We have written a lot recently on the importance of strategic execution – and how to achieve this. This week we look at how to measure strategic value.
Organisations are increasingly competing on a global scale and dealing with projects involving dispersed team members from different cultures and backgrounds. As a result, how initiatives are chosen, as well as managed, is critical to success.
While, in most cases, the Project Management Office (PMO) is created to help project managers perform their roles better, it is also well placed to measure the business impact of projects and initiatives, and in doing so, identify their strategic value.
The best project leaders do not limit their measurement to on-time and on-budget metrics. (Regardless of whether a project is on time and budget – if it is unable to demonstrate that it will generate more value than it costs, it will be at risk of being abandoned.)
Instead, project leaders wanting to identify strategic value must adopt a multi-dimensional approach in order to measure the project whats, hows and whys, such as:
- What is the project?
- Why is the organisation doing this?
- How will it fit into the company’s overall strategy and help deliver on the strategy?
- How are we going to implement this initiative?
This multi-dimensional approach also encourages the PMO and project leaders to think about the vision and mission for the initiative – from what resources will be spent on it, to how it will help deliver on the strategy.
While these factors can be hard to measure and communicate, it is becoming increasingly important for project leaders to do so as initiatives grow in complexity. (For more on how to respond to this complex environment, take a look at our webinar: Navigating Ambiguity: Using performance multipliers to enhance team and project results. And for more on executing against strategy by ensuring people have the skills they need, read our whitepaper: How to Create an Organisation Focused on Predictably and Repeatedly).
This ‘complexity approach’ also helps guide PMOs to focus not on what gets done, but how it gets done.
The formula for this multi-dimensional approach involves answering the following questions:
Before the project:
- Why the project is being pursued and why is the organisation dedicating resources to it?
- Does it align with the strategic goals?
- Does everyone involved understand the goals of the project and how it aligns with our strategic goals?
- How will the project team be used as a resource for scoping and planning how the initiative will be delivered?
After the project:
- Was there good communication and collaboration throughout the project?
- Were issues and red flags identified early enough to handle them?
- Did the project output meet the executive team’s expectations?
To ensure the project team delivers the most measurable impact, PMOs can also embrace the concept of PAM (Purpose, Autonomy, Mastery) which helps tie the team’s everyday work back to the organisational strategy.
Purpose – the project leader understands how each team member’s role contributes to the overall success of the initiative. The goal is to equip project managers with a business mind-set in order to understand what it takes to run an initiative as a strategic business endeavour, with appropriate measures.
Autonomy – this is about giving team members the space to do their jobs. While each person needs something different in this regard, the key is to stop focusing on what people do or deliver – and shift to how people do their jobs.
Because the PMO and project-based workers want to avoid surprises, they tend to dictate how work should get done, but a better and more meaningful measurement focuses on how team members interact with others in the course of the initiative, such as whether they are competing or collaborating.
When relationships have an impact on productivity, cooperation and collaboration are far better than competition in projects and generate greater value and vital partnership.
Mastery – when the PMO focuses on the what of a project, it is difficult to justify a budget for training. But if the focus shifts to how the project will get done, it is easier to make the case for it.
Measuring the ROI for training is not about the money spent, but about identifying and defining success. When team members are trained to be valuable project contributors, the PMO can better assess and select the right projects and ensure more repeatable and predictable project processes.
Adopting this multi-dimensional approach is a proven way to take initiatives to a new level, as well as providing organisations with further insight into the attributes, skills and behaviours that contribute to the highest levels of success.
By defining these differentiators at an individual and team level, organisations can also take steps to reward employees accordingly, as well as upskill when necessary.
To address the need for more strategic project leaders in this increasingly complex world, we have partnered with Duke Corporate Education to deliver the Adaptive Strategic Execution Programme. Find out more here.