JONATHAN DONADO

Strategy Alignment to Project Management

PMI & ASP Linkedin.com/in/jonathandonado

March 23rd 2016

1. The Basics 2. The Alignment 3. Questions

PMI & ASP

What is a Strategy ?

… an Art

Let’s start by defining what it isn’t a Strategy

SOME COMMON MISTAKES:

Be #1 in our market ….Pursue a global expansion….Have unmatched customer

service….etc

STRATEGY is NOT:

a TACTIC an OBJECTIVE or a GOAL a DESCRIPTION

Strategy is a common buzzword:

Where does the word strategy come from?

From the Greek word “Strategos” = The art of the

general

Strategy can be found in the book “The ART of WAR”

by Sun Tzu (from 500 BC)

Today, Business is seen

as a modern

day war….

…challenges of a CEO are similar to an ancient General

…a CEO needs to define a set of tactics to lead to

business “victory”

How do we know what it is our strategy? How do we make one?

A Google Search

provides the following

formal results

?

So … is it a surprise we have misunderstandings about

business strategies?

Or …. why do great strategies have no impact on the

organization?

?

To blame: 1. A strategy that isn’t well defined?

… or 2. A lazy execution?

?

A large proportion of failure is due to Strategy

definition and not in

the execution

Strategy needs to influence Action…. So, in order to influence

Action, it needs to be Remembered….

In order for a strategy to be Remembered…. It needs to be

Understood…

In order to be Understood… a strategy needs to be SIMPLE

(if not it is a just a report)

So, a Strategy needs to be: 1. Remembered 2. Understood

3. Simple

Business Components

Overview

Where are we going? The future. The dreams.

Who are we as a company? What we do. Why we exist. Our purpose. Values.

What are going to do to achieve our objectives? How are we going to get there?

Vision

Mission

Strategy

Example: Business

Canadian

Intellectual Property

Office

https://www.ic.gc.ca/eic/site/cipointernet-internetopic.nsf/eng/wr03475.html

Example: Mission

Vs Vision

From a philosopher

Example: Strategy

vs Tactics

• Planning • Large Scale • Why • Difficult to Copy • Long Term

Frame

• Doing • Small Scale • How • Easy to Copy • Short Term

Frame

Example: Strategy

vs Tactics

So… Business

Strategy in simple terms

A BUSINESS STRATEGY answers 2 questions:

1. How firms create value 2. How firms sustain value

What is Value ?

What Customers are willing to pay What It cost the Company to produce it VALUE

A Survey Says…

70% of employees don’t understand their company strategy

Forbes “When CEOs Talk Strategy, 70% Of The Company Doesn't Get It”, 2013

To make sure all employees understand the Business Strategy,

we need to make sure that it clarifies the following:

1. Why Customers buy our products?

Need to Clarify Key Drivers

Drivers to increase

revenues or lower cost are defined by Strategy

1. Key Drivers

1. Key Drivers

Who are the people that make out target market ?

1. Key Drivers

Value proposition

to differentiate our products:

1. Product Differentiation 2. Cost Reduction

2. Identify Critical Challenges

2. Challenges

Internal or External. Need to define top 3 to 4

obstacles to focus attention

2. Challenges: Internal

What capabilities do we need to be the best in the market at delivering our value proposition ?

2. Challenges: External

- What is the competition doing? - How is the market evolving? - Etc

2. Key Drivers

Strategy Formulation

2. Key Drivers

Strategy Formulation

2. Key Drivers

Strategy Formulation

Porter 5 Forces

3. Determine Must-Win Battles

3. Must-Win Battles

Define battles that a company needs to win in the next 2 to 3 years to

overcome obstacles to value creation

Why do

companies with good strategies

fail ?

Not too many

known names

Let’s take the DOW JONES. It started in 1896. The companies were:

Some names

unknown

DOW JONES 1976. The companies were:

Only GE remains since 1st

Index

DOW JONES 2016. The latest group as of March 21 2016

FAILURE ? Companies

need to balance current

strategies with the

discovery of new ones

The “Strategy Trap” for successful companies:

Exploitation Get cash for growth

Exploration Find new wining products business models

FAILURE because

overtime as Companies

focus more on

Exploitation

The Strategy Trap for successful companies:

FAILURE overtime.

Companies focus

more on exploitation

1 / 3 firms become trapped in just a 5 year period

Exploitation

Exploration

FAILURE overtime.

