Competitive Advantage

Today I would like to cover two categories in the survey that are nearly opposite.  The first is Reduced Quality. The second is what I classified as an Increased Demand for Good Project Management.

Fire

Most of these actions appear to me to be short-sighted ones that solve a current financial problem at the expense of long-term viability and competitive advantage.  It looks to me like a lot of unnecessary fire-fighting will ensue as a result.  Here are some sample comments:

  • North Americaquality resources have been let go despite efforts to let go of ‘poor performers’ first.  The survivors are left with too much to do, and very low moral which both lead to quality problems and schedule slippage.  There is definitely more of a focus on the balance of achieving schedule versus burning people out.  I’ve got my PM’s spending more time on the care and feeding aspect of managing the resources on their teams to keep morale and productivity up.
  • Europe – Making day to day methodology ‘enforcements’ lighter, meaning that eventually the company will need only a part time or associate project manager.
  • North AmericaTraining budgets cut, companies asking people to play dual roles – i.e. PMO Director and PM,  PM and Business Analyst, etc.
  • North America – I have seen project management processes eliminated due to resource reductions or skipped to try and get more done.
  • Asia – Engineering teams left to wonder where they’re going next.  Hard to put out quality software as a result.
  • Europe – search for cheaper pm, which results in worse control
  • North America – The need to implement more projects at once and complete them done more quickly.
  • Europe – I am expected to do more with less:  both money and people.
  • North America – Theme common to most economic downturns…do more with less, which generally means more projects than number of PMs to manage them.
  • Europe – willing to spend less money than before on professional education and training on project management in their attempts to cut the costs.17

Water

Good project management and support systems can help put out fires, and if done right prevent most of them.  Let’s see what comments there are for this focus:

  • North America – Companies are requesting more qualified professionals and it traslates in a PMP requirement in the case of project managers.
  • AustraliaReduced tolerance for ineffective project managers
  • North America – If anything, a much stronger emphasis on project management especially in terms of budget management. Granted, this has always been the case, but even more so now. One thing I am *not* seeing, is a decline in real demand for true / experienced PM’s who can manage very complex enterprise projects.
  • North America – I work across the US.  Impacts vary by industry and geography.  There are always positions for great project managers.  More needed than ever.

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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.

References

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.

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