Strategy – Project Disconnect with Corporate Strategy

Written By: Garry Koop, PMP, SPMgroup Ltd

“I do not have the executive support I need”;

“My budget keeps getting cut”;
“My resources keep getting pulled on to other projects”;

The PM lament! Sound familiar? I am sure it does. Why do we continue to hear and
experience them even as we get better at project management?

The purpose of this article is to shed light on the root cause of this situation and talk plainly
about what Executives, Sponsors and Project Managers can do to ensure we are all fully
aligned and enabled to implement corporate strategy through projects.

In order for us to be successful we need to understand the basic nature and context of
strategy. We also need to agree on some basic tenets.

Once we have this established we will move right into a more in-depth discussion on
precisely what you can do to achieve the goal of being continuously aligned with the
corporate strategy.

We will also talk about exactly what you can do immediately after reading this article.

Context
In essence, this is about you, me, us and “them”, within the context of our company’s
corporate strategy. Are we “in” or “out” of the proverbial loop? “Survival is not mandatory”,
said Dr. W. Edwards Deming. If this is not of interest to you, go ahead and flip the page, but
if it is, let’s get busy.

Strategy is the “how to” plan of action in response to the objectives set out by the company.

Loosely stated, corporate objectives can be organized into three high-level categories with
strategy associated to each one. We need to have a clear and defined understanding so
that we can successfully respond to the strategies.

Category 1 – Financial
The first element of strategy is financial, essentially improving the profit margin or the
EBITDA position of the company (Earnings Before Interest Taxes Depreciation
Amortization).
Category 2 – Innovation
The second major element of strategy is that of innovation, the essence of which is creation
or advancement.
Category 3 – Adherence
The third component of strategy is adherence, typically to industry standards, specifications
and regulatory aspects. In most cases this is considered a requirement rather than a
strategic component, however, we have listed it here for the purposes of visibility. In many
business sectors, the aspect of adherence has an almost equal weighting to finance and
innovation.

The context of strategy or “the theatre of operation” is essential to our complete

understanding. Business objectives are typically established or reviewed during the fiscal
business planning process. The strategic plans are driven out of that planning cycle.
Strategy is most often articulated at the corporate level, but it can also be defined at the
sector, division or department level. For our purposes we will be discussing it at the
corporate level. However you may substitute department or other level depending on the
nature of your particular organization.

We also need to establish some basic tenets that are vital to our success.

Tenet 1 - Communicate the Strategy.

The strategic plan needs to infuse your organization. Executives and Sponsors, you need
to communicate it, often and clearly. Be creative, but effective. I know one organization
that printed their five major corporate strategy points on mouse pads and distributed them to
the entire organization. You can be sure everyone knew the corporate strategy. Survival
hint: Beware of situations where the strategy cannot be communicated “at this time”. That
is a portent of failure.

Tenet 2 – Partnership
Moving strategy to business results is a partnership between strategists (Executives, Senior
Management) and delivery (Portfolio, Program, Project Managers). This partnership has the
responsibility to translate the strategic plan into a course of action (a.k.a. projects).

Tenet 3 - Its business, not projects!

This is about business benefits NOT projects. PM’s, this may be hard to swallow, but your
company is not in the project business. Projects are a means to arrive at a particular
business benefit. This mindset is pivotal for being truly successful.

Taking Action
We now understand the theatre of operation and agree with some fundamental truths about
strategy and projects. But, how do we ensure that the ‘right’ projects get the resources
required and the “wrong” projects are not even started? In the case of the Project
Managers, how do I get on the ‘right’ projects?

• Start at the beginning...

o The first place to focus is at the submission and screening stages of the project or at
the very least the activation stage. Bear in mind, however, that the activation stage is
the last best opportunity for you to influence the direction.
o Remember Tenet #2, this is a partnership. PM’s, we need to help our Sponsor by
highlighting the linkage between the project request and the corporate strategy. If it
is not linked or is linked very weakly, there is every probability that you will run into
 resource allocation issues, budget set backs and basically become a victim of the
infamous “prioritization” beast. As a result there is a very strong likelihood that the
project, and therefore the Sponsor, will not be successful.

o Everyone wants to look good and succeed. That includes the project requestor
(Executive, Sponsor) and Project Manager. We do not knowingly initiate something
where we are convinced that we will look bad and not achieve our goals.

