Linking corporative strategy to project management

Abstract

After working with some clients in the delivery of a Project Management Methodology, we discovered that there are certain points all organizations need to have before implementing a PM methodology:

  • senior executives commitment and understanding of Project Management
  • senior executives understanding there is a strong relationship between what they are interested most that is the Organizational Strategy and all the projects that are being planned and delivered within their organizations.

So we found that in order to convince the senior executives of the need of implementing a PM methodology, we had to do it through the demonstration that all projects in their organization should be related to some organizational objective.

Senior management know a lot about managing their business, but do not necessarily pay much attention to what they believe are “bureaucratic matters”. With little information and knowledge about Project Management, they may believe that implementing a project management methodology, or building a portfolio of projects or even a Project Management Office (PMO) is wasting money they do not want to waste. What should be understood is that all organizations have a vision and a mission which has been built carefully and every executive and employee of an organization should work towards sustaining such vision and mission. So a careful selection and further successful management of projects within such organization, will build towards the company's objectives, mission and vision.

Take a look at the following graphic which shows how Organizational or Business Strategy relates to Organizational Projects:

From Business Strategy to Project Objectives

Exhibit 1 – From Business Strategy to Project Objectives

Introduction

Our organization's vision, mission, and objectives are a set of projects. The success of the projects will build into the success of the whole organization's objectives. If our organization works in a coordinated manner, we will be provided with a 360° view of our organization's ability to define and achieve its objectives.

When trying to utilize Project Management in order to link Organizational Strategy with Organizational Projects, we will realize we need to manage the following aspects:

  • Centralized use of resources
  • Priorization of projects
  • Resolve multiple conflicts across several projects
  • Understand the relationship between projects
  • Work in a coordinated manner, with a single and unique procedure

Our organization needs a complete framework and systematic approach for staying connected to our company's business strategy, remaining responsive to business needs, and prioritizing your resources for maximum effectiveness. We should expand our focus from pursuing results on a project-by-project basis, to a seamless enterprise-wide view of all the work you need to accomplish.

The most effective organizations work in total alignment from top to bottom. Executives and senior managers set strategy, which is clearly translated into an actionable plan for resources. We should implement a methodology that provides the methods and tools to achieve total alignment of the organization.

There are certain roles that need to be defined in order to guarantee the success of its implementation.

Then, there are certain steps that need to be followed. The deployment of this methodology will be carried out like a project itself, and can easily be done through PMI's Project Management Methodology. The major steps that need to be followed during such implementation are:

1.    Assess the organizational's level of maturity within project and program management and its approach towards organizational change. This could be done using Project Management Insititute's (PMI®) maturity model called Organizational Project Management Maturity Model Knowledge Foundation (OPM3®).

2.    Capture the organization's vision, mission, strategies and objectives.

3.    Capture all projects going around the organization and their status.

4.    Determine the relationship of each project with an organizational objective.

5.    Reorder / prioritize projects again.

6.    Build a PMO aligned with the maturity level determined in step 1. This PMO will offer support to the Project Managers in their jobs.

7.    Build all PMO elements needed such as:

a.    Project Management Methodology: templates, checklists, plans, reports

b.    Quality Assurance Policy

c.    Project Management Training for all projects stakeholders within the organization

d.    Project Management staffing, if needed

8.    Establish a “launch date” for a small number of projects (“pilot”), assuring their sponsors are committed with the designed results.

9.    Launch the “pilot”

10.    Measure results of projects and monitor compliance of organizational objectives as projects were being completed

11.    Implement company wide

This is hard work and some roles need to be identified in order to implement this project. This project will start at an executive level with “strategic planning”, continue at a management level with “program management” and end up at a lower level with “project management”.

Executive Owners are responsible for establishing the vision, mission, and goals of the organization. Sponsors are responsible for translating the vision, mission, and goals into tangible objectives to be pursued as projects. The Program Organization works with project teams to align multiple plans and schedules into an integrated, comprehensive view for Sponsors and Executive Owners. Project teams represent the functional and technical resources who plan and execute activities to deliver in accordance with organizational objectives. Together, the four primary levels work in complete alignment to define and deliver upon key business objectives.

Take a look at the following exhibit to understand the relationship between stages and roles.

