The corporate Trojan horse

how can project management revive your staretgic [i.e. strategic] management function

Abstract

The concepts of strategy and project management need not go head to head against each other. They can play a complimentary role to each other. Organisations can greatly leverage on the more structured framework of project management to enable for the successful installation of their strategic management function. Strategy, by its nature, is irregular, to use mathematical terminology, which makes it relatively unattractive to most. Its reward cannot be easily conceived due to its long term nature. As a remedial action, the strategic management activities can be organisaed within a framework that is more familiar to people. Organisations leaders can utilise the euphoria of “implementing” a strategy to steer the organisations towards a more effective and structured strategic management function. The paper discusses how can organisations rekindle their strategic management function through project management activities brought on the environment during the implementation phase. We look into how a company's project support unit can be the caterpillar for the butterfly of the strategic management department.

Introduction

The word “strategy” is probably one of the most used, and abused, terms in today's business environment all across the globe. Executives use it to describe what they call the company's future and employees receive their words with a great degree of passiveness. The fact that strategy looks into the future and try to lay out the plan for the next coming three to five years makes it an unattractive proposition for managers and employees alike, who prefer a more recent solution yielding tangible solutions to their present problems.

So organisations set out to establish a strategy function to accommodate the need for future outlook planning, some call it Strategic Management others refer to it as Strategic Planning and a number of institutes give it a “sexy” name such as the Labour party's Blue Sky Unit. But no matter what name you give it, the successes of your strategic management function will solely rely upon the active participation of the whole organisation's elements. Its success is measured by the level of acceptance demonstrated by the various departments in your organisation.

There are numerous tools available for today's managers helping them to improve their organisation's performance. Techniques and approaches such as the total quality management (TQM), six sigma, just in time (JIT), the EFQM excellence model, business process re-engineering (BPR), and many more, aim to find the lost formula for success in corporate life. The very fact that we have a number of these indicates that there is something wrong here. However, project management techniques enjoy a unique trait not present in any of its peers. Project management is a way of organisational life, a religion that can not only coexist with any initiative, but actually help implementing it. All these initiatives need to happen within the broad framework of the organisation's strategy. So can project management actually help strategy efforts? We believe that project management techniques can be a great enabler for installing a strategic management function within any organisation. It can be the Trojan horse for strategy.

Any organisation involved in any type of strategic planning activities will be looking at issues such as scope definition, cost control, quality planning, communication, roles and responsibilities assignment, procurement and risk. These are the major pain areas in most organisations today and they happen to be the major elements of our beloved A Guide to the Project Management Body of Knowledge (PMBOK® Guide) framework.

The Strategic Management Cycle

The function of the strategic management aims to instill a culture of strategic thinking and planning across all levels of an organisation. Strategic planning is no longer the responsibility of senior executives. Operational managers should be involved in formulating and implementing the company's strategy. The terms we use to describe strategy activities such as strategy formulation, Strategic planning, or strategy implementation can be confusing to the majority of people. The diagram shown below (Exhibit 1) summarizes the key processes taking place within the Strategic management framework.

The cycle begins with the basic direction clarification, i.e. the organisation needs to find what is called its “driving force”. This will give it an initial launching platform and help it define what markets it will, and will not, serve as well as what products/services it will, and will not, offer. A driving force of “operational capability”, for example, means that the organisation has the built-in ability of operational excellence that sets it apart from its competition.

Now that the organisation has formed a rough idea about its “uniqueness” or its differentiation factor, it must start painting the bigger picture of its environment. This is the stage where the organisation needs to scan both its internal and external environments which will call for a more rigorous research studies requiring more resources.

The Strategic Management Lifecycle

Exhibit 1. The Strategic Management Lifecycle

Once the organisation has completed the environmental scanning process, it will then look into describing in more details its potential paths into the future. The strengths, opportunities, weaknesses and threats (SWOT) identified in the earlier step will be a great determinant of this direction. Once various options are laid out, a process to evaluate and select one of these options will then be carried out. The chosen option represents the road an organisation is willing to take in its “strategic” trip. It is usually the most suitable road to the organisation's internal resources and external markets.

