FROM MY EXPERIENCE
The Project Manager/Functional Manager Partnership
George Pitagorsky, PMP, Pitagorsky Consulting, 153 East 32nd Street, 7E, New York, New York 10016 USA, e-mail: pitagorsky@aol.com
T
he collaborative relationship between functional
managers (FMs) and project and program
managers (PMs) is critical to effective project
performance and to the well-being of any organization.
This paper defines PM and FM roles, discusses issues
regarding FM/PM relations, and offers recommendations
that promote collaborative relationships aimed at
furthering the organization’s success. There is no cook-
book approach—PMs, FMs, and their management must
creatively adapt project management ideas and practices
to their situations.
The principle issues addressed are these: stabilizing
project resources, functional manager involvement in
planning, project manager authority, accountability,
custodianship vs. ownership of functional resources, and
the functional manager’s role in project performance
and direction.
The Challenge
Project management and management by projects have
emerged as major trends in the ongoing search to
improve performance in organizations. Some organiza-
tions have a long history of project-centered activity
while others are new to it. My findings, based on anec-
dotal information from hundreds of functional and
project managers attending project management semi-
nars across the country, are that conflict between PMs
and FMs is common to both, and for similar reasons.
The organization’s challenge is to find a structure
that suits its needs. Structure, the foundation for behav-
ior, includes role and responsibility definitions, organi-
zational boundaries, relationships, policies, procedures,
and an effective reward system. In the context of project
management, the roles of and relationships between
functional and project managers are among the most
critical aspects of the structure. These roles vary across
the spectrum of industries and individual organizations
performing projects.
Radical vs. Incremental Change
Radical structural change may be necessary. Often,
though, the structure is sound and the attitudes and
beliefs of the people in the organization are the roots of
the problem. What is needed is a renewal of the under-
standing of the organization’s goals and how already-
defined structures can help to meet them. Renewed
December 1998 Project Management Journal
understanding leads to more conscious relationships;
more conscious relationships, to better performance.
The challenge is to engineer the organization’s struc-
ture to fit its needs. Organizational structure is a means
to an end; it should not be cast in concrete. It is a factor
that contributes to the organization’s ability to perform
projects successfully. Underlying the structure is the
common intention of all participants—to achieve the
organization’s objectives. Although, based on anecdotal
evidence, it is clear to me that, with this common inten-
tion, most organizational obstacles can be overcome. In
other words, people who want to cut through the poli-
tics and interpersonal conflicts that get in the way of
effective performance can do so.
Project Success
The degree to which an organization’s structure is work-
ing is measured by the degree to which projects are
performed successfully. A successful project satisfies its
clients and sponsors with an outcome that achieves
objectives within time and cost constraints, produces a
quality product, ends when appropriate (i.e., avoids
wasting time and money), maintains and promotes
harmonious relationships among project stakeholders
(including project performers and their management),
and contributes lessons learned to the organization.
Project success is measured in terms of:
■ Project performance efficiency (e.g., meeting time and
budget constraints, minimizing costs)
■ Product quality and effectiveness (e.g., whether the
project outcome actually helps to achieve the business
objectives it was initiated to achieve, whether opera-
tional and maintenance costs are within reasonable
expectations, the degree to which quality specifications
of the product have been met)
■ The degree to which the project prepares the perform-
ing organization for the future (e.g., lessons learned)
(Shenhar, Levy, & Dvir, 1997).
Figure 1 graphically shows the relationship between
key success criteria.
Are projects consistently successful? If not, how does
the organization’s structure, particularly the relationships
between PMs and FMs, contribute to any shortcomings?
What changes need to be made to improve performance?
7
 Product
Effectiveness

Customer
Relations
Time Cost

Figure 1. Project Success Factors

Functional and Project Management Roles
There are three primary project-related management
roles: program manager, project manager, and func-
tional manager.
Program Manager. The program manager is
responsible for the overall success of a program. A
program is a set of projects and, often, ongoing opera-
tional activities (manufacturing, support, etc.) related by
a common theme. The program manager generally has
primary contact with the client and is responsible for
program planning (at the higher levels of the work
breakdown structure), administration and management.
Product managers are program managers where the
program is the development and life cycle management
of a product.
Project Manager. Project managers or project lead-
ers are responsible for the planning and performance of
individual projects. Project managers may:
■ Report to functional managers (possibly a manager of
project managers) administratively and to program
managers with respect to their project(s)
■ Report directly to functional managers who act as
subcontractors to program managers
■ Report directly to program managers while managing
resources from functional groups
■ Report directly to executive management.
