Project Management Under What Conditions

Project Management

Under what conditions would it be advisable to use a project matrix instead of a dedicated project team?

There are many reasons why companies will choose to use a project matrix over a dedicated project team. The first and by far the most common is a shortage of talent in many companies, where the key contributors in existing jobs have expertise that is needed on a specific project. Commonly those professionals that have those skills most in demand, for example those in senior-level positions in engineering, product management, software programming, purchasing and procurement, and customer services are recruited into a cross-functional team that is represented by a project matrix. Across many manufacturing industries, the use of cross-functional teams to bring in required experts, organizing them through a project matrix is a major reason for this approach. It is simply not feasible to keep idle experts on staff purely for the periods of high and low demand on a per project basis, hence the lack of dedicated teams in many manufacturers.

A second major influence on the development of project matrices over project teams is also the business models of specific industries, and within industries, companies and manufacturers. Take for example the aerospace industry, where cross-functional teams initially began and were quickly organized into project matrices, leading to the term matrix-driven management. Aerospace is by nature a highly cyclical and project-driven business, where contracts for jet aircraft and space vehicles require an accentuated and highly focused set of skills to complete them. Matrix-driven management requires experts to have multiple bosses or superiors, which has also been known to cause stress in this most valued employees. What is increasingly becoming clear from cross-functional teams and the use of matrix-driven management to manage these project teams is that traditional approaches to top-down management aren't as motivating as providing the members of these teams more accountability over their performance. The use of project matrices then, reflecting the high level of collaboration required to make a project succeed, is also changing the broader management practices of companies who rely on project matrix based approaches to completing work. In summary, while there are many factors that motivate companies to adopt project matrices, the two most common is the shortage of employees with critical skill sets needed on projects, and the nature of their business models having a high percentage of work with customers that is project-based. The aerospace industry an excellent example of where cross-functional teams drive the use of matrix-based management, represented by project matrices, changing significantly management approaches in the process.

Q2. You work for LL Company, which manufactures high-end optical scopes for hunting rifles. LL Company has been the market leader for the past 20 years and has decided to diversify by applying its technology to develop a top-quality binocular. What kind of project management structure would you recommend they use for this project? What information would you like to have to make this recommendation, and why?

For the development of a product line extension of the optical scopes into binoculars, a cross-functional team needs to first be created that includes business development, marketing, engineering, quality, supplier management or procurement, and executive management. This initially needs to be a very small cross-functional team, meeting once every few days to define the business case first, and then define the initial development of a prototype of the market warrants it. it's critical that the group be kept small at first to minimize conflicts over direction, and it's also very critical for a member of executive management to be involved to specifically show ownership for the initiative from the senior management team. This is a fundamental aspect of change management: a senior manager must endorse this change for it to be lasting and taken seriously throughout the remainder of the organization.

What this small initial cross-functional team needs to accomplish is to move through six major phases of the stage gate processes, which is prevalent in many organizations. First, this smaller cross-functional team must quantify the make clear the exact definition of the binocular series of products, starting with the development of a Market Requirements Document that will, if the product area appears attractive, will lead to the development of a Functional Engineering Specification. Stage 2 will lead to the development of a first prototype, followed by Stage 3, which will be a thorough business case preparation, where the pro forma financial statements of the project, the marketing plans including pricing, distribution, product strategies, and promotional strategies and initial engineering plans as well. Stage 4, product development, is the phase of as project where the initial cross-functional team expands significantly to include several other areas of the company. This is the phase where production processes will be added to the manufacturing centers or factories to support producing binoculars. This is the phase where the majority of time is spend during the development of a new product. Stage 5 is product testing where quality assurance and quality testing are used to test the binoculars for durability and accuracy. Stage 6 is the product introduction, where the entire company gets behind the new product, launching it and looking to make the sales quickly increase to offset the development expenses, and also grow company revenue.

Information required to create a cross-functional team for the development of a binocular product family would be first and foremost, the total available market for this type of optical product, the existing presence or absence of competitors in existing distribution channels, the pricing practices in the binocular market, and the costs of competing from a marketing, selling, and service standpoint in the market of interest. In addition, and just as critical will be the ability to re-align internal processes within manufacturing to support the production of binoculars in existing manufacturing centers to drive down costs. There also needs to be a strong endorsement, even at the initial cross-functional team level, from senior management to pursue the project. It will specifically be the decision of senior management to pursue the binocular market or not relative to other strategies and product development plans that may also be in consideration at the same time.