“The essence of strategy is choosing what not to do.” —Michael Porter
Over the last two decades, organizations looking to remain competitive have realized that creating a strategic plan is not enough. The smart execution of that strategy is also needed to move an organization to the next stage.
One way to drive better execution is to align the project portfolio with the organization’s strategy. This should encompass all current and future initiatives, programs and projects — including business projects, operations projects, technology projects, etc.
The project portfolio is the strategic plan’s execution framework. It calls for cross-functional efforts that provide a holistic view to the participating areas, and helps them better understand the strategic goals and how their contributions will move the organization to the next level. This instills a sense of ownership among the participants.
Strategically aligning the project portfolio allows an organization to establish an execution approach that will allow it to improve existing processes and optimize the selection and sequence of initiatives.
Leaders should screen, filter, and select programs and projects based on the organizational strategy and — for those selected — they should define:
Roles and responsibilities: Who will be involved, as well as each person’s level of involvement and authority
Stakeholders: Who will be impacted by the initiatives and their level of influence in the organization
Resources: What resources could be assigned to programs and projects, and their current capacity and capabilities to support the selected initiatives
Funding: What funds will be available to implement the selected programs and projects
Risks: What internal and external risks would affect the strategic plan and therefore the portfolio of projects, and what risks will be accepted or mitigated
Benefits Realization: What benefits will be produced by each program and how those will be harvested
To achieve that alignment, the following groups must support the initiative:
- Executive Group: This group will provide the strategic and portfolio governance guidelines.
- Project Group: This group will handle portfolio management, focusing on delivering value to the business.
- Operations Group: This group will ensure the organization can sustainably achieve its strategic goals.
In the second part of this series I will explore how these groups interact to establish the best execution approach and achieve the strategic goals defined in the strategic plan.
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