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THE BUSINESS  of Projects
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Identifying the right projects works best for organizations that start at the top.

BY GARY R. HEERKENS, MBA, CBM, PMP, CONTRIBUTING EDITOR

In my Last column, “Restoring Order” (PM Network, April 2013), I described how some organizations engage in the practice of “selling” projects to organizational managers. To those organizations, that is a normal business process. The problem is that there's not much business in such a process. Sadly, these organizations don't recognize that adopting a properly ordered process makes selling projects moot, while yielding projects that do a better job of advancing corporate strategy.

I also mentioned that restoring proper order comes in the form of strategy-driven, top-down project selection. This does not have to be complicated to be effective. To illustrate, let's break it down into its component terms.

The core function of projects is to advance corporate strategy. So, step one is for those at the executive level to develop a solid vision of strategic intent. This should begin with the identification of top-level objectives and result in the development of a strategy map. Top-level objectives describe what an organization aspires to achieve or become in the near future: “Maximize new customer sales,” “Minimize operating costs” or “Be an industry leader.”

Organizational goals—the key outputs of the second step in strategy mapping—are simple, action-oriented statements of how those objectives can logically be achieved. Examples of organizational goals could be “Improve service delivery,” “Reduce unit manufacturing cost” or “Improve collaboration within the supply chain.”

TOP-DOWN

I'm sure you've already noticed that this approach has a direction—it starts at the top of the organization and goes down. But right now, we're still at the top. To move downward, take the next step, which consists of identifying the tactics aimed at supporting the stated goals. A tactic—or needs statement—may sound like this: “Establish a 20 percent share of the home-office scanner market” or “Reduce the expense of equipment maintenance to 8 percent of asset value.”

This marks an excellent point for the executive team to hand off a needs statement to a project investigation team that can use a systematic, data-driven approach to examine alternative solutions and ultimately select the best one.

And thus, a project is born. But this time we know it's connected to our strategy. To maintain continuity, the project investigation team and the project execution team should comprise the same individuals.

PROJECT SELECTION

This strategy-driven, top-down approach may result in the identification of many more projects than there are available resources. Now it's time to think about the final component: project selection.

An organization cannot simply assume every project proposed will be implemented (though many do). Instead, it must use scoring models that rationally and objectively seek out projects that will reap the greatest benefit in terms of fulfilling the strategic, operational and financial targets the firm has established. In my next column, I will offer some suggestions on how to accomplish this. PM

 

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Gary R. Heerkens, MBA, CBM, PMP, president of Management Solutions Group, Inc., is a consultant, trainer, speaker and author with more than 25 years of project management experience. His latest book is The Business-Savvy Project Manager.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

JULY 2013 PM NETWORK

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