision based on the objectives set in the mission).

Level 2: Divisional Management

Divisional Management involves creating 3-5 year plans that are in line with the objectives of the overall Strategic Plan. This level of management is responsible for

• setting goals,
• strategies, and
• actions, and
• allocating significant budget and resources to achieve them.
• Additionally, it involves overseeing major programs that have multiple start and end dates.

Level 3: Departmental Planning

Departmental Planning involves creating comprehensive 1-3 year plans that are aligned with financial cycles. These plans encompass

• specific goals,
• actions, and
• broad resource and time constraints.

This level of planning also involves managing complex projects with moderate impact and overseeing minor programs with multiple start and end dates.

Level 4: Team Management

Team management strategy involves creating 12-month plans that are synchronized with the financial year. These plans include

• Specific tasks and actions, each of which is assigned to a particular resource and has time constraints.
• Additionally, some mini-projects clearly define start and end dates as part of the overall strategy.

Level 5: Individual Planning (Self-Management)

Individual Planning is a process of self-management that includes tasks, short-term personal goals, and active engagement in ongoing processes.

EXAMPLE: 5-Level Strategic Plan for a commercial property developer

Organisational Structure

The organizational structure of any company refers to its hierarchy and reporting framework, which outlines how roles and responsibilities are assigned and managed within the organization. It also governs the flow of information between different levels of management.

Common Organisational Structures

Most organisations can be categorised into to three types of structures:

• Functional (or Traditional
• Matrix
• Projectised
  ![[Matrix Organisational Structure.jpg]]

Functional or ‘Traditional’ Organisational Structure

Matrix Organisational Structure

Projectised Organisational Structure

Project Management Maturity

Maturity Levels

5-Level Example Model for an Organisation

The project management processes in an organisation can be considered to align with one of five levels on a scale of
maturity:

Level 1: Common Language

• Token acknowledgement of project management
• Little or no executive level support
• Ad-hoc interest in project management
• “Do it my way” attitude to managing projects
• No investment in project management training/education

Level 2: Common Processes

• Recognition of benefits of project management
• Organisational support at all levels
• Recognition of need for processes / methodologies
• Recognition of the need for cost control
• Development of a project management training curriculum

Level 3: Integrated Methodology

• Integrated processes
• Cultural support
• Management support at all levels
• Informal project management
• Return on investment for project management training dollars
• Behavioral excellence

Level 4: Continuous Improvement

• Lessons learned files
• Cultural support
• Knowledge transfer
• Formal mentoring program
• Strategic planning for project management best practice

Level 5: Benchmarking

• Establishment of project office
• Dedication to benchmarking
• Looking at project management across industries
• Benchmarking against processes, methodologies and cultures

Project Management Methodologies

What is a Project Management Methodology?

A Project Management Methodology is a defined sequence of interconnected phases, activities, and tasks that make up the entire process of a project from start to finish.

Examples include

• A Guide to the Project Management Body of Knowledge (PMBOK® Guide),
• Critical Chain Project Management (CCPM),
• Event Chain Methodology, and
• PRINCE®2 (Projects in Controlled Environments).

PMBOK® Guide

The PMBOK® Guide is the primary methodology utilized in Australia and the United States for managing individual projects. It offers comprehensive guidelines for project management and defines key project management concepts.

The PMBOK® Guide serves as a valuable resource for project management practitioners by identifying a subset of the project management body of knowledge that is widely acknowledged as good practice. It not only provides this recognized set of practices but also promotes a common vocabulary within the project management profession, facilitating the consistent application of project management concepts across different projects and organizations.

Moreover, the PMBOK® Guide establishes several key constructs that form the foundation for managing a project effectively. These constructs include project lifecycle phases, which delineate the stages a project progresses through from initiation to closure; project process groups, which encompass the various processes and activities involved in managing a project; and project management knowledge areas, which represent the specific areas of expertise and skills required for successful project management.

PRINCE2®

In PRINCE2®, which stands for Projects in Controlled Environments 2, project management is approached in a structured and effective manner. This method emphasizes the business case, which outlines the reasoning behind the project and its business justification. The business case guides all project management processes from the initial project initiation through to its completion. Its primary purpose is to ensure that the project has a solid foundation for commencement, is governed effectively, is meticulously planned, and has mechanisms in place to verify that it has achieved its objectives. Additionally, PRINCE2® focuses on managing the project itself rather than solely concentrating on the delivery of products.

ORGANISATION STRUCTURES

The structure of a corporation involves various aspects that contribute to the achievement of its strategic goals. Decision-making within an organization follows a hierarchical order, with strategic decisions typically made by the board or executive level. Business units are responsible for developing strategies to achieve corporate goals, and programs are designed to deliver specific sets of outcomes in line with these goals. Projects, on the other hand, contribute individual deliverables as part of a program. Meanwhile, operations play a crucial role in supporting the ongoing activities of the entire organization.

