This post was originally published on July 24th, 2016. It was just featured in PMI Chicagoland Chapter’s Newsletter!
How many times have you heard the term “Business Transformation?” Have you ever wondered about the exact meaning of this widely used term? I have. Basically, it is a change management strategy which has the aim to align people, process and technology initiatives of a company more closely with its vision, mission and business strategy.
Assuming we can generally agree with this definition, I’m wondering why so many transformational strategies fail. More specifically, why is that only 29% of companies are well above average at strategy execution and only 32% are considered successful at executing initiatives to deliver strategic results? Why is that less than half of organizations report high alignment of projects to organizational strategy and only 48% of projects are designed to achieve the formulated strategy? Why do only 62% of strategic initiatives successfully meet their original goals and business intent, and only 59% of projects have actively engaged executive sponsors? [i]
The answer to these complex questions lies at the juncture of two fundamental realities:
- Reality 1 – Management often does not recognize execution as a formal management discipline. Recognizing this reality is absolutely integral to strategy execution. When management does not understand the critical role it plays in breaking down silos to lead and communicate transformational change, the swirling sound of the drain can be heard. [ii]
- Reality 2 – Portfolio and project management professionals too often do not have a comprehensive view into the thinking behind the organization’s overall strategy, nor a mature strategy mindset required to drive transformational change.[iii] Organizations that align their project management office to strategy report 27 percent more projects completed successfully and 42% percent fewer projects with scope creep. [iv]
To make sure your organization’s transformational strategy doesn’t go down the drain, there are 2 solutions that will help unplug these realities and keep your organization’s strategy clear.
SOLUTION 1: Effectively and efficiently implementing an organization-wide strategy requires many factors to come into alignment before successful implementation can occur.
- An accountability model must be clearly defined and embraced for each element of the organization’s strategy.
- The organization-wide strategy must be effectively and agilely cascaded down into the business units, support functions, teams and individuals down through the organization.
- Adequate resources (time, budget, skills and capacities) must be available. It does great harm to an organization to spend valuable time and money to develop a going forward strategy, only to find out it does not have sufficient resources to implement the plan.
- Managing transformational change on a consistent and professional basis is vital. Change management is the primary responsibility of the executive leadership team and involves the understanding and managing of internal and external change and understanding the influencers of change.
- Establishing a performance culture is a fundamental requirement for effective implementation and a frequent failure point in many strategic planning and management processes.
SOLUTION 2: Even with SOLUTION 1 in place, transformational strategies often times fail because the project management professionals who lead implementation all too often have a tactical perspective, rather than a strategic one.
- An increase in a Project Management Professionals (PMPs) strategic management knowledge and competencies will increase the strategic thinking behind any initiative or project. A clear understanding by project management professionals of the organization’s strategic environment, longer term strategic direction, enterprise level strategic operating plan, and the portfolio of initiatives and investments being made to achieve success is fundamental.
- An investment by project management professionals in adopting an enterprise wide strategic mindset will reduce the frequency of gaps in understanding as strategy flows from the top of the management hierarchy down through the project professionals who are so vital to execution.
In summary, there is growing awareness as strategy comes down from the top of the organization that a problematic gap occurs for those who are charged with implementing strategy. Absent a clear understanding of the who, what, where, when and how of strategy, project management professionals are left to execute strategic initiatives and projects by making assumptions and optimizing tactical considerations versus understanding the strategic thinking behind the initiative or project.
Clear strategic thinking, deliberate communications and attention to detail from the management team, and strategic management competency building by the middle management/project management team will go a very long way towards making sure your organization’s transformational strategy doesn’t go down the drain.
[i] PMI Pulse of the Profession: The High Cost of Low Performance, February 2016
[ii] Execution: The Discipline of Getting Things Done by Larry Bossidy and Ram Charan, 2002
[iv] PMI Pulse of the Profession: The High Cost of Low Performance, February 2016