Moving from strategic planning to prioritized project initiatives

Abstract

Is it clear how each project or initiative you work on contributes to or supports the corporate Strategic Plan? Why should you care how these efforts fit into the corporate vision – as long as your project is funded and your project resources are allocated? These are questions I often ask teams who engage my services to facilitate project scope and requirement definition meetings for their projects. Typical answers I receive for these questions are:

• “I’m not sure how this initiative fits in; most of the efforts we work on appear to be randomly selected.”
• “I have never seen our Strategic Plan so I don’t know how our project solution will contribute to the corporate direction. I just trust that my manager knows how the project fits in.”
• “I assume most of the initiatives we work on support our strategy, but I’m not sure how to validate this assumption.”
• “We select projects based on which sponsor has the most money or screams the loudest about their needs (i.e., the “squeaky wheel gets the grease” mentality).”

Upon hearing these responses, I remind the project stakeholders that there are going to be many choices which will need to be made throughout the life of the project (e.g., Should this requirement be included or excluded from the project work? Which approach should we adopt for the solution? Is this new request scope creep?). When stakeholders lack clarity and alignment on why a project has been funded, any decisions they make regarding project scope and project outcomes will be difficult to make and will likely appear to be right for the project. In retrospect, after the project solution is implemented, it may become apparent that those project decisions were actually wrong for the organization and the delivered solution does not support the corporate strategic direction. In addition to being able to make informed decisions during the project, is the need to ensure that the most beneficial initiatives are those which are receiving the funding and being implemented first? Working effectively and efficiently on projects is not the same as working effectively and efficiently on the “right projects.”

This paper demonstrates how two components of the Strategic Plan, objectives and goals, are used to align project stakeholders on how proposed initiatives and their projects fit and support the organization’s Strategic Plan. The paper describes methods using information in the plan as a foundation for project managers to make better decisions to control project scope and select the best solution to deliver the project needs. This paper describes how to evaluate and prioritize a list of proposed initiatives to ensure that funding decision makers are selecting the right initiatives at the right time, which will provide the most value for the organization. The paper describes how the use of a two dimensional initiatives prioritization technique, which contrasts the “value of each change” with the organization’s “readiness to implement each change,” will improve the confidence that project selection and funding decisions are selecting the “right projects” for the organization.

Improving Project Decision Making

“Strategic planning is a tool for organizing the present on the basis of the projections of the desired future. That is, a strategic plan is a road map to lead an organization from where it is now to where it would like to be in five or ten years” (Suno, 2006, p1, ¶1). The strategic plan projects the organization’s desired future state at multiple levels of detail. Project stakeholders must be able to refer to these future state desires and projections when making project decisions related to scope management. The strategic plan is the foundational source of information required for stakeholders to identify the right project solutions, which will deliver the highest value to the organization. There are two levels of direction setting details in the plan that can be used by project teams when making project scope decisions:

• Objectives, which span multiple functions of the organization and describe outcomes that, when achieved, will bring the organization closer to realizing its publicized vision.
• Goals, which are established by departments or teams and indicate how these entities will commit to and contribute toward achieving the outcomes defined by the objectives.

The Influence Of Objectives On Project Decisions

At the beginning of a strategic planning activity, the organization establishes a vision that focuses attention on the desired future state. This vision is formalized with the vision statement. A well-written vision statement enables the people associated with the organization (employees, directors, customers, vendors, etc.) to formulate a picture in their minds of what the organization will look like in the future (typically three to five years down the road). An insightful vision statement is written as a positive affirmation statement, in the present tense, as if the future state has been achieved already. This allows people to immediately sense and even feel what the future will be like; however, the vision statement does not include a prescriptive description for how this future state will actually be achieved.

The value of writing a highly visual yet non-prescriptive vision statement is to allow stakeholders participating in strategic planning activity to rally around a shared focus of the future as they write the objectives of the strategic plan. Objectives clarify and quantify the direction (increase, expand, reduce, minimize, etc.) of the desired changes needed to actually reach the future state. Objectives establish the framework for pursuing change within an organization and solicit a commitment, throughout the entities of the organization, to set goals and define and execute initiatives which will deliver the actual changes. “Organizations are able to change their operations, products, or systems by creating strategic business initiatives which are implemented through projects” (PMBOK 5^th Edition, 2013, p 38).

