Brighton School of Business and Management November 2011 Student Newsletter
Contributions from you, our students, are very welcome if you have information, advice, website links, or ideas, that may be of help to other students, please send them to us.
Personal & Career Development – Tip of the Month
The advice this month is to look for ways to broaden your knowledge and understanding of the wider aspects of management, rather than focusing only on your own particular management or specialist needs.
The reason that this is important is two-fold.
Firstly, most managers and specialists do not operate in isolation. Rather, they are part of a complex network of managers and specialists who are all working towards the same organisational goals. Having a broad understanding of the approaches taken by those in other areas, the expertise that they are applying, and the reasons for the way they operate as they do, will help you and them to work more effectively with each other.
Secondly, most organisations, in most business sectors, now have established operational and strategic management approaches which all managers and specialists in the organisation are influenced by, and need to respond to. One example of this is Project Management, which we discuss again in this newsletter for that very reason – that it is rapidly becoming the core management approach for many organisations. Others include Quality Management, Environmental Management, and increasingly important area of Business Ethics.
To be successful in your professional life it is now essential to have a broad knowledge of these. Without that awareness and understanding it will become increasingly difficult to contribute effectively in your current role, and increasingly difficult to progress to more senior roles.
Prioritise Projects to Align with Strategic Plan
Project management is rapidly becoming a standard way of doing business in many organisations. The key to productivity is often found in how we manage projects, which are the tools of implementing the business strategy of an organisation.
Every project in an organisation should contribute to its strategic plan. But how can we ensure this linkage? We need to make sure that we integrate projects within the strategic plan. This integration requires a process for prioritising projects by their contribution to the plan. In this article, we will introduce the strategic planning process and how it relates to project management.
The strategic management process
In customer-driven organisations, mission and goals are set to meet the needs of the customers. The mission typically covers “what we want to become” and should be communicated throughout the organisation. Goals translate the mission into specific, measurable, and tangible terms. The goals answer in detail where a corporation is heading or when it is going to get there. These goals should set targets for all levels of the organisation. Each level of the organisational objectives should support the higher-level objectives in more detail.
The development of strategies to meet these needs and goals should focus on “what we need to do to achieve these goals.” It requires an extensive analysis of the internal and external environments. Based on a political, economic, social, and technological analysis (PEST), we analyse the external environment to identify opportunities and threats. We analyze the internal environment by looking for strengths and weaknesses such as management, facilities, core competencies, product quality, technology, and financial resources. The deliverable of this analysis is a set of strategies designed to best meet the needs of the customers.
Implementation of these strategies requires actions and completing tasks, and should focus on how to realise these strategies. Implementation must include attention to the following key points:
Executing the work requires allocation of resources such as funds, people, and equipment. Organisational resources are limited. In addition, multiple goals frequently impose conflicting demands on resources. This requires a mechanism for allocating resources based on organisational priorities.
Implementation requires an organisational structure that supports projects.
Project management processes for planning, executing, and controlling are essential to ensure that we are able to implement strategies effectively and efficiently.
We need a project selection and priority system to ensure strong linkages between projects and the strategic plan.
Need for a project selection and priority system
The need for a project selection and priority system stems from the following observations:
Organisations frequently pursue many projects simultaneously. Almost inevitably, the number of small and large projects in a portfolio exceeds the available resources such as funds, equipment, and competencies.
Politics exist in every organisation and can have a significant impact on project selection. Many projects within companies are called “sacred cows.” We often use this term to describe a project sponsored by a high-ranking executive.
Without an effective project selection and priority system, the capacity overload coupled with project politics will lead to frustration, confusion, and inefficient use of resources.
Questions that need answers
Some of the questions that we need to tackle when considering a project selection and priority system are:
- How can we minimise the power of politics?
- How can we consistently prioritise projects to support the organisational strategy?
- How can we use the prioritised list of projects to allocate organisational scarce resources?
- How can the process encourage bottom-up initiation of projects that support organisational goals and strategies?
We are always going to have more potential projects or proposals than the capacity of the organisational resources would allow for. Thus, we need a systematic process that will select projects and allocate resources to these projects in order to maximise value added. Selection of projects from a slate of projects requires the use of a decision model in association with specific criteria.
The benefits of carefully selected criteria include the following:
- More effective planning of organisational resources
- More efficient utilisation of organisational resources
- A portfolio of projects that balance opportunities and threats given available resources
- Keeping the organisation stakeholders focused on the most critical projects
- Obtaining consensus as to which projects have the highest priority
Nevertheless, when we implement a project selection and priority system in our organisation, we meet enormous scepticism and resistance.
