Episode 385: Aligning Projects with Organizational Strategy (Free)

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Our recommended Project Management Professional (PMP)® Exam Prep:

Jay Payette, PMP

Projects are the tool businesses use to take a strategy and turn it into reality. So your project better be aligned with your long term business plan. All of them!

This interview about strategic alignment with Jay Payette was recorded at the Project Management Institute (PMI)® Global Congress 2016 in San Diego, California. We discuss his presentation and white paper Making it Happen - How Project Managers Can Drive Strategic Alignment and Strategy Execution. Here is the abstract:

Good strategy can be critical to organizational success, however in order for strategy to transform from ideas into results it must be successfully executed. In order for organizations to successfully formulate and execute strategy they must achieve sufficient strategic alignment.

Project managers and project team members can make a critical contribution to their organization’s strategic alignment. This paper examines strategic alignment through the frame of three strategic functions: formulate, align, and execute and how they interact with each other.

Additionally, three strategic alignment frameworks are presented and recommendations are made as to how they may be used by project managers to contribute to organizational strategic alignment at the project-level.

Episode Transcript

Below are the first few pages of the transcript. The complete transcript is available to Premium subscribers only.

Podcast Introduction

Cornelius Fichtner:  Welcome everyone. You are listening to the Project Management Podcast™ at www.pm-podcast.com . We are coming to you once again live from the 2016 PMI Global Congress in now not-so-sunny San Diego in Southern California and with me standing here in the hallway is Jay Payette.

Podcast Interview

Cornelius Fichtner:   Hello, Jay.

Jay Payette:   Hello, good day!

Cornelius:  So, the Congress has just ended. We have heard the final keynote with Wesmore. How was the Congress for you?

Jay:  Oh, it was a phenomenal Congress. I felt –unfortunately I wasn’t able to attend last year in Orlando but I was able to attend in New Orleans the year before and I find every year, participants become even more engaged with the speakers. They tend to ask even more and more questions and the participation level, it just continues to go up. So, I’m really excited to see that kind of enthusiasm amongst practitioners to pick your brains and learn new things.

Cornelius:   Excellent. The title of your presentation is: Making It Happen: How Project Managers Can Drive Strategic Alignment and Strategy Execution. How was the presentation for you here?

Jay:   The presentation was wonderful.

Cornelius:   Well-attended?

Jay:   Very well-attended. It was a full room, Standing Room Only in the back. I did have the benefit of presenting on the first day so sometimes when you’re the last group in the last day you’ll get people flying home but I did have that kind of first mover’s advantage so the attendance was fantastic.

Cornelius:   Alright. The subtitle of your presentation is How Project Managers Can Drive Strategic Alignment and Strategy Execution. Allow me to begin with a somewhat critical question because many of us project managers feel that we are not necessarily in a position where we are asked or even considered when strategic alignment and strategy execution is being discussed. We’re kind of left out of this discussion. People don’t come to us, the C Level, they don’t think that we are the right people to talk to. How do we overcome that?

Jay:   This is a massive challenge, I think for PMs and what you just described, the mindset that most project managers have that we’re more or less, order-takers. Once strategic decisions are made at the portfolio level, once they are made at the program level, we just have to implement something and therefore we don’t necessarily have a strategic organization. I really think that that is completely false, quite the contrary, I think that project managers have a critical role to play in strategy execution and even in strategy formulation. That was the impetus to having this paper written and to do this talk. Now to directly answer your question, there’s really no magic bullet about how to raise the profiles of PMs. I had this exact question in the session and when I came back with it and said the first thing you need to do is really educate yourself about the strategic environment that you’re operating in. Understand how strategies are formulated, understand who the players are, understand the strategy inside and out. That will allow you to identify strategically critical pieces of information, there might be issues, there might be risks, there might be opportunities, and there might be a solution component that your project team develops. So, once you’ve educated yourself, you’ll be able to ask those key critical questions because even though as project managers were not behind closed doors developing strategy or we may not be directly participating in the formulation of strategy, we are operating at the level of the organization where the strategy becomes reality and the rubber hits the road. We are the ones who tend to discover strategic misalignment in the organization and identifying something as misalignment of strategy implementation is a critical problem not just for the project but for the whole organization. By discovering that problem we need to make sure that we have effectively communicated upwards. I feel that project managers do that more and more than our profile across the organization will change and people will start to think of us more into that strategic frame.