If the organisation is happy with its overall direction setting, and has confirmed the specific option to realise this direction, then the implementation process begins. This is when the actual strategy gets “done” and tangible deliverables are produced. The “doing” part of the strategy is translated in the form of a portfolio of projects that are identified as the bridge towards creating the environment, internally, to equip the organisation with the required tools for its strategy journey. The majority of strategic projects have an inward orientation most of the time.

Once the strategy implementation efforts are underway, parallel activities are initiated to manage the change process. The changes introduced as a result of the projects deliverables can really upset the organisation's equilibrium and if not managed wisely, will cause a great discomfort and hence put a great strain on the whole strategy function. Managing changes associated with the strategic management changes means constantly revisiting your strategic direction and hence the whole paradigm of your strategy. The feedback arrows show the constant revision needed to update the initial assumptions made by an organisation throughout the process.

We can also classify the activities carried out during the Strategic management cycle into three areas. There is an initial “information-gathering” set of activities that take place represented by the red colour. Then the organisation goes through a cycle of identifying, evaluating and choosing of various options. This can be described as a “decision-making” group of activities shown in Exhibit 1 in green. The final group of activates are of “project-support” nature where a typical set of project management tools and techniques are adopted to support the projects environment. The blue boxes' activities in Exhibit 1 can be carried out through a typical Project Management Office (PMO) setup.

The strategic management lifecycle is the ultimate aim for an organisation to realise its strategy. However, despite the apparent simplicity, it poses a great challenge to follow it in reality. It is not a smooth ride when it comes to instilling a new way of doing business. The classical change management challenges hinder the straightforward process.

Hostility towards Strategy. It's only Human

The classical approach of trying to smoothly take the organisation through the lifecycle illustrated in Exhibit 1 proved to be almost impossible. The majority of employees feel some sort of resentment towards any strategic management activities. The major factor behind this is due to the nature strategy paradigm itself. Strategy has a quite long term return-on-effort, which means that the majority of the present work force has only a slim chance of enjoying the fruits of the present strategic efforts. Can this be the main reason behind the support demonstrated by younger generation as compared to the resistance of the older ones within most organisations?

Strategy is working out a roadmap towards achieving an organisation's objectives. It is also defined as a framework of choices that determines an organisation's nature and direction. These definitions are fairly straightforward to read; however, when it comes to actually realising this, the subject is not as straightforward.

In order to gain a better understanding of why most organisations struggle to inject some type of strategic management into their daily operation, we need to look closely into the definition of the term “strategic management”. Strategy usually has three components; process, content and context. These components address the questions of HOW to develop the strategy, WHAT should be the content of our strategy, and WHERE (in which areas) to implement the strategy respectively.

Organisations citizens usually have their own interpretation of each of the above three components. The tension resulting from these varying, and sometimes conflicting, views of strategy creates the usual pockets of resistance we usually experience during both the formulation and implementation phases. Questions such as: Should we let our markets or our resources determine our direction? Should we compete against or coordinate with our competitors? Should changes be introduced in an evolutionary or revolutionary fashion? and many more questions posing a puzzle to today's organisations.

Strategy Implementation Group. Heroes or Villains

The strategy implementation phase is a very sensitive one compared to all previous phases in the strategic management lifecycle. It requires careful planning and preparing the environment for success. Here is where strategy is taken to the crowds, and it is here that an organisation will make or break it.

Companies usually elect a group of project managers to take the responsibility of executing the portfolio of projects brought on to them by the strategy formulation process. This group can also help in fine-tuning the projects' initiation documents to allow for a much better scope definition. But that is about it, there is little this group can do about appraising the projects and assessing its value.

