Ted K. Jackson — October 3, 2018 — October 3, 2018
There’s a whole body of knowledge from the Project Management Institute on how to effectively manage projects. And there’s a lot of fancy language from different institutions about the purpose of project management that includes phrases like “successful development of procedures” and “controlling complex activities.” However you define project management, it’s imperative that your projects tie to the organization’s strategy in order to effectively drive your goals.
How exactly do you create a strong link between project objectives (or project goals) and strategy? It takes five steps, and it’s easier than you might guess.
Step 1: Define strategic projects.
The first step is all about understanding what strategic projects are and what they are not. A strategic project drives the execution of your strategy and, when implemented correctly, helps your organization achieve its key goals and KPIs. Non-strategic projects are operational or tactical in nature (some might even call them tasks), and tend to be executed in shorter time frames than strategic projects. If the differences between types of projects still seems like a gray area, use the checklist below.
A strategic project has:
- A time frame that ranges from six months to three years, with one to two years being the average.
- Non-financial resources associated with its achievement (like hours or executive time).
- A close association with your strategy.
- Budget allocated to it.
- A business plan. You need clear project objectives (or goals) for your project.
- A larger purpose than “business as usual” (it cannot be completed by a few people working a little more or changing their activities for a few days).
- Typically requires involvement and alignment from many departments across the organization
- More detailed and specific than a company goal like “improve customer service.”
- No size restrictions. No project is too big or too small, as long as it fits all of the above bullet points.
Remember that your leadership team will be reviewing your strategic projects, so part of your project management objective is to determine which ones to report to your senior leaders. As a rule of thumb, only 8-12 strategic projects should be reviewed by the top-level of your organization.
Step 2: Inventory all strategic projects.
Now that you know what a strategic project is, it’s time to collect a list of them in one aggregate document. This can be completed in four simple phases:
- Take an inventory of all strategic projects underway across the organization, sorted by department. Yes…tedious, but essential.
- Flag the strategic projects that would be reported to the leadership team—your corporate-level strategic projects. (Your other strategic projects won’t disappear. You’ll continue to work and report on them, but only within the departments.)
- List every project you wish you could work on in the next few years, even if it isn’t funded or underway.
- Review the list and ensure that every project named will help you execute your strategy and meets the criteria listed for a strategic project in Step One.
When you’re finished, you’ll probably have a huge list. If you’re using Excel for your project inventory, keep it simple and don’t add excessive detail for this step. List projects by department and highlight the ones that are corporate-level strategic. If you’re using strategic planning software, your job will be much easier. You can quickly plug in projects, move them around with a click, and create summary reports.
Step 3: Map projects to strategic objectives.
Once you’ve inventoried your strategic projects, it’s time to identify which projects tie to strategic objectives or goals. This allows your organization to understand where to put its focus and why, it will help you prioritize projects, and it creates that essential link between strategic objectives and your projects.
If you have strategy software, you can link your projects to objectives with some quick clicks and see the connection points in your summary reports. If you don’t have software, creating a matrix in Excel is the best way to visualize the link between strategic projects and objectives. Here’s how:
- List your projects along the top row and your objectives in the far left column.
- Check off each box where a project supports an objective.
- Look for objectives without any initiatives supporting them (rows without check marks).
- Look for projects that do not support any objectives (columns without check marks).
This matrix gives you an easy-to-understand, high-level view of whether a project attaches to more than one objective and, conversely, how many projects are tied to each objective. If a project doesn’t tie to any objectives, then you’ve exposed one that’s not strategic and should consider eliminating it from the strategic list. If an objective doesn’t have any projects linked to it, you need to create a new strategic project to support it.
Linking projects to strategic objectives or goals should clearly show why that project is being done. Ideally, the project is being undertaken to improve a goal’s performance or help your organization achieve that goal.
Step 4: Determine how to evaluate strategic projects.
In order to prioritize your projects, you’ll need to evaluate each one. This helps avoid prioritizing a particular project over another because “we’ve always done it that way,” or “Jim from finance thinks this is a good idea.” Instead of gut feeling and inertia, a true process or method will drive your decision-making.
There are a few different ways to approach project evaluation, but ultimately you need to define a scoring criteria—typically things like budget, time, percent complete, quality, impact, and effectiveness—and give weighted values to each element. Whatever you decide to evaluate and how it’s weighed should be very well-documented and defined as part of your approach to project management. The “score” projects get will determine how they are prioritized within your organization and reported on.
This will, and should, take time. It’s important. A consistent, unbiased, and documented approach across projects ensures each one is being evaluated the same way. And your leadership team will be able to clearly understand how projects are performing.
Step 5: Allocate resources.
Your final step is to determine (with your leadership team) the budget and resources to allocate to each strategic project, including finances, full-time employees, contractors, consultants, etc. As part of this step, address how to handle unfunded projects. Your organization will have to decide whether to table unfunded projects for the future or cancel them completely. After all, strategic decisions involve what not to focus on just as much as what to focus on.
This just the tip of the iceberg. Learn everything you need to know about strategic project management in this field guide.
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