In the previous article, “Moving from Corporate Strategy to Project Strategy”, Morris and Jamison expand on the idea of moving strategy from the corporate level to the project level. The next review analyzes an article authored by Milosevic and Srivannaboon who support this movement of strategy through their framework for alignment between these levels.
Business strategy is summarized as a means of creating competitive advantages to achieve sustainability while attracting customers and defending against competitive forces. A generic business strategy typology developed by Porter is used to establish the foundation for evaluating the alignment between project management and business strategy. Porter’s generic strategies are cost leadership, differentiation, and focus. Porter proclaims that firms can achieve a competitive advantage by choosing one of these strategies. However, firms are compelled to focus on a combination of strategies in reaction to global competition. This is termed as the best-cost strategy. Milosevic and Srivannaboon use cost leadership, differentiation, and best cost as the primary business strategies of the analysis. The authors also point to Shenhar’s strategic project leadership framework elements which consist of strategy, organization, process, tools, metrics, and culture.
The authors infer that the competitive attributes of the business strategy drive the focus and content of the project management elements. A pattern revealed through research indicates that organizations can align projects with business strategies into three levels: the strategic, the tactical, and the corrective emergent strategic feedback. Level 1 (the mediating process at the strategic level) is the beginning of the alignment process. At this level strategic managers derive the intended strategy and typically used portfolio management to determine the right projects that would contribute to the organization’s goals. Level 2 (the mediating process at the project level) involves delineating additional detail for the projects selected during Level 1 interactions as a means to ensure proper alignment with the project life cycle. The project life cycle is classified as the planning process and the monitoring process. At this level project managers develop a project management plan that ties back to the business goals and objectives. Level 3 (the mediating process at the emergent strategic feedback level) uses stage gates or milestone reviews to evaluate the project status on scope, schedule, and budget. As the project is executed, emergent actions occur that may change the intended strategy. This level ensures feedback from the project level as a means to allow the business strategy to adapt to its competitive attributes brought on by change. The authors therefore conclude that a combination of intended and emergent strategies is needed to align project management and business strategy.
One can infer that once strategic managers have selected a business strategy with the intention of sustaining the organization that portfolio management can assist in the decision making efforts of selecting the right projects that will contribute to the organizational needs. Also, a standard project lifecycle is needed for aligning the business strategy and the project management elements. Projects organized into portfolios that utilize best practices, common methodologies, and continuous improvement will determine the success of implementing the business strategy. The feedback loop, i.e. stage gates, will make sure that resources are funneled appropriately and non-performing projects are terminated efficiently and effectively. Emergent strategy often occurs as change on projects is inevitable. The strategic feedback provided from the project to the strategic business unit is critical for adapting the strategy transpiring through the mediating processes. Initially aligning the business strategy to the project is one thing, closing the gap between projects and strategy is a whole other story.
Milosevic, D., & Srivannaboon, S. (2006, August). A theoretical framework for aligning project
management with business strategy. Project Management Journal, 37(3), 98-110.
Retrieved October 12, 2008, from EBSCO MegaFILE database.
Project Management Strategy
- Linking Business Strategy to Project Strategy
- Moving from Corporate Strategy to Project Strategy
- A Theoretical Framework for Aligning Project Management with Business Strategy
- Close the Gap between Projects and Strategy
- Tying Performance Metrics to Business Strategy
Related posts:
{ 9 comments… read them below or add one }
Hi Travis,
As I see it in the trenches and on the front line, if there IS a link between business strategy and projects something seems to get lost between the board room and the field. In my experience, Yourdon’s “Death March” projects appears closer to what I see day in and day out.
I saw one telecommunications company (now defunct) selling projects at 10% below cost just so their competitors wouldn’t get the project. Then expecting their project managers to make a margin on the job. I see some clients chopping weeks or months of a “sane” and “rational” project duration, just to see if their PM’s can “work miracles” and get it done. And I see clients who want the project done fast AND good and cheap, when they intuitively recognize when they go to their dry cleaner or ship something via FedEx or UPS that getting something done “fast” usually entails a premium, and if they are unwilling to pay the premium, then usually something gets “forgotten”.
I hate to come across as a perpetual cynic, but I see very few companies really implementing project management the way is should work (at least in theory). I see management creating ill conceived projects, then throwing them over the wall with the hopes that the project manager will work some kind of a miracle. The analogy I use in my classroom is “9 women cannot have a baby in one month”, and I always get a big laugh out of it because most of the people I am training know that is EXACTLY what management is expecting. Throw enough resources at something, yell and scream loudly enough and then the miracle will occur.
Again, speaking from some 40+ years of experience, I would characterize most (but certainly not ALL!!) project management “strategy” as being akin to a quarterback making a “Hail Mary” pass on nearly every play.
