1

The Intersection of Strategic

and Project Management

Without a vision the

people project will

perish

E.L. O

wens, Jr. E

d.D

, PMP,

CPPM

2

What brings me to this issue?

Several interviews with senior v.p.’s directors, and clients

Teaching over 9,000 students project management

Current market miscomprehension of the difference in project management and project coordination

A perceive lack of authority given project managers based on senior management ignorance of the role

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Outline

Strategic Management Process

Strategy to Project Project Management Process Project to Process Implications

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The

Inte

rsec

tion

of

Str

ateg

ic

and P

roje

ct M

anag

emen

t “ Only 30 percent of projects come in on time schedule, and/or budget!” PMI Research Conference

2009

5

What are the implications to our firms?

Strategic Management Process

6

Know the Vision and Mission of your enterprise or business unit.

Will this project aid the theory of your business?

Are the objectives clear and do you have clarity of purpose?

Are you organized based on your purpose?

What are the dominate strategy formations?

Based on Strategic Direction

Strategic Management Process

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OWENS’ STRATEGIC MODEL FOR RE-ENGINEERINGTURNING VISION INTO ACTION

INFORMATION RE-ENGINEERING

REAL ORGANIZATIONAL VALUES

Planning On Purpose

Enterprise’sCompetency

M

I

S

S

I

O

N

V

I

S

I

O

N

QUALITATIVE -CONCEPTUAL

ExternalCustomer

Market Assessment

Enterprise’s Culture

Views of Future

Leadership Values

GOALS

GRANDSTRATEGIES

OBJECTIVES

INFORMATION STRATEGY PLAN

BENCHMARKING

BUSINESS AREAS ANALYSIS

BUSINESS SYSTEMS ANALYSIS

FUNCTIONAL STRATEGIES

ACTION PLAN

OPERATIONAL PLAN

PERFORMANCE PLAN

QUANTITATIVE – TASK ORIENTATED

OPERATIONS RE-ENGINEERING

DESIRED BEHAVIORS

Sphere ofInfluence

RESULTS

BUSINESS SYSTEMS INTEGRATION

06/05/06

STRATEGIC RE-ENGINNERING

Strategic Plan

Tactical Plan Tactical PlanTactical Plan

Project Team

Operational PlansOperational Plans Operational PlansOperational Plans

Projects Processes

Processes Projects Processes

Chaos Process Projects

Pro

gram

A

Program B

Program C

Strategic Management Process

8Strategic Management Process

Portfolio, Program , and Project Narrative

9Strategy to Project

FIGURE 2.1

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Theory of the Project

Projects have the greatest chance of success when they emanate out of:

Strategic Plans

Best Practices

Been Given Thoughtful Reflection

Strategy to Project

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Strategic Plan

Tactical Plan Tactical PlanTactical Plan

Project Team

Operational PlansOperational Plans Operational PlansOperational Plans

Projects Processes

Processes Projects Processes

Chaos Process Projects

Pro

gram

AProgram B

Program C

Strategy to Project

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Transformation - WBS

Project Hypothesis

Outputs

Where you want to be:

•Key deliverables

•Stakeholder analysis

•Communications Plan

•Strategic Impact

•Competitive Posture Pro

ject Plan

to g

et there

Project Definition Gap Statement

Define the Problem

Environment

History

Resource

Inputs

Strategic Choice Work

Informal Organization

People

Formal Organization Outputs

Systems

Process

Capabilities

Desired Outcomes

Congruence Model

Why?

Strategy to Project

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Why am I here!

Why am I here!

Why am I here!

Why am I here!

Needs and Wants

Strategy to Project

14Strategy to

Project

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Project management is the leadership art and operations science of organizing the components of a project, whether the project is development of a new process, product, service, policy, strategy, or experience. A project is a one time, multitask effort with a clearly defined start and end date. A project is not something that is part of normal business operations. Projects are owned by a sponsor and managed by a professional practicing project management(P3M). It's typically created once, it's temporary,and it's specific. A project consumes differentcapital resources (human, financial, materials,equipment, and time) based on assumptionsand constraints.

Project Management Definition

Strategy to Project

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PMI Project Phases PMBOK 4th ed.