An aligned sense of purpose exists when initiatives and their projects are mapped directly, or indirectly through goals, to the objectives in the strategic plan. This sense of purpose, when leveraged by project teams, will allow them to answer the questions they most often ask during the project execution such as:

• “Why are we doing this project?”
• “What is the reasoning behind the changes we are expected to make?”
• “How do I know if I am making the right decisions on this project?”

Being able to answer these questions is invaluable to project stakeholders as they may be weighing various options (i.e., approaches and solutions) for implementing their project’s needs (i.e., business requirements). Whenever a clear tie between an initiative and one or more objectives cannot be established, as shown in Exhibit 2, the question should be asked, “why is this project being funded?” Frankly, these types of projects should never be funded. “Organizational strategy should provide guidance and direction to the project management – especially when one considers that projects exist to support organizational strategies” (PMBOK 5^th Edition, 2013, p 41).

Establishing Project Boundaries With Goals

Goals establish the operational milestones that entities (e.g., divisions, departments, teams, etc.) aim to achieve through initiatives and projects, in order to contribute to the changes identified in the objectives. A goal is likely to have multiple initiatives, which. may have multiple projects identified and prioritized. Because initiatives are tied to goals, they are also tied to the objectives each goal supports. While objectives describe the direction of change that is being pursued, goals describe the commitment to a scope of work that will be undertaken to produce the desired changes.

Goals set the boundaries around which operations, products or systems will be changed when the goal is accomplished. Any efforts (e.g., initiatives and projects) that fall outside the boundaries established by the goal are, by default, out of scope to be funded. Likewise, as projects are funded and executed, any requirements that fall outside the boundaries set by the goals should be excluded from the projects. Goals are one of the components most directly tied to a strategic plan, which will improve a project team’s ability to make informed and substantiated scoping decisions.

I will demonstrate the application of this concept with a simple example for a home remodel effort, as shown in Exhibit 1. Assume we are a homeowner desiring to relocate to an another city in two years. In order to relocate, we need to make updates to our existing home to increase its value so that we can sell it for $350,000 by the end of 2015. We create an objective (OBJ-001), which states our need to increase the value of the home so it can be sold for at least $350,000.00 by the end of 2015. We plan on completing several remodeling projects which will improve the marketability and overall value of the home as well. Since we will not be moving for two years, we decide to create a second objective (OBJ-002) focused on our passion for entertaining. The result of achieving this objective will expand our capacity to entertain up to fifteen guests at home during the next two years.

To close the gap between the current and future home values, we created three remodeling goals that are tied to OBJ-001 (goal-001 – kitchen remodel, goal-002 - pool upgrade, and goal-003 – landscape update). All three of these goals will implement changes that will increase the marketability of the home. Goal-001 can also be tied to OBJ-002, the entertainment objective. Because of this additional relationship between Goal-001 and the two Objectives, we may decide to focus on completing goal–001 first.

The example also shows that three initiatives were proposed and mapped to one or more goals. These initiatives provide a narrower set of boundaries around the remodeling work efforts. The existence of these three goals provides valuable information for the remodeling team, enabling them to understand the timing of the work and the types of changes which are in scope and out of scope for each initiative tied to the goals. There is now substantiated information not only for the relevance of each initiative clarifying how each contributes toward the objectives, but also information to drive the timing of the Initiatives.

Notice that INIT-003 is not mapped to any goal or objective. Because of this, we can assume that these changes do not contribute toward achieving either of the objective’s desired results – increasing the value of the home so it can be sold or expanding the entertainment capabilities. Does this mean that the furniture changes should never be done? Probably not, but it does mean that this effort should not be funded or included as part of the remodeling scope of work.

Exhibit 1. Home remodel: Relationship of objective, goal and initiative

Justifying And Prioritizing The Initiatives In The Initiatives Register

The value of associating an initiative and its projects to the strategic plan should be clearer now in terms of how project decision making is enhanced. This concept can be leveraged even further to justify and prioritize every initiative that is included on an initiatives register. Any initiative that is added to the initiatives register should only remain on the register if it is clear how the initiative provides a path to achieving the vision outlined in the strategic plan. This path is established as each initiative is mapped to one or more objectives in the strategic plan and to one or more goals. When stakeholders seek funding approval from a project sponsor for an initiative and its projects, these stakeholders can reliably communicate the value and relevance the initiative will bring to the organization by showing how it is tied to objectives and goals and; therefore, the strategic direction of the organization.

