The Influence of Leadership on the Projectification of the Public Construction Sector in Germany

Abstract

While the projectification of society continues to evolve, it is clearly lagging behind in the public construction sector in Germany. The purpose of the research upon which this article is based was to reveal the role that leadership has on the projectification of the construction sector and to identify the differences between the public and private sectors. Building on the theoretical concept of Institutional Work, semi-structured focus group interviews were conducted on both sides of the construction sector in Germany to ultimately reconcile the findings. The interview’s transcripts were analyzed by applying qualitative content analysis. The responses from the private sector show a very high significance of projects for everyday work and a further trend toward projectification in enterprises. This development is attributable to a positive image of executing projects in the private sector and to the leadership provided. In contrast, projects in the public sector still play a rather subordinate role and tend to be perceived culturally and cognitively as being exceptional. As projects are increasingly important for the public sector, leaders can play a key role in nurturing the necessary cultural and cognitive conditions for projectification. The application of Institutional Work concepts opens promising perspectives for future research in the context of projectification.

1. Introduction

This article explores the question as to what role leadership assumes in projectification in the private and public construction sectors of Germany. Recent research [1] emphasizes that projectification is increasing across the entire society in Germany, but that there are clear disparities between the private and public sectors and illustrates the consequences using prominent infrastructure projects as examples. There has been some indication [2] that leadership may have a positive influence on projectification, which is relevant for all those who want to foster projectification in the public construction sector.

In recent years, institutional theory has been increasingly used in an attempt to elucidate the continuing projectification of society [3,4,5]. With recourse to the concept of institutional work [6], the role of leadership in shaping cultural-cognitive institutions is emphasized, which subsequently creates favorable conditions for projectification. However, there has been so far limited research on the interrelationship between leadership behavior and the process of projectification. Based on an extensive literature review and the results of previous research by the authors in a similar context, semi-structured interviews were conducted with two focus groups. One group consisted of selected leaders from the construction industry in Germany, while the other group included leaders from the public sector with a focus on construction. Comparing the statements of the two groups revealed intriguing insights into contrasting perceptions and behaviors in both sectors.

With this research work, three contributions are made. First, applying the concept of Institutional Work provides a new perspective for understanding the processes of projectification and the role leadership serves along the way. Second, by contrasting leadership perspectives and practices of the private and public sectors, it is possible to illustrate how projectification can be advanced in the public construction sector. Finally, future research demands are identified based on the findings in this field.

Following this introduction, fundamental insights of the literature will be outlined; in addition to projectification and the concept of institutional work, the role of leadership in this context will be addressed in particular. Subsequently, the research methodology and major results are highlighted; these are discussed, conclusions are drawn, and future research directions are outlined.

2. Literature Review

This section outlines major findings from a literature review on essential aspects.

2.1. Projectification, an Enduring Trend

Although the term ‘projectification’ first entered the literature in 1995 through Christophe Midler’s seminal publication [7], the trend of the increasing prevalence of projects has been evident even before this time [8]. While there are several definitions of projectification available today with varying perspectives, this research builds on the following definition, which posits a process perspective: “It is a path taken towards increased orientation to and use of projects and towards formalisation of project management and the project form of organising, rather than a one-time event” [9]. On the one hand, this refers to the increasing prevalence of projects, but on the other hand, it also refers to the organizational transformation that goes hand in hand with this. The growth in projectification is accompanied by changes in governance, collaboration, leadership, and communication in organizations, among other things. Projects become increasingly habitual, legitimate, and performative responses to organizations’ operational challenges. Concurrently, the social interactions within the organization, as well as extraneous influences, also affect the process of projectification, slowing it down or speeding it up [10].

Research on the extent of projectification in some countries has shown that more than one-third of total working time is now already spent on projects, and this proportion continues to rise at a rate of approximately three percent per year [11]. This is accompanied by positive macroeconomic effects, such as an increase in the level of employment and innovation, but in individual sectors, such as the agricultural sector, it may also lead to negative side effects, such as a decline in productivity [12]. The extent of projectification differs both within the individual sectors of a country and between countries with their specific economic orientation [13]. When comparing the figures for projectification in Germany with countries such as Iceland, Croatia, or China, it is noticeable that the public sector in Germany is only half as projectified as the average of the economy, whereas in the other countries the projectification of the public sector is above average [14].

