Everything that people do in a business should be linked back to its strategy. A strategy is a plan of action that allows achievement of long-term goals. In fact, it will cost the organization time and money if a project fails. The organization will not achieve its short-term goals, and will prevent it from achieving longer-term goals or slow it up. When you consider this, it makes sense that managing projects according to a strategy, and aligning that strategy with the corporate strategy. This means that project strategy is a very important consideration for most companies. Here we will consider the relationship between the project strategy and the corporate strategy and portfolio and program management.
How the Corporate Strategy Impacts on the Project Strategy
The corporate strategy with inform the project or program strategy. This allows the business to implement its overall strategy. Since strategies are usually developed at the upper echelons of the organisation, these will cascade down to lower levels, to be managed and delivered through portfolios, programs and projects. This occurs in a hierarchical and systematic manner. There will be cohesion if done well. Visibility and an effective means of communication. Communication is key. Without it there may be difficulties for the project team in understanding what they are doing and why. Without this, there can be project management failure.
Within a solid framework and with good communication, project strategy can be managed dynamically. But what is the project strategy? In most cases, the project strategy typically refers to all aspects of the project lifecycle. Usually, clear review points are decided on to make sure that the project is being well managed. If it is not, then optimisation can occur, as the project strategy continues to develop.
When the organization’s senior management team devise the corporate strategy, they decide what they are going to do, and how they are going to go about it. Running projects is often a major component of how they are going to go about delivering the strategy. It is all very well having a finely-polished mission statement to present on the company website and a thorough five-year plan documented. However, without action, nothing happens.
As noted earlier, the word strategy means having a plan of action. Putting aside the five-year plan and failing to take any action will usually mean that the strategy is not delivered. With that in mind, long-term goals do not get met. Steps must be taken to ensure that processes are in place to deliver projects and achieve goals. This requires that a number of activities occur. First, decide what projects will be likely to be needed to deliver the strategy. There will usually be various projects that they will be needing, but not sufficient resource to complete all of them at the same time. Resources are precious. The senior management team must communicate the priorities and assign resources to these.
A clear direction must be provided by the senior management. A business owner ensures that the project stays on track. This is to help the business achieve its strategy through the project strategy employed. The Project Management team will then report to this business owner. The project or program manager thus has a critical role in impacting strategy delivery and achieving organizational goals. If the PMO runs the project efficiently and effectively, with good communication throughout then there is a greater chance of achieving strategy and delivering long-term results.
Project management is usually a core process within the overall business enterprise model. Programs and projects allow the organisation to effect change in a managed and controlled way. It is worth noting that some companies consider that program management implies the management of business benefits, as well as the idea of product or brand. This distinguishes it somewhat from project management.
How Project Management Tools and Principles Help Advance Business Strategy
Project management tools and principles are important in effectively advancing business strategy. This is because they help the people working on the project to stay on track and aligned with the overall vision. As part of the project strategy, defining projects properly, with a clear scope and related to corporate goals and strategies. Afterwards, Gantt charts and other project tools help track who needs to be doing what and when, so that milestones can be delivered in a timely manner.
Controlling changes to the project is also important to keep it on target. If senior management requires a major change in scope at the last minute, a change control process helps because it assesses what the impact of the change will be in terms of time and cost. This can then be communicated effectively back up the hierarchy so a decision can be made regarding what is most important — delivering on time and to budget or including this change. This helps with effective strategic decision making. Portfolio management is often of fundamental importance for project and program prioritization, as well as for resource allocation.
It is also important to realize that value management is a key aspect of project strategy. Value management works to ensure that value is being created through undertaking the project. On the other hand, risk management is also deployed to ensure that all risks to the project strategy (and consequently the overall corporate strategy) are identified, assessed, understood and mitigated. With continuous review and change it is possible to ensure that the project strategy works to deliver the most value possible, with risks well managed.
To sum things up, if a project is to be successful, it will be run according to a project strategy that is clearly aligns with the overall corporate strategy. These links will be communicated and understood, and the organization will have checks and balances in place to ensure the project is managed such that it can deliver.
Until next time, you are up to date.
Originally published at https://www.projecttimes.com.