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Project Strategy

Project Strategy



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Published by: fakhro on May 29, 2008
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Strategy – Project Disconnect with Corporate Strategy
Written By: Garry Koop, PMP, SPMgroup Ltd
I do not have the executive support I need 
My budget keeps getting cut 
My resources keep getting pulled on to other projects
”;The PM lament! Sound familiar? I am sure it does. Why do we continue to hear andexperience them even as we get better at project management?The purpose of this article is to shed light on the root cause of this situation and talk plainlyabout what Executives, Sponsors and Project Managers can do to ensure we are all fullyaligned and enabled to implement corporate strategy through projects.In order for us to be successful we need to understand the basic nature and context of strategy. We also need to agree on some basic tenets.Once we have this established we will move right into a more in-depth discussion onprecisely what you can do to achieve the goal of being continuously aligned with thecorporate strategy.We will also talk about exactly what you can do immediately after reading this article.
In essence, this is about you, me, us and “them”, within the context of our company’scorporate strategy. Are we “in” or “out” of the proverbial loop? “Survival is not mandatory”,said Dr. W. Edwards Deming. If this is not of interest to you, go ahead and flip the page, butif it is, let’s get busy.Strategy is the “how to” plan of action in response to the objectives set out by the company.Loosely stated, corporate objectives can be organized into three high-level categories withstrategy associated to each one. We need to have a clear and defined understanding sothat we can successfully respond to the strategies.
Category 1 – Financial
The first element of strategy is financial, essentially improving the profit margin or theEBITDA position of the company (Earnings Before Interest Taxes DepreciationAmortization).
Category 2 – Innovation
The second major element of strategy is that of innovation, the essence of which is creationor advancement.
Category 3 – Adherence
 The third component of strategy is adherence, typically to industry standards, specificationsand regulatory aspects. In most cases this is considered a requirement rather than astrategic component, however, we have listed it here for the purposes of visibility. In manybusiness sectors, the aspect of adherence has an almost equal weighting to finance andinnovation.The context of strategy or “the theatre of operation” is essential to our completeunderstanding. Business objectives are typically established or reviewed during the fiscalbusiness planning process. The strategic plans are driven out of that planning cycle.Strategy is most often articulated at the corporate level, but it can also be defined at thesector, division or department level. For our purposes we will be discussing it at thecorporate level. However you may substitute department or other level depending on thenature of your particular organization.We also need to establish some basic tenets that are vital to our success.
Tenet 1 - Communicate the Strategy.
The strategic plan needs to infuse your organization. Executives and Sponsors, you needto communicate it, often and clearly. Be creative, but effective. I know one organizationthat printed their five major corporate strategy points on mouse pads and distributed them tothe entire organization. You can be sure everyone knew the corporate strategy.
: Beware of situations where the strategy cannot be communicated “at this time”. Thatis a portent of failure.
Tenet 2 – Partnership
Moving strategy to business results is a partnership between strategists (Executives, Senior Management) and delivery (Portfolio, Program, Project Managers). This partnership has theresponsibility to translate the strategic plan into a course of action (a.k.a. projects).
Tenet 3 - Its business, not projects
This is about business benefits NOT projects. PM’s, this may be hard to swallow, but your company is not in the project business. Projects are a means to arrive at a particular business benefit. This mindset is pivotal for being truly successful.
Taking Action
We now understand the theatre of operation and agree with some fundamental truths aboutstrategy and projects. But, how do we ensure that the ‘right’ projects get the resourcesrequired and the “wrong” projects are not even started? In the case of the ProjectManagers, how do I get on the ‘right’ projects?
Start at the beginning...
The first place to focus is at the submission and screening stages of the project or atthe very least the activation stage. Bear in mind, however, that the activation stage isthe last best opportunity for you to influence the direction.
Remember Tenet #2, this is a partnership. PM’s, we need to help our Sponsor byhighlighting the linkage between the project request and the corporate strategy. If itis not linked or is linked very weakly, there is every probability that you will run into
 resource allocation issues, budget set backs and basically become a victim of theinfamous “prioritization” beast. As a result there is a very strong likelihood that theproject, and therefore the Sponsor, will not be successful.
Everyone wants to look good and succeed. That includes the project requestor (Executive, Sponsor) and Project Manager. We do not knowingly initiate somethingwhere we are convinced that we will look bad and not achieve our goals.
Make sure you know the linkage
If you were not involved in the submission, screening, registration, or activation of the project but you are managing a project, program or portfolio, make sure youknow to what strategic component your project or program links.
Artifacts like a business case, requirements document or needs assessment arevaluable tools to gain this understanding. Your Project Charter should start with astatement about how the project links to the corporate strategy. This should comestraight from the Business Case. If you are still having difficulties clearlyunderstanding the connection, start tracing the steps of the project back tosubmission and find out! It may be a labyrinth, but no one wants to have anactive project that is going down a rabbit trail.
Don’t forget the team!
Your team members also need to know the connection to the strategy andbusiness. This is an excellent team-building and motivational enabler. Remindyour team members often about the strategic component that is being driven outby way of their project.
I know of one particular project that was linked to the financial strategy, andparticularly driving down the Cost of Goods Sold (“COGS”) and thereby improvingthe EBITDA position of the company. The completion of the project would meana $250K per month reduction in COGS. So we reminded the team often aboutthat target and put it in tangible terms that everyone could understand. For example, the monthly savings represented a lot of FTE’s. A two-week slipequated to a $125K cost. Everyone on the team was extremely clear andmotivated.
No ‘tek tok’!
When the “conflicting priorities” beast rears (and it always does), speak inbusiness terms about the problem.
Assuming for a moment that all active projects are clearly and strongly linked tostrategy, you need to ask the question, “which strategy is more important or takesprecedence”. The pitfall is speaking in project or technical terms that will not beeffective at resolving the issue. For example, if two projects are challenging eachother for resources ask the Executive Sponsor which is more important, thefinancial objective (drive down the COGS) or the innovation objective (deliver thewidget)? Be aware, also that the response will differ based on the timing of thequestion and the current position of the organization.
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