This is a question I’m hearing quite a lot at the moment: How do I turn my company’s strategy into actual projects?
It’s good to have a strategy, of course. But a strategy that stays in a fancy PowerPoint presentation isn’t helpful to anyone. That’s not a strategy, it’s a document.
OK, you need the document first, as a communication tool to explain the strategy to everyone, but you know what I mean. A pretty document doesn’t change the way you run your business or help you achieve your goals. People do that.
If you are in a PMO, you might have this challenge. So how do you get to a place where people can deliver on the strategy that has been set? You go from strategy document to project portfolio like this:
- Identify strategic themes
- Define leading indicators
- Choose the measures
- Set the targets
- Define the projects
- Join the projects up into a portfolio
It starts by breaking down the strategy.
1. Identify strategic themes
Morgan, Levitt, and Malek discuss this in their book, Executing Your Strategy: How to Break It Down and Get it Done. They talk about translating strategy into specific objectives. This is how it works.
First, hold a strategy planning meeting to identify the strategic themes from the strategy. These are the big headlines, and the titles on the PowerPoint deck. In the book, they use an example of an airline. The strategic theme is operational efficiency (a common strategic pillar that I’ve seen all over the place – who doesn’t want to be efficient in their operations?).
You’ll have a number of strategic themes from your own corporate strategy. I think it’s helpful to start with one and break that down first. Then you can do the same exercise with the others.
In Executing Your Strategy, Mark Morgan, Raymond Levitt, and William Malek present six imperatives that enable you to do the right strategic projects—and do those projects right.
2. Define the leading indicators
A leading indicator is a measure that predicts what change will happen. It helps you forecast future performance and define what actions are required for course correction if you aren’t going to be on track or delivering the results you were expecting.
That makes our next step working out the indicators that underpin that strategic objective.
There’s a lot that goes into operational effectiveness, so there may be several indicators that come out of the discussion. In the book, they give one example, fast turnaround for planes on the ground. You can see how this is directly linked to being operationally effective. The faster you can turn planes around, the more flights you can have in the air, the happier passengers are not to be kept waiting, and so on.
However, there’s a trick to choosing the right indicator and the clue is in the title. ‘Leading’ indicators are ones that can be tracked in real-time.
Turnaround time is a valid and real-time measure of effectiveness.
A lagging indicator doesn’t reflect real-time performance. While you will want some of those as well, if you chose profit margin per flight, or return on investment, you can’t track them in real-time.
There’s a huge benefit to having indicators that are as near to real-time as you can possibly make them.
They give you a much earlier warning that a project is not having the desired effect. It makes you much more nimble in being able to step in to make changes because your data is not 6 months out of date by the time you get it.
3. Choose the measures
Now you know what the right leading indicators are, you can establish the measures. For flight turnaround times, the measurement is dictated by minutes on the ground and the percentage of flights that have an on-time departure per day.
These measures take the strategy to the next level. You’ve already stated the objective and established what is important to track, now you’re working out exactly what elements need to be measured.
4. Set the targets
We’re getting closer to something that can be useful in a project delivery environment. You have defined measures, now we need something to aim for.
This can either be stated in the level that must be achieved e.g. 95% of flights having an on-time departure per day, or an improvement that you desire e.g. to reduce ground time by 10% on 2017 times. It doesn’t matter exactly how you write your targets down as long as they are clear, measurable, and meaningful.
This is the kind of information that feeds into a project business case and gives you a mandate to start a project.
5. Define the projects
Now you have business targets that relate directly back to a strategy theme, you can see how a project devolves from that. Carrying on with the airline example, the project here is to improve cycle time for planes, and you could further specify that to a particular airport or route if necessary.
A cycle time optimization project with a target of reducing ground time by 10% is something I can set up and manage. It’s directly linked back to the operating efficiency strategy theme and yet it is tangible enough for a project delivery team to work out a plan of how to get there.
6. Join the projects up into a portfolio
Once you have done this exercise for all the strategic themes, you’ll potentially have a lot of possible projects. I think there is value in joining it all up again. Managing multiple projects is a skill, and portfolio leaders need to be able to see the big picture.
Take a big picture view – the hot air balloon view – of how the strategy breaks down and take the time to review and prioritize the projects that you have identified. Some might not be that important, given the wider view. Others may jump to the top of the pile as the critical activities to kick off in the next quarter.
Strategy doesn’t have to be achieved all in one go. You can phase out your projects so that the things that make the most sense right now are given priority to begin straight away.
However, the big-picture view lets you see where you are investing your time. You may want to spread out your projects so that each strategic theme has at least one active initiative. Otherwise, you’ve got a strategic pillar that is apparently important but no one is working on it (back to strategy being more than just a document).
Your project management office can assist with this and make sure that the spread of projects covers all the essential areas.
Yes, it takes time to do this for all your strategic objectives. Yes, it’s difficult to make the jump from objective to measure in some cases, especially with projects that are more about knowledge work than process improvement.
But this journey from strategy to executable project definition is something that we see lacking in many businesses.
They may have a mature approach to managing projects and a good culture that sets project teams up for success, but they are doing the wrong projects for moving forward in a way that meets their strategy.
Read next: How to decide what projects to do
An older version of this article first appeared on the 2080 blog in 2017.
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