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Influence of Differing Project Management Styles onto Mergers

December 6, 2009 | Author: PM Hut | Filed under: Organizational Structures

Influence of Differing Project Management Styles onto Mergers
By Andreas Schulz

We often hear of mergers of large companies which proved to be a failure in the long run. Initially everything seems to fit, the circumstances are promising, the staff is motivated and looking positively into the new company’s bright future, the ranges of products complement each other, also the customers’ reactions are sympathetic to the merger - so why should there be any concerns, any doubts in completing the merger?

The fact is, much too often after some years have passed by, the original expectations and hopes have been proved to be nothing more than naive dreams. In tenacious daily troubles the original spirit will soon vanish without trace. People are weary, merely carrying out their duties and wishing back “the good ol’times”.

How could this happen?

I would like to set the focus of our attention onto one aspect of mergers, which is mostly neglected and grossly underestimated: differing organizational structures of companies in the field of project management. The focus of attention is often set to technical aspects, efforts to coordinate sales activities, to achieve savings in production costs, etc… But what about differing organizational structures?

Each company has its own style in organizing its internal workflows in an effective way. And now, when contracts are signed and real cooperation has to start, the two different company styles start to clash. We know from our experience as Project Managers, that combining different ways of project organization necessarily causes lots of trouble, to say the least. The moment the co-operation starts, we are starting a common project or better: a sequence of projects, where the project team consists of employees of both companies. To me it is not suprising, that this becomes the source of continuous hassle, frustration and misunderstanding – in short: that the result is a complete failure of communication.

We all have heard mergers between different organizational structures like projectized organizations on one end and functional organizations on the other. When a project manager from company A speaks about a project and a project manager from company B speaks about a project, both might be talking about completely different concepts, tasks and expectations. In most cases, this is not made an issue (with potentially catastrophic consequences). Both are managing projects together, but their work has only the name in common, and possibly neither of them even notices this fact.

Even if both companies set up their projects in a common style, this does not guarantee success to their common projects. There are so many different modes in project execution, that project success is still jeopardized.

I, for once, experienced a large project in the field of IT development where the data warehouses of originally two companies had to be united. One company had a quite formalized project approach, where each step requires formal acceptance, while the other had an agile approach. One of the greatest challenges of this project posed the question of how team members of both companies could work together. This question was dominating all other aspects: Technical problems, questions of software design, project funding, setting up a project plan, scheduling – anything else seems to take a back seat in view of this central question.

Having learned a lot from the above experience, I strongly recommend the following:

  • The Project Management and execution styles of both companies have to be analyzed meticuously.
  • A company wide project management and execution style has to be set up.
  • The organizational structures have to be modified in order to support the company wide project management style.

These tasks are not trivial and not done along the way, and they are an essential part and prerequisites of any successful merger.

ANDREAS SCHULZ (PMP) is an IT Project Manager and IT Consultant in Freiburg, Germany. He has taught application design at University Furtwangen (Germany) and looks back on many years of experience in software design and project management on an international scale. His focus are enterprise database applications and information management. For his profile see: http://de.linkedin.com/in/schulzandreas/en. He has started his own blog about IT and Management at: http://myblog.mcube.de.

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