Functional Managers. Regarding projects and
programs, Functional managers are responsible for
ensuring that the resources in their areas are properly
trained, evaluated, and motivated; that core processes
within the function are effective; and that sufficient
resources are available for program performance. In
some organizations, FMs are responsible for the perfor-
mance of ongoing operations that are not related to
projects. Sometimes FMs are directly responsible for
performance of project tasks, and sometimes they are
responsible for providing resources to be directed by
project managers.
There are two facets to the functional manager role:
administration and technical/discipline leadership.
Managers of nonoperational functional groups that act
as resource pools for projects are primarily administra-
tors. Sometimes they are experts in a functional disci-
pline, who set functional standards and coach functional
resources. In groups that perform project work as
“subcontractors,” both the administrative and perfor-
mance leadership roles must be performed. Often, these
two roles are best played by different people.
Functional managers are custodians, not owners, of
functional resources. They are responsible for ensuring
that capable resources are available to fulfill project and
operational needs. FMs are in a service role when it
comes to either providing resources or deliverables to
PMs. As simple and obvious as this may seem it is often
misunderstood or forgotten.
When FMs think of themselves as owners, relation-
ships become strained. They may arbitrarily set priorities
and dictate the terms under which resources and services
may be obtained. In some cases, members of other depart-
ments and projects may resort to obtaining resources from
outside firms, at great additional cost, even though there
was excess capacity internally. In other cases, performance
may degrade as FMs suboptimize “their” resources to meet
personal objectives.
It is the responsibility of functional managers to assess
operational and project requirements for resources over
the next planning period (at least one year out), and to
make sure that there are sufficient resources to fulfill them.
To do so, FMs need estimates from project managers, data
on past experience, priority criteria from executives, an
appropriate resource budget, and a source of resources.
Even in the most volatile environments, it is possi-
ble to either predict requirements based on past perfor-
mance or to own-up to the complete randomness of
demand and create flexible sources that will enable proj-
ect staffing and other resource commitments to be met.
The functional manager who has come up through
the ranks discipline and has been rewarded for effective
service by being promoted into a management role that
no longer requires years of technical experience is likely
to resist any organization structure that relegates to a
purely administrative management position. The func-
tional manager’s resistance to strong matrix and projec-
tized structures is often based on the attempt to hold on

8 Project Management Journal December 1998

to influence on the way work is performed, even when
this becomes the responsibility of program or project
management.
Some of this resistance can be avoided by giving
functional managers an opportunity to choose a purely
technical or technical management career and by clearly
acknowledging the administrative nature of the func-
tional manager role. Technical managers should have the
availability of adequate administrative support.
PM/FM Conflict
PMs and FMs are partners in the business of making proj-
ects succeed. As in all partnerships, there is an opportu-
nity for conflict. Conflict can be healthy and useful if it is
addressed candidly and leads to better decisions. Unnec-
essary conflict, often based on misunderstanding of roles,
responsibilities, and mutual objectives, should be mini-
mized, if not eliminated. Conflict resolution requires
both a forum at which to raise, define, and discuss issues
and a commitment from senior management, FMs, and
PMs to actually resolve the issues.
The following sections discuss the principle conflicts
between FMs and PMs, as reported by several hundred
attendees at project management seminars that I have
led over the past three years:
■ Contention for resources
■ FM involvement in project planning and performance
■ FM involvement in project performance
■ The tendency of functional managers and their staff to
take a narrow, discipline-centered view, rather than a
holistic view that places the discipline within the context
of a multidiscipline project
■ The failure of project managers to take a holistic view
that places the project in the context of a multiproject
environment within an ongoing process.
Contention for Resources. Conflict over resources
is based on the need by PMs to rely on the availability of
project staff from functional areas. The availability of
resources is a critical success factor in project performance.
Functional organizations provide both human and other
resources for project performance. Project managers plan,
control, and coordinate project performance based on
commitments made by functional managers and external
contractors to provide people, products, or services within
time, cost, and quality constraints.
If FM commitments are not met, project commit-
ments will not be met. Generally, holding external
vendors accountable for their commitments is standard
operating procedure. If the project is important to the
organization, the organization must also hold func-
tional managers accountable for fulfilling commitments.
However, this accountability must be balanced with the
authority and support needed by FMs to deliver.
Functional managers schedule staff and other
resources. Programs and projects compete for resources
December 1998 Project Management Journal
and services from functional groups. Project managers
want the best people for their projects. New projects
often seem to have higher priorities than existing ones.
There is need to shift resources as priorities and sched-
ules change, causing delays in existing projects.
When faced with growing demand, functional
managers may overcommit their resources. This tends to
overwork people, resulting in degraded performance on
projects, excessive costs, burnout, and turnover. Sched-
ule slippage in one project will often result in delays in
other, seemingly unrelated, projects as transfers of
resources are delayed. Pressure from upper management
to hit tight or irrational deadlines leads to additional
overcommitment.