Exhibit 2. Initiatives register tied to the strategic plan

Over the past fifteen years of helping many organizations define their process improvement initiatives, I have found the planning stakeholders possess an enhanced level of confidence with justifying their requests for funding as a result of successfully mapping every initiative to their strategic plan. Likewise, there are also the occasional “aha moments” during the strategic plan / initiatives mapping activity, when stakeholders realize some of their proposed initiatives have no actual tie to an objective or a goal in the strategic plan. While these initiatives seemed like great ideas at the time when they were defined, they must be removed from the register or placed on hold until a substantiated reason to fund them can be identified.

I encourage stakeholders to expand on their clarification of each initiative by adding high-level scoping information in the initiatives register. This scoping information includes assumptions, constraints and critical success factors associated with each initiative, as illustrated in Exhibit 2. This level of scope information is often readily available to the stakeholders at the time the initiatives are being defined. When these scope elements cannot be identified, this may be an early warning sign that the initiative has not been fully thought out or vetted amongst the stakeholders and; therefore, is not clearly or commonly understood.

At this early stage of initiative definition, the assumptions will draw out the presumed decisions related to the types of organization changes, which are likely to remain outside the scope of the improvement effort. The constraints will clarify any known limitations that are expected to be imposed on the project solution, if any, or on the method of executing the project. The critical success factors will communicate the two or three outcomes which must be realized at the end of the project in order for the project to be considered a success. In addition to clarifying the initiative intent, this additional information provides creates the basis for writing project charters, which are required for every funded.

Prioritizing The Initiatives Register

Project success can be defined as creating and implementing a project solution within budget, on time, and delivers the expected functionality defined by the impacted stakeholders. The fact that these success milestones have occurred for any given project does not hold the same value to an organization as achieving project success on the “right projects.” What makes a project the “right project?” I believe the right projects are those which deliver the highest value to the organization and its customers at the earliest possible time they are prepared to utilize this value. Deciding which initiative to fund before others can be accomplished by clarifying how each initiative stacks up to other initiatives on the register. There are two perspectives of prioritization criteria I recommend using:

• Strategic Importance - a measurement focused on value to be delivered to the organization and its customers, and
• Ease of Implementation – a focus on how ready the organization is to acquire or develop and implement the change.

Establishing Initiative Prioritization Criteria

• When developing the strategic importance criteria, consider using key performance indicators (KPIs) related to high customer value as scoreable criteria elements. Several years ago, I was working with the product development division of a large financial company on a multi-year process improvement effort. When they were ready to rank a list of 100+ initiatives, they prioritized the initiatives based on strategic importance and ease of implementation. For strategic importance, they selected five existing KPIs as their criteria since these were already tied to their performance related to providing high customer value:
• Business Growth,
• Business Scope,
• Profitability,
• Market Differentiation, and
• Learning / Development Opportunities.

They also selected five criteria for ease of implementing the initiative’s solution:

• Implementation Readiness,
• Calendar Time to Implement,
• Business Process Complexity,
• Systems / Technology Complexity, and
• Implementation Leadership.

While these ease of implementation criteria were not KPIs for the product development division, they had successfully used the criteria on past efforts to gauge how ready their organization was to implement and utilize process improvements. As illustrated in Exhibit 3 each of the five criteria elements was made objective by adding short bullets to describe what was being measured and how much change was associated with the measure. Each criteria was then assigned a score values of 5, 3 or 1 with measurement outcome descriptions to enable the raters to know what value to assign to each initiative. The measurement descriptions provided example ranges quantifying the different levels of expected value the initiative would contribute to the organization and how implementable each initiative was expected to be.

Exhibit 3. Strategic importance criteria

Exhibit 4. Ease of implementation criteria

Weights can be assigned to each criteria element to draw out the relative importance of each criteria to the overall measurement perspective they fall under (strategic importance or ease of implementation). Raw scores are initially assigned to an initiative, which are adjusted by the weight percentages – increasing or reducing the assigned score. Weighting allows for more important criteria scores to have a stronger influence on the overall score for the initiative. Once the scoring activity is complete, the total score value for strategic importance and the total score value from ease of implementation perspectives are documented on scoring columns that are added to the initiatives register. By including the scores for each initiative as information on the register, the register can be sorted and viewed from multiple perspectives based on the focus of the funding decision activity: highest value initiatives, the easiest to implement initiatives or the overall highest scoring initiatives.

