Article - Implementing Project Management at a Functional Organization

The Phone Call

About six months ago I was contacted by a senior manager of a large company who proceeded to tell me: "Listen, we know that you have a project management course and we are interested in it … But would you be able to come in and just assess what it is that we are doing wrong with projects and maybe customize your course according to the findings?" Obviously I agreed to get together with him and we arranged for a meeting.

Study Background

It turned out that his company was in the real estate development industry with strong ties to federal, provincial and municipal governments.

The organization had recently been created through a merger of several other smaller firms. Consequently, the company has experienced a significant growth in the number and size of their projects (the largest ones hovering at around $500 million). At the time, a typical company project portfolio consisted of approximately fifty ongoing projects, twenty of which were "cross-departmental" (i.e. required the involvement of five to ten or more different departments).

As a result of the above-mentioned events the company started experiencing problems in the areas of resource planning, resource allocation and project management. For example, while the employees of the company were complaining that they were too busy to fulfill all of their project and functional duties, the senior management was concerned that a lot of projects were late and the quality of final product was subpar. Furthermore, there were certain issues with proper planning of the projects, adequate project control and performance reporting. Many of the company's flagship megaprojects were over budget by almost 50% and some of them were close to a year late.

The bottom line expressed by one of the executives was:

"There is something horribly wrong with our projects . . . we are not entirely sure what it is and where to start since there seem to be too many problems."

Study Methodology

I suggested that we start by interviewing the cross-section of organization's employees starting all the way at the top of the company (i.e. C-level executives) down to department heads, project specialists (the company did not have any designated project managers) and even some outsiders, including customers and suppliers.

The idea behind this suggestion was that it would be more appropriate to collect and understand people's issues with projects and propose solutions that address these problems directly rather than come up with an "off-the-shelf", best-practices solution. Also we believed that there is a better chance of people accepting our solutions if you can map them directly to problems mentioned by the employees. We also concluded that an informal approach to information gathering would be more appropriate for this exercise. As a result, all of the data presented in this article was collected mainly through one-on-one interviews.

Thinktank Consulting did not initially impose any standardized questions on the interviewees, but after a certain number of meetings several key issues started emerging repeatedly and therefore the rest of participants were asked to provide their opinions on these issues.

In total, thirteen department heads, seven executives, six project leads and four external people - both customers and subcontractors - were interviewed.

Study Results

The overall results of the assessment stage are summarized in Table 1.

Table 1

Summary of Results Percentage of Interviewees Who Mentioned This Problem
Lack of communications between the departments 98%
Lack of uniformity in project management approach across the departments 92%
Lack of accountability for cost and time overruns and poor quality 83%
Lack of feasibility analysis in project selection 79%
Projects are not prioritized properly 74%
Underestimation is an issue at our company 69%
Projects are frequently over budget or late (either underestimated or due to lack of skills) 66%


We can see right away that an overwhelming number of people interviewed agreed that communication channels are not working properly – especially on large, strategic projects.


  • "One department makes a commitment, and another has to fulfill it",
  • "Department A does its part on the project and then throws it over the fence to Department B"
  • "We do not recognize the interdependency of projects"
  • "I can't speak for the entire organization, but it never happens in my department"

Analysis of the freeform comments from the interview participants suggests that there is a specific lack of project communications on large strategic projects especially during the initial stages when the scope and potential impacts of the project are being defined.

Commonality of the Project Management Approach

Also, an overwhelming majority of interviewees thought that there was a lack of commonality in training and methodology with respect to project management in the organization.


  • "Most of the templates are department-specific"
  • "I had to use templates from my previous company"
  • "There is a uniformity when you have to get the money, but not when running projects"
  • "There is a lack of understanding on the role of a project manager"

A review of comments from the participants in the survey shows that running projects properly, and especially handover of the projects from one department to another, appears to be the key concerns of company employees.  

Project Accountability

Feasibility and Justification

Many of the people interviewed raised concerns about the feasibility of projects undertaken by the company in the first place. "Sometimes it seems that we take on projects just to prove that we can, and sometimes the projects are initiated by a simple 'Wouldn't it be cool if we could do this . . .' " mentioned one of the department directors during an interview.


  • "There is resistance to the fair assessment of project feasibility"
  • "Unlikely to get $100K to conduct a feasibility study of a $100 mil project"
  • "We are very quick to jump to solutions"
  • "Sometimes an executive pet project will inexplicably go ahead"
  • "When approving projects, power should not equal approval. This kills good ideas"

Budgets and Timelines


  • "Cost overruns are typically not viewed as too much of an issue" (Accountability)
  • "If you don't have a plan, it is very difficult to be accountable" (Accountability)
  • “How can you know whether you are on time or not if we don’t document anything?” (Budgets and Timelines)
  • "We have historical data, but unrealistic timelines are still imposed" (Estimation)
  • "We artificially decrease/hide costs in order to get approval” (Estimation)
  • "Sometimes we have to hide costs in contingency" (Estimation)
  • "I can't speak for the entire organization, but it never happens in my department"

Another interesting aspect was discovered during the assessment phase: the perceptions of whether the projects were on time and on budget were quite different between the senior management and the general project team members. Specifically, both department heads and executives had trouble answering the following question: "Do you feel that your projects are mostly delivered on time and on budget?" Analysis of freestyle comments, however, allowed us to understand the reasons behind this. It appears that since cost and time commitments were typically not properly recorded or tracked, it was very difficult for people not involved in the projects directly (i.e. department directors and senior executives) to be aware of their status.