Typical responses include:
- We all know which projects are the most important ones
- All of our projects are important
- Our business is changing on a daily basis. We do not need an extra layer of bureaucracy, which limits our flexibility
Responses such as the above suggest a serious need for a project selection and priority system. Nevertheless, the development and the implementation of such a system does not materialise without the support and sponsorship of upper management.
A project management approach to business problems and opportunities is becoming the norm rather than the exception. Projects are the tools for implementing the strategy of the organisation. Effective project management starts with selecting and prioritising projects that support the organisational mission and strategy. The priority system focuses attention on the mission and major goals of the organisation and fosters consensus to which projects are of highest priority. It results in a portfolio of projects that balance threats and opportunities and provides a better utilisation of resources.
* from an article by George Sifri on www.techrepublic.com
What Project Managers Need to Know About Strategic Planning
The PMI Project Management Institute states: “The very successful sellers of the value of project management, link project management to corporate strategies and position project management as a solution to problems.” The successful selling of project managers as partners in the delivery of solutions vs. simply as pairs of hands is critical today. Partners understand business drivers and enable value creation. Pairs of hands administer and execute deliverers. Partners are consulted. Pairs of hands are merely informed.
This article provides program and project managers with a primer on business strategy—its purposes, components, and high-level tools and techniques. For those of you currently operating at the pair-of-hands level, this article is a wake-up call. For those of you who currently operate at the partner level, this article is a refresher or quick self-knowledge check. In either case, a basic knowledge of strategic planning is the place to start.
Strategic Planning 101
A strategy is a detailed plan for achieving success—the bundle of decisions and activities that we select to achieve our long-term goals—our path. Every organisation must figure out what it wants to achieve and how to make it happen by using its products, customers, and operations. Strategy is fluid, continuous, and iterative and can be broken down into logical steps or elements:
Goal Setting: The First Step
We cannot begin to think about a strategy until we have objectives that are prioritised and are based on our business, our markets, and how value is created in our organisation. These objectives are aimed at maximising the value of the organisation to the shareholders, with the critical factor being time. Even though we create a vision of the organisation, say, twenty years out, the strategic plan considers only a three-year to five-year time horizon. A written declaration of an organisation’s core purpose and focus, commonly referred to as the mission statement, serves as a consistent directional tool for the firm. In contrast, the strategic plan and its related practices fluctuate according to changing circumstances.
Strategy Development Process—the Road Map
Strategy development is focused on three fundamental questions: Where are we now? Where should we go? How do we get there? The answers to these three questions frame the strategy process.
Customer Analysis—Getting the Truth
Unmet customer needs are at the heart of business ideas and the development of a business strategy. While step 3 could be included in step 2, it is usually kept separate to underscore and facilitate the need to continuously analyse the customer as part of everyday management. Essentially, we need to know why our customers buy from us and why others buy from our competitors. This information is typically gathered at point of sale via customer surveys or focus groups. Good, regular, and valid information is essential to business strategy success.
Internal Business Analysis—Health Check
The internal audit explores the organisation’s operational and financial results, evaluates its talent pool, assesses its functions and processes, and explores the health of its key relationships. A good SWOT analysis not only identifies the component strengths, weaknesses, opportunities, and threats (SWOT), but also priorities them and helps to limit analysis to a smaller set of the most important factors.
Generic strategies of cost leadership, differentiation, and niche player provide a good foundation for the strategic choices each business faces. A comprehensive strategy formulation contains both positioning and execution components. An effective strategy must align between positioning and execution.
Positioning articulates clearly and concisely the organisation’s strategic approach to achieving its goals by setting out a direction and a choice of suitable products and services. Execution ensures that the organisation has the necessary resources, operational capabilities, and organisation to support the direction. To enhance our strategic choices, we ask the question “how?” and develop a strategy through approaches like integration, penetration, development, diversification, and divestiture.
Strategic Thinking—Optimising Assets
Strategic thinking involves asking the right solution-oriented questions and conducting appropriate analyses to formulate plans and strategies. Asset optimisation questions have long been fertile ground for new ideas—for thinking about the best use for each significant asset that we currently own and control.
Another strategy-generating approach is to use core-business thinking. Your core business is defined by the set of products, customer segments, processes, and technologies in which you can build the greatest competitive advantage. Defining your core business can be difficult and may require a small team to answer the question. If we were forced to sell off all of our businesses except for one, which one would we keep? Once your core business has been identified, the key is to work the core to your best advantage—for example, taking advantage of operational excellence in the core business area.
Another method uses best practices lists that can be found in publications. For example, Choi and Valikangas distilled a list of nearly two hundred business strategies into a top ten list that includes generic approaches like consolidation, value migration, and bypassing.
Implementing Strategic Decisions—Execution Matters
The principal causes of strategy failures are the attitudes, communication, and commitment of senior management. The best system for implementing strategies is by using the balanced scorecard. It provides a framework for considering strategy from four perspectives—financial, customer, business processes, and learning and growth. It was created by Kaplan and Norton in 1992 as a means of neutralising the limitations of managing only by financial measures.
