allPM.com :: Aligning Project Management with Organizational Strategic Objectives By Giancarlo Duranti, PMP

Aligning Project Management with Organizational Strategic Objectives By Giancarlo Duranti, PMP

Published on Thursday, March 05, 2009 - 08:01 PM

Just getting the job done is no longer enough!

Traditional project managers focus on efficiency which means getting the job done successfully according to the triple constraint: on time, on budget, and to specifications. But what about the business results for which the project was created?

In the words of my dear friend and colleague, Jim De Piante, who during his classes has been known to say, “Projects do not look like investments. They are investments!” Why is this the case? Because someone put money into the organization to finance its business strategy, which means money to fund those projects that support that business strategy. He, she or they, are investors and as a consequence, would like to receive some money back from their investments. This is called Return On Investment or commonly referred to as ROI. Project Management is supposed to help them achieve the expected organizational strategic objectives.

What happens sometimes however, is that even though the project ends successfully, meaning that the product was successfully delivered according to specifications, the budget deemed necessary to create that product was spent according to forecasts and the project delivered the product on time as predicted by a detailed scheduling, but the business results are not able to cover the investments made and cover the expected margin of the investments. On the other side, some projects completed that are not so successful according to the project management criteria, turn out to be a success in terms of their strategic objectives.

It looks like there is a missing link between the project and the business strategy for which the project was chartered.

During my classes, when I explain the triple constraints to attendees, I try to put a lot of emphasis on something that, in my opinion, is still not adequately mentioned: customer satisfaction. When I refer to it I mean that one of the most important constraints in a project is the level of customer satisfaction, which encompasses achieving business results expected by the customer and represents the totality by which the project was chartered and funded.

In order to provide the reader with some tips to think about, I would like to share a new approach to project management called Strategic Project Leadership®. This new framework, coined by Technological Leadership Institute, is a step-by-step approach about how to connect project management to business results, and how to attain the competitive advantage on the market managing projects. It encompasses seven principles.

The Seven Principles of Strategic Project Leadership®

Leadership: Turn project managers into leaders. Make them responsible for business results.

Effective project managers are both managers and leaders all in one. Managers are able to make the right decisions in order to do things correctly, while leaders are able to have the right vision and inspire people in order to get their involvement and commitment on the project. Project Managers should concentrate their focus on strategic vision of the project, interpret the business assumptions conceived at higher levers, define the products and its business expectations and identify and articulate a clear project strategy.

Strategic Project Portfolio Management: Group projects based on their strategic impact and form a policy for project selection.

Since feasible projects can compete for the same resources available in an organization, a selection needs to be made in order to define the priority of execution. The priority list is to be made according to each project strategic impact, business perspectives and resources available within the organization. Other elements such as skills available in the organization, risk and opportunity, and difficulty are evaluated and weighted in order to rank the project priority list.

Project Strategy: Define the competitive advantage of the product, and articulate a detailed project strategy to win in the marketplace.

A project strategy is the specific project’s way of creating competitive advantage. It defines the way through which the project will achieve the business results expected and defined by the organization’s business strategy. It also defines the business relationships with other projects necessary for the product development. The project strategy components are listed in a formal document which is hierarchically positioned above the project plan. Specifically, the project strategy elements are:

Business perspective: which explains why we do the project. It defines the market, the customer needs, the business opportunity and how it will be addressed.
Objective: the objective the project is expected to achieve.
Product Definition: characteristics of the product.
Competitive advantage: added values for which the customers should buy the product.
Success and Failure Criteria: expected business results, risks and possible causes of failure.
Project Definition:elements available to charter the project; e.g. project scope, project manager and team, resources in terms of time and budget.
Strategic Focus: the policy and the desired process that when followed will create the best competitive advantage.

Spirit: Articulate an inspiring project vision and develop an appropriate project spirit, which will support the strategy and create energy, excitement and commitment.

An effective project manager has to be able to inspire and motivate people in order to transmit the business vision for which the project was shaped, and for which it needs to be accomplished according to the business requirements. It is up to the project manager to establish a project culture. A kind of micro-climate perfectly aligned with the organization’s culture but specific to the project, where a set of values and behaviors are practiced and demonstrated by the project manager. In this way, people working in the project will be aware about what is right and what is wrong and what is necessary to achieve the business results and consequently the project success.

Adaptation: Assess the environment and task. Classify the project and select the right project management style to fit the project type.

Adaptation is necessary because every kind of project is specific in its type, and therefore requires a specific management style. Hence, it is not true that one size fits all. Project managers need to evaluate and put in place the right management strategy as well as the appropriate project processes.

Integration: Create an integrated hierarchical plan. Start with strategy and include spirit, organization, processes and tools.

The integration will be focused on strategy instead of the traditional elements like scope or scheduling. The strategic project plan should integrate strategy, spirit, organization, processes and tools.

Learning: Create a project learning organization. Every monitoring and controlling activity will include lessons learned.

One of the most important recommendations in project management, sanctioned also in every edition of the PMBOK®, is to take advantage of experiences acquired in past projects. Every project is unique and involves non repetitive practices. Lessons learned are a kind of treasure that needs to be exploited within future opportunities. Building a learning organization during project execution and project monitoring will allow anticipating and better managing similar events that will have to be faced in current projects.

Conclusion

Linking project management to organizational strategic objectives represents the natural evolution of modern project management. Day by day, organizations are facing faster and fiercer competition. An extended concept of project management will help them to gain competitive advantage in the market. The transition towards an extended vision of project management requires a kind of cultural change from top management support, to modified processes, to new training and organizational monitoring. Even more so, the project manager has to represent the core of project coordination, not only regarding the operations but also taking into consideration actions from his or her own business vision.

© 2009 allPM.com

Giancarlo Duranti is a Project Manager Practitioner, PMP certified. He has been working in the Communication Wire-line & Wireless industry for over 18 years and he is well experienced in managing projects in different international and national business contexts. Giancarlo has consulted for overseas companies in Brazil, Cuba and US. He is also a trainer at IIL – International Institute for Learning, Inc. for project management certification programs and soft skills courses. Giancarlo took part, as a developer, in the new version of the OPM3 - Organizational Project Management Maturity Model, PMI’s Capability Maturity Model standard already available on the market. He has given numerous talks on project management topics at PMI and IPMA Congresses as well as at major corporate companies as IBM, ***** and Siemens. He is also an active member of the PMI Rome Italy Chapter.

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