Integrating corporate learning with project management

international journal of

production economics ELSEVIER

Int. J. Production

Integrating

Economics

51 (1997) 59-67

corporate learning with project management Karen Ayas*

Faculty of Economic Sciences, Erasmus

University Rotterdam,

P.O. Box 1738, 3000 DR Rotterdam.

Netherlands

Abstract This paper demonstrates how, through an integrative approach to project management, corporate learning can be promoted. Since learning is not a natural outcome of projects, a shift is required from the traditional approach to project management The alternative structural arrangement proposed for organizing project teams, allows learning to become an integral part of project management with dual benefits: short-term achievement and long-term capability. The integrative approach to project management, derived from action research conducted in the aerospace industry, suggests the use of a generic project work breakdown structure as a vehicle for expediting organizational learning. Use of additional learning tools, such as project audits and “lessons learned” database, as supportive mechanisms for the proposed project design can provide companies with the means to increase their learning capacity with every project undertaken. Keywords:

Project

management;

Organizational

learning;

1. Introduction Responding

to increasing

environmental

pres-

sure and uncertainty, many companies have adopted program management as their answer. This implies that specific projects often serve as building blocks in the creation and attainment of overall long-term corporate strategy. It insinuates shifting away from the traditional project management which is focused on short-term results. From a long-term perspective, project management requires continuous improvement with every project. Focus cannot remain solely on short-term achievements, yet it cannot simply shift to long-

*Tel.: 31 10 4081352; fax: 31 10 4526094; e-mail. [email protected]. eur.nl. 0925-5273/97/$17.00 Copyright PI1 SO925-5273(97)00056-X

0

Self-managing -

teams; Work breakdown

structure

term accomplishments. Corporate learning, therefore, necessitates an integrative approach to project management which relates to both short-and longterm goals. To develop the ability to sustain success and significant improvement in projects over long periods of time is no easy task, however. Garvin (1993) explains this by the fact that most companies fail to grasp a basic truth: “Continuous improvement involves continuous learning”. Learning within a project does not happen naturally: it is a complex process that needs to be managed. Learning requires deliberate attention, commitment and continuous investment of resources. Resources allocated for a project are limited and they should be invested wisely to guarantee project success. The majority of project managers often express concerns over how to balance the investment: guarantee short-term performance and at the

1997 Elsevier Science B.V. All rights reserved

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same time sustain the necessary learning required for building long-term capability. While the price of investing in learning may be perceived as high, it is generally accepted that the price of repeating old practices that lead to failures, i.e. not investing in learning, may be much higher. For corporate learning, the essence of project management lies in the ability to continually enhance the underlying knowledge base. This implies that all individuals involved in a project are engaged in a constant process of learning, transmit their learning to others, and the cumulative knowledge acquired is embodied in the project organization. Projects which call for the integration of a large number of people who need to be engaged in multiple differentiated tasks represent a complex design problem. This design problem becomes even more complex with the additional requirement that learning needs to be managed along with the project to achieve both short- and long-term goals. Adopting the ideas underlying organizational design presented by Galbraith (1973) it is here argued that corporate learning cannot be attained unless there exists a project ‘design’ that takes the interconnectedness between all factors that influence learning into account. Project design here refers to the conscious and rational choice of the organization form to be used. It relates to large and complex projects, or a group of projects, with teams within teams. One cannot argue that the ultimate aim of a project is learning. The traditional approach to project management and the existing alternatives for organizing project teams, therefore, do not treat learning as central. In search for a project design which can be effective for corporate learning, action research was conducted in an aircraft manufacturing company. The results suggest that the project network structure (PNS), as discussed in the following section, can provide a facilitating context for learning in large and complex development projects (Ayas, 1996).

