Keys to the Kingdom of Strategy Execution
by Dennis Stevens
Being agile is critical to an organization’s success. Agility is the power of moving quickly and easily is response to outside forces. And, there are so many forces to keep pace with. Like competition, regulatory changes, technology innovation, demographic shifts, globalization, and the never ending changes in customer demands.
And what enables you and your organization to stay ahead? Executing strategy, right? To execute strategy, you’re going to have projects and that means you need project management to guide the changes you need to make inside your company, and to ensure you are delivering value to your customers. In this article, we will discuss what it takes to have project management improve your ability to execute your strategy.
While this requirement to change is threatening, there is opportunity here. The companies that learn to respond to these forces more quickly than their competition will gain a competitive advantage. According to PricewaterhouseCoopers “those organizations that understand the vital importance of excelling at project management, and act upon it, will undoubtedly outperform the competition” (2004).
But, maybe project management hasn’t been as effective as you expected. Due dates on your projects are still unreliable, projects take too long, they are running over costs, and there is conflict within the project. But you are stuck with going through the pain because you have to keep up with forces of change.
If you are struggling to perform projects effectively, you’re in good company. Standish Group’s 2004 CHAOS study found that 71% of strategic projects failed to deliver the desired benefit or with almost half of those being cancelled prior to implementation. That same Standish Group study found that in the US, IT spending waste alone was $55 billion made up of $38 billion in lost dollar value and $17 billion in cost overruns (InfoQ, 2006). This number doesn’t even take into account the waste from projects that were executed that didn’t advance the strategy of the company.
Making projects work isn’t easy – but some organizations are able to consistently perform them well. Based on over 20 years of experience, an intensive research project, and a recent study sponsored by Synaptus, we’ve found what it takes to make project work. Leaders need four key elements, all working in concert to make project management successful. To be successful and effective projects management MUST:
- Ensure projects are aligned to the organization’s strategy
- Develop processes and methodology that work for your unique circumstances
- Ensure project manager have the right knowledge, skills, and attitudes
- Focus on enabling the project performers
Without all four of these factors in place, organizations struggle to perform projects. When these factors are addressed exist, an organization will greatly accelerate the execution of its strategy through the delivery of programs and projects.
It must be clear throughout the organization how projects relate to the business strategy. Project failures are often a consequence of aspects that are organizational and over which project managers have little influence (PricewaterhouseCoopers, 2004). Almost 80% of project managers recognize that their project success is dependent on alignment with between the business leaders and the project team (Synaptus, 2006).
As intuitive as this is, only 32% of companies said they had a method for prioritizing projects within the business strategy (PricewaterhouseCoopers, 2004). When projects are not aligned with the business strategy, they don’t help executives accomplish their goals. When they have to interact with a project that is not clearly aligned with advancing the strategy, these executives don’t find the time and energy. Executive sponsorship drives organizational alignment. This alignment is critical to sufficient resource participation. This is critical since inadequate resource and low project sponsorship are the best predictors of project failure (Taylor, 2005).
Project Management Process Maturity
Formal project management helps organizations implement projects. There is a positive correlation between an organization’s level of project management and its actual project performance (Cook, 2003). 85% of project managers have an understanding of this. Yet many organizations don’t have a formal project management approach and 60% of organizations that have project management don’t implement the basic PMI processes with discipline within their organization (Synaptus, 2006).
Many businesses have developed proficiency at process improvement. Project management processes can be managed like other processes and process improvement concepts can be applied to project performing organizations. Project teams that apply process management principles to project management reduced their average development times by 30% to 50% (Harvard Business Review, 1996). The use of a project management methodology is far more common among successful projects than the existence of project management tools or project success incentives (Taylor, 2005).
Project Manager Talent Management
Obviously, project managers are a critical part of successfully implementing project management. But who makes the best project managers. Project managers are often promoted because they have reached a high-level of technical competence. They may be promoted because they are liked and are not performing successfully in a technical role. Project managers are typically not selected based on a systematic understanding of who will be the best project manager. In addition to sufficient technical understanding, project managers should possess the appropriate knowledge, skills and competencies.
