For many organizations, defining the strategic objectives can mean their business strategy is completed. However, the most carefully crafted strategies can fail to deliver tangible results without appropriate implementation. Aligning your business’s strategic objectives with projects is the key to achieving strategic objectives.
Aligning your project with your organizational objectives allows you to gain an understanding of the larger operational context. In turn, this helps you spot potential barriers to project implementation and articulate the vision to relevant stakeholders.
A recap on "strategic objective"
Before delving into aligning projects with your strategic objectives, it’s important to revisit what is meant by strategic objectives. You can also go through our mini-series of blog posts on ‘How to develop strategic objectives and strategic focus areas for a quick recap.
Strategic objectives are your company’s ‘big picture goals.’ They describe what your company wants to achieve and by when. While more specific than ‘focus areas or mission statement,’ strategic objectives give a sense of direction and create a bridge between your company’s mission to goals.
While being multi-year in nature, strategic objectives focus on a performance goal such as:
- Financial growth: Expand our business to secure an annual revenue of $50 million.
- Customer service: Achieve a 90 percent customer retention rate by 2023
- Operational excellence: Deliver products or services on time
- Business expansion: Open five new locations within the next three years.
For instance, Walt Disney revamped its strategic positioning in 2018 to “create a more effective, global framework to serve consumers worldwide, increase growth, and maximize shareholder value.”
These objectives are aligned to the company’s mission and vision while being measurable. Once your strategic objectives are defined, the next step is to move on to project description and project alignment. Let’s first take a closer look at what we mean by projects.
Learn more about developing strategic objectives here.
What are projects?
Projects, in simple terms, are the way an organization implements its strategic objectives. They describe the precise steps and actions your company will take to achieve the strategic objectives.
For each strategic objective, the company creates detailed measures and targets. Projects are then designed and implemented to accomplish each of these objectives. In other words, projects are the specific, concrete actions your business will take to execute your strategic plan.
For example, a company has a strategic objective to gain more customers by exploiting a weakness in their competitor. The company then launches a new advertising campaign that points out the competitor’s weak spot. Here, the advertising campaign is the project implemented to achieve the strategic objective of gaining more customers. Apart from the specific action steps, the project needs to include the timeframe for completing each step, milestones, and resources.
While strategic objectives are macro-level, project execution happens at micro levels across departments and individual levels.
The project structure and steps to create the project
Here are the components of the project structure:
Your project description needs to begin with determining and documenting specific project goals, tasks, deliverables, deadlines, and costs. The project’s scope or the scope statement explains the project’s boundaries and describes the responsibilities of individual team members and the procedures for verifying the completed tasks. The scope statement provides a roadmap for the project team while enabling them to make decisions on change requests while implementing the project. Specifically, the project scope includes these components:
- A task list: The tasks refer to the small jobs/actions that make up the project. Creating a thoroughly detailed list that describes every step in the project is vital for the project’s success.
- Duration: After listing the tasks necessary to complete the project, the next step is to estimate the time required to complete each action step or task.
- Milestones: Breaking down the project into smaller stages or events helps streamline project management. Milestones enable you to accurately estimate the timeframe for project completion by marking key achievements, events, and dates. These milestones can include project approval, securing financing, assembling the team, arranging resources, and others.
- Resources: Deciding what resources are needed to accomplish the tasks within the specified timeframe is the next step. The resources can include office space, team members, project planning tools, software, or budget. Knowing what resources you need ahead of starting a project will help you plan accordingly.
- Dependencies: Your project description also needs to include dependencies as you may not be able to start a task without completing another one. A dependent task can potentially create a bottleneck for another team member or derail the project altogether. Determining dependencies and linking them in your project structure is the key to streamlining project management.
- Responsibilities: This describes the roles and responsibilities of each team or team member, including the project lead, executive sponsor, executive committee, and other stakeholders.
- Risks: Every project carries some level of risk. These require risk identification and description in as detailed a manner as possible. A generalized description makes it difficult to assign ownership and develop responses. Examples of risks include ‘incompatible software,” lack of ground or office space for the new equipment,’ or ‘severe weather that can impact progress.’ Apart from describing the risks, this section also needs to include the consequences of the risk, a risk mitigation plan, and the risk resolution date.
Ways to approach the project structure
When the scope and scale of your project are small, you can create a single project and attach multiple tasks to it.
For instance, a construction project has the following tasks lists and dependencies:
task number task dependencies
- Excavation
- Build Forms 1
- Place Rebar 1
- Pour Concrete 2 and 3
It is a good practice for complex projects to break them down into smaller sub-projects, each with a list of tasks attached.
Project: Attract 10 percent market share by December 2022 in the UK (responsibility: XXX)
- Sub-Project: Research the market in the UK and submit a report by August 30, 2021 (ownership: XXX)
- Sub-Project: Launch a prototype by October 1, 2021, into the test market (ownership: XXX)
- Sub-Project: Analyze response and make improvements to the product (ownership: XXX)
- Sub-project: Prepare a detailed marketing plan by December 2021. (Ownership: XXX)
Why align your project with strategic objectives?
Many corporations worldwide suffer from project failures that can result in losses that amount to billions of dollars. Global research shows that the foremost reason behind such failures is the lack of alignment of projects with the strategic objectives.
Researchers analyzed 70 large failed projects, including the “787 Dreamliner” project and Avon’s “The Promise” project. While the Dreamliner project experienced a cost increase from $5 billion to $US18 billion, “The Promise” project witnessed a $US25 million cost increase. They found that misalignment of the project with strategy was the key reason behind the failure.
