Organisation resource planning versus the evolution of the company.
Our clients, who implement projects where multiple people are involved, often struggled with the question of how to organise in regards to resource planning. In this blog post we will look at the different development stages companies go through and the organisation of resource planning which would be appropriate. We will spell out what the risks would be if you do not prepare for this within a reasonable period of time.
The development of a company is distinguished by the following phases:
For each phase we outline the status of project planning in terms of the number of project managers and how they organise resource planning, or if they are supported by another manager. Of course the situation will vary sector by sector, this is merely an outline. When defining projects, we explicitly mean assignments for which staff are needed from multiple disciplines.
In other words, the entrepreneurial phase. This is when there are only a few employees, often just the founders. During this phase departments are not identified as the organisation is too small. The organisation and its’ implementation is completely fluid. Here, supply and demand find each other perfectly which is possible because the employees are often very versatile. After all, they are entrepreneurs and they address everything that crosses their path.
At this stage of a company both project management and implementation is usually executed by the same person and thus it’s not really an issue. During this stage, they are happy to have even a few projects and will work diligently on them for the success of their clients.
Resource planning doesn’t manifest itself
Resource planning is therefore not an issue during this phase. There are lots of projects taken on as there are hours available to dedicate towards them. Every employee at this stage is the master of their own agenda and they determine how much they will work. The projects are often smaller, and employees fill several disciplines for each project. There is little dependence between staff members, and along with that, resource planning is not necessary.
Pitfall: premature optimisation
I’m actually talking to entrepreneurs who want to use Timewax at this stage, because they want to prepare for the growth. But the reality is they do not need as it would actually hinder their ability to stay engaged. It would be better to pay attention to your clients, projects and recruiting staff. Before you take on resource planning, let it become a problem first: “We’ll cross that bridge when we come to it”.
The company grew out of the start-up phase and now has a small group of employees that operates as one team. In contrast to the previous phase, the need now arises to define competencies and tasks of the employees a little more specifically, which means, to standardise. At this stage, the company won’t be divided into departments, but divided into positions. You may either be a “consultant” or a “developer” and you will be deployed as such on projects.
During this phase, the need arises to create project plans. The company has grown and with it the number of employees and the size of projects. This is a naturally occurring phenomenon. As the company grows, the clients and projects also grow in size. Serious planning must now take place to fulfil the needs of the clients.
In this phase, you have a handful of project managers who manage all projects. Each project manager will work on multiple projects simultaneously. Together, project managers hold weekly meetings to get everyone up to speed on where everything stands and what the needs are on other projects. They make choices in planning and setting priorities that serve the company’s interests.
Initial resource planning
Resource planning is not yet a pain point, but an administrative burden. This is because it is important to have a good overview of the availability of all employees. At this stage, support is often offered by an office manager, secretary or assistant. He or she is responsible for the scheduling of all holidays, sick days and training sessions. This relieves the project managers who will then be able to focus more on their projects.
Pitfall: too few projects managers
A pitfall in this phase is the lack of project management or project managers with inadequate skills in project management and planning. Everyone begins like a chicken with their head cut off as they work to answer client questions without being properly coordinated. In this situation, the demand from projects is not aligned with the standardisation of knowledge and skills within the team. This leads to some employees being totally overloaded while others have plenty of time available. Experienced project managers know to prevent this by aligning together project and resource planning.
The company has now grown significantly and employs dozens of employees. It is now time to classify the company into different departments or teams. For example, all the developers will be organised in to the ‘Development’ team and will be assigned a team leader. This professionalises the management and professional development of the employees. The team leader is also expected to analyse the demand from projects and determine if additional training and recruiting should be taking place.
The number of project managers has now increased considerably. It is no longer a handful of project managers that can both plan all projects and take care of resourcing. In addition, through professionalising project delivery, project managers are now expected to primarily focus on better alignment with the client and translating requirements to work that needs to be carried out. In comparison to the previous stage, project managers now only deal with their own projects and they have low involvement in other projects within the company.
Resource managers as separate staff
Resource planning is now tightly organised. In the previous phase, resource planning was done by a support officer, but now it is a full-time job. A resource manager translates requests from the project managers and in consultation with the team leaders decide which employees should be assigned to it. They also take into account the personal development of employees.
Pitfall: resource planning by project managers
A pitfall in this phase is the lack of a resource manager, making resource planning still the responsibility of the project managers. Because they are focused on their own interests at this stage, you will find that they “fight” for their own projects. The project managers most effective at lobbying will always get the best people on their projects, while others won’t fair as well. In addition, there is a risk that they will deploy staff to work below their level. For sure, the project manager wants the best results in the shortest possible time. This may conflict with the personal development of employees.
The company has now doubled the number of employees compared with the previous phase. Large departments begin to emerge with unique specialisations. This gradually begins to increase distance with the clients, because the specialists have developed to such an extent where they no longer speak the language of the client. The size of the company results in increasingly introduced rules and procedures. The company now clearly exhibits bureaucratic tendencies.
Given the large number of project managers, they have now also been organised as a separate resource pool, as a team. Just like any other employee, project managers are now also being managed in developing their profession. In the previous phase project managers had a clear role in the commercial process. This is now the responsibility of separately appointed account managers. The business aspect and the implementation of projects are now strictly separated from each other. The project managers still provide input on proposals to clients.
Resource planning as a support department
For the planning of projects and resources a separate support department is now set up to handle these tasks, a project office. The tasks of the project managers and resource managers from the previous phase are now taken over by this department. The project managers are responsible for the initial planning of the project and will periodically report progress to the project office that tracks the overall progress of all projects. The project office aims to optimise employee productivity by anticipating the inflow and outflow of employees on projects.
Pitfall: overdue cell division
This is a phase you want to prevent from happening. The size of the company creates too much focus on the internal organisation through the application of rules and procedures. Responding to market demands causes the company to lose some of the initial power it had. The distance between the client and the employees has grown too large. It is now important to apply cell division by splitting the company into several business units, for example by branch. This brings each business unit to the standardisation stage so that entrepreneurship is encouraged. This revives the feeling of ‘being a team’.
Each phase a company goes through requires suitable organisation and resource planning. By recognising what phase your business is in will allow you to plan appropriately for the next phase. Be careful with premature optimisation by introducing procedures and systems that people will experience as a burnen with no added value. That will only cost you in time and lead to frustration.
Recognise that resource planning is also a profession. This is especially true during the transition from the standardisation to the professionalisation phase, where you will find that person mainly responsible for administrative support does not adapt well to the position of resource manager. A resource manager is more concerned about tasks at the tactical and strategic level which requires other skills.