Philip R. Diab, MBA, PMP

What do you do if your organization does not have a strategy?

One of the training workshops that I have offered over the past several years focuses on the role of projects in achieving strategy.  Much of what is discussed is an overview of PMI’s Portfolio Management standards and its role in identifying, selecting, prioritizing, and launching strategic initiatives that are focused on organizational change. One of the primary uses of this portfolio approach is a coordinated management of the transformation program within a given organization.

Advocating for the need to align the projects to organizational strategy is a must. I dedicated a whole chapter in my upcoming book discussing the fact that PM professionals must, at the onset, embrace organizational vision and understand organizational strategy. This is by no means an easy undertaking especially if the leader brought in to implement project management is new to the organization or even the industry.

However, there is an added complication that often arises and that is the absence of an organizational strategy all together.  It is not unusual for SMBs to not have a clearly articulated or documented strategy for their organization.  In this case, the PM practitioners will find themselves caught in a battle of changing requirements and conflicting priorities.

Depending on the size of the organization it is also possible that when the PM practitioner points out this lack of strategy, management will add yet another task to their already full plate of activities.  So suddenly what started out as a very challenging exercise turns into an exercise in futility.

The reason for this is simply that having to introduce a new way to operate the business in addition to launching a strategic planning effort is too much for the stakeholders to handle.  Additionally, many PM practitioners do not have the right skill to lead the organization in strategic visioning.  Finally, the strategic planning effort will add a significant amount of time to the overall effort and as a result causes project delays and PM process development. Even if the PM professional has the strategic planning skills along with PM expertise, having to wear multiple hats in the organization will likely lead to confusion of roles.

This may sound quite depressing and a potential opportunity to brush up that old resume and put oneself back out in the market looking for a new job. However, there are many avenues that should be explored long before an exit strategy out of the organization begins to take shape.

The place to start has to be at the most senior level in the organization.  When a gap in strategy is identified the first thing that needs to be done is communication with senior leaders.  These leaders must at least buy into the idea that there is something missing.  It is possible also that this type of communication might blindside them and cause them to take a defensive posture.  It is critical at this juncture to establish a common understanding of what exists and what is lacking in the organization as related to strategy.  It is important to note that the PM professional tasked with deploying project management must not get caught up in arguing with management.  If organizational leaders insist that a strategy exists, then the discussion should shift from working with the leadership team to extract one to a dialogue on what this strategy means and how it impacts projects.

Assuming, though, that one is successful in getting past the first hurdle of convincing management that a new organizational strategy needs to be developed in order to establish alignment of the project portfolio, the next phase is to attempt to craft this new strategy.  This requires launching a strategic framework (process) that allows the organization to build this strategy quickly.  In fact, if this process takes months or worse years, the PM professional will find that they have set themselves up for failure.

The challenge here is that most executives are so busy and having go through a traditional strategic planning exercise may prove to be very painful.  It may seem easy to get them to sit together in a room and write down a joint vision statement.  However, experience has shown that even if they are able to draft a vision statement, what matters is the actual meat underneath this vision statement which will help inform the way that the project portfolio is managed.

One approach that will likely work in this scenario is the introduction of the concept of strategic principles.  Back in May 2001 Orit Gadiesh and James L. Gilbert wrote an article in the Harvard Business Review titled “Transforming Corner-Office Strategy into Front Line Action.”  In this article the authors argued that organizations “today” are operating at a very fast pace and many are not able to dedicate the time and resources required to build a strategy using a traditional process.

The authors also stated that, in such organizations, the real need is to develop a simplified approach based on “strategic principles.”  In essence a strategic principle is a statement that articulates the organizational leadership’s direction to help the management team apply resources, plan activities, prioritize initiatives, and navigate through the market.  Strategic principles can be in categories such as the following:

1. Boundary Principles: identify which opportunities an organization should capitalize on.
2. Priority Principles: determine the order in which opportunities should be pursued.
3. Timing Principles: address organizational time requirements.
4. Exit Principles: detail circumstances in which to discontinue products or activities.
5. How-To Principles: outline management expectations related to processes.

The idea behind this categorization is not to force organizational leadership to draft strategic principles in each category but rather to offer a frame of reference to help management understand the type of guidance they are handing down to the deployment teams.

It might be helpful here to draw on a simple example.  Let’s assume that a PM professional is asked to come into a small software development company.  Upon discovering that the company does not have a strategy, they introduce the concept of strategic principles to the management team.  The leadership team buys into it and identifies a few strategic principles.  They could include:

• New products must be designed, built, and launched in no more than 6 months.
• The company will pursue client engagement opportunities that would yield a net profit of at least 15% per project.
• The company is committed to maintaining a low turnover of employees through empowerment and professional development activities.

Now that the leadership team has articulated these basic principles, the PM professionals can use these strategic principles as criteria in evaluating potential projects within the portfolio to help them in the selection and prioritization process.  Consider for instance a potential project idea to develop a new product that will take 18 months.  Based on the above statements it becomes clear that this project is not aligned strategically with the organization.

One issue that must be taken into consideration is whether the leadership was successful in developing a set of clear and valuable strategic principles.  Ones that not only complement each other but also do not conflict with one another.  The litmus test to an effective strategic principle as articulated by the authors includes the following criteria.  The strategic principle must:

• maintain strategic focus,
• empower workers to innovate and take risks,
• seize fleeting opportunities,
• create products and services that meet subtle shifts in customers’ needs.