Relationship between strategic planning and project management (Project Corps, 2003, ¶4)

Exhibit 2 – Relationship between strategic planning and project management (Project Corps, 2003, ¶4)

Assess the organizational's level of maturity in Project Management

The first step is getting inside the organization and trying to understand its maturity level in project management. Some factors that will determine its level are:

  • Do they have a Project Management Information System
  • Do they have an homogeneous way of planning and executing projects (methodology, templates, checklists) or does each project manager work based in their instinct
  • Does someone compare actuals vs. budget or baselines of the projects
  • Do resources have a career path within the organization (we are interested in knowing about their training in both soft and hard skills related to project management)
  • How do people within the organization react towards cultural change

The last factor mentioned is crucial for the whole project's success. This is the moment in which hard work is required in order to mitigate or avoid rejection of key stakeholders within the organization. So the following steps should be taken:

  • Foster understanding through targeted communication sessions with all stakeholders at all levels or the organization
  • Foster acceptance at all levels of the organization through focusing on all the benefits the organization will achieve through this project
  • Foster participation of stakeholders in the project, give them key activities and responsibilities. This will build into their commitment with the projects results.
  • Foster ownership. When stakeholders own the solution, they will sustain the solution and promote its further use and improvement.

These and other factors assessed will lead us to know in which stage of the Organizational Project Management (OPM3®) model is the organization. This stage will determine future steps to follow, including the kind of Project Management Office (PMO) this organization is capable of having.

OPM3® Model (PMI, 2003, p. 28)

Exhibit 3 – OPM3® Model (PMI, 2003, p. 28)

Capture the organizational vision, mission, strategies and objectives

As stated before, executive owners mentioned in Exhibit 2 are responsible for establishing the vision, mission, and goals of the organization. In most organizations, the vision, mission and goals are already stated, so at this point one has to reach a deep understanding of them, so that sponsors can be able to translate the vision, mission, and goals into tangible objectives to be pursued as projects.

Strategy Pyramid

Exhibit 4 – Strategy Pyramid

The successful completion of projects will derive in tangible organizational objectives completed, which consequently will build on both the mission and vision of the organization.

Capture projects going around the organization, determine the relationship of each
project and an organizational objective, and finally reorder all projects

All existing projects in the organization need to be captured, later determine which has been the trigger to such project (an idea, a technological shift, a regulatory need, a certain need) and determine if it relates so one or more of the organizational objectives. Successful completion of projects will derive in tangible organizational objectives captured in the previous step.

Finally all organization's projects need to be listed and reordered using the executive criterion determined.

Build a Project Management Office, according to the project management maturity
level assessed in the first step

The PMO to be build is related to the maturity level determined before. It would be a project failure to deploy a PMO at a high level of the organization, if the assessment shows you should start with a low level PMO.

In the following graph you can see three levels of PMO:

  • 1)    Level 1: it is a Project Control Office which provides support to all projects and some few services to the organization.
  • 2)    Level 2: it is a Business Unit Project Office, with more authority than the level 1 project office and offers some more services to the organization.
  • 3)    Level 3: it is a Strategic Project Office, which depends directly from the CEO of the organization and offers lots of services to the whole organization. It has high authority.
The three levels of a Project Office (PO or PMO)

Exhibit 5 – The three levels of a Project Office (PO or PMO)

Establish a “launch date” for a small number of projects (“pilot”), assuring their
sponsors are committed with the designed results

The next step will be that a small number of projects with their respective organizational objective identified, follow the project management methodology and adheres to all standards determined by the PMO already built. This will, probably, end up with successful projects that have been ended up in time, within the established budget and within the scope committed with the client.

All projects that end up in a successful manner, will have built towards one or more organizational objective, and consequently towards the organizational mission and vision.

Implement company wide

Implementing company wide will still need to be done in steps, phase through phase, assessing successful implementation in the organizational areas involved.

There are certain indicators to be monitored during this part of the project:

  • People rejection or acceptance of new way of working
  • Usage of common language and homogeneous project management methodology
  • Implementation and usage of knowledge acquired during project management training

If these are not in place, it is not advisable to continue with the company wide implementation.

References

Project Corps (2003) Implementing and EPM in an Organization Retrieved 1/5/2006 from http://www.projectcorps.com/epm.htm

PMI (2003) Organizational Project Management Maturity Model Knowledge Foundation (OPM3®) Newtown Square, PA: Project Management Institute

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 or any listed author.

© 2006, Carina Kenny
Originally published as part of 2006 PMI Global Congress Proceedings – Santiago, Chile

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