2. The project

network structure

(PNS)

Katzenbach and Smith (1993) have demonstrated that ‘teams’ can be one of the best ways to

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integrate across organizational boundaries, to design and implement. They define teams as “a small number of people with complementary skills who are committed to a common purpose, performance goals and an approach for which they hold themselves mutually accountable”. While the majority of effective teams have less than 10 members (Katzenbath and Smith, 1993) large and complex projects may require hundreds of people whose work must be integrated towards the successful completion of the project. Although it is obvious that more than one team may be necessary for many projects, previous research has not fully explored this issue. The project network structure, proposed as an alternative way of organizing project teams for creating the desired context for corporate learning, overcomes the challenge of integration of a large number of teams. In large and complex projects, changing levels of input from various disciplines may be required at the different stages. During the life cycle of the project, the resource requirements might vary both in quantity and content. The project network structure (PNS) is a flexible design which adapts itself to the changing requirements of the project. The network forming begins with the launch of a project. Initially, a core team is built with the desired mix of complementary skills, technical and functional specialties. The core team is the nucleus of the project network structure and remains active throughout the whole project. In order to minimize the coordination needs within the project, the design of the network and its dynamics stem from the actual work breakdown structure. The work breakdown structure (WBS) refers to the hierarchy of the required work to be performed to complete a project. As Globerson (1994) illustrates, different WBS patterns may be applicable for the same project, but each of them demand different organizational structures and management styles. The major principle of PNS is that both the WBS and the cost breakdown structure are coupled with the organizational breakdown structure of the project. The basic operating units in the network are teams which split off from the core team as the

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WBS demands. A number of teams are formed around the core team according to the WBS-1 (level 1) requirements. Specific members of the core team become responsible for specific WBS-1 work packages. Each of them build their own team while remaining members of the core team, forming the first layer of the network. They become the leaders of teams which are required to manage work packages as a ‘contract’ (i.e. the work to be performed is specified together with the technical contents, cost and schedule). They are responsible for their specific goals (specified by the contract) while assuring that the overall goal of the core team is held intact. As contracts are defined for WBS-2 (level 2) by teams in layer one, new teams are formed. One member of the team from layer 1 becomes the leader of a team in layer 2, without leaving the original team. The same principle is applied for transition from layer 2 to 3. Even in a very complex project, not more than three layers are necessary and usually 2 may be enough to manage the integral work of hundreds of people while attending the constraints of group size for effective teamwork. Teams on the outer layer are dismantled once they finish their contract. The ideal operating units for the network are colocated, multidisciplinary, self-managing teams (SMT). Self-managing teams are high performing teams which have reached a high level of maturity. For a group of people to become a self-managing team, the team development process needs to be guided through leaders who are capable of understanding and recognizing the various stages of team maturity. Self-managing teams aim for operational autonomy, are capable of defining their own challenging goals and can ensure effective interaction between diverse thought processes and behaviour patterns (Imai et al., 1985). In the network, SMTs are given full operational autonomy to perform within the specified budget and time in the work package descriptions, and to optimize their own performance. Having multidisciplinary SMT’s as the operating units in a network based on the WBS allows work packages to be managed concurrently. WBS is especially suited for high concurrence, i.e. overlapping product design and manufacturing processes, since it is a modular structure. Modularity enables project leaders or

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61

teams to continuously upgrade the project without total redesign. Nevertheless, with the modularity approach, there still remains the crucial problem of the interface between modules. This problem can be overcome through effective and efficient use of information and coordination ensured by the PNS. With co-located SMTs (implying face-to-face contact among team members) the information exchange necessary for managing the interfaces is relatively easy. Although they operate as autonomous units, SMTs choose courses of action to solve their problems within an overall mission and set of constraints prescribed by the larger network. Colocating the key resources and interdependent functions in SMTs minimizes the need for coordination in the differentiated tasks. When the SMTs are united by the PNS, each SMT also knows how its function relates to other SMTs in the network. It is the joint staffing in the network that safeguards the effective management of the whole while dealing with its parts. The critical dimension of the whole is placed in an operating unit which is aware of the constraints imposed by the whole. In PNS, every SMT leader is also a member of a team in the subsequent layer. The leaders are the link pins between the parts and the whole. With PNS, therefore, the whole can be integrally managed while dealing with its parts. An additional aspect that needs further attention is the crucial part-whole relationship which arises between single projects (parts) and the project organization (whole). In order to enhance corporate learning, an appropriate design for a project organization would be a network of project networks where the separate project networks are interconnected within the project organization. For instance, in a large program, a master team may be formed by all leaders of core teams of ongoing projects in the program. A multi-project team may be created with representatives from various projects in order to assume the task of priority setting to optimize the overall project performance and fulfill corporate goals imposed by the project organization. It is here suggested that the emphasis should be on minimizing the number of projects running simultaneously while maximizing the efficiency, i.e. getting them done faster to start more.