The big challenge laid on the shoulders of this group of employees is represented by the fact that they did not really have a say in neither the nature of projects they are implementing or the prioritization of these. The majority of the organisation's employees do not know this piece of fact. This is very significant as the attitude of people will have a great impact on the strategy. So a wise move to be made initially by any implementation team should be an intensive series of knowledge sharing sessions to explain the whole process and the specific role of this team in that process.

The majority of employees felt that the strategy will yield good results. How, when, where? They were not sure. This put the team under an immense pressure to deliver, and do so fast. The most popular strategic project of all is the one dealing with HR related issues. This can also be a useful leverage point.

The process of implementing a strategy has project management in the heart of it. Project managers are assigned projects that they have to define, plan, and execute using typical project management tools and techniques. The PMBOK® Guide is an ever present reference in these environments.

The fact that an organisation is new to project management techniques makes the implementation team's job a nightmare. There is no common language between them and the operational managers. They are asked to implement projects by adopting techniques that are not tolerated within the current operation environment.

In our case, the resistance faced by us as Strategy Implementation Group was largely due to a lack of communication from our end. The picture was not fully displayed or described to the majority of the stakeholders. Few people had a complete picture and a full understanding of what we were trying to do. This was a great example of how obstacles encountered by strategy implementation teams are, most of the time, actually created by the team members' failure to effectively address the communication issue.

On top of the classical hostility administered by most organisations towards strategy, we were faced by the usual challenges associated with projects. Some of these are:

  • No controls present
  • Mismatch between expectations and deliverables
  • Lack of coordination between key elements
  • Requirements suffer from scope creep
  • Poor communication
  • Project complexity is usually underestimated
  • Formal project management education is lacking
  • Weak implementation strategy for projects
  • Unclear roles and responsibilities
  • No commitment from leadership and sponsors

The Roadmap Back to Strategic Management

Regardless of which theory an organisation adopts in its strategic planning approach, there is always an inevitable situation when all organisations reach a stage where there are projects on the ground being implemented. This stage is reached as a result of the dash towards results and tangible deliverables. This is the common point where strategic management meets project management and our research has shown that this is the stage where project management can act as a gateway to the lifecycle of strategic management.

The fact that organisations believe that they need to complete the projects on hand does not necessarily reflect their level of belief in the corporate strategy vision and mission. Humans are addicted to “doing” things. You give any human “something” to do and they do it, or at least embark on doing it. So, and despite all the problems associated with introducing strategy into the organisation's environment, companies always, somehow, manage to make it to the implementation phase.

Because projects touch the daily operation across most business units, operational managers are more willing to interact with the activity, sometimes, with some apprehensiveness. However, they usually, at least, do so. We leveraged on this fact to use it as an entry point back into the strategic management process.

By encouraging managers to look a little bit closer into their individual function project's goals and objectives, the strategy implementation team can help them gain a better idea about where does this fit in relation to other live projects. For example, deliverables from the Human Resource System project will be used as an input to the Finance Systems project. Both projects will then be considered as a prerequisite for the Information Technology System project and so on. By continuing to aggregate projects and categorising their impact on the organisation, we will be able to form a picture about the overall direction that the organisation is heading towards. For example, if we have a project looking into establishing a Reward and Appraisal system, it becomes clear that the organisation would like to adopt a Management-By-Objective (MBO) approach in the near future.

Once all projects are reviewed and directions assessed and communicated to all operational managers, we then start sharing our thoughts about how viable this direction is to the organisation. This question will automatically lead the participants to look into the organisation's internal capabilities (resources) and compare these to the external environment demands (market) in order to gain a better idea about its chances in achieving what it set out to do.

When managers reach a point where they feel that they need more rigorous information about their organisation's capabilities as well as intelligence about external markets and competitions, they are already involved in the process of strategic management. The strategy implementation team should be able to sense such Behaviour early enough in order to have the supply ready once the demand materialises. It was essential to have some sort of a function to take care of this area once enough interest is generated.

