March 1, 2013 1 Comment
Within the corporate realm, organizational structures are both complex and varied. Much of the structure that makes up the internal mechanics of any organization is often the result of various preferences of the upper management along with carry over from previous management individuals.
As companies grow, the complexity of their organizational structures can grow just as organically and in many cases, a uniform ‘common’ structure is not always apparent. Additionally, for certain companies and industries, segmentation between various divisions is often the logical and desired outcome depending on the overall portfolio strategy and product offerings.
From the standpoint of the project manager, it is often daunting to navigate the organizational waters and depending on the layout, the job of the project manager as well as the tactics they use to accomplish their job may have to adjust to accommodate the various ways things are being done and how they are organized.
With that being said, project managers may not have a say in what type of structure they would prefer to operate in. Oftentimes, that is dictated for them. But in a general sense, what structure would, from the project manager’s perspective be ‘most’ ideal?
As alluded to, there are often varied structures that exist in the corporate realm. These structures are sometimes ad hoc and often times overlap and sometimes even contradict each other when examining them from the top down. Yet at a foundational level, the different types of organizational structures can often be summarized into three specific types, which are defined as follows:
1. Functional Org
This is an extremely common organizational structure where team members work for a specific department (engineering, human resources, information technology, etc) and will in turn be assigned or ‘loaned’ to a specific project manager as needed. In many cases, a project manager may be ’embedded’ into a functional team if needed and will often not work in areas outside of that team’s scope. In this type of structure, the department managers and functional leaders carry the most sway and the project manager in this circumstance is in a relatively weak role.
- Usually, team members will have a deeper expertise by function
- Many members will be very specialized in their specific skill sets
- Good career path for the individual contributors and functional managers
- Very little efficacy to the project manager role
- Projects themselves are generally prioritized rather low
- Resources can often be removed from a project at a moment’s notice
- Poor career path for the project manager
2. Projectized Org
From this standpoint, the organization is actually structured in and around the projects themselves, as opposed to the functional breakdowns by deliverables. In this structure, the project manager is not only the manager of the project, but will often operate as the department manager as well, with individuals working on his/her projects reporting directly to him or her. In this type of structure, the project manager carries the most sway.
- Project manager has more authority
- Far easier for project communication to occur
- Issues with resources are less of a problem
- Less of a career path for individual contributors
- Less specialization; team members are more ‘jack of all trades’
- Less specific loyalty to project outcomes
3. Matrix Org
The final structure is essentially a combination of the aforementioned functional and projectized structures. Essentially, both functional managers and project managers exist for projects and programs. There are varying degrees of a matrix structure as well. A ‘strong matrix’ has the project manager carrying a little more clout while the ‘weak matrix’ has the project manager with a little less influence. The happy medium is the ‘balanced matrix’ where the project manager and the functional manager are peers and equals.
- Is often the ‘best of both worlds’ option, carrying benefits of both standard structures
- Project managers can get deep expertise and function across varying company programs
- Good career paths for team members, functional managers and project managers
- More overhead due to some duplication of efforts between functional and project managers
- Can lead to some confusion with resources reporting to a functional manager while having dotted lines to project managers, essentially giving them more than one manager to answer to (Office Space anyone?!)
- Can lead to contention between functional and project managers if disagreements arise
So Which is the Best?
The answer to this will vary depending on who you ask. From our point of view as project and program managers, we will likely bias towards the projectized structure. But is that one honestly the best?
If one examines things and attempts a best of breed analysis, the matrix organization is often thought of as the best of both worlds, provided it leans more towards the balanced or strong matrix structure. In this case, not only does the project manager function in a more authoritative capacity, team members and functional managers are equally afforded career paths that suits their desires. As such, while a matrix may not be the ‘uber project manager’ option, it does appear to be the best overall option. One has to consider that a project’s success often depends on certain intangibles, including the satisfaction of the team members. Individual contributors working in projectized organizations may become disillusioned with their options and decide to take their business elsewhere. This can of course have dire consequences for the success of the project.
One other point of notice adding additional credence to the matrix organization is unlike the other types, the project manager can also examine career opportunities that may span beyond their existing role. Maybe they discover that being a functional manager is something they would like to experiment with. Or perhaps ancillary roles such as product management, sales, and so forth. While transitions can occur in other org structures, the very nature of a matrix usually indicates that the Human Resources department has defined various career paths well, providing numerous options for those in the company.
Which org structure is superior will always be a point of debate amongst peers in the industry. The point of this article is more to give views based on the project manager’s perspective, as opposed to taking sides on the veracity of a particular organizational layout. How one functions in any structure is many times up to the individual and how they perform and adapt in the structure they reside. But having some knowledge of the different types of structures can give more guidance to the project manager when they are determining what is best for them in their career path.