This Focused Performance Weblog is a "business management blog" containing links and commentary related primarily to organizational effectiveness with a "Theory of Constraints" perspective. TOC is noted for its applications in Project Management and Multi-Project Management (Critical Chain) and Operations Management (Drum-Buffer-Rope), as well as in Marketing, Strategic Planning and Change Management (TOC Thinking Processes). If you are on an archive page, current postings are found here.
Thursday, September 02, 2004
Multi-Project Management and Organizational Effectiveness II -- Organizations are Multi-Project Systems -- Let us assume that the goal of an organization is to sustain itself so that it can profitably deliver products or services not only today, but also in the future. If that’s the case, then because it’s market environment -- the demands of its customers and the responses of its competitors -- cannot be reasonably expected to remain static, said organization must efficiently deliver today’s business and effectively change to address its future circumstances.
Projects as the business. Drawing a distinction between production-based organizations and project-based organizations, the former is usually dependent on delivering a lot of copies of identical (or at least very similar) units of a product or service, with minimal or easily manageable uncertainty and variation of process. In production environments, the “touch-time” associated with an individual piece of output is usually very small compared to the total duration of building that output, as components tend to spend most of there time in queues awaiting attention or the setup of the machinery that will transform it in some way.
Project environments, on the other hand, are characterized more by uncertainty of expectations, greater variation in the performance against those expectations. Projects also involve larger chunks of “touch time” as a proportion of total project duration. If one’s business is based on directly “selling” the outcome of projects developed with a shared pool of resources, as it is in industries such as custom software and IT systems, consulting, construction, maintenance and repair, and engineer-to-build custom manufacturing, projects are “the business.” In such arenas, the ability to maximize the throughput of multiple completed projects is directly related to both current and future success.
Projects supporting the business. The ability to effectively implement change is clearly related to what most would recognize as projects and project management. Such efforts are typically temporary efforts, with a reasonably finite span of time between launch and completion. In this context, change projects are not only related to tactical, local process improvements or highly visible strategic initiatives, but also to the ability to re-define one’s offerings to meet future needs -- research and new product/service development and deployment. Regardless of whether the business of the organization is production- or project-based, its future success needs to be supported by effective delivery of change -- effective management of multiple projects.
And whether the organization’s project portfolio is dominated by today’s deliveries to customers or clients supported by future-facing development projects, or primarily limited the latter development efforts that will deliver its future, these projects will be done largely with a limited source of time and attention of the people and processes that define the organization.
Organizations and their resources constitute multi-project systems.
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