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Keeping the number of projects run in parallel small, simplifies multi-resource management, enables individuals to be fully committed to projects and thus ensures higher standards of project performance. Furthermore, working on subsequent projects provides a greater opportunity for learning.

3. Design for corporate learning The alternative way of organizing project teams proposed here treats learning as central. “An entity learns if through processing of information the range of its potential behaviours is changed” (Huber, 1991). PNS can contribute to corporate learning in multiple ways. The essence of design is to choose from a feasible set of alternatives, a particular arrangement to most effectively deal with information processing requirements (Daft and Lengel, 1986). The structure should adapt to meet the information processing requirements to attain an acceptable level of performance (Lewin and Minton, 1986). There are, however, costs associated with increased information processing capacity. The more complex, elaborate and comprehensive the coordination and control mechanisms, the more costly they are in terms of time, energy, resources and managerial control (Ashby, 1956; Galbraith, 1973). While establishing the necessary links, in the existing alternatives for organizing project teams, the information chain is long and liable to disruptions in the flow, while the costs associated are relatively high. In a functional project organization, information must cross organizational and functional boundaries; information transfer is slow and information sharing is constrained. In other alternatives for organizing project teams, additional such as integrator roles linking mechanisms, in matrix structures, are proposed to help and speed up the information flow and knowledge transfer. The advantage with PNS is that disruptions are highly improbable and the coordination and control mechanism is simple. In PNS, the nodes in the chain of information are significantly decreased due to the fact that the leaders themselves are the link pins to the next layer.

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Furthermore, less time, energy and effort are consumed considering that the work of hundreds of people may be coordinated through a maximum of three layers. Since the part-whole relationships within the project are clear with PNS, performance anomalies linked to the normative structures and underlying causes of errors can be identified more easily. The joint staffing in the teams in subsequent layers of the network facilitates the type of error detection and error correction required for double-loop learning (Argyris and Schon, 1978) and prevents decision making from being based on insufficient information. Furthermore, leaders can act as effective informational boundary spanning individuals (Tushman and Scanlan, 1981). With every new project, a new PNS emerges with a new constitution and a fresh combination of people and their ideas. When teams are due with their contracts, their members are either absorbed back into the parent organization or assigned to new project teams. This implies that each individual would be stimulated to transmit his/her learning and share his/her knowledge with another group of individuals who were not involved in the specific project. This may not only enhance the knowledge base of the organization but also influence decision making and lead to changes in attitudes due to the shift in the composition of teams. PNS is a structural design which aims to build learning capacity within the organization. Learning capacity relates to the cumulative prior knowledge that is of potential use for developing long-term capability as projects are undertaken. It reflects the cumulative learning or the active memory where all relevant, pre-existing knowledge from all project teams is embedded. It is constituted through the social and human capital of the project organization. The human capital of a specific project can be represented as the reflection of human repositories of information and knowledge related to the project and their potential use. Factors such as previous experience, seniority, age, tenure, motivation, commitment, creativity, willingness to change, ability to predict trends, concern for quality all have an influence on this capital. The social capital