Sorry folks, but I tend to subscribe to Mintzberg (1994) and Mintzberg, Ahlstand and Lampel, 2005. Specifically, that:
1) chaos can be predicted (who would have guessed in July that by years end, oil would be in the low $40 a gallon!!);
2) that strategy can be divorced from operations and projects;
3) that the process of strategy can be formalized.
Bottom line- I think strategy is largely an illusion. Flexibility and adaptability are the only two meaningful strategies, especially in today’s world.
BR,
Dr. PDG, heading to bed in Jakarta
Hi Travis,
As I see it in the trenches and on the front line, if there IS a link between business strategy and projects something seems to get lost between the board room and the field. In my experience, Yourdon’s “Death March” projects appears closer to what I see day in and day out.
I saw one telecommunications company (now defunct) selling projects at 10% below cost just so their competitors wouldn’t get the project. Then expecting their project managers to make a margin on the job. I see some clients chopping weeks or months of a “sane” and “rational” project duration, just to see if their PM’s can “work miracles” and get it done. And I see clients who want the project done fast AND good and cheap, when they intuitively recognize when they go to their dry cleaner or ship something via FedEx or UPS that getting something done “fast” usually entails a premium, and if they are unwilling to pay the premium, then usually something gets “forgotten”.
I hate to come across as a perpetual cynic, but I see very few companies really implementing project management the way is should work (at least in theory). I see management creating ill conceived projects, then throwing them over the wall with the hopes that the project manager will work some kind of a miracle. The analogy I use in my classroom is “9 women cannot have a baby in one month”, and I always get a big laugh out of it because most of the people I am training know that is EXACTLY what management is expecting. Throw enough resources at something, yell and scream loudly enough and then the miracle will occur.
Again, speaking from some 40+ years of experience, I would characterize most (but certainly not ALL!!) project management “strategy” as being akin to a quarterback making a “Hail Mary” pass on nearly every play.
Sorry folks, but I tend to subscribe to Mintzberg (1994) and Mintzberg, Ahlstand and Lampel, 2005. Specifically, that:
1) chaos can be predicted (who would have guessed in July that by years end, oil would be in the low $40 a gallon!!);
2) that strategy can be divorced from operations and projects;
3) that the process of strategy can be formalized.
Bottom line- I think strategy is largely an illusion. Flexibility and adaptability are the only two meaningful strategies, especially in today’s world.
BR,
Dr. PDG, heading to bed in Jakarta
Paul and Travis –
I don’t think that anyone doubts that there should be a link between strategy and projects. The issue seems to be more “how does that link get established and maintained.”
Paul’s in-the-trenches experience (which mirrors much of mine) says that even projects that are clearly linked to and supportive of the organization’s strategy may be poorly executed such that the expected benefits are not realized. But it’s also possible to have a bad strategy well-executed in which case the long-term outcome is much the same.
The real challenge here is taking the models (like the one described in the article that Travis reviews) and implementing them in the real world. Most of the models don’t address either the massively complex nature of the environment, nor do they provide enough emphasis on the need for raw intelligence and pure dumb luck in implementing the model.
Duncan
Paul and Travis –
I don’t think that anyone doubts that there should be a link between strategy and projects. The issue seems to be more “how does that link get established and maintained.”
Paul’s in-the-trenches experience (which mirrors much of mine) says that even projects that are clearly linked to and supportive of the organization’s strategy may be poorly executed such that the expected benefits are not realized. But it’s also possible to have a bad strategy well-executed in which case the long-term outcome is much the same.
The real challenge here is taking the models (like the one described in the article that Travis reviews) and implementing them in the real world. Most of the models don’t address either the massively complex nature of the environment, nor do they provide enough emphasis on the need for raw intelligence and pure dumb luck in implementing the model.
Duncan
As a follow up to my previous postings about the seemingly insurmountable problems we have with definitions, I stumbled across a very useful website that does a really nice job of summarizing the various definitions of “strategy” and in the end, largely supports Bill’s statement about the real question being about HOW. Check it out…. http://home.att.net/~nickols/strategy_definition.htm
Another very rich site describing the nuances and definitions of strategy is http://www.answers.com/topic/strategy.
Lastly, not to confuse the issue even more, but let’s take a look at the relationship between Grand Strategy, Strategy, Grand Tactics and Tactics: http://en.wikiversity.org/wiki/What_Is_Strategy%3F_Why_Study_Strategy%3F
Grand Strategy Political direction. As Clausewitz so accurately observed, “war is politics carried out by other means.” The Grand Strategic decision-making process includes the decision to go to war, the drafting of Rules of Engagement, and the decision on the GOALS to be achieved by a military operation. The ruling government is at this level in military strategy. It plans wars.