Project slippage is inevitable when promised resources
or promised subproject deliverables are delayed, and their
slippage intensifies conflict between PMs and FMs. PMs
blame FMs for the slippage; FMs blame PMs for being
insensitive to the big picture needs for resources across
multiple projects and between projects and internal or
operational activities. Often, FMs and PMs will augment
their staff with consulting services and/or overtime, increas-
ing costs beyond originally budgeted levels.
To manage the contention for resources and
services, functional managers must maintain master
schedules. These master schedules allow each functional
manager to see where and when resources are commit-
ted. Negotiation between FMs and PMs regarding the
staffing and scheduling of new or changing projects can
then be based on objective criteria rather than on poli-
tics, pleading, haggling, and arm-twisting. A higher-level
master schedule, consolidating functional group sched-
ules and cutting across all programs and functional
groups may be useful in organizations where the staff
and number of programs makes it feasible.
The master schedule is simply a schedule that
includes all of the work assignments (current and
planned) for a group. The assignments will generally cut
across projects and should address any nonproject activ-
ities that are performed by or use resources. The master
schedule shows the degree to which resources (human
and other) are allocated and their availability for further
assignments.
In addition, the master schedule shows the rela-
tionships between projects based on resource depen-
dencies—projects that are related to one another
because they use common resources. Resource depen-
dencies are often overlooked by project planners and
functional managers when there is no master schedules.
This, in turn, leads to impossible commitments.
It is the functional manager’s responsibility to make
sure that resource commitments are feasible and that
they are either fulfilled or that project managers are
made aware, as early as possible, when they will not be
kept and why. Functional managers may facilitate nego-
tiations among project managers vying for resources.
9
Functional managers must be consulted before their
resources are committed to project schedules.
Who wants a chaotic environment in which project
managers cannot rely on the availability of resources and
in which functional managers are squeezed between
operational and project priorities, while everyone is
being held to inflexible and often unrealistic schedules
and budgets?
Executive management is responsible to ensure that
the desire for “lean and mean” organizations doesn’t
lead to an irrational relationship between project objec-
tives, resource availability and operational requirements.
Unrealistic demands from above are among the most
damaging factors in organizational performance. At the
same time it is an executive’s responsibility to maximize
performance.
FM Involvement in Project Planning. Authority
is a factor in any organization. Many PMs believe that,
other factors being equal, the more authority a project
manager has over project resources and the more dedi-
cated those resources are to the project, the more likely
is project success. In complex projects, however, it is rare
to find project managers with the authority over all
resources. In fact, it may be far more effective to have
FMs responsible for their resources’ performance, freeing
PMs to manage the big picture and client relations. Proj-
ect managers without direct authority over project
resources can manage through accountability.
Project and program managers must have the mini-
mal authority to get formal commitments from func-
tional managers for resources or, when functional groups
are responsible for performing work on the project, for
deliverables. Commitments for deliverables must be
accompanied by plans that show enough detail to give the
PM the ability to monitor progress. To monitor progress,
PMs must have the authority to require FMs or functional
resources to report progress against their plans.
With this authority and an efficient reporting system
that delivers candid reports to senior management,
program management, and functional management at
various levels, accountability will motivate functional
management and resources to make reasonable commit-
ments and to keep them. When it is not possible to keep
previously made commitments, the reason must be
stated candidly as part of the reporting system. FMs,
PMs, and their management share the responsibility for
adjusting schedules and/or resources, as necessary.
To balance this PM authority, FMs must be asked to
commit to schedules and budgets. Program or project
managers who make commitments for project deadlines
before consulting FMs, cannot expect to pressure FMs
into compliance. The attempt to do so puts a wedge
between PMs and FMs, creating an adversarial relation-
ship. Further, it leads to a continuous juggling act by FMs
as they borrow resources from one project to try to make
the deadline on another. Ultimately, the system breaks
10 Project Management Journal
down and projects run late or, worse, the product is
released before it is ready—quality is subordinated to
schedule, and everyone loses.
For projects in which most or all of the work is
performed by functional groups, functional managers
and/or the project managers who report to them should
do most of the planning. The program manager coordi-
nates the intergroup planning process. The PM makes
sure that functional groups collaboratively perform
dependency analysis, that all of the work needed to
fulfill project objectives has been identified and is
covered by a responsible group, and that the project’s
time and cost constraints are being considered by the
functional groups as they formulate their plans and then
work the project.
Project planning involves negotiation between FMs,
PMs, clients, and project sponsors. Each party to the
negotiation process must have the ability to candidly
present arguments for why project activities can or can’t
be done within desired constraints. If any one party has
too much power, it is likely that the planning process
will be dysfunctional. Dysfunctional planning leads to
dysfunctional performance and to unnecessary interper-
sonal conflict.