Cornelius:   And I think the sentence “Our profile throughout the organization will change” is important. Today we are not looked at as being part of this and we have to change first ourselves and then our profession to be looked at as “let’s go to the project managers and let’s ask them because they know our organization and they can tell us what goes on, what goes right and what goes wrong.”

Jay:   Exactly. As you said, the first step is convincing ourselves of that as a profession and with that will come further down the road our external profile amongst our colleagues, our employers, our clients, etc.

Cornelius:   Right. Let’s open up your presentation. Let’s go into your paper. Let me begin with the basic—how do you define strategic alignment?  

Jay:   This is something that I’ve struggled with. Once you get into a topic and dive deep, you start to reveal the different opinions that people have and there really is no universal definition of strategic alignment. Some people will say that it is a byproduct of execution. Some people will say that strategic executions are byproduct of strategic alignment. The way that I see it, very simply is that you have you strategy formulation or strategic planning although I’m not a fan of that term, on one side and then you have the actual execution on the other side. You can have successful strategy formulation and failed strategy execution. You can also have successful execution of that strategy but in order for both of those to really be successful, they have to consider each other, they have to maintain a constant dialogue with each other so that your strategy formulation is based on the truths, the facts of your business operations which you can only pull up from the operation level and likewise, your organization has to be able to deliver it on that strategy. So the organization needs to be aligned, the culture needs to be aligned, the resources needs to be aligned and individual actions need to be aligned. To me the simplest definition is having your formulation and your execution constantly in dialogue with each other and considering each other.

Cornelius:   And that dialogue, of course, is helped by having a strategic alignment framework.

Jay:   Yes.

Cornelius:   Can you develop that a little bit for us?

Jay:   Yes. There’s a number of approaches organizations can take to ensure that their organization is strategically aligned. There are a number of noteworthy or well-known frameworks. One of the oldest is the Seven S Framework which was created by two partners out of the San Francisco office of Mackenzie in a paper published in 1980. They initially approached the problem of saying, “Why are organizations not able to execute strategy?” And they had thought, as was popular at the time and management to say there must be some kind of organizational design, organizational structural solution to this problem. What they realized was that, “No, that isn’t the case”. The problem is that organizations were making decisions in one area and not considering the other area of the organization. They essentially split the organization up into seven areas. As good consultants, they alliterated their framework, so that it can be well-marketed and remembered. They named all of these area with an S so they have Strategy, Structure, Systems, which could be business processes or information systems, Staff, Style, which really means culture, Skills and then one of my favorite terms, is Superordinate goals. I’ve never heard the term superordinate before…

Cornelius: They have to make it work with the S, of course.

Jay:   Yes, of course, it has to be alliterates. Until I read this paper by Waterman, I’ve never heard of that and really that just means high-level goals, raison d'être  of the firm. If you change one part of the organization, you’re going to have to consider making changes and aligning those other six parts of the organization. I think it’s really not necessarily robust framework per se but as I mentioned in my talk, it’s an excellent visual to put up and start the conversation about “Do we really understand what the implications of one strategic decision might be?”

Cornelius:   Taking this from the high strategic level all the way down to a project implementation and what you have just said starts the conversation. What I always tell junior project managers and when you take an empty template for say a project charter, and you go to your sponsor, you’re not supposed to fill in the template, you’re supposed to take the template with you as a means of starting a conversation with your sponsors. I think this conversation at the very bottom with let’s fill in the project charter taking it all the way up to the strategy and working from there with this framework, I think that fits on to any level –top, bottom and in-between.   

Jay:   Yes, I think it helps to have that conversation. To a degree it helps its scope to make sure that—are you actually considering everything? It really drives the conversation on business value. “Ok, we’re doing this project to improve this part of the organization, why are we doing that?” and “How can we align other work to support that business objective. So really and I totally agree with what you’re talking about with the templates is it’s not just ticking boxes, you have to understand what the business value is and how that business value is created if you’re going to be contributing to it. If the project is worthwhile, you have to understand what the strategic implications of the project are if you’re going to be able to deliver it successfully. And by successful I don’t mean on time or on schedule, which is a traditional project management metric. By successful I mean, why are we doing in the first place?

Cornelius:   Delivering the benefits you’re originally set out to do.

Jay:   Exactly.

Cornelius:  Ok. Now let me be very stupid and ask a rather simple question that may be difficult to answer: How exactly does the Seven S Framework help me to ensure strategic alignment? You mentioned you have to have strategy on one side, execution on the other side, how does it help to ensure that?

Above are the first few pages of the transcript. The complete PDF transcript is available to Premium subscribers only.