Meanwhile, projectification continues to diffuse into not only organizations [15] but also society from the micro to the macro level and sectors beyond the economy. This development has been pronounced in several aspects. After considering projectification for its effect on professional organizations, it is now also seen as a societal trend, a human state, and a philosophical issue [15]. The latter is described as a fundamental social change with complex consequences for individuals, social interaction, and institutional settings. The sociologists Boltanski and Chiapello go furthest in this respect, pointing to a ‘project society’ in which projects play the central role for reciprocal interactions in a permanently changing network of citizens [16].

2.2. Institutional Work in the Context of Projectification

Projects are made by people, together with other people, for people. They are social systems and take place in a social and institutional setting that determines how tasks are carried out and collaboration takes place, and which at the same time becomes an object of the project itself [17]. Constituents of this institutional setting for projects are regulative, normative, and cultural-cognitive elements that have varying degrees of impact on the behavior of the actors and are at the same time influenced by their behavior [18]. While projects strive for change and are required to consider the complexity and dynamics of the context in their activities, the institutional setting remains comparatively stable and provides a solid anchor with its norms, regulations, and values. With this description, the inherent conflict that may exist between the institutional setting and the projects is brought out [19]. “If everyone follows the same template of organizing, actors are provided with a solution that establishes a taken-for-grantedness in the way organizations should behave” [20]. This effect is referred to in the literature as ‘isomorphism’ and depends on the specific environment of a project.

Over time, however, well-established institutions come under pressure: On the one hand, through external influences, such as new legal regulations, technological innovations, or disruptors such as Elon Musk. On the other hand, internal forces also affect existing institutions, such as a shortage of resources, organizational change projects, and the demands of younger generations regarding the workplace [21]. “Purposive action of individuals and organizations aimed at creating, maintaining and disrupting institutions” is one definition for Institutional Work [22]. Creating institutions from scratch is possible when starting a new business or embarking on a major project, while maintenance or disruption is more likely for established organizations or processes. However, this requires, above all, leaders who see institutional work as an important task and actively engage, e.g., through exemplary conduct, coining a narrative [23], or purposefully gearing governance [24]. The first two aspects above all target cultural-cognitive institutions and thus voluntary mimicry, whereas the latter is associated with regulative and normative institutions involving the pressure of sanctions or social expectations regarding a particular behavior. However, pressure is also put on existing institutions by the work carried out in projects, where an interaction with the stability-oriented line organization takes place [25]. Projects can be seen as a means and medium of institutional work with which institutional changes are brought about in their environment [26]. This is particularly relevant in public works projects, where stakeholders from the public sector and private industry meet and institutional differences become visible, but at the same time, institutional change can be induced on both sides [27].

2.3. The Influence of Leadership on Cultural-Cognitive Institutions

Leaders of an organization have certainly a key role in institutional work [28]. On the one hand, for the maintenance or enhancement of the existing regulative, normative, and cultural-cognitive institutions, but on the other hand also for their disruption or reconfiguration when required by internal or external circumstances. This could be achieved by “offering (or co-creating) interesting projects purpose gives direction, guides collaboration amongst project team members and other stakeholders and allows for individual learning and identities development” [29]. Through their behavior and actions, leaders shape beliefs and thus influence the cultural-cognitive elements of the institutional environment [30]. This includes molding a shared vision around projects and project management, storytelling related to successful projects and practices, leeway for contributing individual motives and ideas to projects, and fostering collaborative work [31].

A recent study in Germany on the factors that have the greatest influence on the projectification of society found that exemplary enterprises and entrepreneurs with their behavior are ranked first [32]. They shape a positive image of projects and the project management practices that are worthy to be followed. The narrative of their successes is used for other projects and quickly spreads throughout the organization or society [2]. Cultural values and cognitive attitudes are adopted into one’s practice, changing previously dominant institutional imprints. Even language and terminology are changing as a result of the new narratives. This happens both top-down and bottom-up [33]. In the literature, regulative and normative institutions related to the projectification of public service have been the main focus of interest so far. Thus, projects are primarily understood in this context as temporary forms of organization for exceptional undertakings that cannot be realized by the regular organization, which is more oriented toward stability [34]. Therefore, this research investigates the particular influence of leadership on projectification in the public construction sector by contrasting leadership in the private sector with that in the public sector.

3. Materials and Methods

This research is exploratory and follows a qualitative approach applied to the case of the public construction sector in Germany [35]. This approach is grounded, first, in the fact that we are entering unexplored territory by researching the influence of leadership on the process of projectification; second, that we are looking at context through the lens of Institutional Work, thus laying the groundwork for future research [36]; and third to answer the research question of how leaders influence the projectification of the private and the public construction sector in Germany through semi-structured interviews with two focus groups, i.e., representatives from the private as well as the public sector [37].

