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Case: The Prioritization of Projects

The working relationships between the directorates deteriorated to the point where senior management reluctantly agreed to step in. The total number of projects that the four directorates wanted to complete over the next few years exceeded 350…..

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The directorates of Engineering, Marketing, Manufacturing, and R&D all had projects that they were working on and each directorate established its own priorities for the projects. The problem was that the employees were working on multiple projects and had to deal with competing priorities.

Lynx Manufacturing was a low-cost producer of cables and wires. The industry itself was considered as a low-technology industry and some of its products had been manufactured the same way for decades. There were some projects to improve the manufacturing processes, but they were few and far between. Each of the four directorates, namely Engineering, Marketing, Manufacturing, and R&D, had projects, but the projects were generally quite small and used resources from only its own directorate. By the turn of the century, manufacturing technologies began to grow and Lynx had to prepare for the technology revolution that was about to impact its business. Each directorate began preparing lists of projects that it would need to work on, and some of the lists contained as many as 200 projects. These projects were more complex than projects worked on previously and project team members from all directorates were assigned on either a full-time or part-time basis. Each directorate chief officer would establish the priorities for the projects originating in his or her directorate even though the projects required resources from other directorates. This created significant staffing issues and numerous conflicts:

  • Each directorate would hoard its best project resources even though some projects outside of the directorate were deemed more important to the overall success of the company.
  • Each directorate would put out fires by using people that were assigned to projects outside of its directorate rather than using people that were working on internal projects.
  • Each directorate seemed to have little concern about any projects done in other directorates.
  • Project priorities within each directorate could change on a daily basis because of the personal whims of the chief of that directorate.
  • The only costs and schedules that were important were those related to projects that originated within the directorate.
  • Senior management at the corporate level refused to get involved in the resolution of conflicts between directorates.

The working relationships between the directorates deteriorated to the point where senior management reluctantly agreed to step in. The total number of projects that the four directorates wanted to complete over the next few years exceeded 350, most of which required a team with members coming from more than one division.

Why is it necessary for senior management to step in rather than let the chiefs of the directorates handle the conflicts?

Unlike individual directorates, which may prioritize their immediate needs and objectives, senior management can align project priorities with the company’s overall goals. The observed hoarding of resources by directorates, for instance, may not serve the broader interests of Lynx. Senior management can oversee a more strategic and optimal allocation of these resources based on the entire company’s needs rather than departmental territoriality.

Furthermore, the inherent cross-directorate nature of many projects suggests the inevitability of conflicts that cannot be resolved by a single directorate. Senior management can step in as a neutral mediator to arbitrate these disagreements, ensuring smoother project execution. Their intervention is also vital in dismantling the siloed approach currently observed, where each directorate is narrowly focused on its own projects, hindering collaboration and innovation. By instilling practices that promote inter-directorate cooperation, senior management can foster a more unified and efficient organizational approach.

Another pressing concern is the frequent shifts in project priorities within directorates. Such volatility can lead to inefficiencies and confusion. Senior management’s involvement ensures stability in prioritization, providing a consistent direction for the entire organization. Moreover, with this centralized oversight, there’s an enhanced mechanism for holding directorate chiefs accountable, ensuring decisions are made with the broader company’s interests in mind.

From an economic perspective, a centralized decision-making body, like senior management, can prevent resource wastage, duplicate efforts, and ensure that the projects embarked upon offer a meaningful return on investment.

What should the senior management team do to resolve the problem?

To address the problem, senior management at Lynx Manufacturing should conduct an assessment of all projects to determine their alignment with the company’s broader objectives. Following this, a centralized project prioritization committee, with members from all directorates, should be formed to regularly review and align projects based on strategic importance and resource availability.

Cross-directorate training and team-building exercises should be introduced to foster collaboration and mutual understanding among employees from different divisions. Communication channels need to be enhanced, possibly through regular inter-directorate meetings or a collaborative digital platform.

Clear criteria for project evaluation should be set by senior management to ensure consistency and prevent arbitrary shifts in priorities. A central resource pool could be established, allowing projects to draw resources based on genuine needs and strategic importance.

Regular feedback sessions should be initiated, creating a platform for stakeholders to voice concerns and suggestions, fostering a sense of shared responsibility and mutual respect. Through these streamlined measures and a renewed focus on collaboration, senior management can drive Lynx Manufacturing towards greater efficiency and cohesiveness.