We also discovered that underestimation was an issue at the company due either to direct pressure applied from above, or overly optimistic forecasts created sometimes to please the management of the company, or to obtain approval on projects that would not have been approved otherwise.


Guiding Principles

The following guiding principles were used for this project in general and in the process of generating the recommendations:

  • The main focus of our improvement efforts were larger, strategic interdepartmental projects, since they seemed to be presenting the most problems to the company and we wanted to "go after the big fish" first rather than scatter our efforts on trying to address all of the project-related issues at once.
  • The exact definition of what specifically constitutes a large, strategic interdepartmental project would be determined at a later stage of the overall initiative, but we definitely had an understanding that a $500 million endeavor involving ten departments of the company would most definitely fall in the "flagship project" category.
  • Major importance will be given to simplicity and user-friendliness of the processes proposed since the concept of project management was so foreign to most of people at the company. Therefore, "dropping" a full-scale PMBOK-type project management framework on the organization would probably have scared and turned-off most of the employees.
  • All proposals generated by Thinktank Consulting have to be screened, analyzed, verified and, if necessary, updated by the "focus group" of company employees with previous project management experience. This step was necessary in order to fine-tune a fairly generic set of project management processes and documents to the company's realities.

Action Items

The following action items were given to the company based on the issues identified in the first stage:

  1. Develop a simple and user-friendly project management methodology and apply it to one or several pilot projects. 
  2. Develop a minimal number of project management templates and make their use mandatory on one or several pilot projects
    1. Project Charte
    2. Project Plan
    3. Status Repor
    4. Meeting Minute
    5. Change Request
    6. Lessons Learned
  3. Put all potential project stakeholders (including department heads and executives) through a two-day project management workshop.
  4. Introduce department-independent project managers to larger interdepartmental projects (initially to pilot project only).
  5. If the pilot projects succeed, then decide to which projects the new methodology should apply.
  6. In phases 2 and 3 move into program management/strategic resource planning and ultimately towards project portfolio management (see Figure 3)

Note: Although a "Business Case” document should initiate the project management methodology chain, it was decided to postpone the implementation of this step until Phase 3 – Portfolio Management implementation. This was because the organization already had a project selection procedure, albeit somewhat deficient.

Additional Items and Next Steps

This is a continuation of Implementing Project Management at a Functional Organization. At the conclusion of the first phase of our work, a list of action items was given to the company based on the issues identified in the first stage.  If you wish to reference the first part of this article, which appeared on May 5, 2010, please click here.

We also strongly recommended to the company's management that they try to capture the "before" organizational project performance metrics with respect to time, budget, scope and stakeholder satisfaction. This data will be required in order to compare the results of the pilot project and decide whether it is beneficial for the company to move ahead to the next step in the project management framework initiative.

Further, it will be necessary to consider an efficient way of communicating project results (Phase 1 and all subsequent phases) to the entire company at each key milestone of the entire program. To this end, we proposed the creation of a "Project Management Framework" page on the company Intranet.

Figure 1

Table 2

Phase 1

Phase 2

Phase 3

Introduce project management methodology (v1.0) Revise and update project management methodology (v2.0) Revise and update project management methodology (v3.0)
Introduce project management documentation (v1.0) Revise and update project management documentation (v2.0) Revise and update project management documentation (v3.0)
Conduct company-wide project management workshop Determine the need for further training Implement additional project management training
Commit to Strategic Project Manager (one pilot project) Introduce Strategic Project Manager (one pilot project) Introduce Strategic Project Managers (several pilot projects)
  Review the results of the pilot. Go/No go decision w.r.t. several pilot projects Review the results of the pilot. Go/No go decision w.r.t. all strategic projects
  Determine on which projects the project management methodology is now mandatory  
  Develop strategic program management/strategic resource management implementation plan Introduce project portfolio management (PPM) and develop a PPM implementation plan


Note: Figures 3 to 6 demonstrate the linkage between the issues voiced by the company's employees during the assessment stage of the project and the solutions proposed.

