Monday 2 May 2022

Functional and Project Management: Unity and The Struggle of Opposites

The article attempts to identify objectively existing obstacles in the implementation of project management methods in a large company and find ways to overcome them. This analysis is carried out on the basis of a comparison of various aspects of functional and project management methods.

Principles of company management

In management theory, many different management approaches are described, most of which are used to one degree or another in companies. The choice and adoption of a particular management practice mainly depend on the decisions made by the management of organizations, on the level of professional knowledge and practical experience of management. A significant impact on the application of certain management concepts is exerted by the internal environment of the company, its corporate culture.

There are several approaches that are most often used today. First of all, this is budgeting and controlling - the principle of management "from finance", when financial planning and further compliance with the plans are put at the forefront. In recent years, the management of a balanced scorecard (a method of transferring and decomposing strategic goals for planning the operational activities of each individual employee and monitoring their achievement) first became widespread, and then began to decline. No less popular is the process approach to management, based on the concept that management is a continuous series of interrelated actions or functions. There are organizations whose management is focused on the issues of continuous quality improvement or on the concept of self-learning.

Along with the listed approaches in the practice of modern enterprises, functional and project approaches to the management of the organization, built on various basic management principles, are widely used.

Functional management

Functional management - management, during which each manager is responsible for the execution of work related to a certain dedicated function in the company. These can be production, technological, design, financial, information or support tasks, the variety of which depends on the specifics of the company's activities. The emergence of this type of management is associated with the need to improve various aspects of the organization's activities and improve the maintenance of the main target process, for example, the production of products or the provision of specialized services.

Theories of functional control have long been established. Management approaches used in general management are taught in universities, widely advertised by consulting companies. Under these methods, a certain corporate culture has been formed, inherent in many leading players in the world market.

Project management

The specialty "project manager" still does not appear in the lists of official professions, although in recent years many universities have opened specializations in project management, which is undoubtedly a significant progress in this matter. For example, since 2010, the University of Project Management of the Group has launched a comprehensive advanced training program in the specialty "Project Management". Despite the progress of recent years, quite a few Russian companies can boast of success in the practical application of the project approach, and their corporate culture is rarely adapted to these methods.

What unites the functional and project approaches

Often, the company does not use project management methods, and nevertheless projects are successfully implemented. What is the secret of this situation? In fact, there is no secret as such. Both the operational activities of the organization and the individual project are managed according to the same principles, which are reflected in the Deming cycle. The only "deviation" in the case of projects is the presence of initiation and completion stages.

The Deming cycle (Plan-Do-Check-Act <1>, PDCA) is a cyclically repeating decision-making process that is most often used in quality management.

<1> Plan-Execute-Check-Correct (Act).

The PDCA methodology is the simplest algorithm of actions of the manager to manage the process and achieve its goals. The management cycle begins with the planning of goals and processes necessary to achieve the goals and meet the needs of consumers, continues with the stage of implementation of the planned actions, followed by verification of the result (collection of information and monitoring of the result based on key performance indicators, identification and analysis of deviations) and additional impact if necessary (taking measures to eliminate the causes of deviations from the planned result, changes in planning and resource allocation). After that, the cycle closes and returns to planning (see figure).

                           ¦                          ¦
                           ¦  ---------------¬  ¦
                           ¦  ¦                  --  L-
                           ¦  ¦                      /
                           ¦  ¦                    /
                           L---               /
                       Planning     Execution     
                            /                 ---¬
                          /                   ¦  ¦                     
--------------           /         cycle      ¦  ¦       --------------
¦  Initiation             -¬  --              ¦  ¦       ¦  Completion   
¦               /          ¦  ¦    (PDCA)    --  L-      ¦              /
L------------¬ /           ¦  ¦                   /      L------------¬ /
             ¦/            ¦  ¦                  /                    ¦/
                           L---                 /
                            Impact          Examination
                            /                 ---¬
                           /                  ¦  ¦
                          /                   ¦  ¦
                          -¬  --               ¦  ¦
                           ¦  L-----------------  ¦
                           ¦                      ¦

In practice, the Deming cycle is used repeatedly with different periodicity: when performing the main activity - with the periodicity of reporting and planning cycles. When carrying out corrective actions, its duration may be less or greater than the duration of the reporting and planning cycles and is established depending on the nature, volume, duration and content of measures to eliminate the causes of deviation.

However, there are differences between the project and functional approaches to management - these are fundamentally different degrees of uncertainty during planning, as well as different opportunities for using resources. If everything is functionally clear in operational activities, everything has already been passed more than once, then projects are a completely new activity for the company. Same resources. If in operational activities the organizational structure is built and everyone understands who manages whom and who is responsible for what, then employees from different functional units participate in projects, especially large ones. This leads to organizational difficulties: building non-standard organizational structures and communication systems, distributing rights and responsibilities.

