This Focused Performance Weblog is a "business management blog" containing links and commentary related primarily to organizational effectiveness with a "Theory of Constraints" perspective. TOC is noted for its applications in Project Management and Multi-Project Management (Critical Chain) and Operations Management (Drum-Buffer-Rope), as well as in Marketing, Strategic Planning and Change Management (TOC Thinking Processes). If you are on an archive page, current postings are found here.
Sunday, October 12, 2003
Enterprise PM - It Starts with Strategic Interdependence -- Last week, I wrote a piece extolling the criticality of interdependence in making promises, predictions, and plans. In it, I mentioned the need for projects to be driven to support the strategic needs of the organization and to keep those needs in mind, overcoming the strength of apparent functional boundaries when defining the project. It reminded me that those blocking boundaries don't just happen in a vacuum. They are the result of fragmented strategies that cause conflict and competition exactly where cohesion and collaboration are needed most, in the execution of the strategic plan of the enterprise. So, let's get into strategic interdependence and the strategic plan as the driver of the work done within an enterprise project management process...
An effective strategic roadmap serves several purposes. It identifies the things that are currently blocking desired levels of attainment of "goal stuff" and tactical objectives designed to get there. Once short- or mid-term problems or blockages are dealt with, the strategic roadmap also lays out a clear vision that builds upon the future freed up capabilities and defines the path to strategic objectives.
Too often, strategic plans, when they exist, are merely the collection of local, functional initiatives, developed locally and functionally as a response to a direction set by the top of the house. A high level direction is set, an affordable total budget is determined, and the various pieces of the organization try to divvy up that budget in an fund what they think makes sense to follow the strategic direction, with minimal, if any, regard to the relationship of other parts of the organization to the goals.
These hierarchically driven, silo-centric plans may seem to make sense when looking at the larger functional objectives in relationship to the direction, or when looking at the components within the functional efforts to achieve their local objectives.
They seem to make sense if one buys into the idea that the whole is the sum of its individual parts. But in any complex system, be it an organization or a project, the whole is more about the relationships between the parts than the parts themselves. In the common strategy/budget process described above, the resulting lack of connection across functions, the lack of relationship between local endeavors, and the lack of coordination and synergy all result in wasted efforts at best and conflicting efforts at worst.
An effective strategic planning process is developed not in the isolation of individual functional fiefdoms, but in an effort that involves the leadership of every function. It simply "starts with the end in mind," admits to the problems and obstacles that are in the way of that "end," and develops an understanding of the core root cause problems that perpetuate them as well as the direction of their solution. From there, based on those core, aligning directions, the process identifies intermediate tactical objectives and opportunities that are clearly understood as stepping stones to the larger strategic objectives, and links them to one another via logical connections open to scrutiny and refinement by the rest of the organization.
A Real-life Sample Strategic Roadmap
(Shrunk to illegibility to honor confidentiality of Focused Performance client that used it to grow throughput/revenue over 50% in 15 months and to set them up to support innovative market offers.)
As the driving aspect of true enterprise project management, such a strategy then drives a portfolio of projects and programs to achieve those tactical objectives in a consistently aligned manner. In the same way that a project is collection of interdependent efforts, an organization's strategy is its "meta-project" aimed at delivering its future goals.
A clear strategy, in addition to providing the major project and programs that make up the enterprise project portfolio, also goes a long way to clarifying their relative priorities. Projects and programs aimed at dealing with current constraints to organizational throughput and deeper core problems rank high in priority; the former to drive sustainable immediate gains, and the latter to lay the foundation for subsequent efforts associated with those core problems. To the extent that the strategy identifies time-sensitive opportunities, they too, get a priority nod. The strategic road map often serves to trim a lot of waste that comes in the form of unnecessary local efforts, freeing resources up to address what is truly important. And finally, the easily seen time relationships associated with the cause and effect logic of a good strategic roadmap provide further input into the prioritization process. (After all, causes come before effects, that combined with additional causes added later in the form of projects or programs, lead to further effects and objectives on up the strategic road. There's no point in jumping on project D immediately if, to get its full benefit, you need to complete A, B, and C first.)
In addition to what objectives are going to be targeted and what efforts are going to be used to reach them, the strategic plan also needs to provide a certain level of direction for how those efforts will be delivered. One of the obstacles that faces any strategy is the inevitable fact that there is a finite set of resources available to deliver it. One of the responsibilities is to identify both the key current constraining resource as well as the ideal "strategic constraint" that the organization chooses as the basis for its competitiveness. You can't accomplish more than your current bottlenecks will allow, so there's no point in pipelining more than can be done. And if the current constraint doesn't make sense from a strategic or competitive perspective, a piece of the strategy needs to include means to move the constraint to where you want it. Clarity on resource constraints also impacts prioritization, since you don't want to waste critical resources on low value projects or programs that take a lot of their attention.
Enterprise PM-related Outputs and "Customers" of the Strategic Planning Process
A project plan does not stop at a hierarchical work breakdown structure detailing pieces of the effort. An effective plan goes on to develop dependency networks interlinking the components and defining resources needed to effectively manage the effort and deliver the whole. Too often, strategies stop with the equivalent of a WBS and fail to fill in the arrows across the functions that define the real dependencies and clarify what is both necessary and sufficient to succeed as a complete enterprise. Such a road map, often depicted as a vertical logic tree leading to the strategic objectives, if turned on its side, would look like your basic project dependency network. To a large extent, strategic planning and execution is little more than project management, writ large. And the tools that go along with effective enterprise project management are the means of making it happen, as well as the primary source of strategic risk (and opportunity) management by feeding back the promises and performance of the pipeline of projects against the strategic expectations.
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