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of a specific project can be represented by the relational network density, observed through the intensity, frequency, degree of informality and openness of communication patterns within the project and with all external members of the organization directly or indirectly involved. Building learning capacity implies creating the infrastructure to maintain learning at all levels (i.e. individual, group, project and organization) to provide the capability to create knowledge and the context to share knowledge for its effective use. To enable building learning capacity, consistent with the theory of requisite variety (Ashby, 1956), the preliminary requirement is having sufficient differences and variety with respect to knowledge, skills, values and insights within the human capital invested in projects. An additional requirement is that projects are designed in a way that establishes a communication/relation network among all project participants in which these differences are used with optimum effectiveness, and the social capital is maximized. Every new project represents an opportunity for building learning capacity. Ideally, multidisciplinary self-managing teams attempt at maximizing human capital. They provide the means to ensure the requisite variety at the team level in terms of knowledge, skills, insights and values required for building learning capacity. The multidisciplinary nature of the teams allows establishing dialogue amongst people who come to a problem with different experience, cognitive elements, goals, values and priorities and yet eventually develop a language they can share at the level of the team. PNS can contribute to the growth of the social capital of project participants since the relation/communication network density is significantly higher than in alternative project structures. Highly connected organismic communication networks permit efficient use of individuals’ competencies since they increase the opportunity for interaction, feedback and error correction as well as for synthesis of different points of view (Tushman and Nadler, 1978). Communication networks are formed over a period of time as formal and informal contacts are developed and cultivated. PNS can accelerate this process. The organic nature of PNS encourages job rotation among the various projects and the rest of

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63

the organization. PNS creates ties that connect people in separate clusters. Increasing the density of weak ties within the organization is crucial for information sharing (Granovetter, 1973). While widespread direct communication across organizational boundaries is costly, inefficient and prone to bias (Allen, 1977), PNS in the long run can become an effective medium for acquiring timely, current and soft information through the informal networks that have emerged within the organization.

4. WBS for corporate learning The design of WBS has significant impact on project success. Since the design of PNS is based on WBS, it is extremely important to have a welldefined WBS. Furthermore, varying patterns of WBS may lead to varying output with respect to organizational learning. Although projects are unique by their nature, there are criteria which can be established for an effective decomposition of work. This paper suggests that a generic WBS can be used for projects of similar type and complexity in order to enhance corporate learning with projects. The generic WBS is general framework which provides the criteria for distinguishing between the hierarchical levels of WBS. It allows data to be comparable at detailed level among projects and the relevant and useful information to be widely shared. The generic WBS allows an initial decomposition of project work into work package clusters (WPC) to be assigned to the self-managing teams in the layers of the project network. A WPC must have specification over budget, lead time, interdependency with other WPCs and associated risk. The self-managing teams can further breakdown the WPC into individual work packages for optimum performance given the cost and schedule requirements. A generic WBS is a powerful tool for improvement of planning and control, as well as for continuous learning with projects. It allows to compare data and efforts at similar WBS levels of different projects. It enables the organizational units for which the specific information is relevant and useful, to find each other.

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5. Learning tools To enhance corporate learning with project management, a number of learning tools are proposed as an integral part of the integrative approach. A tool is an artifact that will lead to new ways of thinking through its use (Senge, 1991). Learning tools, such as project audits and ‘lessons learned’ database may be perceived as supportive mechanisms, necessary and useful for developing skills and capabilities to confront new and different issues in future projects. Project audit is a procedure that can be used for systematically developing data on the project’s characteristics and performance, and conducting an analysis of the underlying sources of the performance one observes. As proposed by Wheelwright and Clark (1992) it is a powerful learning and management tool that can be used to enhance learning and knowledge transfer from one project to another. It is here further proposed that in large and complex projects, since there are a number of teams involved, it is essential for project audits to be performed within every team that constitutes the project network, not just at project level or core team (see the appendix).

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For the information acquired from project audits to become a valuable asset, this information needs to be accumulated into a database where ‘lessons learned’ from projects are recorded in an accessible form. Van de Ven et al. (1989) highlight that very few companies have made attempts to build a storehouse of knowledge; yet those who have, attained visible benefits. The lessons learned database aims to provide access to project history of the organization. Using a generic WBS as a basis for creating this database increases the ability to access the desired data, since it provides a common background for grouping of product and functional data. It enables creating the links between details of similar processes and efforts in different projects. The database can then allow the data to be extracted per phase, per function, per product/part, per system/subsystem, per WPC, or per team at the relevant level of WBS (see Fig. 1).

6. Discussion

and conclusion

The necessity for integrating corporate with project management was highlighted

project

pro]ecl

IearnIng capacity

Fig.

