The Project-Driven Organization

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In an environment of constant change, projects are how businesses evolve, adapt, and grow. They’re how strategies are executed. They’re how innovation is delivered.

That became abundantly clear in 2020, when the Covid-19 pandemic was upending old ways of doing business around the world. Organizations everywhere were scrambling to set up digital infrastructures, reconfigure global supply chains, and launch new services—in days, not years. Transformation was urgently needed, and projects were the only way it could be carried out. Virtually everyone in that era, from entry-level employees to the CEO, became a project leader, whether people recognized it or not.

Around that time the author argued, in “The Project Economy Has Arrived” (HBR, November–December 2021), that we were at a turning point in the history of business: While companies had traditionally created value through their operations (by focusing on scale, efficiency, and service excellence), now for the first time projects were the primary engines of value creation. That idea resonated across industries, and in the past four years many companies have tried to adapt to this new reality, with some promising results. They’ve trained more project managers, created centers of excellence and project management offices, upskilled middle managers, and introduced better governance. Execution is now more consistent, frameworks are better understood, and timelines are clearer.

Nevertheless, failure rates remain stubbornly high, and value creation is elusive. Why? Because too many organizations today approach projects with an operational mindset that prioritizes hierarchy, control, stability, and efficiency. And they continue to make a host of missteps, among them: committing to too many initiatives and spreading resources too thin, mistaking output for value and measuring what’s easy, not what matters, failing to deploy fully dedicated cross-functional teams, relying on long, complex transformation efforts rather than short, manageable ones, not appointing active executive sponsors who commit enough time to projects and own their outcomes, outsourcing transformation to consultants instead of building internal capabilities, and not killing underperforming projects quickly—or at all—because of the fear of being blamed

Those are all project management problems, of course. But they’re also evidence of something deeper: To meet today’s demands for constant transformation, we can’t simply focus on managing projects better. We also have to think differently about organizational design, leadership, and value creation.

The authors introduces the idea of the project-driven organization: a new enterprise model that places projects at the center of how companies are structured and led and generate value.   It’s a natural next step beyond the agile organization, a 20-year-old idea that, while groundbreaking in its time, no longer can fully address the scale and complexity of transformation today.

To become project-driven enterprises, companies need to pull eight key levers. The first three—changing culture, changing structure, and changing governance—concern organizational design. The second three—changing the approaches used to set strategic priorities, deploy human resources, and manage performance—concern leadership. And the final two—changing operations and changing execution to facilitate fast, high-impact delivery—concern value generation.

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