• Make sure you know the linkage

o If you were not involved in the submission, screening, registration, or activation of
the project but you are managing a project, program or portfolio, make sure you
know to what strategic component your project or program links.
o Artifacts like a business case, requirements document or needs assessment are
valuable tools to gain this understanding. Your Project Charter should start with a
statement about how the project links to the corporate strategy. This should come
straight from the Business Case. If you are still having difficulties clearly
understanding the connection, start tracing the steps of the project back to
submission and find out! It may be a labyrinth, but no one wants to have an
active project that is going down a rabbit trail.

• Don’t forget the team!

o Your team members also need to know the connection to the strategy and
business. This is an excellent team-building and motivational enabler. Remind
your team members often about the strategic component that is being driven out
by way of their project.
o I know of one particular project that was linked to the financial strategy, and
particularly driving down the Cost of Goods Sold (“COGS”) and thereby improving
the EBITDA position of the company. The completion of the project would mean
a $250K per month reduction in COGS. So we reminded the team often about
that target and put it in tangible terms that everyone could understand. For
example, the monthly savings represented a lot of FTE’s. A two-week slip
equated to a $125K cost. Everyone on the team was extremely clear and
motivated.

• No ‘tek tok’!
o When the “conflicting priorities” beast rears (and it always does), speak in
business terms about the problem.
o Assuming for a moment that all active projects are clearly and strongly linked to
strategy, you need to ask the question, “which strategy is more important or takes
precedence”. The pitfall is speaking in project or technical terms that will not be
effective at resolving the issue. For example, if two projects are challenging each
other for resources ask the Executive Sponsor which is more important, the
financial objective (drive down the COGS) or the innovation objective (deliver the
widget)? Be aware, also that the response will differ based on the timing of the
question and the current position of the organization.

• Continuous review
 o Finally and perhaps most importantly you need to constantly evaluate your project
and the strategic connection.
o This method can be loosely referred to as double-loop learning. Double-loop
learning occurs when managers question their underlying assumptions and reflect
on whether the theory under which they were operating remains consistent with
current evidence, observations, and experience.1 This may be happening at
various levels within the organization and as such you need to be aware that the
strategy could change. You may need to re-align or even kill your project. Also,
your project may change, and as a result, break the strategic link.

Keeping your project(s) strongly and clearly connected to strategy and business benefits is
the strongest enabler for addressing the lack of Executive support, budget, resource, and
even prioritization challenges.

Immediacy - Your Very Next Move!

Great. We’ve read, we’ve agreed (or not), and it all sounds reasonable and logical, but now
you’ve got to put down this article and turn back to your business at hand. What are the
immediate next steps that you can do to start moving in this direction?

1. If you are one of the strategists, walk out of your office right now and ask a few
people if they can tell you what the corporate strategy is. If they can’t you need to re-
examine how you are communicating it. A formal communications plan would be
secondary to making sure that it gets out there immediately. How are you going to
achieve your objectives if the strategy is a secret?
PM’s, find out what the corporate, sector or department strategy is. Get it in writing
and make sure you understand it.

2. Take an inventory of the projects under your management or responsibility. Do they

map back to the strategy? How clearly and strongly do they connect? Is the
connection current or have six months elapsed from the time the original business
case was done to the time the project was activated?

3. Get together with your “partners” as we described in basic tenets earlier and start
talking about what you are going to do about those projects that are not linked or are
weakly linked.

4. Check your “tool kit” to make sure you are appropriately equipped to analyze and
manage accordingly. It is not enough to simply have a spreadsheet, scheduler and
word processor. In the next installment we will focus on some of the key tools.

We have all heard the popular mantra “think globally, act locally”. Well it certainly applies
here. A project not aligned to the corporate strategy is not only tragic it is in fact a stragedy.

1
Robert S. Kaplan and David P. Norton, The Balanced Scorecard (Boston, Mass.: Harvard Business School
Press, 1996), p. 17