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How the change to project organization succeeds

HAMBURG, 17.02.2022

When a company changes its structures from a line organization to a project organization, this means a profound organizational and also cultural change that is felt in many areas of the company. How does the changeover succeed?

The change from a line organization to a project organization affects the entire company: Working methods, hierarchy levels and career paths change. In addition to the technical work content, the disciplinary circumstances also change. Reporting paths shift and lead to new and possibly a larger number of contacts than before.

To ensure that powers and responsibilities are comprehensible to every employee, management must define in advance exactly what is to happen to the individual job positions after the restructuring. The crux, therefore, is often to determine how existing career levels will be transferred to the new system and which structures can be retained. One viable option here is to define entirely new job positions, remunerate them accordingly and integrate them firmly into personnel development.

New responsibilities and accountabilities

While there are pure line organizations, pure project organizations are rarely found. Project-oriented companies are mostly mixed forms or matrix organizations. Areas such as IT, accounting or HR are usually aligned in a linear fashion, and the project division exists alongside them with its own structure. The danger: If the transitions and interfaces are not clearly defined and the associated new positions and reporting paths are not resolved conclusively, confusion quickly arises among those involved and instead of the hoped-for increase in productivity, there is a loss of efficiency. Many employees initially find it difficult to adjust to the new situation, and the old structures cannot be quickly removed from their minds. Work packages are mixed up between project and day-to-day business, there is a lack of communication channels and information does not end up with the intended recipient in the project structure.

The solution

Even if it is unfamiliar at first, new hierarchies and responsibilities must be scrupulously observed. This requires a lot of discipline from everyone involved and patience from management if not everything works as expected right away, but also the tenacity to enforce new rules. Project topics are discussed in project meetings, line topics in department meetings. If a team member is asked by his or her supervisor about the status of the project, he or she refers the matter to the project manager. If the participants deviate from this principle, the project manager or moderator must intervene and guide the course of the conversation back to the defined topic points. In order to be able to do this, he or she must have internalized the respective work packages - i.e., the tasks and schedules defined at the beginning - very well and have them present. To this end, the new roles, authorities, competencies and responsibilities must be clearly described and defined at the beginning of the changeover so that all the people involved know their responsibilities and competencies. A large part of the subsequent success is therefore based on proper preparation.

Project competencies and career paths

For the project career to be successful, the image of the project manager with all its tasks and perspectives must be brought into focus and sharpened. These tasks must be solved within the framework of personnel development. Questions that company management and the HR department must ask themselves are: What levels of success do we need to establish in a project career? How do we perform performance evaluations and assess potential? And what does the corresponding remuneration model look like?

The solution

A practicable basis for this is provided by preceding training courses that employees complete. In these trainings, the potential of employees can be well assessed and assigned, for example by applying and testing different levels of difficulty (international certifications).

The options for evaluating performance must also be reconsidered at this point. It is common to have a performance evaluation based on the type and rank of projects completed. After completion, the project manager receives a performance evaluation and then a new project follows. So for a project manager, this means that the size and level of importance of his project are critical to his career path within the company. For example, if his project enjoys a high level of public interest, it usually also has a high priority and a lot of attention within the company. So if the performance is right, the project manager can move up quickly and take on larger tasks. Thanks to the time-limited nature of the projects, his or her individual potential can be recognized quite quickly.

Project Portfolio Management

During the transition from a line structure to a project structure, the entire project control must be analyzed: According to which criteria are projects selected, prioritized, executed and finally evaluated? Within a company, there can be very different types of projects competing for attention and funds. The available resources (personnel, budget, time) must be systematically calculated and success measured in order to make project-oriented work efficient and sustainable. If employees are to be deployed individually in projects, there must be a way to classify the projects and measure the potential of the employees.

The solution

A mature project portfolio management (PPM) is essential. Project portfolio management is used to professionally classify and coordinate current and future projects. The classification of projects is also used to assess the performance of project staff.

Criticism, resistance and fear

Für die Mitarbeiter im Unternehmen ist es wichtig, klare Vorteile durch die Einführung der Projektorganisation zu erkennen und auch die Attraktivität für die eigene Karriereentwicklung einschätzen zu können. Die neuen Karrieremodelle und Entwicklungsmöglichkeiten – beispielsweise die Projektkarriere – müssen daher im Unternehmen aktiv vorgestellt und unterstützt werden. Schnellere Aufstiegschancen und neue Karrierewege sind für viele attraktiv und sie nehmen die Herausforderungen an. Aber nicht bei jedem kommen die Neuerungen gut an und es kann auch Verlierer bei dem Wandel geben. Wer den Change-Prozess steuert, muss darauf eingestellt sein, dass sich durchaus auch Widerstand formieren kann.

The solution

Skeptics and critics must be picked up and included before they transfer their frustration to others. Their attitudes, fears and objections should be taken seriously. After all, criticism can be justified and constructive. For complex structural changes, critical voices are therefore quite useful in uncovering errors in planning. Addressing fears, taking them seriously and providing clear assistance are good methods for preparing the workforce for the big project.