FM Involvement in Project Performance. In my
seminars, the most frequently reported performance-
related conflicts revolve around the definition of require-
ments and the acceptance of results.
Sometimes feed back of requirements to clients
and/or project managers is bypassed—”We know what
you want. We’re in a hurry. Why waste all the time it takes
to feedback written requirements statements and designs?
Don’t you trust us? Let’s just get right into building the
product.”
Some functional groups object to having others
scrutinize their work, making project quality control a
political issue. “We’ve tested our piece and it works. If
there is something wrong it must be a hardware, soft-
ware, or interface problem. Get someone else to fix it.”
In order to estimate accurately and to avoid unnec-
essary rework, it is necessary for all parties to a project to
have a mutual understanding of what needs to be done
and what an acceptable outcome will look like. This
means that both deliverables and the approach that will
be taken to achieve them must be defined and verified
in a dialogue among the client, sponsor, program
manager, functional manager(s) and/or their staff, and
other stakeholders. The level of detail of this dialogue
depends on the type of work being done and the nature
of the relationships.
Generally, the program manager is the facilitator of
the dialogue. The client is responsible for articulating the
project objectives and product definition. Performers are
responsible for documenting these requirements in a way
that makes it possible for the client to verify that the
performers have an accurate and complete understanding.
December 1998
 IT Technical
Services
Data
Security
Administration
Projects and Operational Services
Figure 2. Discipline-Based Functional Groups in IT
Depending on the functional groups’ roles, they
may be directly involved with the client or may be given
their requirements by the PM. In any case, it is critical
that functional groups document their requirements and
feed them back to the PM and/or the client so that the
possibility of going off and producing erroneous results
is minimized.
Acceptance criteria should be documented and
agreed upon before work is started. Rework and much of
the conflict between functional performance groups and
project managers can be avoided if acceptance criteria,
quality control methods, and responsibilities are clearly
defined and communicated early in the project’s life.
Performers should be reminded that errors found by
quality control people from outside their discipline were
put there by the performers. Quality control people
should be reminded that they don’t make up acceptance
criteria on the fly.
PMs are responsible for the project’s overall outcome.
FMs are accountable for the outcome of the work
performed under their responsibility. Quality control may
be performed by the PM or by an independent quality
control function.
Tendency to Take a Narrow, Discipline-Centered
View. In many organizations, functional managers and
staff are specialists in a particular discipline or opera-
tional area. They may view project work only in terms of
their specific efforts rather than as part of a larger effort.
As a result they may object to or ignore PM efforts to
take part in quality control and assurance activities and
monitor project progress.
Continuous reminders regarding the overall goal of
the organization, as obvious as they seem, are necessary
to avoid the tendency toward taking a narrow, discipline-
centered view.
Failure to Take a Holistic View. Just as functional
managers and staff must take a project-centered view, the
project manager must remember that FMs serve multi-
ple projects and may be responsible for operational
activities. PMs have the responsibility to negotiate with
FMs for resources or deliverables, not to demand or
December 1998 Project Management Journal
PC Unix
Etc.
Engineering Engineering
create unrealistic pressures. When project schedule goals
conflict with the ability of functional groups to comply,
higher-level priorities are used to settle the conflict.
Case Studies
The following two case studies exemplify how relation-
ships between FMs and PMs get in the way of project
performance. The differences between the cases reinforce
the notion that an adaptive approach to organization
structure is necessary. The cases also highlight how atti-
tudes and relationships, not adherence to theoretical
structures, are the keys to improved performance
Case 1: Stabilizing Resource Availability by
Buffering Projects From Operational Priorities. This
case shows how organization change focusing on
PM/FM roles and relationships can help to resolve
resource instability. The use of an “adaptive” structure
that combines elements of other forms of organization
structure is posited as an important element in improv-
ing performance. In this case, a relatively straightforward
organization change simply removed an obstacle, which
permitted the underlying healthy attitudes of both
management and staff to be directed toward success.
At Morgan Stanley, an international investment bank-
ing organization, the information technology technical
support group was divided into functional departments by
technical discipline (e.g., systems engineering, security,
telecommunications). Each discipline was responsible for
project work to perform research and implement new
system features and for support activities to respond to the
ad hoc needs of system users and developers. Figure 2
depicts the organization structure.
Interdisciplinary projects were particularly frustrat-
ing. These were handled as “virtual” projects, with no
dedicated staff. Project performers were often assigned
to multiple projects and were simultaneously responsi-
ble for support activities. Project managers had little or
no authority over the resources working on their proj-
ects. Project status reporting was limited to lists of
accomplishments. In these interdisciplinary projects,
11
frustration often transformed itself into open conflict
(mostly finger-pointing) among functional managers
and among functional and project managers.
