Case Study 6.

Columbus Instruments

Problems have been building at Columbus Instruments, Inc. (CIC) (not

its real name) for several years now with the new product development
process. The last six high-visibility projects were either scrapped outright after
excessive cost and schedule overruns or, once released to the marketplace,
were commercial disasters. The company estimates that in the past two years,
it has squandered more than $15 million on poorly developed or failed
projects. Every time a new project venture failed, the company conducted
extensive post project review meetings, documentation analysis, and market
research to try to determine the underlying cause. To date, all CIC has been
able to determine is that the problems appear to lie with the project
management and development process. Something somewhere is going very
wrong.
You have been called into the organization as a consultant to try to
understand the source of the problems that are leading to widespread
demoralization across the firm. After spending hours interviewing the senior
project management staff and technical personnel, you are convinced that the
problem does not lie with their processes, which are up-to-date and logical.
On the other hand, you have some questions about project team productivity.
It seems that every project has run late, has been over budget, and has had
suboptimal functionality, regardless of the skills of the project manager in
charge. This information suggests to you that there may be some problems in
how the project teams are operating.
As you analyze CIC’s project development process, you note several
items of interest. First, the company is organized along strictly functional lines.
Projects are staffed from the departments following negotiations between the
project manager and the department heads. Second, the culture of CIC seems
to place little status or authority on the project managers. As evidence of this
fact, you note that they are not even permitted to write a performance
evaluation on project managers. As evidence of this fact, you note that they
are not even permitted to write a performance evaluation on project team
members: That right applies only to the functional department heads. Third,
many projects require that team members be assigned to them on an
exclusive basis; that is, once personnel have been assigned to a project, they
typically remain with the project team on a full-time basis for the term of the
project. The average project lasts about 14 months.
 One morning, as you are walking the hallways, you notice a project
team “war room” set up for the latest new product development initiative within
the company. The war room concept requires that project team members be
grouped together at a central location, away from their functional departments,
for the life of the project. What intrigues you is a hand-lettered sign you see
taped to the door of the project war room: “Leper Colony.” When you ask
around about the sign, some members of the firm say with a chuckle, “Oh, we
like to play jokes on the folks assigned to new projects.”
Further investigation of project team members suggests they are not
amused by the sign. One engineer shrugs and says, “That’s just their way of
making sure we understand what we have been assigned to. Last week they
put up another one that said ‘Purgatory.’” When you ask the project manager
about the signs later in the day, he confirms this story and adds some
interesting information: “Around here, we use detached [meaning centralized]
project teams. I get no say as to who will be assigned to the project, and lately
the functional heads have been using our projects as a dumping ground for
their poor performers.”
When you question him further, the project manager observes, “Think
about it. I have no say in who gets assigned to the team. I can’t even fill out a
performance review on them. Now, if you were a department head who was
trying to offload a troublemaker or someone who was incompetent, what could
be better than shipping them off a project team for a year or so? Of course,
you can imagine how they feel when they hear that they have been assigned
to one of our project teams. It’s as if you just signed their death warrant. Talk
about low motivation!”
When you question various department heads about the project
manager’s assertions, to a person they deny that this is an adopted policy. As
the head of finance puts it, “We give the project teams our best available
people when they ask.” However, they also admit that they have the final say
in personnel assignment and project managers cannot appeal their choices for
the teams.
After these discussions, you suggest to the CEO that the method of
staffing projects may be a reason for the poor performance of CIC’s new
product development projects. He ponders the implications of how the projects
have been staffed in his organization, and then says, “Okay, what do you
suggest we do about it?”
Questions
1. What are the implications of CIC’s approach to staffing project teams?
Is the company using project teams as training grounds for talented
fast-trackers or as dumping grounds for poor performers?

2. How would you advise the CEO to correct the problem? Where would
you start?

3. Discuss how issues of organizational structure and power played a role

in the manner in which project management declined in effectiveness at
CIC.

1. The implications of CIC’s approach to staffing project teams is that