Projects vs operational work – How do companies organise to be ‘best’ at both?

Read it on the blog is a project and engineering management discussion blog. A kind of ‘Carrie Bradshaw’ view of the engineering blogging world, only without the shoe fetish!

The aim of this, my second blog, is to open a debate on what is the most appropriate organisational design for companies that are required to deliver high value operational work alongside high value investment programmes. The blog assumes a basic understanding of functional, projectized and matrix organisations. For readers who wish to understand more about these definitions an excellent overview can be found at wikipedia.

I welcome reader engagement and feedback of your views and personal experiences regarding how organisations structure themselves to deliver the different capabilities of ongoing operations and project delivery. If you wish to comment please click the title of this blog and enter your comments in the box at the foot of the page.

Some options that I have encountered include:

1. Create separate functions for operational work and programme/project delivery, alongside typical support functions such as Finance, HR, Legal, IT etc.

2. Create a single function that delivers both operational work and programme/project delivery, alongside typical support functions.

3. Establish separate business divisions for operational work and programme/project delivery, each division containing all the necessary resources required to deliver its objectives.

4. Establish a matrix organisation, containing functions that are tightly defined centres of excellence alongside a programme/project delivery function that is accountable for defining the ‘what’ (programme scope), ‘when’ (programme schedule) and ‘how much’ (financial plan) by jointly managing resources within the the other functions whose leaders are primarily accountable for the ‘how well’ (quality).

So now for the ‘Carrie Bradshaw’ bit

Option 1 may be ideal, providing the demand for operational work, is closely matched to the direct labour resource capacity such that the organisation can meet its required levels of service whilst achieving high levels of resource utilisation. In other words there are no stranded resources or ‘fire departments’. But how often does this situation apply in reality? Possibly in the case of organisations that manage continuous processes, but not so for utilities whose assets are exposed to the effects of weather and other external factors.

Option 2, in my experience, is adopted to address the issue raised in option 1 such that, by combining operations and investment delivery, an opportunity for utilising operational resources on project work during periods of low operational activity is provided. But what does this mean for project delivery ? What happens to projects when the organisation experiences high levels of operational activity? How can programme/project managers produce accurate programme schedules when they don’t know what resources they have at their disposal ? Does programme/project delivery become the poor relation to operational work?

Option 3, is ideal for organisations whose operational activities and investment delivery activities are dissimilar such as water and waste water utilities and where the demand for work is extremely large. Each division being essentially a standalone organisation.

Could option 4 be a solution to the issues experienced by option 2? Establishing a professional programme & project management department within the investment delivery function. A function whose accountability is to deliver the organisation’s investment programmes utilising a common programme management methodology based on best practice and the needs of the organisation. Could this be achieved whilst maintaining a close relationship with the other functions in the organisation through joint management of resources? Is it possible to be ‘best’ at operational work AND project delivery, or does one always succeed at the expense of the other?

I welcome all views, especially those relating to utility industries, please comment.