The pool management concept at Radiance International was eliminated; several line management positions were created in each Radiance International location and staffed with employees from the construction company. Within a year, several employees left the company.
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BACKGROUND
Radiance International (RI) had spent more than half a decade becoming a global leader in managing pollution, hazard, and environmental protection projects for its worldwide clients. It maintained ten offices across the world with approximately 150 people in each office. Its projects ranged from a few hundred thousand dollars to a few million dollars and lasted from six months to two years. When the downturn in corporate spending began in 2008, Radiance International saw its growth stagnate. Line managers that previously spent most of their time interfacing with various project teams were now spending the preponderance of their time writing reports and memos trying to justify their position in case downsizing occurred. Project teams were asked to generate additional information that the line managers needed to justify their existence. This took a toll on the project teams and forced team members to do “busy work” that was sometimes unrelated to their project responsibilities.
REORGANIZATION PLAN
Management decided to reorganize the company primarily because of the maturity level of project management. Over the years, project management had matured to the point where senior management explicitly trusted the project managers to make both project-based and business-based decisions without continuous guidance from senior management or line management. The role of line management was simply to staff projects and then “get out of the way.” Some line managers remained involved in some of the projects but actually did more harm than good with their interference. Executive sponsorship was also very weak because the project managers were trusted to make the right decisions. The decision was made to eliminate all line management and go to the concept of pool management. One of the line managers was designated as the pool manager and administratively responsible for the 150 employees that were now assigned to the pool. Some of the previous line managers were let go while others became project managers or subject matter experts within the pool. Line managers that remained with the company were not asked to take a cut in pay. In the center of the pool were the project managers. Whenever a new project came into the company, senior management and the pool manager would decide which project manager would be assigned to head up the new project. The project manager would then have the authority to talk to anyone in the pool that had the expertise needed on the project. If the person stated that he or she was available to work on the project, the project manager would provide that person with a charge number authorizing budgets and schedules for his or her work packages. If the person overran the budget or elongated the schedule unnecessarily, the project managers would not ask this person to work on his or her project again. Pool workers that ran out of charge numbers or were not being used by the project managers were then terminated from the company. Project managers would fill out a performance review form on each worker at the end of the project and forward it to the pool manager. The pool manager would make the final decision concerning wage and salary administration but relied heavily upon the inputs from the project managers. The culture fostered effective teamwork, communication, cooperation, and trust. Whenever a problem occurred on a project, the project manager would stand up in the middle of the pool and state his or her crisis, and 150 people would rush to the aid of the project manager asking what they could do to help. The organization prided itself on effective group thinking and group solutions to complex projects. The system worked so well that sponsorship was virtually eliminated. Once a week or even longer, a sponsor would walk into the office of a project manager and ask, “Are there any issues I need to know about?” If the project manager responds “No,” then the sponsor would say, “I’ll talk to you in a week or two again” and then leave.
TWO YEARS LATER. . . .
After two years, the concept of pool management was working better than expected. Projects were coming in ahead of schedule and under budget. Teamwork abounded throughout the organization and morale was at an all-time high in every Radiance International location. Everyone embraced the new culture and nobody was terminated from the company after the first year of the reorganization. Business was booming even though the economy was weak. There was no question that Radiance International’s approach to pool management had worked, and worked well! By the middle of the third year, Radiance International’s success story appeared in business journals around the world. While all of the notoriety was favorable and brought in more business, Radiance International became a takeover target by large construction companies that saw the acquisition of Radiance International as an opportunity. By the end of the third year, Radiance International was acquired by a large construction firm. The construction company believed in strong line management with a span of control of approximately ten employees per supervisor. The pool management concept at Radiance International was eliminated; several line management positions were created in each Radiance International location and staffed with employees from the construction company. Within a year, several employees left the company.
Is it a good idea to remove all of the line management slots?