When a "functional" company begins to conduct project activities, the success of this activity often depends on the abilities of project managers. "Good" and successful project managers in such a company should:

be able to build a trusting relationship with its management, which allows you to more effectively solve problems that arise during the project;

have a friendly working relationship with functional units, which allows you to involve the right employees of their units to work on projects for the required period;

be able to motivate project participants using administrative methods, or be able to "knock out" a premium fund for your project.

But there cannot be many such managers in the company. A "good" project manager for a functional company can only exist against the background of most "bad" ones. Consequently, using standard management methods, it is impossible to execute all the company's projects successfully.

How to implement project management

Naturally, most projects have certain problems even at the initialization stage. Management may have uncertainty about the effectiveness of the projects being launched. Almost always, the company is faced with the need to change management approaches.

At the same time, there is often no clear understanding that project management is not only the use of a certain set of tools, but also to a greater extent a change in the entire psychology of management. It is necessary to change the corporate culture in which management trusts existing management methods and in which many elements of the project approach and skills in using project management tools are missing.

Project management has its own specifics and its key tasks. During the implementation of the project, the project manager must:

  • manage a team of contractors (project team), contractors, and sometimes subcontractors;
  • manage your budget;
  • manage existing and potential risks;

plan the project, draw up and maintain work schedules taking into account the use of resources, etc.

The components of the project are its cost, the time of implementation of the project and individual stages, resources (financial, material, personnel). Responsibility for all components of the project lies with his manager, and whether the project will be successfully executed depends only on him, on what management methods he has chosen, and on how successfully he was able to implement them.

Project management methods differ from functional management methods primarily in that regular management operates with repetitive processes, and project management - a unique set of tasks that need to be solved in a limited period of time.

Starting to implement project management methods and tools in the company (building an organizational structure, planning, managing risks, contracts, creating a motivation system, etc.), management should understand that all of them will initially clash in confrontation with the existing foundations of functional management.

To implement the project approach, the company's management can choose the standard path of "trial and error", gradually adjusting management to new needs, inviting consultants and trying to implement what they offer with the help of existing management approaches.

But there is another option. Any project is like creating a new business, new opportunities. In both cases, there is a focus on the result, uncertainty, risks and the need for resources (capital). Only a new business is usually created by the owner himself - the owner of resources, and project management in most cases is entrusted to hired managers. As a result of this difference, one but rather difficult question arises - the question of trust. It is he who is the basis of all failures to implement project management as a new management technology.

The principles of project management require the concentration of resources and responsibilities of the project manager, and the lack of trust in the manager leads to the blurring of responsibility and a decrease in the ability to effectively manage resources.

How to teach a manager to trust a project manager?

We can recommend a number of steps that can facilitate the transfer of responsibility and authority in the implementation of project management:

  • appoint a trustee of shareholders as the project manager. The main characteristics of the position are:
  • knowledge of project management or sufficient flexibility to perceive new management principles with the help of a personal consultant adopted for the duration of the project;
  • subordination to the ceo or directly to shareholders;
  • sole responsibility for the result;
  • the ability to manage or influence all the necessary resources of the project;
  • create a methodological center for project management (project management office), a body independent of project implementation, accepting the experience of consultants and the first project and responsible for the further development of project management in the company;
  • determine with the help of external independent consultants the risks of the project, the cost taking into account known risks and the reserve for uncertain risks, the organizational structure of the team and the motivation model, the tools and processes used in the project;
  • by the project office to conduct a periodic audit of the project;
  • analyze the completed project;

use experience in other projects, constantly improving management processes.

This approach will make it possible to achieve the success of a single pilot project and at the same time begin to implement the methodology and create a culture of project management in the company, gradually forming the institute of qualified project managers and increasing the prestige of this position.

Advantages of the project approach

The project is an independent object of management, which has its own specifics, and it is at least irrational to apply standard methods of managing operational activities to it. The advantages of project management, taking into account all the features of the project, are undoubted, their enumeration and detailed description can be found in almost every book devoted to the subject of projects. I would like to highlight one, according to the author, the most important point: the methods of project management make it possible to make the progress of the project more predictable, as a result of which the owners can rationally distribute financial, material and human resources, managing them, and not just react to the circumstances that have arisen.

In the Russian economy, there are a number of industries, such as energy, oil and gas and mining, construction, investment activities, mechanical engineering, instrumentation, etc., for which a significant share of activities is associated with large projects. 


Today, the need to apply a specialized approach to project management has already been realized, a new generation of managers is emerging who understand and use its methods and tools in practice. The process of forming a new management culture in many large companies has already been launched and, probably, is irreversible.

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