Most organizations face demands for project funding and resourcing well in excess of affordable supply. Ensuring those demands align with organizational strategies and priorities just complicates the decision-making process. Wouldn’t it be nice if there was a simple approach that would address these challenges?
In this post, we’ll look at the complexities one organization faced in dealing with competing and conflicting demands across their various lines of business. The actions it took ensured the tactical plans fully supported the company’s strategic plans and priorities and optimized business and IT capacity in support of those goals. The secret? A simple process that considered 9 factors to ensure strategic project alignment.
Thanks to R.D. for the details on this case.
This mid-size financial services organization had a rough and ready approach to funding business and IT initiatives – convince the CEO and you’d get the dough. Of course, there were a few problems with this approach. The CEO didn’t have a systematic method for assessing the proposals and deciding which should go ahead and when. There was no guarantee that the initiatives approved by the CEO supported the organization’s strategic plans and priorities. Nor was there any assurance that the approved projects represented an appropriate mix of strategic, tactical and operational. Sometimes the CEO considered these things, sometimes he didn’t. Often the other affected departments didn’t know that a project was approved until after the CEO had made his decision, which usually wreaked havoc with the affected departments’ internal plans and priorities. There was very little understanding of the cumulative financial and resource impact as initiatives were approved over the course of the year.
The CEO charged the VP of Finance with managing the financial side but he had little information and even less co-operation from the other VP’s. IT faced varying levels of demand with little warning and little control over expected timing and costs. Needless to say, project on-time, on-budget performance was abysmal. In the eyes of the CEO and the other VP’s, that was IT’s issue.
So the CIO decided that she needed to take control of the situation, at least from an IT perspective. She wanted to implement some kind of gate that would give IT the opportunity to control what projects they took on, what other projects they were packaged and released with, when they were scheduled, how costs were estimated and controlled, how resources were planned and allocated and how project performance would be measured. She reviewed her concerns and plans with the CEO and, to her surprise, found a very receptive audience. It turned out the CEO had been unhappy with the project approval process for some time but hadn’t had the opportunity to consider alternative approaches. Together, the CEO and CIO mapped out an approach that would address the challenges they faced.
The CEO and CIO agreed to develop a tactical planning process that would:
- Ensure support for the company’s strategies and priorities,
- Provide an appropriate mix of strategic, tactical and operational investment,
- Provide an open and transparent process built on a foundation of quantitative assessment,
- Manage overall demand to optimize capacity and maximize value delivered,
- Engage all senior managers in the process so there would be broad understanding and buy-in on the results.
- Develop and deliver a process to achieve the goals within six weeks.
With the CEO’s backing, the CIO presented the plan to the company’s executives. There was lots of grumbling about added bureaucracy, impediments to individual department’s ability to respond quickly to opportunities, loss of control, etc. The CIO, and the CEO, countered that the plan would ensure that the company’s priority initiatives would be launched and resourced more effectively and delivered more successfully. They did concede that some projects that might get funding under the old regime wouldn’t get support under the new plan. But that was an acceptable cost to ensure strategic alignment. With somewhat grudging acquiescence, the executives approved the plan.
The CIO assigned responsibility for developing the process to the PMO Director. With an aggressive target of six weeks to deliver recommendations to manage the demand in support of corporate strategy and make the most effective use of on tap capacity, he charged his managers with a research project: discover the relevant best practices for collective review. Time frame: one week. He called it Maximizing Value, Optimizing Capacity – MVOC for short.
At the end of the week, the PMO Director and his managers met to review what they had uncovered and assess suitability to the task at hand. They had accumulated a collective wealth of best practices, including material from the Office of Government Commerce, ISACA, the Project Management Institute, from leading academic institutions and change management practitioners, a number of books on strategic execution as well as countless articles on executing strategy successfully.
The managers presented their discoveries, explaining why they believed their material supported the organization’s goals and should be incorporated into the final MVOC process. The group discussed the relevance of each of the recommendations presented and made collective decisions to retain or drop from further discussion. They then reviewed each of the retained recommendations against their ability to illuminate the following aspects of a proposed initiative:
- Opportunity – the rationale for undertaking an initiative
- Strategic alignment – the number one driver for a proposed initiative and the most significant test of its value
- Competitive environment – the impact of a proposed initiative on the external environment
- Benefit – the expected operating benefit
- Payback period – the required payback period and life expectancy for a proposed initiative
- Stakeholders – the key decision makers whose involvement would be essential for success
- Organizational impact – the number of organizational units impacted, both internally and externally
- Organizational risk – the aggregate risk for the organization associated with a proposed initiative
- Capacity – the skills, capabilities, resources and services necessary to deliver
The group selected nine different recommendations that addressed most of the above factors to form the core of the MVOC process. They then developed a plan to create the first MVOC draft for review with the CIO. The plan included three activities: develop the initiative workbook that would be used to capture the necessary information; develop the quantitative assessment framework that would be used to arrive at a numeric score for each initiative; and develop the process guide, including background, process goals and objectives, the process model and roles and responsibilities.
