The revolutionary strategic project management maturity model
the next generation!
Attendees of the Project Management Institute’s (PMI®) 2007 Global Congress were introduced to a surprisingly simple, yet effective tool by which organizations could evaluate how well they were implementing project management practices from a strategic perspective. After learning about the tool (called The Strategic Project Management Maturity Model, or SPM3) some attendees correctly noted that it was largely diagnostic in nature. And while the attendees liked the model as presented, the question that immediately formed in their minds was this: “once the SPM3 reveals deficienc(ies), what can organizations do to bring about improvement(s)?” These attendees had made a very valid point, and the answer to their question is the focus of this paper.
Countless hours have been spent agonizing over how effectively we (and the organizations we work for) practice project management from a tactical perspective (i.e., “doing projects right”). In an easy-to-understand and practical way, the SPM3 organizes, structures, and measures specific organizational practices in a way that will help organizations understand how well they are implementing project management from a strategic perspective (i.e., doing the right projects AND doing the right things to leverage the value of a project management approach).
The SPM3 can also be used to develop a roadmap for organizational improvement. However, many attendees who were introduced to the model at PMI’s 2007 Global Congress correctly pointed out that a road map should include both a diagnostic AND a prescriptive element. This paper will reintroduce the SPM3 to those who may not already be familiar with it, then provide a number of valuable suggestions that answer the question: “once the SPM3 reveals deficienc(ies), what can organizations do to bring about improvement(s)?”
What Is Strategic Project Management?
It has been said by many that projects are a key agent for advancing corporate strategy. Perhaps. In reality, this is only true to the extent to which an organization creates useful and relevant linkages between the world of projects and the world of business. For many organizations, these linkages do not exist in any meaningful way today. For example, it would not be uncommon for a business unit to pursue a particular project simply because it addresses an apparent need related to a key product within their product portfolio. However, as the business unit moves forward with that proposed project, no one takes the time to verify that the initiative will generate positive cash flow. So while the project appears to be advancing the strategy of that business unit because of its focus on a key product, in fact it is not advancing the most important strategy of that business unit—to generate profit.
Generally, strategic project management is a series of practices, procedures, processes, tools, and behaviors which, when considered collectively, characterize the extent to which an organization creates effective linkages between excellent project management practices and excellent business practices—all in the name of advancing the overall strategic objectives of that organization.
From a practical standpoint, strategic project management can be thought of as being comprised of four critical elements of so-called higher-level project management practices that have become popular elements in today’s project environment. These four elements are:
Strategic alignment of projects
As the title suggests, this practice refers to the extent to which an organization ensures that the projects it pursues are directly tied to organizational strategy—long-term as well as short-term.
Project portfolio management
This practice refers to the identification and use of an all-inclusive, logical, project investment categorization scheme. Identifying different types of project portfolios helps to ensure that the organization takes a balanced approach to project selection. It also facilitates the process of prioritizing projects against other projects of a similar nature.
Several kinds of program management practices are inherent within the pursuit of strategic project management. Among these practices are the management of groups of projects (such as in the case a large business unit initiative), and the management of interactions between projects (portfolio coordination).
The business results of projects
This subject has gotten considerable attention over the past few years. What is becoming more and more apparent is that projects are really financial investments. If we are to treat projects as such, then it is imperative for organizations to estimate and ultimately measure the kind of impacts that projects have on organizations from a business results perspective.
The Value of Using an SPM3 Approach
Many organizations do a poor job of connecting project management with strategic management. This is particularly troublesome, as those who study the overall life cycle of project investments quickly come to realize that the front end (the “strategic” end) of the project lifecycle is typically where the big money is to be made, so to speak. In other words, decisions made in the early stages of project ideation (for example, what specific customer needs should be met first) have a significantly higher business impact on those that come later (selecting Vendor A or Vendor B during project execution).
While there are several project management maturity models in existence today, nearly all of them focus on how well a given organization executes the tactical aspects of project management (planning, scheduling, control, etc.). And the models in existence today that do focus on strategic issues are often viewed as confusing, excessively complex, and generally onerous.
The Process Behind the SPM3
The exhibit below provides a high-level view of the process for the execution of strategic project management. (Exhibit 1) The first step consists of defining an organization’s strategic intent using an approach (such as Balanced Scorecard) by which a top down, gap analysis methodology can be used in a way that allows for the eventual identification of long-range goals (typically having a 3-5 year time horizon), and targeted business meets. Targeted business needs are short term objectives, representing step-wise progress toward the achievement of long-range goals. Targeted business meets would typically be identified by organizational managers as part of their strategic planning sessions. At this point, the project management community would accept targeted business needs, and work toward identifying the optimum solution to each.
