In a 2008 article in Ivey Business Journal, Wharton’s Lawrence Hrebinlak stated that “Formulating strategy is a difficult task. Making strategy work—executing or implementing it throughout the organization—is even more difficult.”
What we know to be true is that many managers and leaders have spent a lot of time exploring different approaches, techniques and strategies for developing strategy, with it getting messy when we look into execution. And even today in this complex environment, from creating the next micro-chip innovation to determining the next breakthrough social networking platform or converting consumer products into foreign markets – such as the non-existent localization strategy without which Facebook has failed to attain a share in Japan. Regardless of your background in your business, what we do know to be true is that this complexity is everywhere.
Unfortunately, most of the data suggests that we don’t do a great job organizationally at executing and there’s a variety of reasons. The 2009 “Chaos Report” from the Standish Group states that roughly a third of projects executed by executives at companies are defined as successful, with the remainder being classified as either “challenges” or “failures”. In the face of this, we know of the myriad of factors that result in challenges or failures in strategy such as:
a. existing skill set do not match needs
b. distributed teams with varied agendas
c. lack of resources, spread too thin
d. scope creep due to failure in prediction
e. inconsistent project management processes
Over the years, I have worked to understand these challenges and create effective approaches to address and solve the encountered roadblocks. The competence culture at HP revolves around developing cutting edge technologies. When consultants came in to suggest, pitch and convince the board to sell HP branded iPhone’s with the logo of “HP Invent” on them, it actually led to the resignation of multiple engineers who felt a gap between the company mission and management decisions. Terminating this product was one of the first things Mark Hurd did when he took over later that year.
This realm of that project management is all about a portfolio with a prioritized set of projects that need to be reconciled to the actual resources that are required to accomplish them – there’s no point in having a portfolio more ambitious than the resources on hand to implement them. The domain of program and project management deals with what resources are required, how to sequence activities and making sure to coordinate dependencies; so we need to link our projects, programs and portfolio. Typically people think of projects falling into programs but sometimes you have some standalone projects that are independent from programs such as soft projects – to build alliances, change organization structure, to develop marketing campaigns and so on.
When you think about an organization’s real strategy, its the portfolio of strategic projects it invests in, essentially where to look to assess where an organization will be in a year or two. Linking the strategy to the portfolio is the largest determinant of success predictability for an organization. Historically, we did this once a year in a capital budgeting exercise and its often a human capital budgeting problem these days. How? Companies are sitting on stockpiles of cash which they are uncertain on where to spend due to the future of new markets and decision making (budget settlements in the US, Europe’s financial meltdown) of their governments. Once these uncertainties secede, the companies invest and are often shaken to find a lack of talent, both internal and external.