Successful Knowledge Development in Project-based Organizations

Jonas Søderlund, Sofia Pemsel

Start believing in the ability of your staff to grow. Demonstrate through your words, actions and suggested activities that knowledge is vital in your organization. Then your competitive chances will increase.

BI RESEARCH: Knowledge Management in Project-based Organizations

Why is knowledge management so difficult in Project-based Organizations?

Research has documented the difficulty and nested process of managing knowledge. Indeed, we know it is difficult to manage knowledge and we know it is difficult to drive knowledge development. But we also know it needs to be done.

Knowledge development is particularly challenging in certain types of organizations. Project-based organizations (PBOs) is one context where it is especially difficult to organize for successful knowledge development. These are organizations that produce a majority of their activities in and through projects, such as Skanska, NCC, DNV, Equinor and Veidekke. Why is that?

What success hinges upon

Project-based organizations operate mainly on two levels – the project level and the organizational level (strategy, top management, cross-project coordination, etc.). Success hinges upon the interlinkages between these levels.
Projects are excellent mechanisms for integrating knowledge and for innovation, however, projects are often becoming rather independent, even autonomous, within the PBO structure, resulting in difficulties in achieving accumulative knowledge development in the PBO.

Not least since many project managers believe that one of the beauties of being a project manager is to be able to run the project as your own little kingdom. The obvious risk is that the company becomes merely a skeleton and an administrative apparatus rather than a knowledge development mechanism. As one of the interview managers participating in our study put it:

“It’s OK to not collaborate with others, you manage your project anyway, so to say. You are your own boss.” (Middle manager).

Another common problem when working under deadlines which is the everyday condition of project-based organizations is the perceived lack of time:
“We have too much to do to be able to have proper discussions that lead to development and integration of knowledge” (Project manager).

Bridging the knowledge gap

This is not optimal for the PBO’s overall competitive performance and innovative capacity. The PBO needs strong integrative knowledge strategies of how to link the two central levels of the PBO with different knowledge activities to overcome this organizational knowledge gap.

In order to bridge the knowledge gap different knowledge integrating mechanisms have to be used:

  • Does the organization focus on creating large databases of lessons learned to stimulate the sharing of explicit knowledge?
  • Does the organization stimulate face-to-face interactions, job rotation, and internal and external knowledge events to encourage knowledge sharing and knowledge generation also of tacit knowledge?
  • That is, what knowledge integrating mechanisms does your organization use?

Many PBOs struggle both in finding the right solutions and also to make people use them. Some organizations struggle only by making their project managers report their projects in a standardized manner:

“I try to make them use existing guidelines and report into existing systems… but it is difficult…they prefer using their own documents, procedures and routines” (Project director).

While others have a strong vibrant knowledge environment:

“You know, it’s really the way we do things around here: share knowledge, we share it through forums, we share it through processes and systems, and we share it through… just sort of day-to-day interaction” (Project director).

Managers play a vital role

Research has found that the middle managers and top managers have a vital role to play in the creation of a knowledge-supporting environment in PBOs. Three factors appeared to have a significant impact upon whether a knowledge-friendly environment will be established or not.

  1. First, how do you look at human beings? Some managers believe humans have the ability to grow and prosper if they are giving the right conditions, while others have limited faith in the willingness and ability of others to learn and grow. Compare the attitudes of those project directors: “I suspect that, as human beings, we can learn any skill. I think you need to have a certain amount of raw talent and obviously you bring it out in training…a winner never quits but a quitter never wins, right?” (Project Director). “I'm not saying that my employees are crappy, but they have a low level of analytical capacity and with a low level of analytical ability how can you be capable of being reflective and drawing conclusions or learning lessons? I don't know what to do” (Project Director) or “Look there is no point trying to be Elvis Presley if you cannot sing” (Project Director).
  2. Second, do you believe knowledge to be highly valuable in the organization or not? Where are the priorities in your organization: is knowledge stimulating activities the priority and is the organization continuously looking for new knowledge to improve and expand the business or is knowledge activities more seen as a ticking the box activity that is not really prioritized? In some organizations the consequences for not sharing knowledge is hard: “Those behaviors won’t get you to the top: they’ll probably get you out of the door” (Top manager)
  3. Third, how do you try to control knowledge: through performance control or socialization control? Performance control involves controlling either the process (for example formal review processes) or the outcome (databases of lessons learned, course certificates etc.) or both. Socialization control involves indirect control by rather focusing on the commitment among employees in creating a knowledge-friendly environment and culture that includes training in skills and values.

In our study, project-based organizations with leaders who believed in the individuals’ ability and willingness to grow and prosper, who stimulated many different knowledge activities and thus clearly stated that knowledge development is vital for their organization and who focused mainly on socialization control of knowledge (yet a bit on the performance), they were the most successful ones.

Those PBOs were in the forefront of competition and attracted the most capable people.

So, the key lesson learned here is: if your organization is not as successful as you wish; start believing in the ability of your staff to grow and demonstrate through your words, actions and suggested activities that knowledge is vital in your organization, thus focus on creating a knowledge-friendly environment.
Then your competitive chances will increase, at least according to this research study, as stated by one Project director “Once a positive learning environment is created, it tends to grow on itself”.

Pemsel, S. Müller, R. and J. Söderlund (2016) Knowledge governance strategies in project-based organizations. Long Range Planning, 49(6), 648-660.

This article was first published in BI Leadership Magazine 2019. BI Leadership Magazine is a Science Communication Magazine published by the Department of Leadership and Organzational Behaviour at BI Norwegian Business School.

Text: Associate Professor Sofia Pemsel, Copenhagen Business School and professor Jonas Söderlund, BI Norwegian Business School.

Published 8. February 2019

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