Organising for Project Management

Organisations can be structured in the following ways:

Projectised

In a projectised organization, the project manager wields complete authority, making all decisions regarding the project. The project team's focus is clearly defined, with the project goals in sight. Communication with the client is clear, and there is usually good communication between the client and the project team. An example of a projectised organization is the construction of a pyramid.

Traditional

The traditional form of organization, which has been prevalent for over a century, is characterized by the grouping of individuals with similar skills and expertise. Each group is typically overseen by a manager with comparable skills. In this model, employees tend to specialize in their respective roles, becoming highly proficient in their specific areas of expertise. One of the main drawbacks of traditional organizations is their resistance to change in response to market demands and the introduction of new technologies. This resistance is particularly evident in industries such as automotive manufacturing and the public sector.

Matrix

The matrix organizational structure emerged in the 1970s as an innovative approach that sought to combine the advantages of project-based and traditional hierarchical organizations. In a matrix organization, employees report to both a functional manager, as in a traditional organization, and a project manager, based on their skill sets.

Unlike in a traditional organization, where employees with similar skills are grouped together, in a matrix organization, employees with the same skill set report to the same functional manager. The functional manager is responsible for allocating resources to projects and overseeing administrative tasks.

On the other hand, project managers are responsible for directing the majority of the work performed by the employees. They focus on the project's objectives, timelines, and quality standards. There is also a separate organization for project managers, who are accountable for the work carried out by the employees under their supervision. However, they are not responsible for administrative tasks, allowing the project team to concentrate on project-related activities without being burdened by administrative work, similar to a projectized organization.

Despite its benefits, the matrix organization structure also poses challenges, particularly in maintaining a balance of power between project managers and functional managers. Achieving this balance involves determining when the project team should handle certain tasks and when work should be delegated to functional departments. An organization that successfully maintains this equilibrium is referred to as a balanced matrix organization.

The balanced matrix structure is characterized by a harmonious distribution of power between functional managers and project managers, ensuring that neither group dominates the other.

Strategic Project Context

Why “Strategic” ?

The importance of the term "strategic" in the context of project implementation lies in the fact that projects serve as a vehicle for realizing the strategic goals of an organization. Unlike operations, which are ongoing and repetitive, projects are temporary and unique endeavors. Therefore, projects should be viewed as a means of addressing strategic objectives that cannot be met through the organization's regular operational activities.

In the organizational hierarchy, various layers develop plans at their respective levels, with all plans ultimately aligning with the organization's strategic plan. Each plan consists of a set of objectives, and these objectives are accomplished through the application of project management methodologies.

![[Strategic Project .png]]

Strategic Management Terms:

Mission
The mission of an organization represents the overarching premise that is in line with the values or expectations of major stakeholders. It is concerned with defining the overall purpose of the organization, as well as its scope and boundaries. Key questions to consider when defining the mission are: "What business are we in?" and "What is our reason for being?"

Vision
The vision of an organization defines the field of endeavor for the organization and provides a clear picture of where the organization aims to be in x years from the present.

Goal(s)
Goals are general statements of aim or purpose that are in line with the organization's mission. They may be qualitative in nature, providing a broad direction for the organization.

Objective(s)
Objectives are more specific and quantifiable statements that aim to achieve the organization's goals. They provide a precise focus for the organization's efforts.

Strategies
Strategies are fairly broad statements of intent that outline the types of action required to achieve the organization's objectives. They provide a roadmap for the organization to follow in order to reach its goals.

Actions/tasks
Actions or tasks are individual steps that are taken to implement the organization's strategies. They link the broad direction provided by the strategies to specific operational issues and individuals within the organization.

A Thought on Change Management

From: The Prince, by Niccolo Machiavelli (1469 – 1527)
“It must be considered that there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things.

For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order, this lukewarmness arising partly from fear of their adversaries, who have the laws in their favour; and partly from the incredulity of mankind, who do not truly believe in anything new until they have actual experience of it. Thus it arises that on every opportunity for attacking the reformer, his opponents do so with the zeal of partisans; the others only defend him half-heartedly, so that between them he runs great danger.

It is necessary, however, in order to investigate thoroughly this question, to examine whether these innovations are independent, or whether they depend upon others, that is to say, whether in order to carry out their designs they have to entreat or are capable to compel.

In the first case, they will invariably succeed ill and accomplish nothing, but when they can depend on their own strength and are able to use force, they rarely fail.“

Also, read PMBOK VS PRINCE2, which discusses on how PMBoK equips project managers with knowledge and flexibility, while PRINCE2 provides a structured approach with control for organizations. The key differences in areas like focus (project manager vs. governance) and planning (flexible WBS vs. rolling wave). How can they be complementary, and how can a well-combined approach improve project success rates?