Because support activities took priority over project
work, projects were constantly being delayed as the staff
was pulled from their project tasks to respond to ad hoc
service requests. Project managers, who worked directly
for the functional (discipline) managers, were frustrated
in their attempts to adhere to schedules. FMs often prior-
itized their internal projects ahead of cross-functional
projects.
Because of the difficulty in adhering to schedules,
project planning and control were viewed as academic
and performed in name only. How can you keep a plan
up to date when your resource assumptions are being
changed all the time? If you can’t keep the plan up to
date, how can you control the project? Why bother to
plan if you can’t use the plan to predict the project
outcome and as a baseline for control?
Evaluation of the organization’s problems—late
projects, unpredictable end dates, chronic overtime, lack
of high-level planning, dissatisfied clients—led to a reor-
ganization that showed positive results quickly (see
Figure 3).
The new organization clearly separates service from
engineering to stabilize the environment by making sure
that project performers are not interrupted to address ad
hoc support requirements. Service is responsible for the
ad hoc aspect of technical support. Engineering is
responsible for more stable, project-oriented activities,
both those growing out of service issues and those that
are more forward-looking (upgraded performance, new
products, etc.).
In addition, a project office supports project
managers with assistance in project planning and
control and maintains master schedules for the engi-
neering staff so that project planning can easily take into
consideration interproject contention for resources—
human and equipment. While the organization is averse
to administrative overhead, it has recognized that this
function adds sufficient value to justify its cost. Because
each major functional area within IT (e.g., technical
services and application development) has its own proj-
ect office, the issues associated with a large centralized
group have been avoided.
Most project managers continue to report to func-
tional managers and most cross-functional project teams
are “virtual.” The project manager role is temporary, with
no official project manager title or position. There is still
little or no authority over functional resources. But,
because there is a more effective status reporting process
and because the availability of functional resources is
more predictable, it is possible to hold functional
resources and functional managers accountable for
meeting their commitments.
12 Project Management Journal
For long-term and high-profile/critical projects, a
project manager is assigned and taken out of the func-
tional hierarchy to report directly to executive manage-
ment for the duration of the project. These projects are,
generally, staffed with dedicated performers who report
directly to the project manager.
Relationships among the functional managers are
improved because the functional manager with primary
responsibility for a project’s performance can rely on the
schedules agreed to by other functional managers. Proj-
ect manager frustration is reduced as they are supported
by project office coaches and administrators and can
manage functional resources through accountability.
The structure in this organization is “adaptive.” It
combines elements of a weak matrix and projectized
structures in a way that effectively supports both project
work and ongoing activity. This structure works in this
organization because both management and the staff
are very results-oriented and anti-bureaucratic. The
organization’s size and its need for staying abreast of
and integrating fast-changing technology into its envi-
ronment further supports the need for this nontradi-
tional structure.
While, from a traditional, formal project manage-
ment point of view, the adaptive structure may not be
seen as “optimal,” it is effective for this organization at
this stage of development. The adaptive structure may be
a point in the transition to a more traditional strong
matrix, or it may be a more permanent structure well
suited to the characteristics of this organization.
Comparing the adaptive structure to a strong
matrix, the adaptive offers far more flexibility. The abil-
ity to quickly and easily create either virtual or projec-
tized projects is well suited to the organization’s entre-
preneurial style. By not having a permanent cadre of
project managers, there is the flexibility to have engi-
neers play project management or technical perfor-
mance roles, as needed.
While the lack of formality could be a disadvantage
in an organization in which there is a tendency toward
turf warfare, it is an advantage in this organization. The
organization’s culture is nonhierarchical, making it
possible for project managers to stand up for themselves
even when confronting their own FM. The group is very
results-oriented and is rewarded for success, as opposed
to political prowess. Engineers chosen for project
manager and project leader roles are not only trained
but also supported by coaches.
The transition to the new structure was relatively
painless, as the old structure was relatively short-lived
(less than five years) and the culture was accustomed to
flexible, performance-oriented relationships. While in
the beginning it was difficult to motivate some of the
technical staff and functional managers to devote their
efforts exclusively to support work (most preferred engi-
neering project work), there was little resistance from the
December 1998
 IT Technical
Services
Service
Help Floor
Desk Support
Operational Services
Data
Administration
Figure 3. Separating Functions to Stabilize Project Staffing
discipline managers. Over time, recruitment of people
with a greater interest in support as a primary activity
and rotation between engineering and support manage-
ment roles will further stabilize the organization.
The structural changes in the technical services area
were made to address the need for a stable and reliable
supply of human and other resources for project work.