Companies focus

more on exploitation

7 / 10 firms can’t escape the trap

Exploitation

Exploration

Business Strategy:

Takeaways:

Business Strategy

Takeaways

1. a Strategy defines how the company creates and sustains value

Business Strategy

Takeaways

2. a Strategy has to be remembered, understood and be simple

Business Strategy

Takeaways

3. a Strategy fails because companies focus on mainly in Exploiting instead or Exploring

1. The Basics

2. The Alignment 3. Questions

PMI & ASP

Between high level Vision/Strategy and in-the-trenches project

implementation, we need to bridge the gap

The PMO delivers 2 main areas of improvement to the organization:

1. Helps choose the right projects 2. Helps deliver the projects correctly

Project Expectations:

The projects are expected to be delivered meeting:

1. Budget 2. On Time And …

The projects are expected to be: 1. On Budget 2. On Time 3. Synchronized with

strategy

Otherwise, it is a waste of company’s resources

(human capital and $$)

Project Expectations

But less than 42% of organizations report NO high alignment of

projects to strategy PMI “The High Cost of Low Performance”, 2014

Fact

90% of Senior Executives report that Executing Strategic initiatives are critical for the company’s competitive advantage ( 2013 The Economist Intelligence Unit report)

Facts

Senior Executives report that: - 61% struggle with the execution of those

strategies - Only 56% of strategic initiatives are

successful ( 2013 The Economist Intelligence Unit report)

Why there is no alignment ? That’s where the PMO comes in

PMI “The High Cost of Low Performance”, 2014

- Strong PMO

- No PMO (large firms)

- Not a strong PMO

1. If company lacks uniform management and oversight processes

2. Leadership has hard time gathering information about the project progress and results

3. Project goals are not aligned with business goals

An Organization will benefit from a PMO:

Business Unit PMO

Project Specific PMO

Enterprise PMO

No Alignment

Factors with PMO office

1. Internal Factors: No top support, resources, talent, etc

2. External factors: constant change, volatile markets, competitors, etc

1. If company lacks uniform management and oversight processes

2. Leadership has hard time gathering information about the project progress and results

3. Project goals are not aligned with business goals

An Organization will benefit from a PMO:

Business Unit PMO

Project Specific PMO

Enterprise PMO

TOP DOWN APPROACH: Recipe for Success

1. Have Leadership buy-in 2. Executive team needs to engage PMO in

Strategic Planning 3. PMO needs to report to C-level

(Forrester Research found in those case the PMO is highly successful)

PMO: The RIGHT TALENT

High performance vs Low Performance PMO: 1. 2x more likely to succeed as they have people

with the right talent (technical and business) 2. 1/3 more like to succeed as they have the

adequate number of people

(The Project Management Office Report. PMI 2014)

- General Business Acumen - Leadership - Decision Making - Financial/Cost Control

MEASURING RESULTS

Right Procedures + Right Talent = Results 1. Need to measure 2. Look beyond simple project metrics: scope/

budget / schedule. Look for: • Customer Satisfaction • Delivery time • Etc

Alignment Takeaways

1. The main way to bridge the gap between strategy and project execution is the PMO

2. PMO needs to have the support of the company’s leadership to succeed: Top Down Approach

3. PMO needs people with business acumen and measure other factors on top of project metrics.

1. The Basics 2. The Alignment

3. Questions

PMI & ASP

15

Question #1

PMI & ASP

Are there any more resources (books, web sites, etc.) on the topic?

Best Strategy Books

Websites

15

Question #2

PMI & ASP

Are there other popular Agile methodologies in practice especially in

the Chicago land besides Scrum?

15

Question #3

PMI & ASP

As a case study, looking at Yahoo, where did program and project

managers fail or was this more a corporate strategy failure?

15

Question #4

PMI & ASP

Can we share some tools that help keep things aligned with the

organizational strategy?

Aligning Strategy to Execution: Balance Scorecard

BALANCE SCORECARD Robert Kaplan HBS in 1990s

What you measure is what you get

Aligning Strategy to Execution: Balance Scorecard

BALANCE SCORECARD Robert Kaplan HBS in 1990s

What you measure is what you get

Aligning Strategy to Execution: Balance Scorecard

BALANCE SCORECARD

Aligning Strategy to Execution

Robert Kaplan &

Norton 2008. They present their management system, which houses six sequential stages intended to help organizations capture what they call an “execution premium”—a measurable increase in value derived from successful strategy execution. They outline six stages in this system: 1. Develop the strategy 2. Plan the strategy 3. Align the organization 4. Plan operations 5. Monitor and learn 6. Test and adapt http://www.amanet.org/training/articles/What-Is-Strategy-Execution.aspx

15

Question #5

PMI & ASP

Do you determine strategy first and project management is the tool that

helps you manage the projects to complete the strategy?

Strategy >>> Implementation (PM)

http://www.amanet.org/training/articles/What-Is-Strategy-Execution.aspx

15

Question #6

PMI & ASP

Do you have a strategy development template?

Strategy > Business Model Canvas

http://www.peterjthomson.com/2013/11/value-proposition-canvas/

By Alexander Osterwalder “Business Model Generation”

15

Question #7

PMI & ASP

Does all strategies include projects and the underlying management of them?

