Strategic Alignment of Projects
Delivering on your strategic goals means change and change happens through projects and programs. This page will explore how strategic alignment of your projects will help you achieve your goals with less risk.
We will also look at how to actually achieve strategic alignment within a complex organization.
Why Strategic Alignment of Projects Matters
Research by The Economist Intelligence Unit found that 90% business leaders fail to reach all their strategic goals because they simply don’t implement well.
You execute your strategy through a portfolio of projects. Changing your compensation scheme to support your strategic goals is a project. Upgrading your IT systems to deliver greater business insight is a project. Developing a new product is a project.
Picking projects that support your strategy is, therefore, a necessary step in successfully executing your strategy, yet most organizations use methods that have been shown to be ineffective.
This blog goes into more detail about the benefits of strategic alignment.
For now, let’s just acknowledge that projects that are aligned are more likely to achieve their goals, suffer lower levels of risk, enjoy better executive sponsorship and more.
In this PPM Academy podcast, TransparentChoice’s CEO, Stuart Easton discusses the importance of aligning your portfolio of projects with your strategy.
Achieving Strategic Alignment in a Complex Organization
Selecting projects is often done by an executive committee and, because of this level of visibility, people tend to assume that the resulting project portfolio is aligned to strategy.
Research indicates that this is not the case.
Researchers looked at over 100 methods used by leadership teams around the world and concluded that only two methods are suitable for picking projects. They are called AHP and DEA. You can learn more about project prioritization here.
Put another way, if you are not using AHP (or DEA) in your project selection process, you are using a failure-prone method for selecting projects.
What these two methods have in common is a basis is decision science, specifically the decision science of groups.
Wherever you have a group of people, you have decision bias and conflict. Different people take different journeys through life and have different knowledge and perspectives. Crucially, they also have different strategic goals that they are trying to achieve.
And, when it comes to delivering projects, they are all competing for the same resources.
The AHP method of aligning projects to your strategy starts by bringing the leadership team together to agree on a set of criteria that can be used to measure strategic alignment. It does this in a way that helps reduce bias, but that also ensures rapid and strong buy-in to the final decision.
These criteria can then be used to assess potential projects and programs and to allocate resources in a way that will deliver maximum strategic value.
A great way to get started is to find out how you’re performing today.
TransparentChoice offers an audit of your portfolio that will help you identify projects that aligned to strategy and ones that are not aligned. It will also help you identify which projects are doing well and which are at risk.
This will allow you to make immediate adjustments to your resource allocation to ensure your most important projects are delivered with minimum risk.