2.3 Corporate Strategy and the Management of Projects
Let us first define our terms as they relate to managing strategic project portfolios. When we talk of an organization’s strategy, we typically define strategic management in the following terms:
Strategic management is defined as: the method by which corporate, business, unit, function, organizational units and projects formulate, implement and evaluate their strategies.
This definition is important because it gives us a three-part perspective on the strategic management process. First, it is concerned with formulating strategy. The fundamental question here is the means by which an organization determines what strategies are appropriate, how they determine them, how they self-analyze their own competitive posture, and so forth. In other words, the first and, many would argue, most critical step in strategic management consists of the process of determining what strategies are most likely to further company goals. Second, strategic management concerns the implementation of these strategies. It is useful to think of the implementation stage as the project development process; in that projects are often the means by which organizations operationalize their strategic vision. Finally, strategic management consists of an evaluation step, where the aforementioned strategies are assessed periodically to ensure that they are still relevant, useful, and in line with corporate priorities.
We can demonstrate visually the manner in which an organization’s projects build on the theme of complementarity through the use of Figure 8.2.1. In the figure, referred to as the “Strategy Puzzle” we note that if we adopt a perspective whereby the organization operates at three different levels (corporate, business unit, and project), we must constantly think of how we can ensure that each level operates in accordance with the overall themes and priorities of the other two. In this puzzle we see that the organization is represented by the overall square. Each of the levels depicted fit to make a unified whole. If the strategic actions at any level are not in alignment with the other levels, the organization will experience wasted effort.
Figure 8.2.1