15

Question #8

PMI & ASP

Does project management have any influence on strategy?

15

Question #9

PMI & ASP

How can I get a PMO started in a company where I am the only PMP

certified person?

Strategy > PM Influence

https://www.pmi.org/~/media/PDF/Publications/PMI-Pulse-Impact-of-PMOs-on-

Strategy-Implementation.ashx

15

Question #10

PMI & ASP

How can the PMO get a stronger voice into the 'C' level suite if not property

represented through the Organizational Chart ?

Strategy > PMO Voice

https://www.pmi.org/~/media/PDF/Publications/PMI-Pulse-Impact-of-PMOs-on-

Strategy-Implementation.ashx

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Question #11

PMI & ASP

How can we best bridge strategy and project management ?

Strategy > PM Bridging the Gap

http://www.herbrubenstein.com/articles/Implementation.pdf

COMMUNICATION

TOOLS: BALANCE SCORECARD

FORMULATION: SIMPLE STRATEGY

PMO

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Question #12

PMI & ASP

How did you become interested in the topic being discussed?

Strategy > Personal Interest comes from

EXPERIENCE

ROLES

INTEREST

EDUCATION

POST-GRAD

MASTERS

COLLEGE

RESPONSABILITIES

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Question #13

PMI & ASP

How do projects get chosen to align with new strategies?

Strategy > Project Selection for Strategy

http://www.techrepublic.com/blog/tech-decision-maker/prioritize-projects-to-align-

with-strategic-plan-116516/

FUNDS (MONEY)

PRIORITIZE

EQUIPMENT

PEOPLE

Company resources are

limited /scarce

Need a project selection and

priority system to ensure strong link between projects and the strategic

plan

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Question #14

PMI & ASP

How do we ensure that projects we've taken on are still delivering the

business value that was promised in the business case?

Strategy > Delivery Business Value

http://https://www.mindtools.com/pages/article/newPPM_58.htm/

BUSINESS VALUE

1. Continuous support from

SPONSOR

2. Realistic Project

Requirements

3. Measuring ongoing results

4. Feedback / Communication

To continue to deliver business value is critical

that the following occur:

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Question #15

PMI & ASP

How do you balance Strategy and resource loading?

Strategy > Resource Loading/Allocation

http://www.techrepublic.com/blog/tech-decision-maker/prioritize-projects-to-align-

with-strategic-plan-116516/

Strategic Planning: Resource allocation begins at strategic planning when a company formulates its vision and goals for the future. The vision and strategic goals are accomplished through achievement of objectives.

Budgeting: Once you have set your objective, you will need to allocate sufficient resources to accomplish it. In practical terms, this is often a matter of project budgeting.

15

Question #16

PMI & ASP

How do you define a business strategy?

Strategy > Definition

“Business Strategic” is the direction/path and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations".

15

Question #17

PMI & ASP

How do you ensure benefit realization is tracked consistently and accurately?

15

Question #18

PMI & ASP

How do you get executives to be more transparent with the PMO with regards to the business strategy? It seems PMO

tends to be that last to know.

Strategy > Management to Support PMO

https://www.pmi.org/~/media/PDF/Publications/PMI-Pulse-Impact-of-PMOs-on-

Strategy-Implementation.ashx

THE IMPACT ON PMOS ON STRATEGY IMPLEMENTATION: Conclusions

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Question #19

PMI & ASP

How do you get more funds for resources? Best methods?

15

Question #20

PMI & ASP

How do you manage project and strategy integration cross culturally?

Strategy > Cross Culture Project Management

Time Orientation

Individualism

Communication

Project Manager shall be culturally sensitive and promote creativity and motivation through flexible leadership. The PM needs to promote an environment of cross-cultural communication with respect and understanding of differences among team members.

Main Challenges:

https://www.gwu.edu/~umpleby/recent_papers/2009%20PMI%20Anbari%20Cultural%

20Differences.pdf

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Question #21

PMI & ASP

How do you use the tools discussed at your job?

Strategy > Tools Used

https://www.gwu.edu/~umpleby/recent_papers/2009%20PMI%20Anbari%20Cultural%

20Differences.pdf

Tool Used: Business Plans, SWOT, Business Model Canvas, Balance Scorecard, Porter 5 Forces, McKinsey 7s

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Question #22

PMI & ASP

How does one get to be empowered to say 'no' to a project, without hiding

behind process ?

15

Question #23

PMI & ASP

How does one put an end to pet projects that do not align to the mission/vision of the company ?

15

Question #24

PMI & ASP

How is the growth of Agile project management impacting strategic

planning?

15

Question #25

PMI & ASP

How much does the PMO influence either or both (agile project

management & strategic planning)?