P3M Effort

Process GroupInitiating Develop Project Charter Identify Goals and Objectives Develop Strategies and Plans Research Previous Experience Develop Project Charter Stakeholder Analysis Feasibility Analysis Requirements Analysis

Develop Preliminary Project Scope Statement

Process GroupPlanning Set Up Project Environment Define Scope Develop Project Schedule Develop Risk Plans Plan for Quality Organize Project Resources Develop Procurement Plans Develop Financial Plan Develop Project Support Plans Develop Project Management Plan

Process Group

Executing Acquire Project Team Obtain Resources Conduct Team Orientation Assign Responsibilities

Direct and Manage Project Execution

Manage Team Performance Assure Quality Manage Project Communication Contracting with Subcontractors

Process GroupMonitoring and Controlling Monitor and Control Project Work Integrated Change Control Scope Verification Schedule Control Manage Finances Perform Quality Control Manage Project Team Produce Performance Reports Manage Stakeholders Risk Monitoring and Control Contract Administration

Process GroupClosing Close Project Assess Satisfaction

Summarize Project Results and Lessons Learned

Review and Recognize Team Performance

Close Out the Project Records

Review and Reconcile Financial Performance

Contract Closure Close Contract

Project Management Process

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.

Quality

Scope

Cost Schedule

Risk Resources

Requirements

Key Project Elements for Success

Project Management Process

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People

Process

Application

Information

Technology

Business Framework

Change Management

Who?What?Where?When?How?Why?How Much?How Risky?What Value?

PM manages the orchestration of change across layers of a business framework

Project Management Process

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Program Mgmt Project Mgmt

Leadership/Ownership

Project to Process

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Four Functions of Organizational Culture

Project to Process

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Change Management

The different “constituencies” go through various stages of reaction to change, at different times.

Certainty Denial

Shock

Anger

Fear

Confusion Surrender

Acceptance

Curiosity

Experimentation

AHA!

Practices

New ProcessesNew Competence

Letting go > real curiosity > experimentation > insight (AHA!) > change

Endings Neutral Zone New Beginnings

Project to Process

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Product/Process Cash flow

To Tp

Tb Tf Tr

Tv Tpb Te

Profit

New Development

To= opportunity cost

Tp= perceived

Tb= begin

Tf= frozen spec.

Tr= released

Tv= volume ramp up

Tpb= payback positive

Te= end of life

Project Effort

Delivered Process

Project to Process

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PM Network Diagramming Tool Set

Project to Process

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SPI = BCWP (EV)/BCWS (PV)

Scheduling EfficiencyShows how much work has been accomplished

for each dollar worth of schedule to date.

CPI = BCWP (EV)/ACWP (AC)

Cost EfficiencyShows how much work has been completed for

each dollar actually spent. This is the more common ratio used

Earned-Value AnalysisProject to Process

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Investment Returns

• The difficulty with cost benefit analysis is that some of the costs and most of the benefits will occur in the future, while the development costs must be paid in the present.

• We try to determine what each of the future costs and benefits are worthnow (their present values) so that valid comparisons can be made.

• Therefore a clear sense of the project ROI, ROA, and ROE is essential for understanding the firms strategic viability.

Project to Process

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Learn from the Effort

Lessoned Learned

A summary of mistakes avoided and risk managed.

Actions are defined to ensure success.

Reflection of difficulties encountered and insights turned into gains.

Project to Process

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Some PM Perceptions

• PM or P3M (Professional Practicing Project or Program Management)

Is there a distinction?

• PM or Task JockeyingThe team leadership narrative

• Method maturity match to cultureWhat is the right amount of rigor?

• Role between sponsor and P3MFidelity: the quid pro quo – referent power

Law of Reciprocity

Implications

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Power of Access and Agendas

Having a seat or impact at the strategic decision making table.-Boman & Deal

Power & Influence

Implications

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Improper P3M assignment will frustrate the project team and enable scope creep. Can the P3M stand up to the forces embedded in the plan!

Assigning the Project Manager

Implications

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A Systems Model of Change

Figure 16-1

Implications

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Project System View

Environment

History

Resource

Inputs

Strategic Choice

Outputs

Systems

Process

Capabilities

Desired

Outcomes

Congruence Model

(Nadler, 1999)

Implications

Work

Informal Organization

People

Formal Organization

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VisionMission

Programs and Projects

Objectives

Implications

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PM BibliographyBolman, Lee G. and Deal, Terrence E. Reframing Organizations, San

Francisco: Jossey-Bass, 1997

Gray, Clifford F. and Larson, Erik W. Project Management-The Managerial Process Boston : McGraw-Hill, 2003

Kerzner, Harold. Project Management 8th ed. Ohio: Wiley & Sons, 2003

Lewis, James P. The Project Managers Desk Reference. Boston: McGraw-Hill, 2000

Nadler, D.A. & Tushman, M.L. (1980) A model for diagnosing organizational behavior. Organizational Dynamics, 9 (2), 35-51

PMBOK Guide. A guide to the Project Management Body of Knowledge. 3rd ed. Newton Square: Project Management Institute, 2004

Senge, Peter M. The Fifth Discipline: The Art & Practice of the Learning Organization. New York: Currency, 2006

Schwartz, Peter, Art of the Long View. New York: Currency Doubleday, 1991

Strategy to Project