The managers divided the responsibilities for the activities among themselves and went to work. When the PMO Director and his managers met with the CIO to review progress, the drafts for the initiative workbook, the quantitative assessment guide and the process guide were well formed. After a few tweaks, the CIO was sufficiently pleased that she booked a review meeting with the executives to approve the package and initiate rollout. The proof would be in the application. The executives agreed to the rollout.
The PMO managers introduced the MVOC to business unit directors and managers with the VP in attendance and in support. Business Analysts then worked with the business units over a six week period to complete a workbook and apply the assessment framework on all current and planned initiatives. At the end of the six weeks, 145 new initiatives had been documented and assessed in addition to the 65 that were already in progress. The results for each department were reviewed and approved by the responsible VP.
The PMO managers took the assessment results and put them together to reflect ratings and rankings, organizational demand and impact, risks and rewards. From that they prepared two scenarios – one maximizing strategic value but posing significant risk and capacity challenges and one that included the top strategic initiatives but included a greater allocation to strategically aligned tactical initiatives to lower the risk and capacity concerns. The scenario maximizing strategic value included only eight initiatives. The second, more tactically focused scenario included four strategic initiatives, twenty tactical undertakings and six operational allocations. They also looked at the 65 in-progress projects and concluded that eleven should be cancelled outright for lack of strategic alignment.
They reviewed the findings with the CIO who took the results to the executives largely unchanged. The VP’s received the full package of assessments a week before the meeting and were given an opportunity to discuss the results with a PMO representative. Two of the eight executives took advantage of the offer and only four minor adjustments were made to the package. None the less, the executive review was a tense affair, pitting departmental interests against strategic value. At the end of the meeting, the second scenario was approved with the addition of three more tactical initiatives. The executives agreed to cancel six of the eleven recommended projects to resource the three additions. Incremental hiring was approved to resource the plan.
A month after the executive review meeting, at the request of the CIO, the PMO Director sent out a short assessment to the executives to get their feedback on the effectiveness of the MVOC process. The results:
Not bad for a quick six week effort! Also, in an interesting follow-up one year later, the CIO assessed executive satisfaction with project performance. Prior to the implementation of MVOC only 30% had rated project performance as “Met Expectations”. A year after MVOC, slightly over 80% were at the “Met Expectations” level or higher. For this company at least, it definitely paid to manage value and optimize capacity.
How a Great Leader Delivered an Effective Corporate Practice
The CIO did a number of things right to deliver the results.
- She tackled, head on, an issue that was causing her grief and costing the organization through poor project performance and wasted capacity. In the process of getting support from the CEO, she discovered that she wasn’t the only one bothered by the existing practice. It pays to talk!
- She established a few key goals for MVOC and got buy-in to those goals from the stakeholders that mattered most.
- She set a very short time horizon to deliver results. She achieved the six week target with time to spare and ensured that the executives would retain the information presented at the start to facilitate the review and decision-making process later on.
- She engaged the PMO Director, and through him his managers, right up front. It got them involved and on-side early and enabled the rapid development of the MVOC process. They were also fully up to speed when they received the go ahead to roll out MVOC.
- She was willing to work with her peers to shape and mold MVOC to meet their collective needs. She welcomed changes in the process itself and in the final results. That helped reduce resistance from the other executives.
- She measured the executives’ satisfaction with the process and followed up with the measurement on project performance. Of course she shared those results with the rest of the organization. That helped her peers to feel even more positive about MVOC and the follow-on project results.
So, if you find yourself in a similar situation, leverage all those practices you know have been proven and add value. Marshall the insights and support of your colleagues. Involve the affected stakeholders right up front. Do things quickly, in four to six week intervals. And measure and report how you’ve done. Finally, put these points on your checklist of things to do in future endeavours so you too can be a Great Leader. And remember to use Project Pre-Check’s three building blocks right up front so you don’t overlook those key success factors.
In the interim, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, send me the details and we’ll present it for others to learn from and comment on. Thanks
Drew Davison is the owner and principal consultant at Davison Consulting, a senior consultant at Mapador Inc. and a blogger on Project Times. He is the developer of Project Pre-Check, an innovative framework for launching projects and guiding successful project delivery, the author of Project Pre-Check – The Stakeholder Practice for Successful Business and Technology Change and Project Pre-Check FastPath – The Project Manager’s Guide to Stakeholder Management. He works with organizations that are undergoing major business and technology change to implement the empowered stakeholder groups critical to project success. Drew can be reached at firstname.lastname@example.org