A projectized organization is an organizational structure that places a strong emphasis on project management. In this structure, projects are at the center of the organization’s operations, and most employees work on a project-by-project basis rather than having permanent functional roles. The concept of a projectized organization has gained traction in industries where project work is the primary mode of delivering products or services.
Projectized organizations are characterized by several key features:
Project Teams: Employees are organized into project teams, often consisting of cross-functional members who collaborate to complete a specific project.
Temporary Assignments: Employees are temporarily assigned to projects and return to a resource pool or are assigned to new projects once a project is completed.
Project Managers: Project managers play a central role in projectized organizations, overseeing project planning, execution, and control.
Resource Allocation: Resource allocation is dynamic, with individuals allocated to projects based on project needs and their skills and expertise.
Project Management Office (PMO): Many projectized organizations have a dedicated PMO that provides project management support, standards, and methodologies.
To understand projectized organization fully, it is essential to delve into its core concepts:
1. Project-Centric Approach:
Definition: A project-centric approach means that the organization’s primary focus is on projects as the means of delivering products or services.
Characteristics: Projectized organizations prioritize project success, and project managers have significant autonomy and authority.
2. Temporary Teams:
Definition: In projectized organizations, teams are formed for the duration of a specific project and disband once the project is completed.
Characteristics: Team members are selected based on their skills and expertise relevant to the project’s requirements.
3. Matrix Structures:
Definition: Matrix structures are common in projectized organizations, where employees have dual reporting relationships to both project managers and functional managers.
Characteristics: Matrix structures facilitate efficient resource allocation and coordination between project work and functional responsibilities.
4. Dynamic Resource Allocation:
Definition: Resource allocation is dynamic and based on project needs, with individuals moving in and out of projects as required.
Characteristics: This flexibility allows organizations to allocate the right resources to projects and adapt to changing project demands.
5. Project Management Standards:
Definition: Projectized organizations often establish project management standards and methodologies to ensure consistency and quality in project execution.
Characteristics: A dedicated PMO may oversee the development and implementation of these standards.
Significance of Projectized Organization
Projectized organizations hold significant importance in several contexts:
For Industries:
Construction: Projectized organization structures are prevalent in the construction industry, where each construction project is unique and requires specialized teams.
Consulting: Consulting firms often adopt a projectized approach to deliver client projects efficiently.
For Project Management:
Project Success: The projectized approach places a strong emphasis on project success, resulting in effective project delivery.
Resource Utilization: Dynamic resource allocation ensures that the right resources are available for each project.
For Research and Development:
Project-Oriented Research: Research in project management explores best practices and methodologies for projectized organizations.
Innovation: Projectized organizations often foster innovation and knowledge sharing among project teams.
Practical Applications of Projectized Organization
Projectized organization offers practical applications for businesses and industries that rely heavily on project work:
For Industries:
Resource Allocation: Adopt a dynamic resource allocation system to ensure that projects have access to the necessary skills and expertise.
Project Teams: Form cross-functional project teams with members who bring diverse skills to the table.
For Project Management:
PMO Establishment: Establish a Project Management Office (PMO) to provide project management support, standards, and training.
Project Managers: Develop project management competencies among project managers and empower them with decision-making authority.
For Human Resources:
Training and Development: Invest in training and development programs that enhance employees’ project management and collaboration skills.
Talent Pool: Create a talent pool of individuals with diverse skills and expertise who can be assigned to various projects.
For Innovation:
Knowledge Sharing: Encourage knowledge sharing and lessons learned among project teams to drive innovation.
While projectized organizations offer numerous benefits, there are challenges and considerations to keep in mind:
Resource Conflicts: Resource conflicts can arise when multiple projects demand the same specialized resources.
Coordination Complexity: The matrix structure can introduce complexity in managing dual reporting relationships.
Employee Satisfaction: Employees may experience uncertainty and stress due to frequent project assignments and team changes.
Project Dependencies: Managing interdependencies between projects can be challenging in a projectized organization.
Future Directions in Projectized Organization
As organizations continue to evolve in response to changing market dynamics and technological advancements, projectized organizations may adapt and expand in the following directions:
Agile Practices: The adoption of agile project management practices may become more widespread in projectized organizations to enhance adaptability and responsiveness.
Remote Project Teams: The rise of remote work may lead to more distributed project teams and innovative ways of collaborating.
Artificial Intelligence: AI and machine learning tools may be used to optimize resource allocation and project planning.
Sustainability: Projectized organizations may increasingly focus on sustainability practices in project execution.
Conclusion
Projectized organizations represent a dynamic and responsive approach to project management, where projects are at the core of an organization’s operations. By adopting a project-centric approach, these organizations prioritize project success, efficient resource allocation, and project management standards. Projectized structures are particularly prevalent in industries where project work is the primary mode of delivering products or services, such as construction and consulting. As organizations continue to adapt to evolving market dynamics and technological advancements, projectized organizations remain a pivotal framework for achieving effective project delivery and maintaining a competitive edge.
Key Highlights:
Introduction to Projectized Organization: A projectized organization emphasizes project management, with most employees working on a project-by-project basis rather than permanent functional roles.
Key Features:
Project teams collaborate on specific projects.
Employees are temporarily assigned to projects.