1, Designing

the WBS for learning

capacity.

learning through

K. AyaslInt.

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the analysis of a large number of product development projects in an aircraft manufacturing company. As a result of action research conducted in this company, PNS was proposed as an alternative structure for organizing project teams and successfully implemented in all ongoing product development projects. These were large and complex projects with a scope varying from 30000 to 700000 man hours and lead times between 1 and 4 years, varying in complexity and the number of different disciplines. The implementation of PNS in the product organization for product development in this company provided evidence that as for design of organizations, structure alone is not sufficient for the design of projects. All attributes affecting learning had to be taken into account in the design problem. From a behavioural perspective, organizational learning is about changing organizational behavior for collective improved performance. Organizational behaviour arises through separate but interrelated components. All the components, strategy, structure, culture, systems and the reciprocal interaction between them, control organizational behaviour and thus influence learning (Swieringa and Wierdsma, 1992). A design which is effective for corporate learning therefore also requires: . A strategy, where continuous improvement with projects is a governing principle for all project members: learning perceived as a goal in itself, not a by-product of a project. . An open culture where no one feels threatened to expose their opinions or beliefs: a culture where

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individuals can engage in higher levels of learning, questioning the underlying organizational norms, basic assumptions and beliefs and not remain constrained by ‘taboos’ or existing norms. . Systems that rely on explicitly shared principles and norms rather than a set of rules based on hidden principles and enable higher levels of learning. In order to enact these changes, accelerate the rate of change, and generate a greater impact for commitment to learning, a top-down bottom-up approach (see Fig. 2) was adopted in the project organization. The assumption underlying this approach is that the impact from opposite ends can lead to the required change in organizational behaviour, i.e. in all attributes that affect learning. The top-down pressure is created as senior management perceives learning as a governing principle and key strategic variable. The bottom-up pressure is created as learning individuals form self-managing teams which form the project networks, amplifying the impact of each individual. The impact created through both ends can then provide the momentum for people to change their attitudes and beliefs which will gradually change the culture. This allows them to initiate changes in the systems within which they work, which will lead to systems that are supportive of and conducive to learning. In the project organization, the systematic use project audits at fixed milestones during the projects, ensured that crucial information was not lost. Identifying causes of failure and underlying sources also at the level of teams through team audits,

a network of project network structures

Fig. 2. The top-down

bottom

65

approach

for corporate

learning.

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enabled the narrative lessons learned to be accurately recorded and safeguard that same mistakes were not repeated in future projects and by other teams. To increase the effectiveness of retrieval of information on previous projects, a project history library was set up with all the documents containing concluding reports and lessons learned. The essence of corporate learning with project management lies in the ability of the organization to continually improve its processes and systems with every project that is undertaken. This requires continual enhancement of the learning capacity. The results derived from action research suggest that the proposed approach and design can increase this capacity. The result that could be detected on the short term was significant improvement of project performance. The real progress, however, can be observed on the long run, after the practice of project management goes through cognitive and behavioral changes, and learning becomes widely shared. As the learning capacity is enhanced, individuals expand their knowledge and begin to think differently, and eventually alter their behaviour for improved performance. Note that, although PNS is designed to encourage information seeking and sharing behaviour for knowledge creation, its effectiveness for learning is largely influenced by the effectiveness of leadership. Leadership determines to a great extent of learning within teams. PNS necessitates highly competent leaders, who have the capability to allow their teams to mature into high-performing self-managing teams. Team building is critical for meeting the implementation challenge since high-performing self-managing teams, which are the operating units of PNS, emerge from team building activities. The alternative structural arrangement for project teams, allowing the effective integration of a large number of teams while keeping team size at optimum is an important contribution from this study. The results suggest that a project organization constituted through project network structures has positive influence on project success. Potential limitations of this model include the fact that the findings are derived from a single organization and rely primarily on a sample of product development teams. Within the same organization, PNS was successfully implemented in organiza-

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tional restructuring and process improvement projects conducted to reach overall corporate goal of productivity improvement. Nevertheless, future validation of this model would benefit from using different types of projects in multiple organizations. The focus on product development teams may also be perceived as a strength of this study rather than limitation, since they represent one of the most demanding types of teams (Nonaka, 1991). Further research can also contribute to testing the applicability of this model for program management which integrates a large number of small projects.

