The right fit
BY JEFF MacINTYRE
PHOTO ILLUSTRATION BY MARK HOOPER
At its best, strategic planning enables an organization to chart its course and take flight, but project managers aren't just passengers along for the ride. Looking beyond scope, schedule and budget, the most adept project managers are keen observers of the organizational landscape they inhabit. Up at cruising altitude, appreciating the seamless cabin window view is easy. Reading the topography 40,000 feet below—on the ground, where projects happen—is not.
Keeping projects in sync with strategy remains a challenge for many organizations. Only 23 percent of nearly 150 global executives considered their project portfolios completely aligned with the core business strategy, according to the 2006 Adopting the Value Habit report by Deloitte Consulting LLP and the Economist Intelligence Unit. What's worse, only 14 percent reported being aligned and agile, with the processes needed to adjust their project portfolio as business needs change.
One of the big challenges is developing a common value creation frame-work that “allows you to both clearly articulate the business strategy and to show the alignment of the project portfolio to these strategies,” says Bob Dalton, principal at Deloitte Consulting LLP, Atlanta Ga., USA.
These tools are powerful not just for keeping the organization on track, but also for asking questions about the project's purpose that transcend revenue generation. Projects take all forms and shapes, and while they may not drive profitability, it is important that any analytical map of the projects in place recognize the sort of value they present.
ONLY 23 percent of nearly 150 global executives considered their project portfolios completely aligned with the core business strategy.
The ability of project managers to communicate the project benefit can mean the difference between landing on the map—and falling off of it. Yet many project managers simply aren't adept at assessing alignment. “The rarest and perhaps most meaningful skill is that of translating the corporate strategy and being able to tell a compelling story about your project in that language,” Mr. Dalton says. “A lot of projects fall down because their managers lack for that narrative. They can't tell me how their project drives shareholder value.”
Where to begin? In jump-starting the process, Mr. Dalton says project managers should identify the project's benefits to the organization and whether that value has been acknowledged. He admits “program managers are better suited to these kinds of skills, already having a [group] of projects they overlook.” They're also sometimes more adept at being able to express an understanding of the inherent connections between corporate values and the nuts and bolts of their own projects.
Assessing alignment must begin with understanding “the organization's view of success,” says Michael Schweitzer, PMP, project management facilitator at Chevron Thailand Exploration and Production Ltd., Bangkok, Thailand. He is also executive vice president of the PMI Bangkok, Thailand Chapter. In larger and longer-term projects, markets, stakeholders and sponsorship can change—and this often affects the perceived value of the project to the organization. “Value drivers can change and do change,” he says. “At the project manager level, you will see this at project status update meetings with senior management.” Even if the project's success criteria are clearly laid out at project initiation, perceptions can shift over time.
Mr. Schweitzer recommends finding an executive or sponsor who can help direct traffic and unsnarl any congestion between strategic vision and project delivery. “It's easy to lose the big picture, and that's where this person will be invaluable to a solid project manager,” he says.
Champions can also be found outside the executive suite, says Chioma Nnoli, PMP, head of the project management office, technology group at Guaranty Trust Bank Plc, Lagos, Nigeria. “We all know the vital value of the ‘halo effect’ among the most charismatic individuals in an organization,” she says. “Often, these people are not ‘senior’ enough or are placed in distant departments, but achieving their involvement means you can draw on their leadership competencies and their magnetic personalities.” Be careful not to completely outsource the responsibility for articulating project value, though.
Reaping the Benefits
However rare a skill, effectively translating and communicating your project's benefits in the language of organizational goals can:
- Leverage support from project sponsors and organizational leadership
- Strengthen stakeholder engagement
When Project Management IS THE STRATEGY
In the 10 years Carol Wright, PMP, has led IBM's Project Management Center of Excellence, Jamestown, R.I., USA, she has picked up some lessons about how to establish and maintain strategic alignment of her program with the company's organizational objectives.
start the alignment process at project initiation and use regular detailed check-ins, no matter where a program sits in the organization's list of priorities. “It is important early on to understand how your program and its projects directly affect the organization's long-term, strategic initiative,” she says. “Failure to draw the connection between the program, its projects and the strategic objectives can result in defining outcomes and deliverables too narrowly.”
request explicit and ongoing support from sponsors. IBM recognized the need for a steering committee, a move that Ms. Wright says allowed her program “to span the objectives of the entire corporation much more effectively than a single sponsor ever could. By growing from a single champion to a broader sponsorship and level of executive commitment, this committee, our key stakeholders, allowed us to more fully scope the program and its projects over the entire life cycle. You can maintain alignment of the program with the business objectives through the use of constant checkpoints and necessary change management.”
change your metrics over time to ensure progress is occurring. In Ms. Wright's case, as the center's success drew increased focus and bolstered expectations for skilled project managers, training targets were shifted to meet the increasing level of organizational maturity. “You have to be mature enough as a project management professional to recognize and accept that the next step to maintain alignment with the objectives may require a change in direction, deliverables or the associated metrics,” she says.
stay attuned to changes in the work environment. Each year, IBM business units and programs adjust plans in response to how the environment is affecting company's strategic objectives.