Once the needs and the solutions are known, the organization is now in a position to begin a thorough evaluation of each project proposed. The attractiveness of any given project proposal is evaluated using a combination of financial metrics (NPV, IRR, etc.) and nonfinancial metrics (a set of subjective arguments in support of the project).
Exhibit 1 - Process for the Execution of Strategic Project Management
Projects are then loaded into their respective portfolio categories and prioritized according to their importance and value to the organization. Once this is accomplished, one of the last steps consists of identifying the overall set of projects that the organization will pursue in the forthcoming year, taking into consideration constraints such as money and human resources. The only thing left to do now is to manage across all projects. Once again, the key challenge here (at least in today’s environment!) revolves around the effective deployment of limited resources.
The strategic project management process itself (along with the SPM3) is guided by a number of foundational principles, namely:
- Strategic project management is fully scalable
- Project identification should be based on a top-down, “needs” approach
- Those engaged in strategic planning should NOT identify specific (project) solutions
- Every business need has at least two alternative solutions
- Projects that do not generate a positive financial return should not be pursued
- All project types must be properly represented (overall portfolio must be balanced)
- The effects of projects on strategy and goals should be tracked and measured
- The total volume of project work must be controlled
- Project management practitioners are permitted to play a much more expanded role
Orientation to the Structure of the SPM3 Model
The Strategic Project Management Maturity Model is comprised of three main elements, arranged as major columns in a table, as shown on the illustration below (Exhibit 2):
Exhibit 2 – Three Main Elements of SPM3
These items represent the major areas of focus which, collectively, comprise the practice of strategic project management.
These items may be thought of as “competency groupings”. They represent subdivided elements within each strategic dimension. The pinpoints will be different for each strategic dimension. In organization’s level of maturity is evaluated within each pinpoint.
These items represent observable practices. Within any given pinpoint, the lowest level of maturity will tend to be characterized by the statements on the left (the sub column entitled “1”), and the highest level of maturity is characterized by the statements to the right (the sub column entitled “5”). The incorporation of a scale (i.e., Level 1 through Level 5) allows the user to generate evaluative “scores”. It’s worth noting that the generation of a score for your organization should not be viewed is a main objective in using this model, as it is in other models. However, for organizations who wish to generate scores as a way of tracking their progress over time, the use of the five-point rating scale will enable them to do so.
Orientation to the 10 Strategic Dimensions and Their Pinpoints
A significant amount of insight with regard to the design of the original diagnostic aspect of the model (what attendees at the 2007 Global Congress saw) can be obtained by examining the strategic dimensions and the corresponding dimension pinpoints, both of which represent the foundation of the SPM3 model. The table below provides that insight. (Exhibit 3)
Exhibit 3 - Original Diagnostic Aspect of the Model
Once again, note the correlation between the strategic dimensions and the steps the process flow diagram on page two. In the context of this model, the strategic dimensions really comprise strategic project management. And as mentioned previously, the dimension pinpoints are subdivisions of the strategic dimensions, and may be viewed as organizational competency groups.
SPM3: The Next Generation!
Once again, the model as shown above would typically be used to conduct high-level diagnostics. But what would an organization do to address so-called “low scores”, the indication of deficiencies? There are really two approaches: (1) “fix” a specific deficiency; or (2) follow a set of prescriptive recommendations so as to optimize performance within a given strategic dimension. In reality, either approach can be applied by looking at some suggested best practices.
The table on page four has been adapted so as to do this, and appears below (Exhibit 4):
Exhibit 4 – Prescriptive Recommendations
Space limitations do not allow for total elaboration of the prescriptive suggestions identified within the chart above. Learning how to get additional information and/or detail is offered in the closing thoughts paragraph that follows.
This evolutionary step of the Strategic project Management Maturity Model has taken the process from purely diagnostic to diagnostic AND prescriptive. It remains a straightforward, easy-to-use, process-driven instrument that can ultimately prove to be of great value to all organizations large and small. I would encourage all who read this paper to take three actions. The first would be to enhance your understanding of strategic project management by requesting a copy of the current version of the model (email@example.com). Second, if you desire additional detail or discussion on any of the prescriptive items mentioned in the table above, you may write to the same email address. Third, and perhaps one of the most important actions you can take, would be to feel free to offer comments and suggestions to me on how the model could be improved. I welcome your input and feedback. Good luck in your organization’s pursuit of strategic project management!
© 2008, Gary R. Heerkens, PMP, CPM, CBM, CIPA, PE, MBA
Originally published as a part of 2008 PMI Global Congress Proceedings – Denver, Colorado