Integration of Organization Strategy with Projects: Summary and Quiz

Integration of Organization Strategy with Projects: Summary

The priority system focuses attention on the mission and major goals of the organization. The system forces management to develop a mission and goals that are highly operative, not motherhood and apple pie statements such as “maximize shareholder’s wealth.” A single-project priority system that links strategy formulation and implementation fills a void found in many product and service organizations. The important point is to develop a relative ranking system that ties the long-range plan to projects. The major value of the system described in the case study is not in the numbers but rather in identifying areas of disagreement and gaining consensus on direction. The resultant priority system provides focus at all levels in the organization and furnishes the basis for effective allocation of scarce human and nonhuman resources. The system results in bottom-up proposals from front-line managers who have the expertise, who are closest to the customer, and who have a clear vision of where the organization is headed. The process encourages the entrepreneurial spirit and allows individual project initiators to flourish.

The system described in detail is only one example of many priority systems found in practice. Linking strategy formulation and projects using a priority system helps to ensure that everyone will stay focused on the organization’s objectives. Many organizations have gained considerable insight from the use of their priority system. The benefits of projects to the long-term strategic direction of the organization are more easily evaluated before and after they occur with a priority system.

Only one priority system can exist. It's important to ensure all projects are evaluated by the same consistent criteria. It's critical to communicate priority criteria to all organizational stakeholders. Every project selected should be ranked and the results published. Senior management must take an active role in setting priorities and sup porting the priority system. Going around the priority system will destroy its effectiveness. The project priority team needs to consist of seasoned managers who are capable of asking tough questions and distinguishing facts from fiction. Resources (people, equipment, and capital) for major projects must be clearly allocated and not conflict with daily operations or become an overload task. The priority system must respond quickly to changes. An appeal process should be included in the system; all appeals and responses should be open and documented.

When strategy and projects are closely linked and projects are readily recognized as the primary vehicle to implement strategy, the next challenge is to establish a consistent, formal, disciplined process for managing the implementation of projects. In theory this may appear to be a contradiction since all projects are different and teams need autonomy to act freely. However, the absence of strategy linkage and a consistent process for managing projects is known to create serious problems. It's possible to meet both conditions and not strangle organization innovation and the motivation of self-directed teams.

Quiz

1. Describe the major components of the strategic management process.

2. Explain the role projects play in the strategic management process.

3. How are projects linked to the strategic plan?

4. Why does the priority system described in this section require that it be open and published? Does the process encourage bottom-up initiation of projects? Does it discourage some projects? Why?

5. Describe an operative system that will prioritize projects by their contribution to the strategic plan. How does this system assist in allocating organization resources and avoiding over-commitment of resources? How does your system differ from the case study model?