To alleviate contention between projects and production
work, the organization was structured to ensure that the
ad hoc needs of the organization were provided by a
support function with dedicated resources. Specific
computing resources were dedicated to project work.
Any extra expense was justified by the benefits of
increased predictability of project performance and
improved product and service quality.
The principles in this case are:
■ Adapt a structure to meet the needs and character of
the organization. Don’t be averse to blending elements
of different traditional structures.
■ Ensure that the project manager can rely on functional
commitments by holding functional managers and staff
accountable for meeting their commitments to project
managers.
■ Structure the organization so that functional managers
can more effectively budget and manage resources, e.g.,
separate ad hoc and operational activities, like service,
from project activities, like engineering.
These principles can be applied to manufacturing,
engineering, and other organizations. In manufacturing,
there is often a need to provide either dedicated
resources or to prioritize project needs so that manufac-
turing facilities are available on a reasonable basis for
use in projects. The manager of manufacturing opera-
December 1998 Project Management Journal
Special
Projects
Engineering
Project
Security
Office
Projects
PC Unix
Engineering Engineering
tions should be held accountable for keeping commit-
ments to project managers as for maintaining other
production schedules. Similarly, in service and other
organizations performing cross-functional projects (e.g.,
business improvement, product development), it is
necessary to dedicate human resources or appropriately
prioritize and schedule project work.
Case 2: FM/PM Relationships in a Program-
Centered Organization. This case explores how atti-
tudes, turf protection, and FMs’ desire for control over
their resources get in the way of effective performance,
even when the organization structure is sound. This case
study highlights how a unique approach to resolving
FM/PM conflicts is required from setting to setting. It
provides an example of how attitudes and relationships
are at the root of many of these conflicts. Without
addressing these human relations issues the conflicts will
not be resolved, regardless of the organization’s structure.
The setting is a large government-sponsored scientific
and engineering organization. The organization’s struc-
ture, which has been in place for many years, is a balanced
matrix with strong functional management. Program
managers control suites of related projects, manage
customer relationships for these programs, and adminis-
ter project planning and reporting. The organization
derives all of its income from programs and projects.
Functional areas are divided into disciplines (e.g.,
physics, life sciences). They provide the resources, includ-
ing the project managers, to perform project work. Many
projects are within a single discipline. Programs are
interdisciplinary. Functional managers tend to be experts
in their disciplines.
13
 The organization has acknowledged a need to
improve the way programs and projects are managed.
Project overruns are common, costs are high, and there
are instances of projects in which scope changes have
caused significant overruns and client dissatisfaction. In
one example, a $56 million construction project was
canceled after the first several months when an $8
million overrun and significant schedule slippage were
identified. The overrun was caused, in part, by failure to
fully identify the entire scope of work to be performed
before the project was estimated and, in part, because
workers decided to upgrade an electrical system without
full authorization by program management.
Individual projects are performed as if they are
autonomous rather than parts of higher-level programs.
While this may be more efficient from the point of view
of the individual project manager, it is detrimental to the
program as a whole.
Project leaders and their FMs have a great deal of
autonomy and often view the program manager as an
administrator rather than a true manager of the program
and its component projects. Project leaders work with
staff who also report to the FMs. While most of the proj-
ect staff is dedicated to specific projects there are also
performers who work on multiple projects simultane-
ously. Some functional resources work on internal proj-
ects, mostly focused on process improvement and
research and development.
Functional managers want to limit the role of
program managers and retain control of project perfor-
mance. FMs, to make matters more complex, have a
history of dealing directly with customers in a way that
sometimes contradicts the aims of program managers.
Program managers want more direct control over proj-
ect leaders, more influence in performance, and to
reduce and closely coordinate direct contact between
FMs and clients.
The FMs, who are senior scientists in management
and administrative roles, often value their scientific disci-
pline expertise over their administrative management
expertise.
The organization needs to become more program-
centered because programs are its source of income and
the organization is facing significant competition for the
first time in its history. At the same time, the perfor-
mance of its knowledge workers (the realm of the func-
tional groups) has been the substance that allowed the
organization to succeed. The organization needs to
retain its competencies and make the most efficient use
of these specialized, scarce and expensive resources.
Functional managers must give over to program
management some or all of their autonomy, control,
and authority as their group’s efforts are seen as integral
parts of interdisciplinary programs. Giving up auton-
omy, control, and authority is rarely easy, particularly
when an organization values power and individual
14 Project Management Journal
accomplishment over collaborative effort. In this case it
seems necessary if the organization is to compete in a
newly market-driven industry instead of one that has
had a history of unlimited budgets and no competition.
To make the transition even more complex, many
functional managers see themselves as scientists or engi-
neers first and managers second. Their manager posi-
tions have often come as the reward for years of service
as expert performers. These FMs want to keep their hand
in the work itself rather than be relegated to an admin-
istrative role.