In our case, managers were able to get in touch with the Project Support Unit and seek help in collecting information about the external environment. The Project Support Unit then introduced an Information Services Unit which was promoted as a “complimentary” function to the Project Support Unit. The unit was ready to receive the requests from managers seeking key intelligence about specific markets. The Competitive Intelligence Unit reports played a key role in getting operational managers into the loop of strategic management.

When management receives information about competition this usually call for a more proactive management style to be better prepared for competition moves. Managers then seek help with the process of making a decision about a particular issue. This where the New Ventures Unit was born. The unit had a methodology designed to guide management in the process of making a decision based on the external market demand and the organisation's internal capabilities. Once managers feel that they are at a crossroad, the New Ventures Unit will play a facilitating role in helping them make or reach a decision.

The initial act of projects evaluation led to the eventual management's active involvement in the process of strategic management. The key success factor here was the readiness of the Project Support Unit and the speed of providing the relevant service once the initial request is placed. Anticipating what the environment needs was of paramount importance. Operational managers are very busy people and they quickly lose interest if a delay is experienced between placing a request and the delivery of the product or service.

The Project Support Unit (PSU) now has two more functions attached to it, and they are perceived as very useful too. The organisation's operational managers are loving it. They keep coming back with more requests and queries. The function now needs to be tighten up and lay out a more logical structure to allow for a more efficient and effective delivery of services for all stakeholders. This is where we can now introduce the term “strategic management” to the organisation. The Trojan Horse has now started its serene assault.

The Evolution from Project Support Unit to Strategic Management Department

The establishment of a Strategic Management Department was one of the projects identified as essential for a successful implementation of the company's strategy. One of the key components for executing and sustaining a successful strategic management activity is having a full-time function overlooking this activity. The department is expected to do the following:

  • Overlook the strategy process across the company
  • Gather and analyse strategic intelligence
  • Monitor the company's key indicators of strategic success
  • Research into new business opportunity and develop feasibility studies
  • Support the implementation of the company's and the business units' strategies.
  • Run the programme and project office

Despite being one of eight projects that are approved by the Board for execution, we opted to follow a different route to establish the department. Rather than embarking on designing the process for the department, acquiring resources and launching our services in a solicitation fashion, we invested most of our efforts in creating an environment which calls for such a department's services.

The initial Project Support Unit was providing a typical suite of services expected from any standard “PMO”. Services were ranging from: projects documentation, reporting structure, project managers coaching, templates, methodology support and others. The Project Support Unit was staffed by three full time employees and three part timers.

The Project Support Unit Function

Exhibit 2 The Project Support Unit Function

The project support unit function was communicated to the stakeholders as one that aims to link and align the operational environment's activates to the organisation's overall vision through a number of services such as a methodology to guide execution, training to project managers, distraction support and others as depicted in Exhibit 2. One of the service lines bears the title “strategy” which aims to educate operational managers and supervisors about how the projects, being implemented at present, contribute towards the strategic direction of the organisation. The Project Support Unit was able to evolve into a potential strategic management department.

Once we felt that there was enough energy generated and people within the organisation are interested in activities of a “strategic” nature, the proposal for establishing a Strategic Management Department was pushed to the Board of Directors for official announcement. The new department consolidated the already existing three units into a single name: Strategic Management Department (SMD). Each unit addresses a specific function within the strategic management lifecycle displayed in Exhibit 1. The information gathering related processes are taken care by the Competitive Intelligence Unit; the New Ventures Unit will address the decision-making processes area; and the Project Support Unit will provide technical support for the strategic projects.

The new Strategic Management Department now consisted of three units. It houses six full time staff members and three part-timers working for it:

The Competitive Intelligence Unit will provide senior corporate decision-makers with intelligence on the actions and behaviour, capabilities and intentions of the company's competitors. It will also provide knowledge on internal factors in the environment, which can significantly impact business. Intelligence will be disseminated in an ongoing, systematic fashion to facilitate effective and proactive decision-making. CI department, personnel and consultants will abide by all legal and corporate ethical standards.