Implementing strategy is a team game, and even though senior management has the responsibility to formulate and articulate the business strategy, you, as a program or project management professional, play a lead role in the strategy implementation segment of the process. As a program manager, you are expected to understand the strategic drivers of the program, the specific benefit levers, and the required level of governance to make change happen. As project manager, you are expected to fulfil a similar role at the project level, whether it is part of a formal program or a one-off high-impact strategic project.
Each successful strategy could be a catalyst for a strategic thinking direction and approach. As a program or project manager, take the time to identify the strategies in play in the next business case or feasibility study you review. If they are not clear in the financial analysis document, do not be afraid to ask for clarification from your sponsor.
Partnership status may take months or years to establish. Regardless, you will not be able to “link project management to corporate strategies and position project management as a solution to problems” if you do not understand the driving business strategies. This article helps you start—now, it’s up to you to go deeper!
* from an article by Bill Richardson, PMP, senior consultant and trainer www.iil.com
A Strategic Approach to Managing Project Stakeholders
What does it take to manage the stakeholders of a project and why is it so important? More than ever, the most challenging part of a project isn’t the budget or the time constraints but rather the politics in play. Keeping stakeholders happy is no easy task, and when they are not happy, bad things can happen to projects, project managers and their teams.
The problem is that far too many project managers see stakeholders as necessary evils, and in so doing create their own demise. Project stakeholders can make or break a project. When happy they can provide support, resources and slack, but when unhappy they can create stress, micromanage, sabotage efforts and wreak havoc. So what does it take to manage project stakeholders? Perhaps the answer can be found in the approach use to evaluate how they are most likely influence that success.
Those who have a vested interest in the outcome of a project are stakeholders in that project. Life would be great if every stakeholder was supportive and enthusiastic about every project and the changes that would occur upon successful completion.
Unfortunately, reality paints a different picture. Therefore, it only stands to reason that we need a way to create stakeholder profiles that objectively indicate how each stakeholder should be managed. This article presents a profiling technique that evaluates a stakeholder across a number of dimensions, resulting in a rating of the stakeholder that identifies the management strategy most likely to be successful.
Under this approach, project stakeholders get classified into one of the following categories:
Destructive: Stakeholders who have a high stake in the project, can assert strong influence, intend to be highly involved but do are not supportive of the goal and have a negative attitude about the effort.
Passive/Neutral/Shaky: Stakeholders who have a low to moderate stake in the project, have minimal influence, need only moderate involvement are reasonably supportive of the goal and have a healthy attitude about the effort.
Constructive: Stakeholders who have a high stake in the project, can assert strong influence over its conduct and success, intend to be highly involved in the process, are demonstratively supportive and have a positive attitude towards the effort.
Of course, given the number of dimensions there are many permutations (2,625 to be exact) that fall in-between these rankings, and each brings with it nuances as to the management strategy to be deployed. The good news is that you don’t need that many strategies to be effective. The concept boils down to two basic elements: the stakeholder’s power over the project and their intention (their heart, how they intend to use their power).
The analysis will show the combinations that could be used to arrive at a rating and then the recommended strategies for managing the related stakeholder. Keep in mind that these are general strategies and need to be augmented by the data collected in a Stakeholder Expectations Analysis Worksheet.
In order to get a complete view of the stakeholder it is important to understand any gaps between what we expect from that stakeholder, what we need from that stakeholder and what we want from them.
Once the expectation ranking has been assigned, the PM needs to assess whether or not there is a need and a way to work with the stakeholder to close any gaps arising from this phase of the analysis. For example, if a stakeholder has a negative attitude about the project yet has high influence and interest then turning the stakeholder into an ally could yield positive benefits. In this situation, the PM would need to understand the motivations behind the negativity toward the project and seek a way to persuade the stakeholder to a different point of view; usually through some form of facilitation and collaboration.
Notice that the strategies are broken down into the following major groups:
- Containment: Be cordial and supportive of the stakeholder knowing that they are an opponent of the project and could become destructive to the process and the outcome given their high power ratings.
- Comfort: This strategy is for stakeholders with low power ratings and who are needed to make the project successful. Typically these are line staff who are integral to the workflows effected by the project. For these stakeholders, consistent and easy-to-digest status updates and sometimes face-to-face support works best.
- Embrace: This strategy is for high-power rated stakeholders who have strong interest in seeing the project completed successfully. They are demonstratively supportive and have a positive attitude toward the effort. These stakeholders are the linchpins to the project’s success and need the highest levels of attention. They should be frequently consulted for their ideas and engaged as much as possible to for guidance and on issues that require executive intervention to resolve.
