P ROJECT C ATEGORIZATION S YSTEMS Aligning Capability with Strategy for Better Results Dr. Lynn Crawford University of Technology, Sydney Dr. J. Brian Hobbs University of Quebec at Montreal Dr. J. Rodney Turner Erasmus University, Rotterdam ISBN:1-930699-38-7 Publishedby: ProjectManagementInstitute,Inc. FourCampusBoulevard NewtownSquare,Pennsylvania19073-3299USA. Phone:(cid:1)610-356-4600 Fax:(cid:1)610-356-4647 E-mail:[email protected] Internet:www.pmi.org ©2005ProjectManagementInstitute,Inc.Allrightsreserved. ‘‘PMI’’,thePMIlogo,‘‘PMP’’,thePMPlogo,‘‘PMBOK’’,‘‘Project ManagementJournal’’,‘‘PMNetwork’’,andthePMITodaylogoare registeredmarksofProjectManagementInstitute,Inc.Fora comprehensivelistofPMImarks,contactthePMILegalDepartment. PMIPublicationswelcomescorrectionsandcommentsonitsbooks. 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ThepaperusedinthisbookcomplieswiththePermanentPaperStandard issuedbytheNationalInformationStandardsOrganization(Z39.48—1984). 10 9 8 7 6 5 4 3 2 1 iv Table of Contents Executive Summary ix Chapter 1: Introduction 1 What is a project categorization system? 1 The Organization of the Report 3 Chapter 2: The Nature of Categorization 5 Classification versus Categorization 5 Introduction to the Nature of Categorization 6 Principles of Categorization System Design and Management 7 Limitations 10 Politics of Categorization 11 Categorizing Projects 12 Conclusion 15 Chapter 3: Methodology 17 The Literature Review 17 Focus groups to investigate project categorization systems in Organizations 17 Web-based questionnaire to validate and expand on results from the small preliminary sample 19 Development of a preliminary model based on a synthesis of the results to date 19 Validation of the preliminary model with the organizations from phase two 19 Analysis of the results, modification of the preliminary model, and writing of the final report 20 Chapter 4: Presentation of Results 21 Project Categorization Systems are Not Immediately Visible 21 The Formalization of Project Categorization Systems 24 Purposes and Attributes 26 The Pervasiveness of Project Categorization Systems 27 Attributes used to Sort Projects into Categories 27 Attributes, Labels and Definitions 28 Attributes Not Linked Directly to Purposes 29 v Construction of Complex Categorization Systems 30 Difficulties with the use of Project Categorization Systems in Organizations 36 Chapter 5: Presentation of the Model 45 Organizational Purposes Served by Categorization Systems 45 Variation of Usage with Organizational Context 49 The Attributes used to Categorize Projects 50 Chapter 6: A Guide to the Use of the Model by Organizations 55 Evaluation and Validation of Project Categorization Systems 56 Chapter 7: The Use of Project Categorization by Other Stakeholders 59 The Use of Project Categorization by Project Management Researchers 59 The Use of Project Categorization by Libraries and Documentation Centers 60 The Use of Project Categorization by Professional Associations 60 A Single List of Attributes 60 Differences among Stakeholder Priorities 61 Chapter 8: Discussion and Conclusion 63 Standardized Categories of Projects 63 Implications for Research 64 PMI’s Role in Standardization 65 Project Categorization and Portfolio Management 65 Sorting Things Out 66 Implications for Practitioner Organizations 66 Appendix A: Three Examples of Categorization from Other Fields 69 The Classification of Knowledge 69 The Categorization of Objects 71 The Categorization of Work 72 Appendix B: Focus Group Protocols 77 Who to Invite 77 Draft Letter of Invitation 78 Objectives 78 How to Set the Scene 78 Questions to Ask 79 How to Record and Share and Use/Analyze Findings 79 vi Appendix C: Web-Based Questionnaire 81 Appendix D: Protocols for Validating the Project Categorization System Model 91 Goals of the participating organization: 91 Goals of the research team: 91 Preparation of the validation sessions 91 Validation Protocols 92 Appendix E: Categorization Validation Meeting Question Sheet 95 Appendix F: Descriptions of the Use of Project Categorization in Organizations 99 Introduction to the descriptions that are to follow 99 Appendix G: The Detail of the Organizational Purposes Map 135 Appendix H: The Detail of the Map of Attributes for Building Project Categorization Systems 147 Bibliography 167 vii C 1 HAPTER Introduction This report is a presentation of the methodology and the results of an investigation of project categorization1 systems that was initiatedandsupportedbytheProjectManagementInstitute(PMI). Theorganizationofboththeresearchprojectandthepresentreport was designed to answer the following questions: 1. Whatcanbedrawnfromthephilosophyofscienceliterature andfromexamplesofcategorizationinotherfieldsthatcould be useful in the study of project categorization systems? 