The interviewees were selected on the basis of their experience in managing projects or units responsible for handling projects and were thus familiar with the environment and influential factors. The participants were chosen from the authors’ network to ensure access to them. In addition, the participants were chosen for their variety of perspectives due to their different professional backgrounds, such as the various number of employees, different types of construction projects, and so on, to gain different perspectives on the research topic, which is crucial for a qualitative research approach as selected [38]. As all chosen participants have long-term experiences of managing projects and leading project managers, it can be assumed that all participants cover all areas of the research’s topics of interest. This is crucial to determine the sampling size. Gläser and Laudel [39] stipulate at least three to four key players for such a research setting and we decided to include at least twice that number for our research.

In the first phase of our exploratory study, we conducted twenty one-to-one semi-structured interviews [38] between 28 July 2022 and 22 September 2022, eleven with participants of the focus group from the public construction sector and nine with participants from the private construction sector.

The appropriately one-hour-long interviews with the experts were conducted virtually, recorded and transcribed with the help of a specialized service provider, and checked for accuracy. The guiding interview questions (see

Table 1. Relevant statements after applied qualitative content analysis.

	Main Statements Private Sector	Main Statements Public Sector
1. What importance do projects currently assume in your day-to-day work?	96% project work; 4% administrative tasks	60% project work; 40% administrative tasks
1.1 If this distribution is an issue: How do you deal with it?	-	We try to separate our staff into either administrative or project tasks (6/11)
2. Will project work tend to increase, decrease or remain about the same in the next 5 years?	It will be consistently high (5/9)	It will increase (7/11)
		It will be constant (4/11)
3. Are projects perceived currently positively or negatively by your colleagues in the work environment? How do you see this yourself?	Positively (6/9)	Varies, tends to be positive (4/11: positive; 4/11: different)
4. How are you promoting project management skills to your staff?	Empowerment through project management training (5/9)	Empowerment through project management training (6/11) Standardized project management processes (6/11)
5. What, if anything, prevents you from further fostering project work?	Nothing (4/9)	Lack of project management skills among staff (4/11)
6. Which cultural factors exert an influence on the perception of working on projects in your environment?	Openness (4/9)	Two types of employees: some create and take on tasks independently, and others only do the tasks they are given (5/11)
7. As a leader, how do you influence this culture in your day-to-day work?	Very different responses	Very different responses
8. Which leader serves as a role model for you and your colleagues when it comes to delivering projects?	Nobody (6/9)	A former supervisor (5/11)
9. What success stories are you aware of regarding projects in Germany that could be a guiding light for them?	Different concrete examples (5/9); none (4/9)	Different concrete examples (4/11); none (7/11)

) were derived from previous studies about projectification [1,2,3,32] and asked about the importance of projects during day-to-day work; if the importance of projects will increase within the next five years; the staff’s perceived attitude towards projects; the way that the leaders promote projects in their direct environment; possible limitations of fostering project work among the staff; the cultural factors that influence the perceptions of working on projects in their specific environments; the leader’s impact on their environment’s cultures; the leader’s and their team’s role-models for project work; and finally success stories of projects in Germany that are guiding their organizations.

The statements of the interviews were examined through a qualitative content analysis [40] with the help of NVivo and Excel by using a multi-step process [36]. As the interviews were structured through guiding questions, the analysis follows a deductive approach. In the first step, we divided the transcripts of the two focus groups and created codes for the categories of the different guiding questions and for the two groups. In the second step, the participants’ answers were coded and compared within the groups. The number of similar answers within the groups were counted. The criterion for a statement to be relevant was defined as more than 1/3 of the participants making the statement. These relevant results are shown in Table 1. Then, a comparison was drawn between the main statements between the two focus groups which will be presented in the sub-chapters of Section 4.

4. Results

Based on the analysis carried out, we can explore the similarities and the main differences between the two focus groups: leaders in the private sector and leaders in the public sector of the construction industry in Germany. Table 1 shows the guiding questions and the relevant answers and the upcoming subchapters are structured according to the different questions and their analyses.

4.1. Importance of Projects in the Day-to-Day Work (Question 1)

The analyses show a significant difference between the private and the public sector. For both groups, the mean score of all responses was calculated. Whereas private-sector leaders report that their and their team’s tasks are almost entirely organized in projects, the public-sector leaders’ answers show that project-based work accounts only for about 60% of the tasks. For 40% of the time, administrative activities are carried out in the public sector. These results confirm the level of projectification in Germany’s public sector [14] and show clearly that the level of projectification is less evolved in the public sector than in the private industry.