Once a stakeholder has been rated, it is relatively easy to look up the recommended strategy based on their TFVSA rating (see red letters in dimensions above). Gaps between the PM’s expectation for the stakeholder and what they need/want from them in terms of their participation in the project are areas of misalignment and must be addressed within the overall strategy.
Once the all the stakeholders have been rated and the various strategies derived, their ratings can be summarised onto a Project Expectations Worksheet. This is useful for getting an excellent overview of the quality of stakeholders involved in the project. Too many high power/low intention ratings could spell big trouble for the project.
The secret is to work the low intention stakeholders with the goal of improving their point of view while pampering the high intention stakeholders, reinforcing their commitment to the effort, meanwhile giving just enough attention to the middle so-as-to make them feel positive and included in the effort.
Clearly, these assessment tools are for the private use of the PM and are most likely best kept confidential. They are intended to provide the PM with insights on how to “best manage” each stakeholder’s relationship throughout the project in a way that best serves the interests of the organisation.
* from an article by Michael Wood on www.gantthead.com
Project Management and Continuous Improvement
A project is an organised method for reaching specific goals and planned benefits within a target schedule and defined budget. Project management methodology provides an organisation with powerful tools that improve its ability to plan, implement, and control its activities. Up to recent times organisations considered project management processes as an optional tool for planning and implementing business activities.
But today this mentality has changed drastically and organisations believe Project Management methodology as something mandatory to maintain the competitiveness of the firm. The number of projects is increasing rapidly and they manage most of their activities through projects. Therefore project management has become an integral tool of an organisation.
The goal of an organisation that uses PM methodology is to achieve excellence in project management. Excellence can be defined as the ability to complete projects successfully and continuously. Excellence in project management is achieved through best practices. The use of best practices ensures ability to deliver projects predictably, constantly, and successfully. Therefore identifying best practices and improving them continuously is an important exercise for any organisation that aspires to achieve excellence in PM.
‘Good practice’ means there is general agreement that the correct application of these skills, tools, and techniques can enhance the chances of success over a wide range of different projects, in other words, something that works well on a repetitive basis or something that leads to a competitive advantage. Best practices can be in the form of templates, guidelines, procedures, policies, or processes which everybody has agreed to follow. Lessons learned documented by the project team throughout the life cycle can be a source of best practice for an organisation. Best practices are very dynamic; they are reviewed, updated or removed over time.
This is known as continuous improvement. For example conducting continuous project management training in the organisation, or establishing a formal change control system with defined change control procedure can be best practices of an organisation. The best practices are made up of capabilities.
Capability is a specific competency that can be sued to implement projects. Each best practice should have its associated capabilities that help to perform the best practice. Organisations can have their own best practices or they can be industry standards. The best practices can be at different levels; Professional Standards, Industry Specific, Company Specific, Project Specific and Individual level Listed below are some best practices:
- All the organisational decisions are made considering the interest of the stakeholders
- Organisation ensures all the projects are strategically aligned
- Organisation follows a standard set of project management processes and procedures
- Formal performance management system is used to manage the performance of all involved in the project
- The organisation uses a process to select and prioritised projects
- The organisation uses risk management processes to asses and control risks
- The organisation has a process for capturing, storing and sharing lessons learned” The organisation uses bench marking techniques to improve project performance
- Programme management processes and standards are established
- Portfolio management processes and standards are established The org continuously takes steps to develop project managers
- Training plans for all levels of project employees are established and implemented
- Project management processes are integrated with all the other processes in the organisation
- The org measures project effectiveness using project delivery methods
It is mandatory for organisations that use project management methodology to have a best practice process to discover, evaluate, classify and store best practices, so that they can be used for effective project management and continuous improvement.
* from an article by Duminda Weeraratne – Project Management Solutions www.pms.lk
- Dr Paul Gardiner: Project Management: A Strategic Approach – Palgrave McMillan, 2011
- E Larson, C Gray: Project Management: the Managerial Process – McGraw Hill, 2010
- Jeffery Pinto: Project Management: Achieving Competitive Advantage – Pearson, 2009
- Bruce Barkley: Project Management in New Product Development – McGraw Hill, 2007
- D Cleland, L Ireland: Project Management: Strategic Design and Implementation – McGraw Hill, 2002
Quotes from the Gurus
Project managers make extraordinary things happen by drawing on the knowledge and skills of every team member
– Jim Kouzes
The most valuable and least used phrase in a Project Manager’s vocabulary is “I don’t know, but I will find out”
– Colin Williams
The more you plan, the luckier you get
– Unknown (but very wise) person
As project manager, to be at the end of a project and to report that the project plan has been fully met, on time and on budget, is a significant achievement, whatever the project size and complexity. The mix of skills required is such that good project managers can manage anything
Useful Study Links