This paper presents a case study of an organization transitioning its production from the middleweight motorcycle category to the larger touring class. The touring class motorcycles, being complex products, need a project-driven organizational structure that centers on the individual project and customer demands. This approach brings many benefits, including being responsive to the changing needs of the customers, effective at incorporating diverse skills in a team, and useful in project risk management.
In a project-based context, the PM coordinates the resources, spearheads product development, facilitates team learning, and influences decisions at the senior management level. He/she is a transformational leader who liaises with the functional managers in defining a marketing strategy and technical requirements. Regular design reviews, customer visits, and corporate reporting are some of the strategies the PM can use to mitigate risks that the project may face.
Type of Project Organization
High-value products require an appropriate project organization to help manage the complex production and marketing systems. Usually, firms use either a matrix or a functional form of project organizations to manage low-technology production. The present case will use a project-driven type of organization as a model for managing the development of larger motorcycles to serve the touring class market segment. Unlike non-project-based organizations, project-driven firms operate each project as a distinct entity with a separate profit and loss statement (Kerzner, 2013).
In the new project, a PM who reports to the company’s general manager or vice president (VC) will manage the resources and workforce, handle commercial issues, control the technical developments of the larger motorcycles, and take responsibility for project outcomes. Additionally, the PM will report to the top management (VC) to influence corporate decisions affecting the project (Kerzner, 2013). New projects give organizations a competitive advantage in the industry. As such, the PM will coordinate team efforts in key activities related to product development and marketing.
The process the firm will employ in the development of the larger motorcycle will involve the steps outlined below:
- Team formation – the project manager will select a team of professionals to work on this project. The team will comprise of company workers, suppliers, potential customers, and experts drawn from the touring industry. The rationale of having a diverse team is to help in the generation of useful ideas and views regarding product design and specifications.
- Formulating the objectives – the assembled team will define the project’s goals and objectives within the five-year transition period. The views and ideas of the users will be incorporated into the development process to “establish customer requirements in the product” (Tzokas, Hultink, & Hart, 2004, p. 621). The rationale for defining the objectives is to help meet customer needs and grow the touring class market.
- Planning phase – this step will entail the development of the product specifications for large motorcycles based on user requirements and feedback. In the planning phase, engineers will design motorcycles with an engine capacity that exceeds the 1100 cc of middleweight class. The rationale is to integrate client needs into the current production processes.
- Conceptual design phase – during this stage, the best engine design will be selected for development. The rationale is to brainstorm for the best concept among the many designs developed by engineers.
- Prototype phase – a prototype of the motorcycle that meets user requirements will undergo testing and evaluation before development. The evaluation will cover costs, performance, and usability. The rationale is to address both economic and technical issues related to the product to determine its cost-effectiveness.
In order to satisfy both short- and long-term needs, the writer recommends a project-led organizational strategy. In this strategy, the PM will nominate task force managers to oversee resource allocation “along functional lines that cut across project interests” (Hobday, 2000, p. 876). This strategy will induce organizational learning and ensure adequate resources for continued technical development (Hobday, 2000).
In this way, the organization will develop a long-term technical capacity to manufacture touring class motorcycles beyond the five-year transition period. The functional managers will coordinate the manufacturing processes, monitor operations, and address issues that might hamper production at the departmental level. On the other hand, the company directors will undertake the role of allocating resources between the two projects, i.e., the middleweight and touring classes.
Projects that involve high-value products require distinct commercial and technical units. In this strategy, a project engineer will head the technical unit while the PM will control the overall project, including the commercial aspects. The PM will address customer relations, monitor project progress, ensure adherence to procedures, and organize meetings.
On the other hand, the project engineer will control all the technical details related to the production of the touring class motorcycles, including prototype specifications, design, and development. Additionally, the project engineer will address the technical issues that customers may raise. In this strategy, both the PM and the project engineer will participate in decision-making and resource coordination.
The PM will need certain resources to run the new project efficiently and effectively without affecting the existing production. He/she will be responsible for risk assessment, scheduling, team building, and marketing, among others (Hobday, 2000). For this project, the PM requires a skilled workforce, finances, and cost control tools to manage the transition. The PM must hold training for project team members to introduce them to new procedures, tools, and risk management approaches, as the company transitions from middleweight to touring class motorcycles. In this regard, the PM will require risk assessment and cost control tools, especially during the design review stage.
