Project organization: Your ultimate guide

Project organization 101: the frameworks to know

When your goal is to define a solid project organization framework to use across your typical initiatives, you need to know your options. 

Project organization can generally be diagrammed in three ways. Each option shows:

• The project hierarchy, showing who’s responsible for decision making, the accountability for each area of a complex project, the reporting relationships, and the way project team members should route their questions or requests for approval 
• The team structure, showing the departments or subteams that will produce the deliverables 
• The project overlap, showing areas where subteams collaborate on certain parts of the project, and others where one subteam has sole responsibility 

But because there are clear differences in the structure of teams, the distribution of skills, and the nature of your project work, you’ll probably find one of the structures stands out as a natural fit for your team. 

I’ll compare functional, projectized, and matrix project management structures here. 

1. Functional project organization 

A functional organizational structure is built around the different departments in a company. 

With this structure, projects are initiated by the heads of various departments — think finance, creative, or IT — who then take on a project management role alongside their day-to-day duties in their own “functional department.” The managers meet together throughout the project to coordinate their work and request resources. 

Pros of functional organization

This functional structure has some clear advantages: 

• Deep expertise: The separate parts of the project are delegated to specialists, so your work benefits from their training and experience. 
• Efficient resource allocation: Specific project tasks stay within the most appropriate functional departments. There, the teams already have the resources they need on hand, because they’re the same resources they use to complete their daily tasks outside the project. 
• Clear communication in subteams: Each section of the project is completed by a team that has already worked together at the departmental level. They have established channels and a shorthand, so they can communicate effectively from the very beginning of the project. 

Cons of functional organization

That being said, this way of dividing up a project is not without its challenges: 

• Information silos: When each department handles a separate piece of the project, it’s easy for information to get stuck in a silo. Important details won’t make it across team boundaries without good coordination from the department managers (and ideally, project management software to organize and store the project resources).
• Skills gaps: Although these projects are built around the specialist knowledge in each department, you won’t always have the skills or capacity you need within your company. In these cases, you’ll need to bring in external support, which can complicate your project timeline and your budget.  

Where functional project organization works well 

Functional project organization works well for complex projects that bring together very different skill sets. One example of this is healthcare project management.

Imagine a hospital developing a new patient care initiative. This project might involve: 

• An IT department to develop and install the records system for the new project 
• An HR team to handle staffing and training  
• A marketing team to develop materials to raise awareness of the new initiative
• Feedback from the medical team that’s handling the clinical care  

Each department has the skills to complete one of the project tasks, so that’s where they focus their energy. It takes a strong project coordination system to manage a project in this way, but it’s the logical choice for an initiative that hinges on those specialist skills. 

2. Project-oriented organization

With a project-oriented structure (also called a projectized structure), a company creates a project division with dedicated project managers. 

Companies that projectize their work employ project managers (rather than “functional managers” who also manage and coordinate projects alongside departments). These managers can use the resources within the project division, and they work with dedicated project teams to deliver their briefs. 

Pros of projectized organization 

• Focus: Each project team has the authority and resources to complete their work internally, so this structure eliminates a lot of delays you might see with a structure that involves more departments. Everything from project planning to approval can be completed within the project team, so the manager doesn’t have to align their decisions with, for example, other functional managers assigned to the project. 
• Clear authority: Authority in these projects lies with the project manager. From the beginning, you have strong accountability and a clear flow of information within each project, which simplifies communication within the team. 

Cons of projectized organization 

• Bottlenecks: Delays during busy periods are the main drawback of a projectized structure. As well-resourced as a company’s project division might be, there will always be times when projects have overlapping demands and deadlines. For example, if multiple subteams need resources from the division’s graphic designers in the same week, projects can stall while they wait for the resources to be delivered. For this reason, many projectized teams include a coordinator to monitor demand for resources and help to ease the bottlenecks. 

Where projectized organization works well 

A projectized organizational structure makes sense if the majority of your company’s work is project-based — imagine agencies in industries like marketing and events, or even construction. 

For these companies, a project-oriented structure makes it easier to juggle demands and deadlines from multiple clients, because each project has a manager to provide leadership, oversight, and a clear point of contact. Projectization also allows these teams to pivot and act more quickly because the managers are steering a self-contained project team rather than an entire, multi-department operation.  

3. Matrix project organization 

A matrix organizational structure assigns a manager who pulls their team from across the company’s departments.

You can think of this method of project organization as sitting between the functional and project-oriented models. In this case, the project team is composed of experts (often hand-picked). Those team members report to both the manager of the specific project and their department head. 