15

Question #26

PMI & ASP

How much involvement in the strategy from external PM? (6 months contract)

15

Question #27

PMI & ASP

How should change of strategy be communicated to all shareholders?

15

Question #28

PMI & ASP

How to effectively communicate strategy up, down and across the

organization?

15

Question #29

PMI & ASP

How to identify the most effective project management methodology for

a project?

15

Question #30

PMI & ASP

How to measure cost of risk for your project ?

15

Question #31

PMI & ASP

I have seen a lot of divestment by formerly large companies, e.g., HP,

Abbott, and parts are being sold off. Does strategy come first before

projects, programs and portfolios ?

15

Question #32

PMI & ASP

I majored in MIS, specializing in IT project management. While I have a little PM

experience from past work experience I have never been a real PM. How do I get

started towards a true PM career ?

15

Question #33

PMI & ASP

If I gave you a laptop to plan your next project, what software would you want

on it?

15

Question #34

PMI & ASP

I'm interested to hear about the alignment of strategy with PM

15

Question #35

PMI & ASP

In a large organization, how can a PMO do a better job to help facilitate project

selection/prioritization across departments?

15

Question #36

PMI & ASP

In an acquisition situation, when 2 cultures are radically different, what type of turnover would be expected?

15

Question #37

PMI & ASP

In the arena of IT, much focus is on new/shiny features that will advance

strategic objectives. How can we help the business to understand the

importance of underlying ?

15

Question #38

PMI & ASP

Is having a $ value or cost avoidance the only true measures of aligning projects with business strategy ?

15

Question #39

PMI & ASP

Is it always necessary to have a strategy defined around a project or is

it enough just to have scope and deliverables ?

15

Question #40

PMI & ASP

Is it still project or maybe program management already ?

15

Question #41

PMI & ASP

Is there a recommended framework for aligning strategy with performance ?

15

Question #42

PMI & ASP

Does this question of strategy and projects differ in large organizations

versus start-ups ?

15

Question #43

PMI & ASP

I just want to get a high level background on Strategic & Business

15

Question #44

PMI & ASP

Please explain your experience in expressing the value of PM's to upper

management.

15

Question #45

PMI & ASP

Project Management in the Federal Government

15

Question #46

PMI & ASP

Project with PMO role in it, and without

15

Question #47

PMI & ASP

Recommendations for newly certified PMPs looking for work ?

15

Question #48

PMI & ASP

Share your few thoughts on best business practices for Global Business

Management

15

Question #49

PMI & ASP

Should each team possess own strategy?

15

Question #50

PMI & ASP

Should project strategy be dictated by the shareholders or recommended by

the project manager ?

15

Question #51

PMI & ASP

Should a strategy be bottom up or top down ?

15

Question #52

PMI & ASP

Since many functions tend to become siloed over time, what steps can a PM

take to insert themselves into the strategy conversation ?

15

Question #53

PMI & ASP

Tools and ideas ?

15

Question #54

PMI & ASP

What are common techniques to align PMO objectives with corporate

strategies ?

15

Question #55

PMI & ASP

What are some techniques to verify strategic and project alignment ?

15

Question #56

PMI & ASP

What are some ways to communicate that projects are not aligned properly

to affect change ?

15

Question #57

PMI & ASP

What are successful efforts you have used to integrate project management

efforts into strategic development efforts ?

15

Question #58

PMI & ASP

What are the major stumbling blocks to align strategy with project

management ?

15

Question #59

PMI & ASP

What are the ramifications of misalignment ?

15

Question #60

PMI & ASP

What are the ways that portfolio management aligns company's project

management practices with its corporate objectives ?

15

Question #61

PMI & ASP

What are ways to view a list of strategic initiatives ?

15

Question #62

PMI & ASP

What characteristics needed of a PMO leader ?

15

Question #63

PMI & ASP

What is the best example of a project well aligned with strategy that you have led? How did that alignment

affect the project outcome ?

15

Question #64

PMI & ASP

What is the difference between tactical and strategic ?

15

Question #65

PMI & ASP

What is the fastest growing PM methodology ?

15

Question #66

PMI & ASP

What mechanisms do you recommend to address outcomes when project managers are contractors and no

longer at the company ?

15

Question #67

PMI & ASP

When would a project be chartered that does not align with the strategy

and why ?

15

Question #68

PMI & ASP

Where have you seen project management efforts fail during

strategic initiatives ?

15

Question #69

PMI & ASP

Would this vary between Waterfall and Agile environments ?

15

Question #70

PMI & ASP

Wouldn’t your company’s business strategy dictate whether or not to

initiate a project ? (internal or external clients)

15

PMI & ASP

THANK YOU

By Jonathan Donado

15

Contact Info

Linkedin.com/in/jonathandonado

Thank You

Jonathan.L.Donado@gmail.com

www.branded.me/jonathandonado