Based on this finding, the public-sector leaders were asked if they perceive a necessary change in their organizations to foster more project-focused work (Question 1.1).

A majority (6/11) of participants reported that they try to separate the workers into two groups: one that focuses on projects and one that deals with administrative tasks. There is a recognizable need and development in the public sector towards more projectification.

4.2. Trend of Ratio between Project Work and Administrative Tasks in the Next Five Years (Question 2)

The majority of the private-sector leaders state that the focus on project work will remain consistently high within the next five years.

The public-sector leaders’ answers vary: 7/11 participants state that the focus on project work will increase. This estimation confirms the trend of growing projectification in society as described in our literature review. However, 4/11 participants of the public sector’s leaders state that the ratio between project work and administrative tasks will remain constant.

4.3. Perception about Project Work (Question 3)

Project work is above all positively associated in the private sector. The statements of the leaders in the public sector vary in this estimation whereas approximately half of the participants state that projects are associated positively and the other half state that projects are associated negatively among their staff.

It should be considered where these differences between the two focus groups come from. In combination with the results about the time spent on necessary administrative tasks in the public sector, one reason could be that the project-specific tasks are perceived as hindering the daily administrative routines.

4.4. Promotion of Project Work in the Environment (Question 4)

Whereas both groups of leaders promote the quality of project work through training programs in project management skills, the leaders from the public sector state that they focus in addition on clear standards for project management tasks. Thus, project managers in the public sector seem to be restricted in their ways to manage projects compared to project managers in the private sector.

4.5. Obstacles that Prevent from Fostering Project Work (Question 5)

The leaders from the private sector state mainly fostering project work is not prevented by anything.

In contrast, a significant number of leaders from the private sector claim that the lack of project management skills among the staff is preventing their teams from focusing more on project work. It seems as if the leaders from the public sector do not believe in the capabilities of their staff, which may also be a reason for them to embrace standards more to support their teams, as the evaluation of the previous question has indicated.

4.6. Cultural Factors that Influence the Perception of Working on Project (Question 6)

In the private sector, openness especially influences the perception of project work.

In contrast, the leaders from the public sector divide their staff into two groups: one part of the staff creates their projects and likes to take responsibility for them, and the other group of employees waits for others to define clear tasks for them to process without showing any initiative to take responsibilities outside of these predefined tasks.

4.7. Leader’s Influence on the Cultural Factors of Working on Projects (Question 7)

Both groups answered with such very different responses that no significant statement can be made.

Exemplary answers from the private sector leaders were: “Supporting the employees wherever I can”; “Creating flat hierarchies”; “Regular feedback”.

Exemplary answers from the public-sector leaders were: “Making clear decisions and taking responsibility for them”; “Acting as a role model”; “Creating clear structures” and “Addressing problems openly”.

The main difference between the responses of the two groups seems to be that the leaders from the private sector try to support their staff through a kind of servant leadership style whereas the leaders from the public sector seem to foster clear structures and take responsibility away from the employees.

4.8. Leaders that Act as a Role Model for the Leaders and Their Staff (Question 8)

The majority of the leaders from the public sector state that they and their staff are not influenced by any specific leader when it comes to delivering projects.

In contrast, a significant number of leaders from the public sector refer to their former supervisors.

Whereas the private-sector leaders seem to be relatively disoriented and do not see a need for role models for themselves or their staff, the leaders from the public sector seem to orient themselves on well-known and experienced leadership patterns.

4.9. Success Stories of Projects in Germany that Could Be Guiding Lights (Question 9)

Both groups of leaders reply diversely to the question if there are success stories regarding projects in Germany that act as a guiding light for themselves and their teams: A significant number of participants name specific successful projects which are seen as an orientation for themselves and their staff and the other half of participants state that they do not know of such a project.

5. Discussion

This research aimed to find out what role leadership plays in projectification in the public construction sector in Germany. The assumption was that there are noticeable differences between the private and public sectors, and by examining these differences conclusions can be drawn about recommendations for leaders in the public construction sector. The results of the semi-structured interviews clearly show that projects in the private construction sector are now routine, have a positive image, and will continue to be of importance in the future. The organization of the enterprises is strongly integrated and geared to project work. In contrast, the public construction sector in Germany is still lagging well behind in terms of project orientation, or projectification. For example, projects are handled in a separate organizational set-up and are still viewed rather critically. However, this is changing for the better and the share of projects in total working time is also growing in the public construction sector.

