Modern Business Management: Driving Strategy

by September 5, 2017

Modern Business Management has to start with leadership, but it has to reach the lower-level execution stages as quickly as possible.

In the first post of this series we talked about the need to more closely integrate leadership and delivery functions in order to improve the quality of project delivery.  This is a critical element of modern business management, and in this post I want to look more closely at how that integration occurs, focusing on how strategy drives execution.

We discussed the concept of enterprise agility last time—the need to adjust and evolve strategy to respond to threats and opportunities in the organization’s environment.  This results in strategy being a very fluid notion: While there should be directional consistency in the medium term, the specific strategic goals will evolve continuously as customer demands, market opportunities and operational necessities shift.  This must result in similar ongoing adjustments of the projects that are the mechanism for delivering that strategy, in order to maintain alignment between the benefits being delivered and those that are required.

For that process to be effective and efficient, it cannot involve all of the decisions being made at the strategic level. That would not only consume too much time and effort analyzing change, but it would also separate decision making from where the knowledge and understanding of the projects that need to absorb those changes resides—the execution level.  Instead, decision making on the mechanics of the changes necessary to maintain alignment with strategic goals must exist within the teams that are delivering those projects.  Project managers and their teams must be empowered to change project elements to ensure their initiatives still deliver “on benefit” even when that benefit has evolved from what was originally envisaged.

This distributed decision making is challenging for both leadership and project functions.  Leaders are relying on relatively low-level teams to make decisions that impact their ability to succeed, while project teams are faced with the responsibility of making such decisions.  This is where the modern project management office (PMO), containing effective portfolio management, comes into its own.  Before any specific project starts, the focus is on creating an appropriate project delivery culture, preparing teams for frequent change in constraints, resourcing and purpose, and ensuring project managers have the skills, knowledge and context to facilitate the decisions those changes require.

Once project delivery is underway, portfolio management must act as a catalyst for effective communication between leadership and project teams, and that has two elements:

  • Minimizing the time it takes for change communication to flow from leadership to project teams
  • Maximizing the ability of teams to process that communication

This is a balancing act and an example helps to illustrate the point.  In theory a leadership team could decide that they need to increase their revenue target by a further $5 million and just communicate that to the project team.  This can happen almost instantly, but without more context or explanation it will leave those project teams guessing on the right approach.  A better approach is for portfolio management to “slow down” the message in order to improve the ability for it to be processed correctly.  Discussions between portfolio management and leadership around where the revenue should come from (if it matters), why the change is happening, whether other priorities can be compromised, etc., will help build a full picture of what is happening and why.

Combining this knowledge with the skills of an effective, modern, business-focused portfolio management function enables the message to be delivered to teams, with the full context required for them to quickly review options for adjusting their work and select the best one.  That in turn minimizes the disruption on progress, reducing the cost of the change and therefore the cost of value.  The key to success is to build a modern PMO that is at the heart of the modern business management concept.  This function can then maximize the benefit it offers project teams while minimizing the time needed to add that value.  The same concept applies to communication in the other direction—from team to leadership, and that’s what we’ll look at next time.

You can learn more about the modern PMO on the CA modern software factory webpage.