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The term projectized organization relates to companies that are structured based on projects instead of traditional functional teams or departments. More small to mid-size businesses are recognizing the benefits of developing a projectized structure and rapidly migrating away from other traditional structures. Project team members work under the direction of a project manager (PM) regardless of the nature of a project or area within the business.

Traditional vs. projectized organizations

A traditional functional organization

In a conventional structure, the company is segmented based on the functions performed by a particular group such as Human Resources, Information Technology, Marketing, and so forth. In this type of organization, the project manager might be an external consultant or an employee, generally under the direction of a sponsor.

The PM acts as a facilitator on a project. Moreover, the project manager does not have control or authority over things like the budget, resources, or other key elements of a project. This can be more frustrating for a project manager and everyone involved as functional areas tends to operate as silos, which can create conflicting priorities and goals.

SEE: How to build a successful project manager career (free PDF) (TechRepublic)

A projectized organization

In a project-based organizational structure, the majority of the organization’s resources are utilized for project activities, and the project is generally completed for an external customer. PMs have almost full control and authority over resources, budgets, activities, and other aspects of the project.

These PMs play key internal roles and have project experts available to them such as project schedulers, developers, various analysts, change management specialists, and other employees. The project manager has the power to make decisions around how issues are resolved.

The concept behind projectization is that all activities should fit within a project that requires human and organizational strength with clearly defined lines of accountability and organizational goals.

Benefits of a projectized organization

  • The delegation of power and authority is clearly defined, and employees, team members, leaders, and other stakeholders are more likely to be cooperative and less combative.
  • Members of a project are answerable to only one member of the leadership team, which makes communication more efficient.
  • A single channel of communication simplifies and expedites collaboration with stakeholders.
  • Urgent tasks are easier to prioritize.
  • Team members are provided with an opportunity to decrease their learning curve due to directly relevant project experience.
  • Team members of a project are more apt to be agile and productive as the project progresses.
  • Projects serve as a global barometer to assess employee and organizational strengths and weaknesses.
  • Cross-training and career movement within the business is more easily accomplished.
  • Loyalty and dedication are enhanced because each team member works closely on a project under a single project manager.
  • The organizational structure is simple and clear to understand.
  • Team members are more likely to feel comfortable and emotionally satisfied due to the variety and challenges within their roles, which lowers the turnover rate and enhances job satisfaction.