Strategy High-level military planning. This work primarily involves LOGISTICS. The goals set are of lesser scope than those of Grand Strategy, which is concerned with the whole war. Strategy is concerned with dividing the war into theatres, supplying forces in these theatres, and harmonizing the Operational objectives in-theatre to the general battle-plan. Once the army has been given its objectives by the state, the Generals decide how best to achieve these aims. Generals plan campaigns.
Operations (Grand Tactics) In-theatre manoeuvre and attainment of limited objectives planned by the General Staff. This work involves MANAGEMENT of forces which are attempting to make headway towards Tactical goals which must be harmonized with the Strategic and in-theatre goals. Field/senior officers (Colonels, Lt. Colonels, to a degree Majors) are charged with utilizing supplies provided at the Strategic level to achieve their limited goals. These officers plan battles.
Tactics Short-term, easily identifiable objectives. With simple goals set by the Operational level of command, the tactical goals are all bite-sized parts and parcels of the higher level game plan. This level is primarily concerned with IMPLEMENTATION, and the personnel employed here, though not necessarily long-term planners, are technically proficient and capable. Junior officers and senior Non-Comissioned Officers manage combat. Securing and defending geographic points, persons, or denying the same to the enemy are easily identifiable tactical goals. This level takes objectives within a battle.
Curiously enough, this definition fits nearly perfectly with the work of Parvis Rad and Ginger Levin, showing the relationship between Portfolio, Program and Project Management Offices.
Quite frankly, I like the above explanation best of all, and it fits nicely with my long held belief that project managers are not strategic at all, but merely tactical. (The PROJECT or PROGRAM may be strategic, but the project managers and project team are primarily tactical, make things happen, “take the hill” type people)
BR,
PDG, from Jakarta
As a follow up to my previous postings about the seemingly insurmountable problems we have with definitions, I stumbled across a very useful website that does a really nice job of summarizing the various definitions of “strategy” and in the end, largely supports Bill’s statement about the real question being about HOW. Check it out…. http://home.att.net/~nickols/strategy_definition.htm
Another very rich site describing the nuances and definitions of strategy is http://www.answers.com/topic/strategy.
Lastly, not to confuse the issue even more, but let’s take a look at the relationship between Grand Strategy, Strategy, Grand Tactics and Tactics: http://en.wikiversity.org/wiki/What_Is_Strategy%3F_Why_Study_Strategy%3F
Grand Strategy Political direction. As Clausewitz so accurately observed, “war is politics carried out by other means.” The Grand Strategic decision-making process includes the decision to go to war, the drafting of Rules of Engagement, and the decision on the GOALS to be achieved by a military operation. The ruling government is at this level in military strategy. It plans wars.
Strategy High-level military planning. This work primarily involves LOGISTICS. The goals set are of lesser scope than those of Grand Strategy, which is concerned with the whole war. Strategy is concerned with dividing the war into theatres, supplying forces in these theatres, and harmonizing the Operational objectives in-theatre to the general battle-plan. Once the army has been given its objectives by the state, the Generals decide how best to achieve these aims. Generals plan campaigns.
Operations (Grand Tactics) In-theatre manoeuvre and attainment of limited objectives planned by the General Staff. This work involves MANAGEMENT of forces which are attempting to make headway towards Tactical goals which must be harmonized with the Strategic and in-theatre goals. Field/senior officers (Colonels, Lt. Colonels, to a degree Majors) are charged with utilizing supplies provided at the Strategic level to achieve their limited goals. These officers plan battles.
Tactics Short-term, easily identifiable objectives. With simple goals set by the Operational level of command, the tactical goals are all bite-sized parts and parcels of the higher level game plan. This level is primarily concerned with IMPLEMENTATION, and the personnel employed here, though not necessarily long-term planners, are technically proficient and capable. Junior officers and senior Non-Comissioned Officers manage combat. Securing and defending geographic points, persons, or denying the same to the enemy are easily identifiable tactical goals. This level takes objectives within a battle.
Curiously enough, this definition fits nearly perfectly with the work of Parvis Rad and Ginger Levin, showing the relationship between Portfolio, Program and Project Management Offices.
Quite frankly, I like the above explanation best of all, and it fits nicely with my long held belief that project managers are not strategic at all, but merely tactical. (The PROJECT or PROGRAM may be strategic, but the project managers and project team are primarily tactical, make things happen, “take the hill” type people)
BR,
PDG, from Jakarta
Dr. Paul, I really hope you consider writing some posts here…your comments are very insightful, and many of them could be posts in and of themselves!
If you’re interested, just click “Register” in the top-right corner and you can start posting with us!
Dr. Paul, I really hope you consider writing some posts here…your comments are very insightful, and many of them could be posts in and of themselves!
If you’re interested, just click “Register” in the top-right corner and you can start posting with us!
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