Mind your business
UNDERSTANDING THE STRATEGIC SIDE OF THEIR ORGANIZATIONS CAN HELP PROJECT PROFESSIONALS DELIVER WHAT EXECUTIVES WANT NOW—AND LATER.
BY PETER FRETTY
Call it the fourth dimension of project management.
Truly successful project managers don't just bring in their projects on budget, on schedule and within scope. They also understand their business, their industry and how their projects align specifically with the organization's strategic objectives.
But while well-informed business acumen helps project professionals with the competence and credibility they need for decision-making, it's not just about gaining an understanding of financial needs or strategies.
“Business acumen represents overall strategy that helps employees learn how their organization generates revenues and what key role they play in it,” says Shilpa Eguvanti, PMP, assistant project manager at research and analytics firm ValueNotes, Pune, India. “It is about awareness of what drives business objectives and plays an instrumental role in bridging the communication gap between project managers and executives.”
Without an understanding of the business as a whole—marketing, finance, operations, etc.—project managers risk not being seen as organizational leaders. They also may inadvertently make decisions that could negatively impact the chance of a project meeting long-term objectives.
Here are five steps project managers can take to avoid those choices by increasing their business acumen.
LEARN THE LANGUAGE
Each organization inevitably has its own phrases, words and concepts to describe organizational performance. That language frequently surfaces in large, complex projects that draw a diverse group of participants with their own agendas, metrics, and departmental language and jargon.
“Business acumen enables pulling this all together and focusing on what the business needs rather than the individuals involved,” says Mark Rogers, director, Xafinity, an employee pension and benefits provider based in Manchester, England. “It allows project managers to serve as the glue holding all of these individuals together and avoid language differences that cause misunderstandings.”
Tres Roeder, PMP, president of Roeder Consulting, Cleveland, Ohio, USA, suggests turning to company materials to learn organizational language. For example, if a company is publicly traded, project managers can review the annual report and listen to quarterly shareholder conference calls.
“You can learn a lot by hearing the CEO and CFO explain business performance to analysts and by paying attention to the types of questions analysts ask,” Mr. Roeder says. “This helps in understanding the key issues the executive leadership team is facing and how your project is going to address those issues.”
ASSESS THE ENVIRONMENT
In addition to having a basic understanding of a business' specific language, project managers also should gain an industry-wide view.
Trade and business publications can play a significant role here, but informal discussions with customers and existing suppliers about industry-based problems and solutions can be equally effective. Engaging in user and market research groups with industry specialists can serve as a big-picture barometer.
Mr. Rogers also suggests paying close attention to what the competition does to spot successes and failures—and implement any lessons learned.
Project managers need face time with their organization's leadership to help them better comprehend the strategic vision.
Karen Wang, PMP, business continuity project manager with Turner Broadcasting, Atlanta, Georgia, USA, suggests setting up a governance program involving either a single executive stakeholder or sponsor, or a team of executives on a steering committee. The program lends structure to communications between executives and project managers. “Build in an accountability system and set agendas, clear program objectives and measurable business value,” she says.
When initiating executive-level engagement, Ms. Wang recommends advance research. “Be ready to briefly state your current direction in supporting the corporate objectives,” she says. “No executive will want to introduce you to corporate objectives that have been published or shared in another way. One-on-one meetings are more appropriate for hearing their priorities and concerns. During one-on-one time, ask the executive for guidance concerning a specific problem or roadblock, but come prepared with at least one possible solution. Wrap up the meeting by summarizing their opinion or guidance and any follow-up action for either of you.”
Troy McKnight, PMP, partner at PM Alliance in Stone Mountain, Georgia, USA, recommends seeking out mentoring opportunities as well. “Finding a senior executive who has been where you are and who can give you personal insights into their experiences is a great way to leverage experience and expertise,” he says. “This can be instrumental in learning how to clearly communicate the direction from upper-management to the day-to-day team members.”
Traditional education opportunities such as MBA programs are great avenues to build business acumen. But other oft-overlooked yet valuable sources exist as well:
• Leadership training: Gina Abudi, president of Abudi Consulting Group, Amherst, New Hampshire, USA, recommends investigating what the organization offers to management and leaders to increase their business acumen. “Some businesses use simulations to enable high potentials and other future leaders to learn more about the business and to learn how to make decisions to ensure overall long-term business success,” she says. “These are great opportunities for project managers to expand their reach.”
• Team members: Rather than looking at teams as silos or work streams, project managers should recognize the learning opportunities that exist with cross-functional and interdisciplinary teams, says Andrew Ritcheson, PhD, PMP, senior program manager and consulting psychologist, DRC, Washington D.C., USA. “This type of team is the best source for out-of-the-box thinking that builds a project manager's understanding of the business,” he says.
• Embrace outsiders: Staying open to innovation and having the confidence to embrace non-traditional solutions build business acumen. “For instance, on a complex IT engagement, the project manager contracted a third-grade teacher to decompose technical information into the most basic building blocks, as if teaching a child to write. At a conference some time later, that same third-grade teacher received a standing ovation. The approach had really worked,” Dr. Ritcheson says.
CONVERSE WITH COLLEAGUES
Whether through water-cooler conversations or relationships with those in other parts of the organization, learning the entire business picture is essential.
“Starting dialogues with people from other disciplines or departments allows you to understand what they do within the organization, what challenges they face and why their role is important,” Mr. Rogers says. “This is instrumental in finding out what their view of the business is and how it all fits together.”
Those relationships don't have to be limited to the professional realm; it's okay to be friends, too. “Social relationships are a key part of breaking down the departmental silos and forging two-way relationships,” Mr. Rogers points out. “However, project managers need to spend more of their one-on-one time learning about the organization and how all the pieces fit together.”
APPLY TO ACTION
Application—in the form of conversing with clients and executives in their language—is the best test of acumen.
“[Business acumen] is about awareness of what drives business objectives and plays an instrumental role in bridging the communication gap between project managers and executives.”
—Shilpa Eguvanti, PMP, ValueNotes, Pune, India
That's especially true when communicating with clients, when the conversation might cover everything from the market size of an industry to projections of industry growth to customer landscape. “Every day is a test, and it's very important for us to understand the business acumen of the client so we can align the project to provide the necessary recommendations to help their business stay ahead of the competition,” says Ms. Eguvanti. “We have to continually talk in terminology the clients use to negate any communication gap.”
But project managers should never assume they have sufficient knowledge of business issues. “Building business acumen is a never-ending process that should allow you to challenge whether the objectives provided are actually sensible, or whether something else would be better to deliver what the business needs,” Mr. Rogers says. “People simply should ask themselves, ‘What am I doing today?’ and ‘How am I adding value to the business?’ Each day, you should be able to come up with one concrete thing your work has done to provide added value to the business.”
As project managers gain a better understanding of the business' language and tools, it becomes easier to explain in several short sentences how their projects deliver value to the organization. “As you continue to grow your foundation, integrate business acumen language into your project documents,” Mr. Roeder says. “Success comes from continuous learning. Stay abreast of business developments in your organization and industry.”
Those who do so, and continuously boost their acumen, will prove their value to the whole organization—and may someday find themselves a home in the executive suite. PM
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AUGUST 2012 PM NETWORK