Identifying the “Right Project”

One of the “best prioritization practices” I have come across in my practice, which I encourage my customers to adopt, is plotting the scored initiatives on a graph using a multi-dimensional filter that contrasts strategic importance and ease of implementation. This filter enables the funding decision makers to compare and evaluate the initiatives against one another beyond the simpler two perspective viewpoint; namely, which has the highest value or which is the easiest to implement. Using the scores from these two scoring perspectives, the initiatives are plotted into one of four assessment quadrants on the graph:

• Less Difficult Implementation / Low Customer Value;
• Less Difficult Implementation / High Customer Value;
• More Difficult Implementation / Low Customer Value; or
• More Difficult Implementation / High Customer Value.

Strategic Importance / Value To The Customer is plotted along the horizontal y-axis of the graph and Ease to Implement is plotted along the vertical x-axis of the graph as illustrated in Exhibit 5. This graph enables funding decision makers to readily see how each of the initiatives scored. Their attention will most often go to the top right quadrant of the graph (Less Difficult Implementation / High Customer Value); however, they may also be interested in those initiatives considered to be “low hanging fruit” or those initiatives that are quick to implement even though they have lower customer / organization value. In essence, this tool provides decision makers with a more effective tool for selecting the “right initiatives” to fund.

Referring back to Exhibit 2, Initiative INIT-K03 is tied to the strategy of the organization, but knowing that fact is not necessarily all that is needed when deciding if or when to fund the initiative. Looking at Exhibit 5, INIT- K03 falls into the Less Difficult Implementation / Low Customer Value quadrant. If the funding attention is “currently” on High Customer Value Initiatives, then INIT-K03 is not the best choice to receive a green light for funding.

Exhibit 5. Plotting scored initiatives

Looking at the top right quadrant (Less Difficult Implementation / High Customer Value), we see that five other initiatives (E-03, E-07, E-05, E-08 and H-02) not only compare favorably with INIT-K03 from an ease of implementation viewpoint, but also provide a significantly higher value to the customer. Initiative A-02 (Campaign change consequences) may be the best choice to fund first because of the balance it provides between high value to the customer with being ranked as one of the easiest initiatives to implement.

Notice I used the word “currently” in the prior paragraph regarding funding intention. It is not uncommon for the funding focus of an organization to shift from one funding period to another or even within funding periods. Plotting scored initiatives into the four quadrants discussed in this paper, will enhance the agility of decision makers to shift their focus on what constitutes the “right projects” to fund, based on the most current funding interest.

Summary

This paper discussed the relationship that exists between initiatives and their related projects with the strategic vision of the organization and its focus on introducing change. The need for the change is in direct correlation to the goal commitments established by departments or teams throughout the organization. The accomplishment of initiatives, which are tied to the goals, directly contributes to achieving the organization level changes represented by the strategic plan’s objectives, which are in turn driven by the plan’s vision statement. By clarifying how each initiative contributes toward achieving the vision of the organization, it becomes clear to project stakeholders why their project was initiated and the nature and amount of change they are expected to deliver. This alignment is the foundation upon which project team member’s decision making abilities will rest as they weigh options for including or excluding project scope as well as evaluating the options that are the most appropriate for their project solution. It is only through this alignment and clarity of purpose that project stakeholders are able to feel confident that the project choices they make and the solutions they choose to implement are correct and will contribute to achieving the future vision of the organization.

This paper acknowledged that initiatives and their related projects only exist for the purpose of introducing change. Working efficiently to complete projects successfully is less important than working efficiently and successfully completing the “right projects.” The “right projects” are those which deliver the highest value change at the most appropriate time. Techniques were presented for mapping initiatives to the objectives and goals in the strategic plan in order to substantiate the relevance of every initiative to the organization. The use of a two dimensional initiative prioritization technique was presented as method to reduce subjectivity when ranking an initiative’s strategic importance to the organization as well as the readiness of the organization to implement and embrace the new change. This paper demonstrated a technique of contrasting strategic importance with ease of implementation to establish an even more objective multi-dimensional filter for comparing initiatives against each other based on four perspectives:

• Less Difficult Implementation / Low Customer Value,
• Less Difficult Implementation / High Customer Value,
• More Difficult Implementation / Low Customer Value, and
• More Difficult Implementation / High Customer Value.

When applied consistently in an organization, all of the techniques described and demonstrated in this paper can serve as the key to ensuring that funding decisions and resource assignments are allocated to the “right projects” at the right time.