PMI’s latest research, Why Good Strategies Fail: Lessons for the C-Suite, was recently published. The report was developed with The Economist Intelligence Unit and it looks at the gap between strategy development and strategy implementation at global organisations.
We all think that having a strategy is a good idea. Even the smallest businesses have a business plan. So the finding that 88% of executives believe that delivering on strategic plans is important does not come as a big surprise. What is interesting, though, is that the study uncovers that many organisations aren’t achieving their strategic plans, and one of the main reasons for that is because executives in the C-suite (that’s Chief Executive Officers, Chief Information Officers, Chief Financial Officers and so on) don’t engage with the strategy.
The gap between strategy and implementation
Over 60% of the people who responded to the survey said that their companies find it hard to bridge the gap between strategy formulation – coming up with the good ideas that make a strategy – and the day-to-day implementation – carrying out projects that deliver on that strategy. That’s a big disconnect between the people who come up with a strategic direction for the company and the people who actually carry out the initiatives – mainly project managers and operational managers.
Over 40% of strategic initiatives carried out in the last 3 years did not succeed, according to the PMI research. That’s a lot of projects that are failing. Strategic initiatives aren’t always in the form of projects, although they are a lot easier to track and manage if they are consistently managed through a portfolio or program structure and led by an experienced project manager.
Why do strategic initiatives fail?
Over 50% of survey respondents said that the main reason that strategic initiatives were successful was strong leadership buy-in and support from the most senior managers in the company. The report suggests that instead of micro-managing, C-suite executives should identify and focus on the key initiatives that are strategically relevant – those are the ones that they should be spending time supporting.
It also recommends that you should make the link to financial rewards. Understanding the financial rewards makes it easier to justify the effort involved in completing a strategic initiative. According to Mark A. Langley, president and CEO of PMI, “Maintaining strategic advantage superior to competitors is no longer enough: success hinges on an organization’s ability to deliver strategy. The imperative for leaders will be deciding not just where but how.”
So what does this mean for project managers?
What this means for project managers is that we must be spending a lot of time working on projects that are not linked to overall company strategy. Think about your organisation. Are project managers deployed on projects with a short-term, tactical gain? Or on measures that are ‘compulsory’ projects, such as those linked with legal or regulatory changes? How many of the project managers in your business are actually working on long-term, strategic initiatives?
If you are working on a tactical project, talk to your project sponsor and see if you can understand how this fits with the company strategy. There must be some reason for doing the project, and if you don’t understand how it will contribute towards growing the business, you’re not going to be able to explain the benefits to your project team members. It is really important to understand why you are working on something – it’s one of the main reasons that people enjoy and are motivated by project work.