When your tempo is set by the inflow of projects, it's all about how your people perform.
Project-driven organizations operate very differently from traditional organizations. Traditional businesses rely on a continuous stream of activity?think retail or utilities companies, whose leaders typically define global annual objectives that cascade down through the organization to align focus and drive company performance. Employees are given yearly targets and quarterly reviews, and will be evaluated by the end of the year to determine individual performance and potential bonus or rewards.
The picture is very different for project-driven companies whose tempo is set by the inflow of projects. Research and development-intensive businesses such as pharmaceutical companies, construction building companies, or software publishers put their efforts into launching multiple capital-intensive, risky projects. The success of the projects is directly tied to the potential of the people?researchers, managers, architects, software engineers?and their actual performance.
Project-driven organizations need to balance uncertain future project-related revenues with the investment they are making in terms of people and assets. These organizations need to follow a project-oriented HR framework that includes the following:
Goals: What do I want to achieve? What should be the focus of this project?to meet deadlines, achieve a certain result, or minimize cost? Which skills and experience will I need?
Staffing: Who is able and available for the project within my talent pool? Do I have some skill gaps for which I would need to recruit or train? If this is my most critical project, what would it take to assemble my very best people?
Evaluation: What was the contribution of each team member? How well did they perform? Was there any improvement in skills? What are the next steps for each team member from a career development perspective?
Become an Effective Project-Driven Organization
To achieve operational excellence and maximize the revenue generated per employee, project-driven organizations need to build a dedicated HR strategy that strikes the right balance between the project's revenue potential and the level of resources and time invested. More people means more complexity, while fewer people equals more risk. The quality and engagement level of the people will impact the time to complete the project, the quality, and the risks of failure. Such a strategy needs to be articulated around three core principles:
1. Project Focus: Use projects as the base unit to measure business performance and people. Evaluate employee performance on a project-by-project basis, not by calendar year. Organizational leaders should know how well the employee fared in a project environment in terms of delivery (meeting deadlines, achieving quality) and leadership (for team managers). This also helps identify competencies people have gained during the project, their strengths, and whether they should work on weaknesses in future projects. Waiting for a full calendar year to take action on performance creates too much latency in the organization.
2. Enhanced Staffing: Establish a dynamic process to match projects with people and their data (skills, availability, and geography). Unlike traditional organizations, people staffing relies on many moving parts and needs to be constantly revised: reducing or increasing the number of resources during a project, replacing a resource midflight, or allocating someone to multiple projects at the same time. The volume of staffing activity in project-driven organizations requires a systematic and scalable approach to secure responsiveness to unexpected events and maximize productivity.
3. Data-Driven Decisions: Putting the right people in the most valuable projects is key to driving performance. The major challenge is to maintain an up-to-date data set as employees' information will change on a project-by-project basis. Traditional organizations can typically rely on spreadsheets or annual data updates. For project-driven organizations, insufficient, outdated data will lead to less productivity and suboptimal decisions based on instinct or personal relationships. This can directly impact the topline.
The Right Tools
To carry out these strategies, project-driven organizations need to combine two different approaches: On one end, a human capital management solution (HCM) that can manage performance, skills, and goals as well as learning and development; and on the other, a project portfolio management solution (PPM) to handle resources optimally. A comprehensive, cloud-based suite that encompasses human capital management and project portfolio management is the best tool for project-driven organizations looking to execute projects successfully.