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We need to talk about strategy

Advances in Project Management

SERIES ARTICLE

By Prof Darren Dalcher
Director, National Centre for Project Management
University of Hertfordshire

United Kingdom

 



Is there a link between project management excellence and long-term business or organisational success?

The traditional bodies of knowledge in project management have little to say about organisational strategy. This is somewhat surprising given that the organisational appetite for projects is on the increase. Indeed, projects seem to consume an ever-expanding proportion of organisational resources, whilst anecdotal evidence points to a persistent, yet, unbridgeable gap between intention and execution.

The gap implies that while senior executives may be asking themselves if they are ever likely to see the value, or the benefits, implicitly promised through the organisation’s project portfolio, project practitioners may be left adrift with little, or no knowledge of the strategic preferences. Meanwhile, in agile implementations, local team autonomy may lead to execution drifting further and further apart from strategic intention.

The importance of strategic initiatives

Robert Kaplan and David Norton followed their pioneering work on balanced scorecards, strategy maps and strategy-focused organisations by zooming in on the need to link strategy to operations in order to develop and maintain a competitive advantage. Their book The execution Premium focuses on the implementation of formal systems for the successful implementation of strategy. In the book, Kaplan and Norton describe the need to translate a strategy into strategic themes, objectives, measures and targets that represent what the organisation wants to accomplish. However, execution requires bridging the execution gap, and therefore strategic initiatives are utilised to represent the how.

Strategic initiatives are the collections of finite durations discretionary projects and programs, outside the organization’s day-to-day operational activities, that are designed to help the organisation achieve its targeted performance’ (Kaplan & Norton, 2008; p. 103)

While the need for an explicit link between long term strategy and immediate actions may appear obvious, they point out that their own survey reveals that 50 per cent of organisations fail to link strategy to short-term plans and budgets (ibid.; p. 4).

‘A senior executive summarized many executives’ frustration with the lack of alignment between strategy and action plans when he said, ‘half my initiatives achieve strategic goals. I just don’t know which half.’ ’ (ibid. ; p. 103)

Reading between the lines: So why do strategic initiatives fail?

Kaplan and Norton propose an initiative management process model encompassing three distinct core activities required to align action with priorities:

  1. Choose strategic initiatives – Identify what action programmes are needed for executing the strategy
  2. Fund the strategy – Identify a source of funding that is separated from the operational budget
  3. Establish accountability – Determine who will lead the execution

However, in reading the discourse related to the specific steps, it would appear that the true insights into the nature of the execution gap reside in the limitations and barriers associated with each of the steps.

Strategic plans require coordinated action that often extends beyond organisational boundaries, functions and business units. Kaplan and Norton reflect that in their original conception of scorecards, they encouraged companies to select initiatives independently for each strategic objective. However, they subsequently concede that selecting initiatives independently ignores the integrated and cumulative impact of multiple related strategic initiatives (p. 104). Those following only the earlier writing of the authors may thus miss on the opportunity for integrating—choosing instead to optimise around individual activities and initiatives.

The new advice is that initiatives should not be selected in isolation as the achievement of a strategic objective ‘generally requires multiple and complementary initiatives from various parts of the organization. … We continue to recommend that each nonfinancial objective have at least one initiative to drive its achievement but also that the initiatives be bundled for each strategic theme and considered as an integrated portfolio.’ (ibid. p. 104-5)

In other words, in order to achieve the associated performance objectives of a strategic theme, it will often be required that the entire collection of initiatives, or the full portfolio of actions is implemented. Successful execution with regard to organisational strategy thus requires a synergistic perspective rather than localised optimisation at an initiative or unit level.

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Editor’s note: The PMWJ Advances in Project Management series includes articles by authors of program and project management books published by Gower and other publishers in the Routledge family. Each month an introduction to the current article is provided by series editor Prof Darren Dalcher, who is also the editor of the Gower/Routledge Advances in Project Management series of books on new and emerging concepts in PM. Prof Dalcher’s article is an introduction to the invited paper this month in the PMWJ.



About the Author


Darren Dalcher, PhD

Series Editor
Director, National Centre for Project Management
University of Hertfordshire, UK

 


Darren Dalcher
, Ph.D. HonFAPM, FRSA, FBCS, CITP, FCMI, SFHEA is Professor of Project Management at the University of Hertfordshire, and founder and Director of the National Centre for Project Management (NCPM) in the UK. He has been named by the Association for Project Management (APM) as one of the top 10 “movers and shapers” in project management in 2008 and was voted Project Magazine’s “Academic of the Year” for his contribution in “integrating and weaving academic work with practice”. Following industrial and consultancy experience in managing IT projects, Professor Dalcher gained his PhD in Software Engineering from King’s College, University of London.

Professor Dalcher has written over 150 papers and book chapters on project management and software engineering. He is Editor-in-Chief of Software Process Improvement and Practice, an international journal focusing on capability, maturity, growth and improvement. He is the editor of the book series, Advances in Project Management, published by Gower Publishing of a new companion series Fundamentals of Project Management. Heavily involved in a variety of research projects and subjects, Professor Dalcher has built a reputation as leader and innovator in the areas of practice-based education and reflection in project management. He works with many major industrial and commercial organisations and government bodies in the UK and beyond.

Darren is an Honorary Fellow of the APM, a Chartered Fellow of the British Computer Society, a Fellow of the Chartered Management Institute, and the Royal Society of Arts, and a Member of the Project Management Institute (PMI), the Academy of Management, the Institute for Electrical and Electronics Engineers, and the Association for Computing Machinery. He is a Chartered IT Practitioner. He is a Member of the PMI Advisory Board responsible for the prestigious David I. Cleland project management award and of the APM Professional Development Board. Prof Dalcher is an academic advisor for the PM World Journal. He can be contacted at [email protected]

To see other works by Prof Darren Dalcher, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/darren-dalcher/.