Strategic planning + project management = competitive advantage


Despite a shrinking marketplace and slow-moving state economy, Blue Cross and Blue Shield of Louisiana leveraged the strengths of both project management and strategic planning to stand out among the competition.

by Philip Diab

TRADITIONAL WISDOM DICTATED that strategy formulation was the responsibility of a Strategic Business Unit and a chief planning officer. Developing a strategic plan was ultimately up to executive management, so participation in this process was limited. Execution, through implementation of the formulated plan and budget, was the responsibility of line managers (middle management). Middle management's lack of involvement often resulted in miscommunications of organizational capabilities and expectations. As a result, corporate goals were often not met.


When this top-down approach didn't work, organizations shifted to a bottom-up approach in which middle management, with the help of lower-level supervisors, generated a list of annual and future goals based on budgeting. These were submitted to top management for inclusion in a strategic plan. However, both middle and lower management lacked the understanding of the overall market picture to align departmental goals with corporate goals.

Is this a Catch-22 situation? No, there is a solution to the problem: project management.

Aligning Strategic Planning and Project Management. While project management over the past decade has emerged as a premier solution in business operations, many managers do not understand the potential value that the profession and its methodology can offer executive management in strategic planning. One company that utilizes the marriage of strategic planning with project management is Blue Cross and Blue Shield of Louisiana (BCBSLA).

BCBSLA has developed a system that enables the organization to overcome the weaknesses of both the top-down and bottom-up strategic planning approaches. They accomplished this by utilizing basic project management tools and linking them to strategy formulation and implementation. This combination is successful because using both project management and strategic planning enables managers to offset the weaknesses of each individual methodology. Strategic management traditionally has been unable to provide techniques for evaluation and, more importantly, for monitoring and controlling activities. Project management, when executed on its own, does not tend to address the broad business perspective as it relates to overall corporate goals. Utilizing project management as a tool for implementing various strategic planning initiatives provides a system of checks and balances for both executives and line managers.

This strategy's success at BCBSLA prompted the creation of a Corporate Project Administration Group to help corporate officers refine the scope of corporate initiatives and develop goals and objectives for potential corporate projects. In addition, the group is responsible for working with the project team in developing project plans, monitoring activities, and reporting on performance to corporate officers in various departments. Corporate Project Administration generates success in project implementation by providing a bridge for interdepartmental communications and creating a system of documentation and reporting on project performance. This ensures that team members receive the credit due for their participation in the project team and their efforts in ensuring project success.

Within BCBSLA, project management is specifically used to implement corporate strategic initiatives deemed critical to the corporation and its competitive advantage. Project management tools and methodology are not only utilized by Corporate Project Administration but also by line managers. Corporate initiatives range from introducing new products to upgrading an information system or implementing a new facilities automation system. Perhaps the most prominent introduction of this approach is seen in the Year 2000 project, where ensuring that all corporate systems are millennium compliant becomes a matter of survival.

Integrating Project Management Into Strategic Planning. While at first glance a combination of strategic planning and project management may seem difficult to implement, BCBSLA created a process that tracks corporate initiatives and project performance as they relate to overall corporate goals and objectives. This system combines project management techniques, strategic planning models, and a new BCBSLA corporate software application called PULSE. According to Sam Griffin, director of information and system security, PULSE “allows the company to bring awareness and attention to major projects in the corporation and helps communication between stakeholders in regard to the success of companywide initiatives.”

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PULSE, as an application, was created as a tool to track and measure corporate initiatives. Once the officers of the company identify its strategic direction, they must identify goals for their areas and set the operational plans to achieve them. These initiatives are classified into one of the four corporate “Pillars”: Market Share, Financial Stability, Quality Performance, Resource Management. The pillars allow the company to ensure a balance between financial performance, employee value, quality products and services, and market share rather than focusing only on profits. The real driver of PULSE is the need for the balanced approach of the four pillars.

Within PULSE, the four pillars are further subdivided into areas of responsibility. For example, when corporate officers begin their annual budgeting process for the upcoming year, they are required to define targeted and tangible results for each potential initiative. The targeted results are loaded into PULSE and are tracked and measured on a monthly basis. Project management tools and techniques, as a component of this process, play a critical role in assisting the project team in meeting their targets.

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Once corporate initiatives are finalized, the corporate project administration team meets with each officer to determine the scope of the projects and develop project charters. At this stage, the project team composition is determined, the goals for the project clarified, the deliverables identified, and a target date set for completion. This stage is critical because the results of this meeting are loaded into PULSE. For example, if one of the corporate initiatives calls for developing and implementing a new software system, the goals may be a reduction of full-time employee hours (FTEs), a reduction of cycle time in customer service, and an increase in claims processing. Each of these goals will be assigned a tangible target such as a three-hour-per-week reduction in FTEs or a 50 percent increase in claims processing. These numbers are then loaded into PULSE for tracking during project implementation.

A project plan is then developed based on the goals identified in PULSE. As project performance is tracked and the schedule is monitored, the PULSE system is updated using the figures from the project team inputs. In addition, the project manager provides feedback on the overall project progress.

Monthly status reports are provided for each initiative, allowing the company to use PULSE to track progress and adjust performance. This combination of strategic planning and project management as facilitated by PULSE provides the company with a balanced approach to corporate success through participatory planning and execution between management and employees.

Over the life of the project, the project manager is responsible for reporting project progress to corporate officers and executive management. Upon completion of the project, the final data is loaded into the PULSE system. There are three primary benefits of the PULSE system: (1) corporate executives are able to look through any corporate initiative and determine its status; (2) line managers can report progress on initiatives in a systematic, accurate and timely manner; (3) all officers, directors, managers and supervisors are able to view the annual initiatives as part of an overall strategic plan. These results enable everyone to think globally and act locally. The beauty of the system is that it is achieved by utilizing the project management team, the PULSE system, and the corporate strategic plan links between corporate officers and line managers. As a result, communications are enhanced, productivity increases, resources are allocated more appropriately, and performance is measured accurately.

Bottom-Line Benefits. Another valuable benefit of this system is that it captures financial information. Once the annual budget is developed, financial information is divided into administrative and capital expenditures and cost savings. This format allows both officers and executive managers to plan, track and adjust strategy through the use of financial data. The mixture of data and identified targets affords the company a process to make informed and balanced decisions.

This approach has enabled BCBSLA to plan, track, evaluate and change performance through the use of two traditionally separate methodologies. Additionally, “our ability to balance the four pillars with not only accurate information but also historical information will ensure the growth of our organization,” stated Paul Dykes, executive vice president for administration. The success of this system, however, lies squarely on the shoulders of individuals within the company. Their attitude and input into the process are critical for achieving positive results. “The accountability of all management has proven key to our success,” Dykes added.

THE USE OF PULSE, strategic planning and project management help BCBSLA capitalize on its strengths. Blue Cross and Blue Shield of Louisiana's strong team mentality, dedicated employees, and corporate loyalty have provided a stable environment to launch this integrated approach. The company maintains extremely high employee morale despite a climate of corporate change and competition. It is anticipated that this effort will not only ensure continued profitability but also a balanced success in all four pillar areas: Market Share, Financial Stability, Quality Performance, and Resource Management. ■

Philip Diab is a project manager with Blue Cross Blue Shield of Louisiana. He is also chair of PMI's Marketing and Sales SIG, communications vice chair of the Financial Services SIG, and founding president of the PMI Student Chapter at Thunderbird University.

PM Network • July 1998