There are three types of matrix organization, depending on whether the authority lies with the project manager or the functional manager who’s making their team available: 

• Weak matrix: This is most similar to the functional model. The department manager has the ultimate authority, and the team generally completes their work without direct input from a project manager. 
• Balanced matrix: The project manager acts as a coordinator and a point of contact, but they don’t have the full authority they would have, for example, over a team from a project division.  
• Strong matrix: This is most similar to the projectized model. The project manager is the decision maker for the project, and they’re supported by the department manager. 

Pros of matrix organizational structure

• Collaboration: A matrix structure has cross-team collaboration at its foundation, so you begin new projects with the expectation that you’ll share ideas and expertise. 
• Specialization: With this structure, projects can benefit from the special skills within each department without having to permanently shuffle the team at your company. 
• Continuity: This model assumes the project team will continue with some of their regular departmental work as well as working on the project, so your company’s daily operations won’t grind to a halt. 

Cons of matrix organizational structure

• High costs: Projects with a strong matrix take more effort to coordinate, which means you’ll spend more time and money on reporting and project meetings. 
• Conflict: Because the members of a matrix team are still paid by their departments, they’re still loyal to them. It’s easy for disputes about priorities and workloads to arise in these projects, and it takes careful management to avoid negativity and delays.  

Where the matrix organizational structure works well 

In my experience, it’s very common for companies to use a matrix structure rather than coming down on one end of the spectrum between functional and project-oriented organization. Smaller companies without a project division don’t have the resources to pull off a projectized approach, and even companies that do have a dedicated projects team can see the benefits of including the experts in their work. 

For ongoing jobs like product development, matrix structures work particularly well. In these cases, the input from multiple specialties is crucial, and there are a lot of moving parts to coordinate if you’re going to create a cohesive product. 

A strong matrix brings the oversight these projects need to keep up momentum, while still making sure the core operations continue without compromise. 

By now, you might be able to see the opportunities to improve project organization at your company. 

Maybe you’re already using one of these structures, and you see areas where you could better define the roles and communication channels to help your project information flow more smoothly. Maybe it’s clear you’re using the wrong structure for the types of projects you tackle — like forcing a projectized approach without the resources to support it — and you can see the chance to take a new approach. 

Whatever you choose to do next, it’s important to remember we’re talking about complex projects where collaboration and resource sharing are key. 

A lot of posts on project organization show you your options with diagrams. They’ll give you a project organizational chart for each of the options above, and send you on your way as though that’s all it takes. 

But in the real world, mapping out your project structure is only the first step. To really improve your project organization, you’ll also need project management software to coordinate your team, share resources, monitor your progress, and measure your results. 

That’s why, for the rest of this post, I’ll show you how to implement a new project organization system using Wrike.

Reorganize for good, with project management software

Step 1: Understand your project goals

Before you diagram your project organization or start assigning roles, it’s important to know what you want to achieve. When you start with your goals and project objectives, you’ll be able to: 

• Identify areas for improvement and choose an organizational structure that targets them. 
• Measure your progress and your project success, so you can see where your new methods are paying off and where you still need to adjust your approach. 
• Unite your team by giving them a shared endpoint to work toward. It’s particularly important to be clear about your project goals if you’re bringing in team members from different departments as part of a matrix model.

Project management software like Wrike gives you all the information you need as you set your goals for your upcoming projects. 

By measuring data on your past projects (which you can import from tools like Excel and Microsoft Project when you’re setting up for the first time), Wrike reports on metrics like time tracking, budget usage, feedback, and task distribution. You can use these reports to see where your project work has aligned with your company’s strategic planning, and zoom in on the areas where there’s still room for improvement.The best way to set goals is with the SMART framework, especially when you’re informed by historical project data. Read more here: SMART Goals: An Ultimate Guide with Examples.

Step 2: Define project roles and responsibilities

The next important part of your project organization is defining the project roles — specifically, who does what in the project team, and who they report to. 

Clear roles will simplify your organizational framework. They’ll break your project into subteams and lay out a roadmap for project communication. 