Let’s assume that the decision was to create a list that included all of the projects from the four directorates. How many of the projects on the list should have a priority number or priority code?

If the decision was to create a list that included all of the projects from the four directorates, then every single project on that list should have a priority number or priority code. Assigning a priority to each project ensures clarity, avoids confusion, and helps in effective resource allocation. Without clear prioritization, there can be ambiguity about which projects to focus on, leading to inefficiencies and potential conflicts. By providing each project with a priority number or code, it gives a clear indication to all stakeholders about the sequence or importance of each project in relation to the company’s broader objectives.

Can the directorate chiefs assign the priority or must it be done with the involvement of senior management?

While directorate chiefs possess a deep understanding of their specific domains and can certainly assign initial priorities to projects based on their insights, the involvement of senior management in the final prioritization process is paramount. This is because senior management offers a holistic viewpoint of the entire company’s objectives, ensuring that the prioritization of projects aligns with the broader strategic goals. Furthermore, considering that many projects span multiple directorates and require shared resources, it’s senior management that can oversee balanced and effective resource allocation. Their involvement also becomes essential in mediating potential conflicts that may arise among directorates during the prioritization process. By taking a unified approach, senior management reduces the risk of departments having conflicting agendas or duplicating efforts, ensuring a cohesive strategy for the organization. Additionally, having senior management involved in the prioritization lends a greater degree of accountability and transparency to the process. In essence, while directorate chiefs can give invaluable initial recommendations on project priorities, the overarching and final decisions, especially for projects that intersect multiple directorates, should be overseen by senior management to guarantee alignment with the company’s larger vision and foster optimal inter-departmental collaboration.

How often should the list of prioritized projects be reviewed and who should be in attendance at the review meetings?

The list of prioritized projects should ideally be reviewed on a quarterly basis, as this timeframe offers a balanced approach, allowing companies to adjust based on the previous quarter’s performance and any shifts in the business environment or strategic direction. However, provisions should also be made for ad hoc reviews, especially in cases of significant internal or external changes, such as mergers, regulatory adjustments, or major market disruptions.

When it comes to attendance at these review meetings, it’s imperative to have a comprehensive representation to ensure informed decision-making. Senior management should be present to ensure alignment with overarching company objectives. Directorate chiefs or department heads are crucial for their deep insights into the specific needs and challenges of their respective domains. Project managers, being directly involved in the execution, can offer granular updates and raise potential concerns. Financial representatives should attend to provide insights on budgetary considerations and project ROI. Depending on the nature of specific projects, stakeholder representatives might be included to represent different affected groups, such as customers or frontline employees. Lastly, for technically intricate projects, the inclusion of specialists or subject matter experts can be invaluable.

For these reviews to be effective, it’s essential that all attendees come equipped with relevant data and updates, and the meetings themselves should be structured with a clear agenda and objectives, ensuring focused discussions and actionable outcomes.

Suppose that some of the directorate chiefs refuse to assign resources according to the prioritized list and still remain focused on their own pet projects. How should this issue now be resolved?

If directorate chiefs resist the prioritized list and prefer to allocate resources to their favored projects, addressing this challenge requires a combination of communication, transparency, and authority. Firstly, it’s pivotal to engage in a dialogue with these chiefs to grasp their reservations, discerning if they stem from strategic disagreements, misunderstandings, or personal inclinations. The broader company objectives and the alignment of the prioritized list with these goals should be reiterated, emphasizing that the overarching aim is the holistic success of the organization.

To keep the chiefs accountable, a system tracking every project’s progress, resource utilization, and outcomes should be put in place, with results transparently shared across all directorates. If these deviations continue, senior management has a responsibility to step in, asserting the necessity of aligning with company-wide objectives. Incorporating clear performance metrics, which not only assess project outcomes but also adherence to organizational strategies, and tying them to performance reviews can be instrumental. Involving these chiefs in the actual prioritization process might also foster a greater sense of ownership and compliance.

Furthermore, to instill a company-wide perspective, leadership training sessions emphasizing teamwork, collaboration, and unified vision could be beneficial. If significant resistance continues, the prioritized list itself might warrant re-evaluation, ensuring that it genuinely resonates with the strategic imperatives of the company. Ultimately, if certain chiefs consistently act in conflict with broader company interests, senior management might need to contemplate leadership adjustments, as organizational alignment from leadership is paramount for collective success.

This case, and questions, is take from the book “Project Management Case Studies – Sixth Edition” – 2022, by Harold Kerzner.

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