The New Venture Unit facilitates the decision-making process by providing a mechanism consisting of a number of tools and supervised by a number of portfolio managers who are constantly fed with data from the Competitive Intelligence Unit to help them make decision on investment and future business decision.

The Project Support Unit is the execution arm of the department. It will overlook the implementation of strategic projects as well as acting as an archive for historic information. The development and maintenance of the methodology used to initiate, plan, execute, control and close projects will be the unit's responsibility. The unit will also cater for coaching and mentoring the company's project managers.

The department was placed in the organisation's Headquarters and report directly to the Board of Directors.

Enabling Success. Critical Success Factors

It is always useful to have some sort of a measurement tool in place if you really wish to effectively manage your assigned department. The European Forum for Quality Management introduced a simple model based on the premises that for an organisation to produce positive desired results in the areas of its market, customers, employees and other vital key business areas, then it has to seek a strong leadership that develops a vision which must then be implemented through a set of clearly set policies and strategies. There is also a need for a strong set of processes, key partnerships, and sufficient resources to support that vision. Organisations also need excellent people to realise their strategies. We can identify five enablers that form the critical success factors for a satisfying implementation of our project support unit that, eventually, evolved into the strategic management department. Exhibit 3 below illustrates the relationship between the five enablers and displays the four main results we use to measure our performance against.

Leadership

This is the beacon light for any initiative. If the organisation's most senior leaders are not prepared to take that role on and be the first to face disaster and the last to accept praise, the PMO function will stay in a state of dizziness for s long as its leadership is behaving like a lost ship in the middle of the sea. The titanic had all the necessary equipment and tools in place; it was built like no other ship. But those “gadgets” did not save it from a fatal Leadership error; misjudgment.

One of the very interesting behaviours that human being exhibit at times of disasters are directly related to the animal kingdom, in which most scientific theories have us as full-time members. Individuals tend to gather in groups when faced by danger. In modern organizations they form a committee. What these committees are basically manifesting is a very simple message: “together we share the responsibility”, but what it is actually doing is “sharing the load of the responsibility” Nice move and very romantic indeed. However, what they end up doing is breaking down the load to an extent where it is diluted and eventually disappears. The result is a passive group of people that has no power to do anything but to call for meetings. The lesson we can draw here is that we should avoid “committee”ing ourselves whenever faced by a problem. Instead, leadership traits should be demonstrated at difficult times to steer the organisation away from danger.

The way out of this dilemma is to form a community of employees and not a committee of managers. All managers are employees, but not all employees are managers. The role of leadership during these difficult times is paramount. During a difficult game of any sports competition, players look up to their “field” leadership to provide them with guidance when things get tough in the field. The executives sitting up in the executive air-conditioned, sound-proof boxes, protected from the heat and cold, wearing their Armani suits and talking on their expensive mobile phones, are part of the decoration.

Leadership has always been identified as the art of making people wanting to follow you. How can I follow an isolated individual? We tend to believe in people who share our joy and sadness. We move closer to those who will protect our interests. We listen to those who respect us. Leadership is one great myth in organizations where no such behaviours are exhibited. Leading the PMO effort has to be exemplary in nature if the PMO is to stand any chance of survival in an environment not short of management initiatives.

People

This is a vital, yet ignored, success factor, not only in our organization, but also in the majority of similar organizations. In order to address the People issue in organisation, training is an important element. In most organisations, training is not necessarily tied to budgets. It has to be if we wish to achieve excellence in customer service. One myth that has been experienced by most of us for a long time is the perception that training is the Training Department's responsibility. In fact one of the training department's objectives could read as “Obtain Training from the PMO on new methodology”. We will be committing a big mistake if we assume that training is something that the Training department alone is responsible for. I think that the titles of the departments have been a little bit misleading so far. Another example is the Operations department that bears a department's title that according to management books is responsible for the day-to-day running of the organization! The PMO will be playing an integral part of the Strategy implementation practice, and it needs to be well equipped to do so through a proper competency-building plan for its people.