To define the roles and responsibilities, it helps to: 

• Break your project into stages and milestones, so you can add more detail to your plan by showing who’s responsible (and who can answer questions about) each step in the workflow. For example, in a functionally organized project, the manager who initiated the project might have ultimate oversight, but the managers of, for example, the product, design, and customer service teams might have approval authority for their parts of the project. 
• Use tools to delegate your project tasks. For example, in Wrike, you can assign tasks to specific users or job roles. Our software will notify them so they can begin work, and the task will appear in their dashboard so it can’t be overlooked. This is a more dynamic way of delegating tasks and building accountability than a simple list, and it’s far easier to adapt if something changes in the course of your project. 
• Spend time aligning stakeholders across your project. You’ll need to build structures to help boost communication, especially when your project subteams have distinct responsibilities. As you’re assigning roles and starting to bring team members on to the project, make sure you’re on the same page about the project scope, the budget, the timeline, and how these work toward your goals. Project management tools like shared communication channels and a clear project folder structure can all help to maintain this alignment. 

Step 3: Structure your project hierarchy

Now that your goals and roles are defined, you can create a project organization chart to share with your wider team. 

It’s important to know you’ll probably update your project hierarchy as you learn more. However, this starting point is vital if you’re changing your organizational framework, because it’s the best way to give your team a clear point of reference as they get used to the new system and form their initial impressions. 

Whether you lean toward a functional, project-oriented, or matrix approach to project organization, your chart should name:

• The project’s executive officer, who’s ultimately responsible for overseeing the manager 
• The project manager(s), who can include the managers of the different departments involved in a functional project, or the names of the project manager and the functional managers in a matrix 
• The project staff who will be completing the daily tasks the initiative involves 

Some project managers prefer to map this with sticky notes or on paper and then transfer it to their digital workspace when they find a system that works. Project management software then makes it easy to share the final version, and add it to your project records, so your team can refer back to the plan as they work through their tasks. 

Step 4: Onboard your team and listen to feedback 

Even the best-planned project organizational structure won’t succeed unless your team understands it. This is especially true in matrix projects, where the dual accountability element raises questions about reporting and approvals. 

When you’re implementing a new plan, make sure to allow enough time to explain the new structure and the logic behind it, and then to hear feedback from the team during and after the first projects. 

Depending on your team and the type of organizational structures you’re working with, these initial stages could look like: 

• A shared strategy document that lays out what’s changed from your previous approach, the first steps the team members need to take, and your expectations 
• A shared workspace (like your team dashboards and folders in Wrike), where you can track your project progress and centralize your work 
• A kick-off meeting to walk through the structure with the whole team and field their immediate questions

As the rubber hits the road, project managers should keep listening to feedback from their teams. 

This means tracking your project status, your team’s capacity, and the KPIs you chose as part of your goal-setting. When you see how your progress stacks up against your plan, and balance this with insights from the team that’s using the system every day, you can identify areas to optimize your organization and adapt your approach to new projects. 

Put your plans into practice with Wrike

I’ve shown you the difference that project management software can make when you want to develop your organizational framework and bring your team on board. From helping to set SMART goals to visualizing your project hierarchy, software takes the manual tasks of project organization and makes them an effortless, integrated part of your process. 

When you choose Wrike, you’ll also have features to put all these plans into practice — not just at kickoff, but through the entire lifecycle of your project. Check out these project management tools to create a better-organized project and a smoother experience for your teams and your clients. 

• Instant communication: Wrike facilitates real-time comms, including notifications on new tasks or task progress, automated reminders, personalized to-do lists, and @mentions in task comments. Teams like Trifermed have eliminated 100% of their internal emails by switching their communications to Wrike. 
• Crystal-clear project folder structure: With Wrike, you can create folders for your projects and your teams to organize everything from your planning to your final assets. With our innovative cross-tagging feature, you can share resources effortlessly without creating a versioning headache. By using these features to improve visibility, Moneytree sped up its projects by 75%. 
• Seamless workflow automation: Wrike includes cutting-edge automations you can tailor to your project workflow. With features like blueprints and automated task tracking, Electrolux has streamlined the creative workflow and reduced the time it spends on each project by 30%. 
• Easy-to-read project visualizations: With overviews in Gantt charts, Kanban boards, and a Table view that covers even the most complex projects, Wrike shows your work from every angle. Gwynnie Bee switched from traditional task lists to Wrike’s Gantt charts, and managed a successful project rollout with 700 separate tasks. 
• Robust risk management and planning tools: Coordinating projects across an organization is never risk-free. But with Wrike, you can automatically generate reports on your performance, progress, and risks to your success based on your real-time project data. Arvig uses Wrike to report on its Scrum progress and business processes. With this informative overview (and a suite of other project management tools), they’ve scaled up to tackle 250% more projects. 

Wrike is powerful enough for complex projects, cross-department collaboration, and distributed teams. To find out more about what Wrike can do for your project organization, book a demo with our sales team now.