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.
So how do you get to a place where people can deliver on the strategy that you have set? It starts by breaking down your strategy.
Identifying 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 strategic into specific objectives. This is how it works.
First, identify the strategic themes from the strategy. These are the big headlines, 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.
Define the Leading Indicators
The next step is to work 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. If you chose profit margin per flight, or return on investment, you wouldn’t be able to track those in real-time. They are called lagging indicators because they don’t reflect real-time performance.
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.
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.
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.
Define the Project
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 optimisation 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.
Join the Projects Up
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. Take a big picture view of how the strategy breaks down and take the time to review and prioritise 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 once 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.