According to a KPMG analysis, 70 percent of companies have experienced a minimum of one project failure over the previous 12 months. Half of the survey respondents indicated that the project failed to achieve its objectives. Surveys show that organizations waste US$122 million per US$1 billion they spend on projects. About one out of three projects do not meet their defined goals, while 43 percent go over their budget and close to 50 percent are not completed within the timeframe.
A key factor that differentiates high-performing organizations is that the success rate of their strategic initiatives is double that of low performers.
- Business benefit: Projects aligned with the strategic objectives are 57 percent more likely to offer a tangible business benefit. They are also more likely to stay within the budget and finish on time.
- Executive sponsorship: Securing executive buy-in is less complicated when the project aligns with the company’s objectives.
- Better resource allocation: One benefit of prioritizing projects that align with the company’s strategy is that it helps streamline and optimize resource allocation.
- Team focus: When teams know where they are heading and why they need to do the project, they are more engaged and motivated in completing the project.
- Eliminates waste: Focusing on the wrong projects translates into wasted capital investment costs, labor costs of the workforce involved in these projects, and time. In addition, the lost opportunity of working on projects that add value to the organization can mean losing out on the competitive edge or, worse, business failure.
How to structure projects that align with your company's strategic objectives
Structuring projects that align with your organization’s strategic objectives involves these steps:
1. Identifying the organization’s strategic objectives,
2. Review all the projects currently underway and those completed in the past year in your organization.
3. Prioritize projects with a systematic approach
4. Align each project to a strategic objective
5. Allocate resources to prioritized projects
6. Assign roles and responsibilities.
7. Track the progress
Here are the measures you can take to create a project structure that contributes to achieving the strategic objectives:
1. Identify your company’s strategic objectives
Every organization needs to have documented vision, mission, and objectives. If you are unaware of your company’s objectives, consult the organization’s leadership and stakeholders to formulate one. This vision will guide your efforts to create a project plan. While strategic objectives are aligned with the company’s vision, mission and goals, each project should support the overall strategy.
2. Review all the projects currently underway and those completed in the past year in your organization.
- Ask each department to list the projects they are working on and the goal of each. Evaluate if they know if the project is aligned with the strategic objectives.
- Create an inventory of your organization’s projects irrespective of their size or scope
- Measure each project in terms of whether they are on track with respect to scope, budget, time, and other metrics.
- Identify completed projects over the last year and evaluate their success rate. The lessons learned from this exercise will help identify the possible roadblocks to project success. For instance, if one or more projects failed due to lack of resources, factor this in when determining project viability. For strategically essential projects, prioritize the availability of resources.
3. Prioritize projects with a systematic approach
- Develop criteria to prioritize projects that include their alignment with strategic objectives and impact on customers.
- List the projects and their goal, strategic alignment, and their expected impact on the customers, departments, and the organization on the whole. Then, use a scoring system to prioritize projects based on the criteria of strategic alignment.
- Establish a senior management committee to review project prioritization and approve project implementation priorities.
4. Align each project to a strategic objective
- Review the strategic objectives of your company
- Examine all projects to understand how they align with the strategic goals.
- Terminate low priority projects or the projects not linked to the company’s strategy. This helps save the organization time, money, resources, and lost customers.
- Redesign the project structure to include projects that support the objectives. Multiple projects may be needed to achieve some objectives.
5. Allocate resources to prioritized projects
Resources are not only scarce, but often multiple projects compete for the same limited resources. Leverage your strategic priorities to guide resource allocation:
- Instead of deciding which project gets the major share of resources, allocate resources by prioritizing strategic objectives. The highest priority objectives will need the most resources.
- Before going ahead with the project execution, ensure that you have as accurate an estimate as possible of the skills, money, and time needed.
- Track resource availability to prevent workplace conflicts and unpleasant surprises at the last minute.
6. Assign roles and responsibilities
Strategy execution depends on individual members of teams and the organization. Training, measuring, promoting, and rewarding people is vital for effective strategy execution. People management best practices ensure alignment of strategic objectives and the project execution:
- Project stakeholders understand that their work is important to achieve strategic outcomes and their influence on successful project execution.
- Project members have clearly defined team and individual performance targets and KPIs precisely aligned with the company’s strategic objectives.
- Structured performance management reviews reward performance based on individual employee’s contribution to the organization’s strategic objectives.
- Project stakeholders buy into and clearly understand the strategic objectives.
- The project management team can deploy, create, and maintain the project, program, people, and enterprise strategies.
7. Track the progress
Once the projects are prioritized, use project dashboards to track the progress of your projects. Dashboards consolidate key data into visuals that are easy to grasp. These metrics enable you to get the big picture of each project’s status and identify potential barriers to project success.
Conclusion
When the organization’s strategic objectives are executed with a streamlined project structure, the benefits extend beyond financial success. It results in shareholder satisfaction, customer retention, and optimization of time, money, and other resources.
Creating a project structure to align your project to the corporate strategy ensures your projects contribute to the overall vision while enabling your company to become more competitive and agile.
Project execution and corporate strategy are equally important for the success of an organization. As per author Simon Moore (2009), high-performing organizations combine a clear strategy with solid execution. Lack of either will “result in failure.” Aligning projects with the company’s strategic goals is also crucial to get an optimal return on investment. The role of projects is no longer to deliver on their objectives merely, but on the value, they add to the organization.
If you want to learn more about writing a strategic plan, you can go through our blog post on ‘How To Write a Strategic Plan.’