Giving up control to PM reinforces the weakening
of FM involvement in project performance. Further,
program managers may not be competent in technical
areas to directly manage subprojects in those areas. A
systematic approach that clearly recognizes the multiple
facets of the FM role and assigns people with appropri-
ate skills and motivation to perform both administrative
and discipline leadership roles is necessary.
The IT technical services case was one in which the
division of work within the organization was at the core
of project performance problems. In this case, the roles
and relationships of program and functional managers
are at the core. The organization structure is relatively
sound and well defined. Relationship issues have far
more impact than structural issues and will not be
resolved unless they are directly confronted. No simple
reorganization will help.
The incentive system must promote program-
centered effectiveness, not just the ability to perform
within functional boundaries. The more performance
evaluation, compensation, and incentive plans are
aligned with program success the more likely functional
and program management people will collaborate. When
it is made clear that no one can have unilateral control
over the use of resources, FMs and PMs must come to
consensus. As obvious as it is, people in the organization
must align their efforts with the larger organization’s
objectives, as opposed to departmental objectives.
Perhaps, over time, this organization will also adapt
a more fluid, adaptive structure that allows it to design
project teams to support project success instead of
adhering to a structure for the sake of tradition.
Creating a Collaborative Relationship
There is no formulaic approach, no magic bullet that
will resolve all problems, everywhere. Each organization
is unique and each needs its own specific solutions
based on sound project management principles. The
organization’s goal should be to promote and support
collaborative relationships.
Further, a holistic program is needed to improve
project performance. No one aspect of the organization
and its performance can be addressed in isolation.
December 1998
 A change initiative is necessary to create lasting
improvement. The initiative is a complex program that
may be as complex as a business process reengineering
project. The changes required, the degree of resistance to
change in the organization and the degree to which
senior management, FMs and PMs are committed to
change are all factors that determine the level of
complexity, difficulty, and risk for the initiative.
Change Initiative Objectives. To directly address
PM/FM relationship issues:
1. Appropriately balance authority between func-
tional managers and project or program managers.
1.1. Avoid, particularly in large cross-functional
projects, having a PM report directly to a FM that is
providing resources or services to the PM’s project.
1.2. Ensure that there is a clear escalation path and
criteria for when to escalate issues between PMs and
FMs. Generally, this means identifying a steering group
or a higher-level executive with the authority to break
ties and adjust priorities.
1.3. Clearly define PM authority in a project charter.
1.4. By requiring FM involvement and approval of
project plans, ensure that FMs have the authority to
“push back” when they are forced to comply with sched-
ules and budgets that conflict with their resource avail-
ability and preexisting commitments.
2. Clarify and regularly review roles and responsi-
bilities, particularly with regard to functional manage-
ment involvement in project initiation, planning,
requirements definition, customer contact, and the
direction of functional resource performance.
2.1. Perform post-project performance reviews in
which the effectiveness of role and responsibility assign-
ments is one of the items addressed.
2.2. Perform cross-project performance reviews that
assess the organization’s track record and correlate roles
and responsibilities and organization structure with
project success and the occurrence of problems.
3. Ensure that everyone is accountable for achieving
their commitments via a project reporting system that
requires functional managers and their resources to regu-
larly report progress against relatively detailed plans to
project managers, who candidly report results to inter-
ested stakeholders.
3.1. Implement a tool-based reporting procedure
that gives the PM the ability to incorporate their group’s
work plans into the overall project plan and that enables
a relatively seamless reporting of progress against these
plans.
3.2. Eliminate, if it exists, the attitude that the PM is
breaking some code of silence when he or she holds
functional groups accountable for slippage.
3.3. Make the identification of the cause(s) of slip-
page a normal part of all progress reporting.
December 1998 Project Management Journal
4. Ensure that project managers have a formal and
candid input to the performance evaluation of individ-
ual functional resources and of functional groups.
4.1. Institute a regular procedure by which PMs give
formal (written) performance evaluations for functional
resources reporting directly to them and for functional
groups performing tasks on their projects.
4.2. Institute a procedure to give FMs the ability to
give candid feedback on PM performance.
5. Change incentive systems to motivate functional
resources’ project performance.
5.1. Require that evaluations of functional staff and
functional group performance by PMs be used in perfor-
mance and salary reviews.
5.2. Continuously reinforce the need for collabora-
tive efforts in cross-functional projects by highlighting
the criticality of these efforts to the organization’s
bottom line.
5.3. Include project performance and support in the
mission statements of functional groups.
5.4. Include functional groups and resources in
project bonus plans.
6. Buffer projects from unnecessary contention for
resources between project work and operational work.