The decision of Radiance International (RI) to eliminate all line management slots in favor of pool management proved to be innovative and highly successful within its unique context. The maturity of RI’s project managers enabled them to make autonomous decisions, both project-based and business-related, without the need for constant oversight. This fostered a climate of trust and efficiency. The pool management approach also introduced flexibility in staffing projects, with project managers selecting talent based on expertise and previous performance. As a result, the company experienced enhanced teamwork, improved morale, and possibly even cost efficiencies due to reduced managerial overhead.
However, while this model was effective for RI, it’s essential to recognize potential pitfalls. Such a system might introduce chaos in larger organizations due to the lack of a structured hierarchy. The very nature of pool management, where employees’ continuity is contingent on being regularly chosen for projects, could lead to feelings of insecurity and potential burnout. Moreover, as companies grow and scale, maintaining such a system effectively could become challenging. Ambiguities in decision-making authority and resource allocation could also arise, leading to conflicts. And as observed in RI’s case, if an acquisition occurs, the new parent entity might not value or even understand the pool management system, leading to potential disruptive overhauls.
In conclusion, while the pool management system was a resounding success for Radiance International given its specific circumstances and the nature of its projects, it might not be a one-size-fits-all solution. Organizations considering such a structural change should weigh their unique attributes, team maturity, and long-term goals. And even if a model is successful, it’s crucial for companies to effectively communicate and defend its merits, especially when interfacing with potential stakeholders or external entities.
If pool management does not work, can line management slots then be reinstated?
If an organization finds that pool management is not delivering the desired outcomes, it is entirely possible to reinstate line management slots. However, this transition must be undertaken with diligence and careful planning. Firstly, it’s essential to determine the reasons why pool management wasn’t effective. This could be due to the company’s size, project nature, employee feedback, or other specific challenges. Once understood, the next critical step is to maintain open communication with all employees, informing them about the impending changes, the reasons behind them, and the anticipated benefits.
A gradual, phased approach to the transition might be more effective than a sudden overhaul, allowing the company to pilot the changes in specific departments or projects and refine the process based on feedback and observations. During this period, training and developmental sessions can be invaluable, equipping both managers and employees with the skills and understanding needed to navigate the new structure.
Setting up a robust feedback mechanism will be important in capturing employees’ concerns and adapting the transition process in real-time. Given the potential for unease with such structural shifts, it’s crucial to continually reassure employees, emphasizing job security and the overarching vision of the company. After the transition, continuous reviews of the effectiveness of the line management structure will be essential, making adjustments as business needs evolve.
How important is the corporate culture to the pool management concept?
Corporate culture plays an instrumental role in the success or failure of the pool management concept. A culture that promotes trust, flexibility, collaboration, and autonomy is imperative for pool management to thrive. In such a system, employees must feel empowered to make decisions and be accountable for their outcomes. They need to trust that their colleagues will provide support when needed and collaborate seamlessly on projects. Moreover, the organization should value open communication, allowing for a free flow of ideas and feedback. If the corporate culture leans more towards rigid hierarchies, micromanagement, or lacks trust in employee capabilities, the pool management concept might face significant challenges. Essentially, the effectiveness of pool management is deeply intertwined with the prevailing corporate culture, emphasizing its importance. An alignment between the two ensures that the organization can harness the full potential of this innovative management approach.
Are there project sponsors at Radiance International?
At Radiance International, while project sponsors did exist, their role and involvement had diminished over time due to the trust senior management placed in project managers. With the evolution and maturity of project management at Radiance International, project managers were empowered to make both project-based and business-based decisions autonomously. As a result, the traditional role of executive sponsorship weakened. The trust was so profound that sponsors would occasionally check in with project managers, asking if there were any pressing issues, and if there weren’t, they would simply check back at a later date. Therefore, while project sponsors were present at Radiance International, their active involvement and oversight in projects had notably decreased.
This case, and questions, is take from the book “Project Management Case Studies – Sixth Edition” – 2022, by Harold Kerzner.
