Strategic Roadmaps Support Value-Oriented Decision Making

by August 3, 2018

In this blog, we will look at three concepts of strategic business roadmapping:

  1. A strategic roadmap serves as a basis for crafting a shared vision of the future.
  2. Focusing the portfolio on value allows for comparison between possible investments on different roadmaps.
  3. Roadmaps aid in sequencing all work across the portfolio because dependencies become clearer and can be better aligned.

Used correctly, strategic business roadmaps can unlock entirely new project portfolio insights in a more agile fashion and in less time than most organizations currently spend on their annual planning process.

Roadmaps More Easily Generate a Shared Vision of How a Strategy Gets Executed

To many organizations, the classical hub and spoke model of communication is the easiest way to start the process of building a culture of bi-directional communication. If you look at Figure 1, the obvious problem with the hub and spoke model should leap right off the page. Even assuming perfect communication between corporate and the divisions, the model does not promote communication between the divisions. The Harvard Business Review article “Why Strategy Execution Unravels—and What to Do About It” pointed out that only 9 percent of managers say they can consistently rely on colleagues in other functions to help them get their strategic work executed. To solve this problem, we need move toward the star pattern shown in Figure 1.

Star pattern for strategy roadmapping

Figure 1: Corporate communication models

Issuing a memo to all the divisions that reads “As of now, you are all responsible for talking to each other” would be a great simple solution if it worked. It doesn’t. What will do the trick is creating a clear picture of how mutual support benefits everyone. Business roadmapping can be used to highlight two very important issues. The first is the competition between day-to-day operations and strategy, and the second is the contribution that each division or function makes toward the eventual fulfillment of the strategic goal. The previous statement is not to imply that the business roadmap alone is a magic wand, but this is one case where a thousand words plus a picture will probably make a significant improvement.

Roadmaps Support Meaningful Value Assessments in the Portfolio

Having spoken with hundreds of PMOs, I’ve discovered that there is a deep-seated wish to be able to design a process that will ensure the information provided to corporate will be perfect and allow executives to make the right decisions without multiple back-and-forth discussions. As discussed, this is not only impossible, it’s counterproductive. Once each roadmap has been produced, the next step is to look at how the roadmaps support strategy across the enterprise.

The strategy matrix shown in Figure 2 is a way to bring the roadmap process and the portfolio investment process together.

Strategy matrix to bring roadmap process and portfolio investment together

Figure 2: Investment proposal by strategy

 

The roadmap is divisional and organized against a timeline. The strategy matrix is enterprise-focused and organized by proposed project start date. The strategy matrix attempts to answer two questions: If the enterprise invests in some or all of the investments listed in a strategic column, what percent of strategy will be completed? And how much of proposed work do we have the resources to complete (a subject we’ll cover in the third part of this series)?

I’ve always been surprised that organizations don’t routinely ask how much an investment proposal contributes to the goal of executing strategy. Of course, most organizations historically don’t have tightly defined strategies with measurable outcomes. Today’s focus on digital transformation changes that because it presupposes that a company must complete its transformation process or get left in the dust by its competitors. Therefore, looking at Figure 2, if a company chooses to spend 27 percent of its investment dollars on “increase customer engagement” in 2019, how much closer to “mission accomplished” will it be?

While the answer is different for every organization, the most common situation I’ve seen is that some of the project proposals don’t significantly move the progress needle. They are small, incremental changes at best, and a comparative waste of money in other cases. The notion of “comparative” is important here.  As an example, in the table we see that Division B wants to make three separate investments in digital products in the first quarter of 2019. Investment 8B might pay off well, but there are a large number of risks and too many unknowns, especially when compared to investment 6D. This doesn’t make investment 8B wrong, it just makes the timing suboptimal. It is at this point that we loop back to our divisional roadmaps. Division B now has the choice of moving investment 8 out to Quarter 4 or dropping it off the list entirely.

Look at All the Roadmaps Again: Odds Are Critical Dependencies Are Still Missing

It would be nice to say that an organization that has done everything I’ve talked about to this point will be able to declare success and get on with its execution efforts, but experience has shown otherwise.  Until the day the star pattern of communication is the norm and everyone is in very tight communication, it seems something will always get missed. This situation is so common that I recommend that companies add a divisional review step that occurs after the portfolio is finalized. The rules of this review are very clear-cut. The only things a division can escalate back up the chain are missed interdependencies or unforeseen circumstances (generally around resource availability).

A portfolio manager once shared the story of having spent months working on a very contentious portfolio process. Two days after he thought they’d declared mission accomplished, one of the divisions called in an absolute panic, explaining that one of the projects cut from another division-approved project list was a critical dependency for their most critical initiative. Adding that project back in took over a week, and it required changing the timeline on some projects and ultimately cutting two others.  Experience has shown that when people are looking at fact rather than possibility, they suddenly start to see things they should have seen earlier. The roadmaps significantly decrease the odds, but it’s still going to happen.

Executing strategy is a journey into largely unknown territory. The best any company can do is invest in the right tools—building business roadmaps and good portfolio analysis—because there will always be surprises along the way, and the more responsive to change an organization is the better the long-term outcome.

To learn more about our unique approach to roadmapping, read the ebook Roadmapping: Strategic investment planning for the enterprise.