Policy and Strategy

Any initiative needs to operate from a carefully drafted plan. The underlying strategy needs to be based on the needs of those stakeholders whom the initiative is aimed for. People, by their nature, hate rules and orders. They can relate to those guidelines that enable them to achieve their objectives more effectively.

Policies and strategies to guide the establishment of any of the units mentioned earlier need to be realistic and logical. Organisations must carefully assess their capabilities and then formulate their policies and strategies. Establishing a PMO or any other function needs well formed strategy to guide the process. These strategies must be constantly reviewed and updated.

Another key factor in achieving a successful implementation is the communication part. It is one thing formulating and documenting your policy and strategy, but unless these are communicated, they are as good as none existing. Organisations need to ensure a full visibility of these guidelines and spent every effort to reach every single individual in the organisation.

The European Forum for Quality Management's Excellence Model

Exhibit 3 The European Forum for Quality Management's Excellence Model

Process

It is vital that the Project Support Unit, and the eventual Strategic Management Department, have a clear set of processes in place before it launches its services. The steps needed to deliver a service must be clear and transparent to the entire unit's support staff. An engagement plan should combine all these processes in a coherent set of activities to allow for a streamlined service delivery.

Process mapping, automating and optimising is a key activity when it comes to building a successful service model. Establishing the competitive intelligence, new venture, and the project support units called for an intensive effort on the area of process design. Having your processes clearly laid in front of you will help massively in designing a stable unit with clear objectives and efficient processes.

Partnership and Resources

The team that builds the project support unit usually has little content knowledge about the subject. But this lack of knowledge does not prevent them from being a vital cog in the department's future machine. Their role will be valuable in securing the initial resources needed to launch the department's work as well as laying the foundation for the future partnerships needed by the units to succeed in its role.

Resource planning plays a vital role in establishing a successful PMO, and other support functions, because they provide guidelines in resource allocations and leveling; an area very critical to a successful and effective operation. HR will have a vital role to play here and will administer a bilateral relationship with the PMO.

Conclusion

Project management can be a great enabler for establishing a successful strategic management function. Not by typically applying its tools and techniques as a framework to set up the department as a project, but by applying its logic into guiding the organisation's key stakeholders back to the strategic management lifecycle.

Getting operational managers to embrace strategy is an uphill struggle when done the classical way. An evolutionary style approach means that they will choose to get involved in the strategic management activity through the project management gateway.

People within today's corporate environment are well educated about project management techniques. It is a more familiar subject and they feel a lot more comfortable discussing it as opposed to a subject such as strategy. Our experience showed that project management can be a great vehicle to take an organisation from a typical project implementation state to a full fledged strategic management approach by simply making that logical link between executing a single project and implementing a full strategy.

Today's organisations are constantly bombarded by management initiatives. We believe that project management can be the Rosetta stone that will decode all other initiatives aiming to improve a company's performance. This can be best demonstrated by looking into how can we leverage on the much trusted and well tested project management techniques to revive one of the most essential organisational performance improvement activities; strategic management.

References and Appendices

Ansoff, I. (1965), Corporate Strategy: An Analytic Approach to Business Policy for Growth and Expansion, McGraw-Hill

British Quality Foundation (1999). The EFQM Excellence Model. Publication manual of the Strategic Project Office from www.pmsolutions.com/services/office.htm

Englund R., Graham R., & Dinsmore P (2003) Creating The Project Office, A Manager's Guide to Leading Organisational Change : Wiley, John & Sons, Incorporated

Marsh, D.E. (2000) The Project & Programme Support Office Handbook – Volume 1 and 2.

Mintzberg, H. (1994, January-February), The Fall and Rise of Strategic Planning, Harvard Business Review, 72(1), 107-115.

Santosus,M. (2003)Why You Need a Project Management Office,
www.cio.com.au/index.php/id;464985391;fp;4;fpid;16

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 Mazin Abusin
Originally published as part of 2006 PMI Global Congress proceedings – Madrid, Spain

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