Integration of Organization Strategy with Projects:
Introduction

Today's intense global competition has altered organizational culture and business processes. Business has been forced to downsize and decentralize operations. The resulting changes are most obvious in organizations strongly influenced by time to market. Examples include: CNN, Hewlett-Packard and Electronics Data Systems (EDS). In the late 1980s and early 1990s these and other organizations addressed this environmental transformation by shifting their organization culture to be project-driven and results-oriented. A notable project-management author coined the phrase "Managing organizations by projects" to describe this evolving shift in organization culture. It is clear that the intent is to use projects to move organizations toward their strategic targets. Linking all projects to the strategic direction of the organization is critical to success.

Every project should contribute to the organization's strategic plan, which is designed to meet the future needs of its customers. However, there are few medium or large organizations in which many managers can identify a project's priority and link it with the strategic plan. Ensuring a strong linkage between the strategic plan and projects is a very work-intensive task that demands lots of continuous attention from top and middle management. The bigger and more diverse an organization, the more difficult it is to create and maintain this strong link. There is ample evidence that many organizations have not developed a process that clearly links project selection to the strategic plan. The result is poor utilization of the organization's resources-people, money, equipment, and core competencies.

How can an organization ensure this linkage? The answer requires integration of projects within the strategic plan. Integration assumes the existence of a strategic plan and a process for prioritizing projects by their contribution to the plan. A major factor that will ensure the success of integrating the plan with projects lies in the creation of a process that is open and published for all participants to review. This series of articles presents an overview of the importance of strategic planning and the process for developing a strategic plan. Typical problems encountered when strategy and projects are not linked are presented. A generic methodology that ensures integration by creating very strong linkages of project selection and priority to the strategic plan is then discussed.

Finally, a priority-selection model used in practice is explained. The intended outcomes are clear organization focus, best use of scarce organization resources (people, equipment, capital), and a vehicle for motivation.

Why Project Managers Need to Understand the Strategic Management Process

In today's world of organization downsizing, the process of strategic planning has come to include participants from nearly every level of the organization—as opposed to only senior management. There is a distinct trend toward a top-down and bottom-up approach to strategic management that encourages commitment from stakeholders at every level. Project managers are finding themselves a part of this process and are becoming more involved in strategic planning and the project selection process. This participation is good for several reasons:

1. Involvement gives the project manager an overall perspective of the organization focus, which typically leads to professional growth and more reasoned decisions.
   
   



2. Experienced project managers can provide valuable insights concerning organizational capabilities and resource constraints.
   
   



3. Each project manager can see his or her project in relation to other projects.
   
   



4. Awareness of the selection criteria and process facilitates reassignment of resources and priorities among projects in a less hostile manner.

Therefore, project managers find it valuable to have a keen understanding of strategic management and project selection process. The latter is discussed next.