Project managers play a central role.
Resource allocation is dynamic.
Project Management Office (PMO) provides support and standards.
Core Concepts:
Project-Centric Approach: Focus on project success with significant autonomy for project managers.
Temporary Teams: Teams formed for specific projects and disbanded afterward.
Matrix Structures: Dual reporting relationships to project and functional managers.
Dynamic Resource Allocation: Flexibility in allocating resources based on project needs.
Project Management Standards: Establishment of standards and methodologies by PMO.
Significance:
Industries like construction and consulting benefit from efficient project delivery.
Ensures project success and effective resource utilization.
Dynamic resource allocation and cross-functional project teams for industries.
Establishment of PMO and development of project management competencies for project management.
Investment in training and talent pool creation for human resources.
Knowledge sharing and continuous improvement for innovation.
Challenges and Considerations:
Resource conflicts and coordination complexity.
Employee satisfaction and managing project dependencies.
Future Directions:
Adoption of agile practices for adaptability.
Remote project teams and AI tools for optimization.
Focus on sustainability practices.
Conclusion: Projectized organizations prioritize project success and efficient resource allocation, making them pivotal in industries reliant on project work. As organizations evolve, projectized structures remain crucial for effective project delivery and maintaining competitiveness.
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The Amazon organizational structure is predominantly hierarchical with elements of function-based structure and geographic divisions. While Amazon started as a lean, flat organization in its early years, it transitioned into a hierarchical organization with its jobs and functions clearly defined as it scaled.
The Coca-Cola Company has a somewhat complex matrix organizational structure with geographic divisions, product divisions, business-type units, and functional groups.
Costco has a matrix organizational structure, which can simply be defined as any structure that combines two or more different types. In this case, a predominant functional structure exists with a more secondary divisional structure.
Costco’s geographic divisions reflect its strong presence in the United States combined with its expanding global presence. There are six divisions in the country alone to reflect its standing as the source of most company revenue.
Compared to competitor Walmart, for example, Costco takes more a decentralized approach to management, decision-making, and autonomy. This allows the company’s stores and divisions to more flexibly respond to local market conditions.
Dell has a functional organizational structure with some degree of decentralization. This means functional departments share information, contribute ideas to the success of the organization and have some degree of decision-making power.
eBay was until recently a multi-divisional (M-form) organization with semi-autonomous units grouped according to the services they provided. Today, eBay has a single division called Marketplace, which includes eBay and its international iterations.
Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams are based on the main corporate functions (like HR, product management, investor relations, and so on).
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Google (Alphabet) has a cross-functional (team-based) organizational structure known as a matrix structure with some degree of flatness. Over the years, as the company scaled and it became a tech giant, its organizational structure is morphing more into a centralized organization.
IBM has an organizational structure characterized by product-based divisions, enabling its strategy to develop innovative and competitive products in multiple markets. IBM is also characterized by function-based segments that support product development and innovation for each product-based division, which include Global Markets, Integrated Supply Chain, Research, Development, and Intellectual Property.
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McKinsey & Company has a decentralized organizational structure with mostly self-managing offices, committees, and employees. There are also functional groups and geographic divisions with proprietary names.
Microsoft has a product-type divisional organizational structure based on functions and engineering groups. As the company scaled over time it also became more hierarchical, however still keeping its hybrid approach between functions, engineering groups, and management.
Nestlé has a geographical divisional structure with operations segmented into five key regions. For many years, Swiss multinational food and drink company Nestlé had a complex and decentralized matrix organizational structure where its numerous brands and subsidiaries were free to operate autonomously.
Nike has a matrix organizational structure incorporating geographic divisions. Nike’s matrix structure is also present at the regional and sub-regional levels. Managerial responsibility is segmented according to business unit (apparel, footwear, and equipment) and function (human resources, finance, marketing, sales, and operations).
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Samsung has a product-type divisional organizational structure where products determine how resources and business operations are categorized. The main resources around which Samsung’s corporate structure is organized are consumer electronics, IT, and device solutions. In addition, Samsung leadership functions are organized around a few career levels grades, based on experience (assistant, professional, senior professional, and principal professional).
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Starbucks follows a matrix organizational structure with a combination of vertical and horizontal structures. It is characterized by multiple, overlapping chains of command and divisions.
Tesla is characterized by a functional organizational structure with aspects of a hierarchical structure. Tesla does employ functional centers that cover all business activities, including finance, sales, marketing, technology, engineering, design, and the offices of the CEO and chairperson. Tesla’s headquarters in Austin, Texas, decide the strategic direction of the company, with international operations given little autonomy.
Toyota has a divisional organizational structure where business operations are centered around the market, product, and geographic groups. Therefore, Toyota organizes its corporate structure around global hierarchies (most strategic decisions come from Japan’s headquarter), product-based divisions (where the organization is broken down, based on each product line), and geographical divisions (according to the geographical areas under management).
Walmart has a hybrid hierarchical-functional organizational structure, otherwise referred to as a matrix structure that combines multiple approaches. On the one hand, Walmart follows a hierarchical structure, where the current CEO Doug McMillon is the only employee without a direct superior, and directives are sent from top-level management. On the other hand, the function-based structure of Walmart is used to categorize employees according to their particular skills and experience.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