2. Howhasthesubjectbeentreatedinprojectmanagementliter- ature? 3. How do practitioner organizations categorize projects? 4. What purposes does project categorization serve in: a. Practitioner organizations? b. The project management research community? c. The Project Management Institute? The primary focus of this research project has been the study of projectcategorizationsystemsastheyareusedinpractitionerorgani- zations. What is a Project Categorization System? If you work in an organization that manages many projects and someone asks you to describe the organization’s project work, how would you respond? Would you describe each project separately? No, of course not. You would identify the ‘‘types of projects’’ your 1Theterms‘‘classification’’and‘‘categorization’’areveryoftenusedinterchangeably. Theterm‘‘categorization’’hasbeenusedinthisdocumentforthereasonexplained atthebeginningofChapter2. 1 organization does. You would use names to identify the types of projects.Insodoing,youwoulduseanexplicitorimplicitcategoriza- tion system to describe the organization’s portfolio of projects. In ordertomakesenseoftheorganization’swork,themembersofthe organization use systems of labels for naming their projects. When they use different labels, they are attempting to communicate the perceived differences among the various projects. This system of labels can be viewed in different ways. If the project categorizationsystem isviewed aspart ofan organizational languagefortalkingaboutprojects,thenthephenomenacanbeseen from an interpretive perspective. The language develops over time and is shared by a community of organizational members. People invent,adopt,andadaptanduselabelstodescribetheorganization’s projectsastheyperceivethem.Theutilizedlabelsbecomethefilter through which the projects are seen and discussed. Over time, the system of labels becomes ‘‘naturalized,’’ that is, the organizational members use the labels without questioning. The labels’ very exis- tencecanbecomeinvisibletothosewholiveintheculture,asthey become taken for granted. In many of the organizations studied duringthisresearch,thepeopledidnotsee,atfirst,thattheirorgani- zation had a system for categorizing projects. However, after a few examples were given of what such a system might include, they were able to describe their organization’s system in detail. Onlygroupsofprojectswithanamearediscussedintheconver- sations within the organization. Other possible groups of projects are not discussed and may even be difficult to perceive. From the point of view of the everyday workings of the organization, it is as if they did not exist. From a phenomenological point of view, the groupings only exist because people can see them and talk about them. For all of the people participatingin this study, the projects are seenasobjectivelyhavingthecharacteristicsthatthelabelsidentify and bring to our attention. The groupings are also seen as existing inobjectiveexternalreality.Thisis verymuchapositivistpointof view.Butevenfromapositivistpointofview,thechoiceofgroupings issomewhatarbitrary,forprojectshaveaverylargenumberofchar- acteristics or attributes that could be used alone or in combination to identify almost innumerable groupings. However, organizations useonlyasmallsetofallthepossiblelabelsforgroupinganddescrib- ing their projects. This choice of names brings certain groups and features to the forefront and ignores others. Therefore, even from a positivist perspective, there is a question of choice among a large number of possible categorization systems. 