Table 3


Addresses which Issues


Project Management Methodology Lack of communications Entire methodology is based on creation of proper documentation and peer reviews with the project stakeholders
Lack of project management methodology Self-explanatory
Lack of accountability Introduces Status Reports, Meeting Minutes and Lessons Learned documents
Lack of project feasibility/ justification analysis One of the sections of the Project Charter deals with project feasibility/justification

Table 4


Addresses Which Issues


Project Management Documentation Lack of communications All documents address this issue
Lack of project management methodology All documents address this issue
Lack of accountability Status Reports, Project Charter and Project Plan
Lack of project feasibility/justification analysis Section of the Project Charter directly deals with project/ feasibility/justification

Table 5


Addresses Which Issues


Project Management Workshop Lack of communications Workshop included a module dedicated to effective project communications and overview of all project management documents
Lack of proper estimation Entire workshop module was dedicated to generation, presentation and negotiation of estimates
Lack of project management methodology Workshop is dedicated to dissemination of project management skills and concepts
Lack of project feasibility/justification analysis Workshop included a discussion of project feasibility

Table 6


Addresses Which Issues


Project Manager of Strategic Projects (Department-Independent) Lack of interdepartmental communications PM will be responsible for production and dissemination of all project-related documentation and conducting peer reviews across all the departments involved in the projects
Lack of uniformity in project management approach He/she will be responsible for maintaining all project documentation and following the methodology prescribed on an entire project rather than only parts of it
Lack of accountability Project Manager – Strategic Projects will be the person responsible for creation of Status Reports (accountability to project)
Lack of project feasibility/justification analysis He/she should be qualified to understand the basics of finance and be able to properly assess projects proposed
  Problem of underestimation Project Manager – Strategic Projects should be properly trained to estimate projects with appropriate degree of accuracy
  Projects are frequently over the budget or late Experienced project manager should be able to address this issue by using proper methodology, effective communications and improved project accountability



Follow up

The following steps were undertaken as a result of the above-mentioned recommendations:

  1. The project management methodology proposed (see Figure 2) was validated by the focus group and approved by the senior management. There was mutual agreement that the current methodology is only the first step in developing a company-specific project management framework and will be revised and updated in each of subsequent phases.
  2. Six key project management documents (see Figure 2) were reviewed by the focus group and updated according to their feedback to better reflect the organization's realities and specifics. These documents will also be updated in the following phases based on the feedback provided by the pilot project team members.
  3. All of the people involved in projects (as project managers, team members, champions or any other types of stakeholders) have undergone a two-day project management seminar in order to familiarize them with key basics of project management.
  4. Four pilot strategic projects were selected and department independent project managers (i.e. reporting to the Director of Project Management) were hired and assigned to manage them.
  5. The project management department, with the assistance of the IT department, has created a "Project Management" section on the company Intranet where all the methodology documents and pilot project information are posted.

Lessons Learned

There were several lessons that we learned during the implementation of this initiative. Among them were:

  1. Never try to impose an "off-the-shelf" project management methodology onto a functional (traditional) organization. Instead:
    • Interview a cross-section of company employees and, if possible customers and suppliers, to obtain the real project-related issues.
    • Use a "best practices" project management methodology to tailor the solutions proposed to the concerns voiced by the people working for the organization
  2. Debrief key stakeholders at every milestone. Presentation software like PowerPoint with charts, graphs and tables is your best friend!
  3. Initially try to concentrate on the simplest forms of the methodology. If processes and documents become too complicated people will find creative ways to ignore them!
  4. Always use "focus groups" of company employees with at least a basic knowledge of project management to validate the processes and templates you are proposing. This will ensure that they are properly fine-tuned to company realities and you get buy-in.
  5. Try to determine what constitutes a project and what doesn't for that particular organization. Establish a threshold to distinguish between "project" and "business as usual".
  6. Run several one- or two-day company-wide project management seminars. Your mission is not to create several dozen project managers "overnight" but rather to familiarize all of the potential project stakeholders with the key concepts of project management.
  7. If a significant resistance to change is encountered (a very likely scenario) try to apply a phased approach. For example, select a group of pilot projects to be run under the new methodology to be followed by all flagship projects, to be followed by all projects.
  8. Introduce the role of a full-time project manager to the company. Depending on the number of pilot projects, the organization will probably require more than one.
  9. Capturing the "before and after" project related data is essential. Otherwise it would be very difficult to prove to the naysayers (and the executives) that the project performance and results have indeed improved and that the investment has been worth the effort.
  10. And finally, keep in mind that communication is the key. An intranet webpage dedicated to the new methodology and project-related news, seminars, debriefing lunch-and-learns, short updates during functional department head meetings – any combination of the above-mentioned tools should be used to carry the positive message to your organization.


About the Author

Jamal Moustafaev, MBA, PMP – president and founder of Thinktank Consulting is an internationally acclaimed expert and speaker in the areas of project/portfolio management, scope definition, process improvement and corporate training. Jamal Moustafaev has done work for private-sector companies and government organizations in Canada, US, Asia, Europe and Middle East.  Read Jamal’s Blog @

Jamal is an author of two very popular books: Delivering Exceptional Project Results: A Practical Guide to Project Selection, Scoping, Estimation and Management and Project Scope Management: A Practical Guide to Requirements for Engineering, Product, Construction, IT and Enterprise Projects.