Appendix Project audit - Project level . Do you think at this stage the outcome

. . . . . . . . . .

is satisfactory? Why? Was there lack of information? Which? Why? Was there lack of communication? When? Why? Was there lack of expertise or capacity? Which? Why? Was there lack of support? Where? Why? Were there conflicts with respect to decision making? Were they resolved? How? What were the other alternatives that were considered? Why were they discarded? Was there any possibility of improvement? Why could not they be applied? Was there any specific event that created a bottleneck? How could it have been avoided? What would you have done differently if you started the project again? What are the remaining critical aspects that need further attention before the next stage?

Project audit - team level . Do you think at this stage the outcome

is satisfactory with respect to your specific assignment/ objectives, meeting technical requirements, being on time, performing within budget? . What would you consider as a unique accomplishment of this team? . Consider each of the following areas of attention, and answer the following with respect to each one of them: (1) What were the problems encountered? (2) Were there alternative solutions? (3) Why were they discarded?

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~ clarity of objectives - project planning _ work breakdown - budget/time allocation _ risk analysis _ resource allocation _ co-location - leadership _ team building ~ conflict resolution - decision making ~ communication with other teams within the project _ communication within the organization _ relationship with vendors, partners, customers ~ What should have been done differently if the project started again? References Allen, T.J., 1977. Managing the Flow of Technology. MIT Press, Cambridge, Mass. Argyris, C., Schon, D., 1978. Organizational Learning: A Theory of Action Perspective. Addison-Wesley, Reading, MA. Ashby, W., 1956. An Introduction to Cybernetics. Wiley, New York. Ayas K., 1996. Professional project management: a shift towards learning and a knowledge creating structure. Int. J. Project Mgmt. 14(3), 131-136. Daft, R.L., Lengel, R.H., 1986. Organizational information requirements, media richness and structural design. Mgmt. Sci. 32(5), 554571. Huber, G.P., 1991. Organizational learning: the contributing process and the literatures. Organization Sci. 2(l), 88-l 15.

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Galbraith, J., 1973. Designing Complex Organizations. Addison -Wesley, Reading, Mass. Garvin, D.A., 1993. Building a learning organization. Harv. Busi. Rev., pp. 78891 Granovetter, M.S., 1973. The strength of weak ties. Amer. J. Sociology 78, 136&1380. Globerson, S., 1994. Impact of various work-breakdown structures on project conceptualization. Int. J. Project Mgmt. 12(3), 165-171. Imai, K., Nonaka, I., Takeuchi, H., 1985. Managing the new product development process: how Japanese companies learn and unlearn. In: Clark, K., Hayes R., Lorenz, C., (Eds.), The Uneasy Alliance, Harvard Business School Press, Boston, MA. Katzenbach J.R., Smith D.K., 1993. The Wisdom of Teams: Creating the High-Performance Organization. Harvard School Press, Boston, MA. Lewin, A.Y., Minton J.W., 1986. Determining organizational effectiveness: another look, and an agenda for research. Mgmt. Sci. 32(5), 514538. Nonaka, I., 1991. The knowledge creating company. Har. Busi. Rev., pp. 96-104. Senge, P.M., 1991. Transforming the practice of management. Paper at the Systems Thinking in Action Conference, Boston. Swieringa, J., Wierdsma, A., 1992. Becoming a learning organization. Addison-Wesley, Wokingham: Tushman, M.L., Nadler, D.A., 1978. Information processing as an integrating concept in organizational design. Academy Mgmt. Rev. 3, 613-624. Tushman, M.L., Scanlan, T.J., 1981. Boundary-spanning individuals: their role in information transfer and their antecedents. Academy Mgmt. J. 24, 289-305. Van de Ven, A.H., Angle, H.A., Poole, M.S., 1989. Rsearch on the management of innovation: the Minnesota studies. Ballinger/Harper and Row, New York. Wheelwright, S.C., Clark, K.B., 1992. Revolutionizing New Product Development. Free Press, New York, NY.