many-organisations-have-a-well-defined-and-well-scoped-strategic-process

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Many organisations have a well-defined and well-scoped strategic
process. Frequently this process is augmented by a broader idea capture which
provides insights and suggestions for the tactics associated with the
implementation of the overall strategy. What is recognised, however, is that
regardless of the process which is used to set strategy, the critical challenge
is the actual execution of that strategy. Indeed, as is widely recognised,
weakness in execution, not weakness in strategy, is a primary reason for CEO
failure. Knowing this, it is important to tie the strategic theory governing
the business to the experience of project management. Without this linkage,
either the project portfolio ignores the needs of the business or the strategic
goals are empty, with no support at the executive level. It is clear that this
is an area which businesses must get right for long-term success.

Strategy needs to come before portfolio ranking and selection. In
order to select the right set of projects, strategic goals must be defined in
advance. Furthermore, the strategic goals should ideally be relatively limited.
Having a small number of goals helps to keep the goals memorable and at the
necessary high level, thus avoiding the blurring of strategic goals with the
tactics for their implementation. Of course, the process of linking projects to
strategic goals is critical. If the projects an organisation undertakes do not
reflect its strategy, then what does? It is much less likely that operational
work has a strategic impact relative to projects, which are more likely to
create some level of change within the organisation.

Though the strategic goal definition must come before project
selection, it must not be rushed. Selecting the right strategy is imperative
for defining a portfolio which will have a strong impact on the future of the
organisation. A poor strategy which is executed flawlessly is still a failure.

Linking projects to strategic goals, however, is only one step in
the ranking and evaluation process for a project portfolio. The most important
projects are the ones which provide the most business value. Business value,
measured using a variety of means, might be a way to create more customers,
retain the ones you have, or create a new market altogether. It is important
that value is clearly defined and assessed, and that the organisation uses
analytical techniques which are thoroughly defined and accepted throughout the
organisation. It might be a way to release products faster, to make more money
on support, or to spend less money on support. Business value will be unique
for your organisation and your projects.

In the ranking process, however, there are some common approaches
(detailed in the supplemental articles for this week) which corporations have
found to work. The ranking process should be standard across the corporation,
so that ‘apples are compared to apples’. Another approach is to have the
ranking process involve collaboration across the organisation, so that not just
one individual or organisation makes the decisions. These and other approaches
are essential to ensure buy-in from the organisation to the overall results.

For this week, discuss the following questions:

1.
Assess and explain the advantages and disadvantages of the different
methods for evaluating projects and rank portfolios. Discuss how project
evaluations can be used to make decisions on individual projects—especially in
the termination of projects.

2.
Discuss the advantages and disadvantages of the methodology outlined
in the Sharpe and Keelin article. How were these individuals able to gain
buy-in to the approach which they used for this portfolio evaluation within the
SmithKline-Beecham organisation?

Please submit your initial response through the Turnitin submission
link below in addition to posting it to the Discussion Board thread.

References

Textbooks

Kerzner, H. (2010) Project
management best practices: achieving global excellence
. 2nd ed. Hoboken,
NJ: John Wiley. Chapters 14, 15, and 16.

Rothman, J. (2009) Manage
your project portfolio: increase your capacity and finish more projects
.
Raleigh, NC: The Pragmatic Bookshelf. Chapters 4, 5, and 8.

Morris, P. & Pinto,
J. (2007) The Wiley guide to project program and portfolio
management.
Hoboken, NJ: John Wiley. Chapters 5, 6, and 8.

Supplemental reading

Allen, M. (2000) Business
portfolio management: valuation, risk assessment, and EVA strategies
. New
York, NY: John Wiley.

Benko, C. &
McFarlan, F. (2003) Connecting the dots: aligning projects with
objectives in unpredictable times,
Harvard Business Review Book.
Boston, MA: Harvard Business School Publishing.

Bodley-Scott, S. &
Brache, A. (2009) ’Which initiatives should you implement?’ Harvard
Business Review
[Online] Available from:.hbr.org/hmu/2009/02/which-initiatives-should-you-i.html”>http://blogs.hbr.org/hmu/2009/02/which-initiatives-should-you-i.html (Accessed: 29 August 2010).

Carr, N. (2002) ‘Unreal
options’, Harvard Business Review, 80 (12), p. 22.

Forman, E. & Gass,
S. (2001) ‘The analytic hierarchy process: an exposition’, Operations
Research
, 49 (4), pp. 469–486.

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