Consultants like Bob Dalton at Deloitte Consulting LLC come upon projects misaligned to organizational strategy all the time. “When we begin a portfolio optimization process, we often find strange things in the project inventory,” he says.
Just like those detectives in a film noir, Mr. Dalton has come to recognize the “crime scene” of misalignment all too well, and shares these common markers of an imperfect portfolio:
- * Many more projects than originally shown in the inventory provided
- * Inconsistent benefits quantification and benefits double-counting
- * Competing projects
- * “Interesting” projects that do not support wider objectives
- * Projects where cost exceeds the benefit expectation
- * Projects with a higher risk profile than others in the portfolio
- * Lack of benefits ownership and tracking against the plan
Keeping an eye on the project portfolio over time is important. “You don't need to re-optimize every week, but quarterly assessments are highly recommended,” he says. Otherwise, there is no opportunity for making adjustments and tracking continued alignment.
The suboptimal portfolio can often be traced back to simple communication failures, Mr. Dalton says. Deloitte's Adopting the Value Habit report found that only 30 percent of respondents work in organizations where “project approval is only granted when it is clearly understood how value is being generated.” Without asking the question, it's unrealistic to expect your project to present an answer.
- Raise the project's profile
- Enhance the project's benefits.
Those last two points are particularly noteworthy. Increased project visibility can draw new champions and resources. The process of alignment can itself identify overlooked or entirely new ways of making your project meaningful to the organization.
Ms. Nnoli recalls convincing a CIO sponsor to delay an IT project while she posed questions about how the project was intended to contribute to the organization's goals and generate value. Those questions prompted waves of interest outside the immediate environment. “It was only when this project received the attention it deserved that it was able to progress beyond the IT department,” she says.
Ensuring alignment can also be a matter of reserving a seat for project managers at executive strategy planning sessions, notes Ms. Nnoli. “In the past, project managers have been relegated to the background of these discussions. But some organizations are learning that the project manager role can be a big influencer of strategic alignment beyond the ranks of the organization's decision-makers.”
Ultimately, she says, “experience has taught me that projects that keep the big picture in view have a higher success rate.”
Alignment shouldn't just fall on project management, though. Achieving strategic objectives requires the understanding and engagement of everyone in the organization, says Michel Kalika, director of the Centre for Research in Management and Organization at Paris Dauphine University, Paris, France. Whether they do it by appealing to financial interests or pride, companies must “get people to support the organization and its objectives,” he says.
The Deloitte report advocates the use of a chief value officer, “a single high-level person responsible for aligning a company's strategic objectives with its processes, people, systems and projects.” Centralizing that responsibility helps with alignment while ensuring a solid focus on rewarding projects that support and advance strategic objectives. The presence of such a position is rare, however. The report found only 27 percent of the large organizations polled had a single person in such a role.
Strategy as Symphony
Whether as an executive or a project manager, the ability to decipher and articulate the organization's strategy helps ensure projects and their outcomes remain aligned to it.
That doesn't mean a lock-step march to the organization's drumbeat, though, says Herb Rubenstein, CEO of Growth Strategies Inc., a consulting firm in Golden, Colo., USA. Alignment can be a bottom-up exercise that taps individual performers working in a complementary fashion.
Mr. Rubenstein, whose client roster has included everyone from Nextel to the National Football League Players Association, worries that leadership sometimes “strangles an organization with one vision” when it could adopt and endorse many. Rather than require team members to toe the company line, organizations should disaggregate goals to the individual leader level, he says. By engaging team members in this way, organizations can ensure buy-in and adoption of the overall organizational strategy.
“Strategy is a symphony, and as a leader you are the conductor,” he says “You don't want to produce one sound—you want the best from each of the assembled performers. Some are instrumentalists, some vocalists. The sound produced is that of consistent, harmonious visions working together and at the same time.” PM
Jeff MacIntyre is based in New York, N.Y., USA, and has written for The New York Times, WIRED and The Boston Globe. He is also a project communications specialist at AMBiT Consulting Inc.
PM NETWORK | NOVEMBER 2006 | WWW.PMI.ORG
NOVEMBER 2006 | PM NETWORK