2 In the organizations that participated in this study, systems for categorizing projects were mostly seen as products of the organiza- tions’history.Thiswasparticularlytrueinorganizationswherethe systemhadbeeninplaceforsometimeandwasseenasafunctional partofitsoperatingsystem.Aprojectcategorizationsystemisthus seen as specific to an organization, its context, and its history. Likealanguage,anorganization’ssystemoflabelsfordescribing itsprojectsisdynamic.Insomeverydynamiccontexts,suchasthe telecom industryin recentyears, languageevolves quitequickly to capture new realities, new understandings, and new meanings. In other,morestablecontexts,thesystemoflabelschangesveryslowly. Some labels come from outside an organization, from the profes- sionalfieldorindustryinwhichtheorganizationoperates.Insome cases,projectcategoriesareseenasauthoritativeandexternaltothe organization. They have been standardized in much the same way thatadictionaryauthoritativelypresentsacceptedwords,meanings, and usages. The study of an organization’s project categorization system, therefore, consists of identifying the labels that are used to name groups of projects, and the usage that is made of these groupings. This is what was done during the empirical investigation of the researchproject.Duringthisinvestigation,noorganizationwithan appreciablenumberofprojectswasfoundthatdidnothaveasystem for categorizing its projects, whether it was formal or informal. Organization of the Report Followingtheintroduction,thisreportisorganizedintosevenmore chapters.Thesecondchapterdiscussesthenatureofcategorization in general, including the implications and potential consequences ofcategorization,aswellasprojectcategorizationsystemsproposed withinprojectmanagementpracticeandliterature.Thisisfollowed, in the thirdchapter, by a presentation ofthe research methodology thatwasusedforthisstudy.Thefourthchapterpresentsanoverview oftheresearchresults,whilethefifthchapterpresentsanddiscusses themodelthatwasdevelopedduringthisproject.Thesixthchapter featuresadiscussionoftheuseofthemodelinorganizations,while Chapter 7 presents a discussion of the use of project categorization (andofthemodel)byotherstakeholders.Chapter8,thefinalchapter, identifies the implications of this study for researchers, for prac- titioner organizations, and for PMI. Theobjectiveinwritingthisreporthasbeentopresentfindings inawaythatwillappealtoboththepractitionerandresearchcom- munities. The content of the report’s main body has been chosen with the practitioner in mind. Additional information that would 3 be of greater interest to theresearch community has been included intheappendices.Theseincludeexamplesofcategorizationsystems fromotherfields,alongwithadetailedpresentationofthemethodol- ogy,includingapresentationoftheresearchinstruments(i.e.,focus groupprotocols,validationprotocols,andquestionnaire).Examples oftheuseofprojectcategorizationinorganizationsarealsopresented in the appendices. These examples may be of interest to both the practitioner and research audiences. 4 C 2 HAPTER The Nature of Categorization Classification versus Categorization Forthemajorityofauthors,aswellasthoseemployingtherhetoric ofthetopic,classificationandcategorizationaremoreoftenthan notusedinterchangeably(Jacob,1991,p.77).Eveninmajordictionar- ies such as the Oxford English Dictionary, the Merriam-Webster Dictionary, and the Macquarie Dictionary, one term is often used to define the other: Classify: to assign to a category (Merriam-Webster Diction- ary,2003) Categorize: to place in a category or categories; to classify (OxfordEnglishDictionary,2003) However,writerssuchasJacob(1991)haveastricterinterpretation and draw distinctions between the terms: Classificationentailsaone-for-oneslottingofobjects,events, orproperties,basedupontheapperceptionofacoreofneces- sary and sufficient characteristics, into mutually exclusive classeswithinthehierarchicalstructureimposedbyanarbi- trary and predetermined ordering of reality. Categorization, ontheotherhand,referstotheprocessofdividingtheworld ofexperienceintogroups–orcategories–whosemembersbear someperceivedrelationofsimilaritytoeachother.Incontrast totheprocessofclassification,theprocessofcategorization entails neither that membership within a category is deter- minedbytheapprehensionofasetofdefinitivecharacteristics 5