Being effective as a project manager requires specific knowledge and skills. Knowing how to go about project initiation, planning, execution, control, and closeout transition are important for a project manager. The Project Management Institute (PMI) provides a certification, called the Project Management Professional (PMP) that demonstrates a baseline set of project management experience, knowledge, and skills. Project management knowledge and skills be developed through training and professional development.
A competency is a combination of inherent traits, skills, attitude and behavior. Competencies for effective project managers include taking initiative, customer service, interpersonal understanding, organizational awareness, relationship building, assertiveness, perspective, self control, problem solving, and flexibility. Competencies can be developed over time through experience, self-development, and coaching.
Since effective project managers must have the appropriate technical knowledge, project management knowledge, and professional competencies, not ever person will be an effective project manager. When gaps exist in the knowledge, skills, and competencies a development plan should exist to close these gaps. There is a clear correlation between companies that invest in professional development for their project managers and the success of the projects they execute (PricewaterhouseCoopers, 2004).
There is also a very strong relationship between an ineffective project management and project failure (Taylor, 2005). Even in organizations that have project management 40% of projects still fail (Taylor, 2005). Ineffective project management adds administrative and bureaucratic overhead without contributing enabling the performance of the group.
While it is important to maintain a clear understanding of project performance, effective project management is not about tracking and blaming. Specific methods to communicate alignment with the strategy, gain organizational support, and manage project execution are more important to achieving strategic change than any other single element (Taylor, 2005). That means the most important role of the project manager is establishing understanding around the project, effectively scheduling resources, and coordination of people.
It is interesting to note that on projects that have failed, 90% of the people new half-way into the project that it would fail without correction (VitalSmarts, 2007). In over 80% of these cases, the project could have been gotten back on track if changes had been made (VitalSmarts, 2007). Ineffective project management treats people as machines in an assembly line that instructions are sent to, not as active participants in the project.
Projects take place within a social network of understanding, coordinating, and committing conversations (Synaptus, 2007). Every project management artifact serves a purpose. This purpose is typically to aid in establishing or sharing knowledge through the social network. Improving communications does not mean putting more effort into reporting status or documenting requirements. Project management must participate in enabling this network of conversations. Effective communication, scheduling, and coordination take place when the project manager actively participates in the conversations that occur within the project.
In today’s fast paced world, the failure to execute project equals the failure of strategy. Project management is effective when clear strategic alignment leads to organizational support; when the project management processes are managed; when the right effort is put into the selection and development of project managers, and when project manage focuses on enabling the people. When all four factors are addressed on the project is likely to perform successfully. When any of these factors is overlooked, the project is likely to fail.
Maybe your organization is different and isn’t facing these pressures to change. Maybe your organization is effective in delivering projects on time and on budget. If so, you are on your way to success. If not, its time to figure out how to make effective project management a priority in your organization.
Cook, R. (2004). PMI Research Topic: Measuring the value of success in project management organizations. Retrieved from July 16, 2006 from http://www.pmi.org/prod/groups/public/documents/info/PP_RobertCook.pdf.
Harvard Business Review (1996). Getting the most out of your product development processes. Harvard Business Review, March-April 1996.
InfoQ (2006). Interview: Jim Johnson of the Standish Group. Retrieved on March 2, 2007 from http://www.infoq.com/articles/Interview-Johnson-Standish-CHAOS.
Synaptus (2006). Factors Influencing the Successful Project Management Office. Synaptus White Paper: Atlanta, GA.
Synaptus (2007). Project conversations: Raise the conversation above blaming and conflict. Retrieved on March 15, 2007 from http://www.synaptus.com/project-conversations.php.
Taylor, A. (2005). PMI Research Topic: Increasing IT Project Success for Project Managers and their Clients. IT Project Success Research Results. Retrieved on July 16, 2006 from http://www.pmi.org/prod/groups/public/documents/info/PP_Taylor.pdf.
VitalSmarts (2006). Crucial Conversations Online Survey. Retrieved in March 15, 2007 from http://www.vitalsmarts.com/userfiles/File/download/SilenceFails020707.pdf.
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Dennis Stevens leads Synaptus, a consulting firm that helps executives improve business performance by connecting strategy to execution. For more information, please visit www.synaptus.com.