Just as managers in the private construction sector see projects as a normal part of their work, they also understand their special responsibility to lead project teams by setting their own example and by challenging and supporting employees, e.g., by providing specific empowerment through training. Although leaders in the public construction sector also see the empowerment of their project teams through training as a priority, they still rely just as heavily on the normative institution of project management standards that must be adhered to in projects. Finally, it´s not surprising that the interviewees in the private construction sector had more to say about successful projects than the focus group in the public sector.

The research results confirm the differences between the state of projectification in the private and public construction sectors in Germany as shown in [1]. A positive cultural-cognitive view of projects, as described in [2], shapes the work of the organizations in the private construction sector, their leadership, and in this way their performance in projects. Projects are implemented with a holistic perspective that integrates all those involved, something that has so far been found predominantly in the private industry of Germany. Managers in the public sector still tend to focus on normative standards in their institutional work, be it through project management processes and regulations or their transfer in the context of training courses. In the private sector, the focus is more on cultural-cognitive institutions, including a positive narrative, success stories, and opportunities for individuals to shape the project. Projects tend to be routine in these companies rather than the exception, as they tend to be in the public sector.

Although there is no one leadership approach to dealing with project teams in either focus group, it is noticeable that in the private construction sector there is more emphasis on flat hierarchies, supporting teams, and regular feedback. In the public construction sector, on the other hand, even more emphasis is placed on clear structures, roles and responsibilities, processes, and some form of control of the project team.

Comparing the two groups, it is noticeable that the public-sector leaders try to stick to the leadership patterns that they know from former supervisors as role models whereas leaders from the public sector do not orient themselves to specific persons. With the orientation on former leadership styles, a cultural-cognitive change in terms of projectification will hardly take place in the public sector, especially if the amount of non-project-specific tasks does not change and if the importance of project work increases in the immediate future. Leaders in the public construction sector in Germany should use the opportunity that comes with the increasing number of projects and create a project-friendly environment through a leadership style that understands projects as being routine, and requiring entrepreneurial behavior at all levels. This includes not only setting one’s own example and empowerment through training, but above all focusing on institutional work on the cultural-cognitive imprint of the organization. In doing so, public-sector leaders can certainly learn something from the leadership and project work in the private sector. Unfortunately, there is little exchange between the two sectors these days and, according to [3], this could be initiated and facilitated by their respective project management associations.

In some of the interviews, it was stated that it is difficult in the public sector to build cross-departmental project teams with employees that can take decisions within such teams. One issue would be that decisions cannot be taken within these teams without consulting higher hierarchies outside of the project teams which slows project work down and complicates it. The question arises if this is a cultural issue as the public sector leaders stick to those patterns to stay responsible for project decisions or if norms and regulations force the project managers to follow these routines. In both cases, strategies should be formulated to overcome this situation, especially as this study has shown that the importance of project work in the public sector will increase significantly within the next few years.

This qualitative research with twenty participants had the primary aim of investigating insights about different leadership styles in the construction industry. Due to the limited number of interviews and the focus on Germany, the results cannot be generalized and are limited in their significance. It is therefore advisable to conduct further qualitative as well as quantitative studies, possibly also in comparison with other countries or over a longer period, in order to identify further differences and developments.

6. Conclusions

This research aimed to investigate how leaders influence projectification in the public sector in the German construction industry. Our findings contribute to the overall picture that has emerged from previous research, namely that there is a significant difference between the private and public construction sectors in Germany in terms of projectification.

Specific leadership behavior contributes to seeing projects as ordinary, as is now the case in the private sector, or as an exception, as is the case in the public sector. Whereas organizations in the public sector create a social structure where the employees focus almost exclusively on project work, the workers in the public sector must almost equally deal with administrative tasks. The public-sector leader’s strategy is to create more standardized processes to manage the projects effectively. Nevertheless, the leaders from the public sector evaluate also that their team members lack in applying project management skills. As projects are per definition unique, standards must therefore always be adapted through individual choices, which is what is meant by empowerment. This empowerment is also on the part of the public sector leaders to promote project work. Thus, there seems to be a big discrepancy in the public institutions: On the one hand, strict regulative norms are created to support the staff in their limited working time; on the other hand, the leaders try to train their staff to detach from those norms and to take individual and project-specific decisions.

As the majority of the public-sector leaders foresee that the importance of project work will increase within the next few years, a strategy must be created on how the public sector will manage their projects. Some of the participants from the public sector state that they try to create project teams that focus only on projects or only on administrative tasks. Nevertheless, they also see regulative issues to overcome, such as cross-departmental power of instructions.