12 - The Process Trap...Should We Be A Project-Oriented Or Process-Oriented Organization?
Updated: Sep 24, 2018
Companies manage their business activities by setting rules and guidelines to govern their day-to-day activities.
The two most popular approaches are:
Process Oriented, and
The question now is which approach best suits Oil & Gas companies?
Before deciding which approach works best, we should first understand the difference between two sets of definitions:
Process vs Project
Process-Oriented Organizations vs Project-Oriented Organizations
Process vs Project
As defined by PMI, a process is a systematic series of activities directed towards causing a repetitive and identical result such that one or more inputs will be acted upon to create one or more outputs.
A project is a temporary and unique endeavor that has a defined beginning and end in time, and therefore defined scope and resources. It is not a routine activity, but has a specific set of tasks designed to accomplish a singular goal.
Process-Oriented Vs Project-Oriented
Process-Oriented organizations tend to conduct repetitive activities on a day-to-day basis. Therefore; they work on perfecting their processes to ensure that the same outcome is being reproduced over and over again.
On the other hand, Project-Oriented organizations tend to conduct distinct tasks that result in unique and non-repetitive deliverables. Such organizations work on perfecting planning, monitoring and controlling of every unique task in each project.
Which direction should Oil & Gas Companies follow?
First, an organization needs to identify itself by answering two questions:
in which sector of the Oil & Gas industry is it participating?
how repetitive its daily activities are?
It is observed that the more you move towards downstream Oil & Gas, the more repetitive activities are, and visa-versa.
Saying that, Upstream Oil & Gas companies tend be more Project-Oriented, while Downstream Oil & Gas companies are more inclined towards being Process-Oriented.
Advantages of each approach
forces management to scrutinize results
forces management to set reliable KPI's to measure performance
facilitates strategy implementation, since goals are being cascaded down to a project-level
ensure that managers always keep in mind what customer-perception is towards their product (or deliverable)
promotes out-of-the-box thinking
keeps employees engaged, accountable, and rewarded by incorporating an entrepreneurial mind-set into the corporate culture
ensures consistency and standardization
builds a foundation for organizational learning and knowledge transfer
drives efficiency and realizes learning curve
identifies clearly roles and responsibilities
Process-Oriented organizations believe that by strictly following rigorous procedures, the organization will be capable of achieving results. On the other hand, Project-Oriented organizations believe that by undertaking distinct and unique projects growth will be realized.
Despite the great debate over which approach works best, today's complex business environment makes it difficult for one to triumph the other.
Therefore; it is crucial to organizations to adopt a hybrid model which incorporates both methodologies and which works best with its current capabilities. This pushes organizations to be more agile and adaptive to change as they might be inclined towards one over the other in a cyclical fashion.
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