6.1. Assess staffing levels to ensure that functional
groups have sufficient resources to satisfy ongoing oper-
ational requirements (including proposal and estimat-
ing support) and project requirements.
6.2. To the extent possible, structure the organiza-
tion so that operational and project work are performed
by separate people.
6.3. When allocating resources to projects, account
for operational work. Don’t assume full-time availabil-
ity unless there is a realistic probability that the resources
are fully dedicated.
7. Maintain master schedules for functional groups
to enable accurate estimating of resource availability.
7.1. Require that each functional group keep an up-
to-date master schedule that accounts for all project and
nonproject effort and shows how resources are allocated
over time.
7.2. Ensure that when responding to PM requests
for commitments that FMs use their master schedules to
justify the response.
7.3. Provide adequate administrative support to
functional managers (perhaps via a project office) to
enable them to manage their resources more effectively
without having to sacrifice technical leadership and
human resource management effectiveness.
8. Clearly prioritize projects to de-politicize the
assignment of resources among competing projects.
8.1. Establish appropriate steering groups or project
executives to prioritize projects and make other deci-
sions to avoid or break deadlocks between FMs and PMs.
8.2. Require senior management and internal clients
to document the priorities of the projects they initiate.
15
 8.3. Require that the impact of changes in priorities
be reported across all effected projects.
9. Clearly define requirements and acceptance crite-
ria for projects and tasks within projects and validate
that they are mutually understood and accepted.
9.1. Establish standards and procedures to clearly
identify who is responsible for documenting require-
ments for task performance, including processes for clar-
ifying and verifying requirements.
9.2. Require that acceptance criteria for deliverables
from and to functional groups be formally defined.
Roles and Responsibilities
The work to create a collaborative relationship requires
commitment and effort from the following principle
participants:
■ Senior management must fully understand the issues
and support the plans to improve relationships through
organizational change. The nature of the changes are
such that without senior management involvement they
would not be possible. A member of senior manage-
ment should act as the sponsor of the change initiative.
Senior managers should be involved in the development
of procedures for project prioritization.
■ Functional managers and project managers must take
an active role in the development of role and responsi-
bility definitions and procedures. Without their direct
involvement and commitment to change, any improve-
ment program will be marginally successful, at best.
■ The human resource function must participate to
develop or revise and implement procedures for perfor-
mance review, incentive systems, and any other aspects
of the program that impacts human resource-related
issues. Further, the HR person may be a good facilitator
for the change initiative.
■ A project office function, if one exists, should be
involved in the initiative to ensure coordination and to
negotiate its role and responsibilities under the new
system. If there is no project office, consider the devel-
opment of one to provide minimal administrative
support and coaching and possibly to be the “home” of
the project managers.
■ A program manager for the initiative should be
appointed to direct and drive the initiative through the
change process. Depending on the size of the organiza-
tion and the degree to which the FMs and PMs can be
relied upon to take proactive roles, dedicated resources
reporting to the program manager should be provided.
Ongoing Dialogue and Continuous Improvement
Healthy relationships require an ongoing dialogue
among functional managers, project managers, program
managers, their management and clients. This dialogue
is part of a formal quality assurance process that, among
16 Project Management Journal
other things, evaluates the organization’s performance
and identifies desirable changes to the organization’s
structure based on what is best for the organization as a
whole.
Holding onto old structures for the sake of tradi-
tion, or to perpetuate “silos” is impractical and counter-
productive. There is a need to take a fresh view that
permits the organization to regularly redefine itself so as
to minimize politics and the inefficiencies that go along
with political infighting between people who should be
acting as partners, not competitors.
Adaptive structures evolve as the organization
matures and as the staff changes. Performance analysis
and dialogue among managers and executives will lead
to the most effective organization structure given the
work to be done, the nature of the resources available,
and the need for clear accountability for planning and
performance.
References
Project Management Institute Standards Committee.
(1996). A guide to the project management body of knowledge
(PMBOK guide) (pp. 18–22). Upper Darby, PA: Project
Management Institute.
Shenhar, Aaron J., Levy, Ofer, & Dvir, Dov. (1997).
Mapping the dimensions of project success. Project Management
Journal, 28 (2), 5–13.
George Pitagorsky, PMP, is a management consultant special-
izing in project management and process improvement. With over
a 34-year career, he has managed projects in software develop-
ment, business process reengineering, process automation and
product development and has been a founder of two consulting
firms. He has developed and implemented development life cycle
methodologies, in both service and financial service product
areas. As a mast facilitator, trainer, and consultant, his clients
include Ameritech, Sears, Morgan Stanley, K-Mart, Los Alamos
National Labs, and the Depository Trust Corp. He is the director of
Information Technology Services for International Institute for
Learning and has an independent consulting and training devel-
opment practice based in NYC.
December 1998