The transition period also requires investment in organizational learning. The PM will require resources to establish training and development programs for the project staff. The training programs will give team members an opportunity to learn new technical skills and knowledge relevant to the project. In this way, they will be able to manufacture the touring class motorcycles that match customer needs.
The programs will also give younger workers an opportunity to learn from older experienced staff. This will ensure long-term and optimal productivity within the organization. The PM will also organize formal learning through workshops and cross-project seminars that will involve experts from companies that have already ventured into the touring class motorcycle industry.
Project Management Leadership Style
Given its complex magnitude, the new project requires a PM who not only has greater control of resources but can also influence decision-making at a senior level. The most conducive leadership style for the touring class motorcycles project is the transformational approach. A transformational leader stimulates creativity and encourages team members to adapt to new changes (Hobday, 2000). In the current project, the organization will adopt a structure that allows all functional managers of five key departments, namely, design/engineering, marketing, HR, finance, and production, to report to the PM. This will help the PM to manage risks, customer relations, and production processes efficiently.
The project requires effective management of customer relations. The PM will handle client questions regarding product performance and production schedules to ensure prompt responses and avoid delays in addressing complaints. Since the functional lines are many, confusion may arise if each manager is allowed to address customer complaints. In this regard, a transformational PM with a clear vision of the team’s objectives can address customer questions related to technical and commercial aspects of the new motorcycles. As aforementioned, the PM will manage project resources and personnel and participate in decision-making at a senior management level. This will enable him/her to transform the organization during the transition period.
Transformational leadership instills good communication and trust among team members. In this project, the PM must build an environment of trust and open communication among suppliers, sub-contractors, clients, and staff. This will ensure flexibility and responsiveness when addressing risks, costs, and changes in specifications. The PM will plan and assign roles to the project staff within the five-year transition period.
Positive work relations between the PM and the engineers are essential to project success. It requires trust and strict adherence to rules and procedures to avoid workplace conflicts that may derail the progress of the project. In this project, the PM will consult the technicians and functional managers before coming up with budget estimates. This will ensure that the project is financed properly and alleviate conflicts between the PM and the functional managers.
A leader conversant with the technical aspects of the project is the most appropriate PM for the touring class motorcycle project. Such PM will execute the production process more effectively as he/she understands it better than one with no engineering/technical background. The execution stage is the most vital phase in a project’s lifecycle (Hart, Hultink, Tzokas, & Commandeur, 2003). A poorly executed project is likely to fail prematurely due to internal and external business risks. In this regard, only a transformational PM can be able to steer the company through the transition period and bring about a positive organizational change.
Risk Mitigation Strategies
There are three potential risk factors likely to affect this project: external, internal, and negotiated risks. It requires a proactive approach to manage internal and external risks associated with client-supplier relations, including specification adjustments. One strategy the PM can use to mitigate risks is the establishment of a customer relations framework prior to the start of the project. In this framework, the engineers will contact customers and suppliers regularly to ensure the timely delivery of products and raw materials, respectively.
Clients are bound to change their demands and specifications of the touring class motorcycles. Failure to adjust to the changing needs will affect relations with clients, which will give room for external risks to emerge. Thus, changes in client tastes and preferences, which can expose the project to financial risk, can be addressed through a clear customer relations framework. This will allow customers to give their feedback regarding the efficiency and performance of the touring class motorcycles relative to the middleweight ones.
The second risk mitigation strategy relevant to this project is regular design reviews. The PM will organize meetings to facilitate the sharing of information among team members. Weekly meetings to review the product designs will help adjust the product design to reflect customer needs and preferences. Moreover, design reviews can help evaluate the product’s performance and introduce new features that may make it superior. The third strategy entails regular reporting to the firm’s directors regarding the project’s overall performance. Given its significance to the firm’s overall success, the senior management must be involved, particularly in the formulation of the business strategy (Tzokas et al., 2004). Isolating the senior management will create operational risks related to team coordination and resource allocation.
Hart, S., Hultink, E., Tzokas, N., & Commandeur, H. (2003). Industrial companies’ evaluation criteria in new product development gates. Journal of Product Innovation Management, 20(1), 22–36.
Hobday, M. (2000). The project-based organization: an ideal form for managing complex products and systems? Research Policy, 29(1), 871–893
Kerzner, H. (2013). Project Management: A systems approach to planning, scheduling, and controlling. Hoboken, NJ: John Wiley & Sons, Inc.
Tzokas, N., Hultink, E. & Hart, S. (2004). Navigating the new product development process. Industrial Marketing Management, 33(2), 619–626.