Manage the middle game
- 28 October, 2008 22:00
Specialised knowledge and high-level leadership skills are vital to strategic planning. Many executives lack the basic smarts to conduct adequate strategic planning. As a result, many companies' strategic plans are doomed to failure because of poor implementation. More than 50 per cent of strategic plans are not fully implemented due to poor project management, underlining the need for greater project-based expertise. In a nutshell, executives who are good at project management are good at implementing change initiatives.
In sectors that are changing rapidly through consolidation, and with demanding controls and customer needs, increased competition, new legislation, greater regulatory oversight and intervention, there is a need for particular skills for managing complex change programs and intervention projects.
The need for these skills will be especially evident in the financial services sector in the wash-up of the global financial crisis, which is likely to lead to fundamental changes at organisational and regulatory levels.
While it is rarely one factor that causes a project to fail, an important issue is around the calibre and training of people who are responsible for delivery of a portfolio of complex projects needing procedural change.
There is a clear need for not only process knowledge, but also particular leadership qualities that enable a person to lead specialist teams to deliver the variety of project outcomes.
Mergers, acquisitions, joint ventures and strategic alliances require exacting skills in project-based management. The absence of those skills - particularly in sensitive competitive and market environments - can present many opportunities for public embarrassment and expensive failure.
With so many organisations using projects to introduce strategic initiatives, it is apparent that managers require far more astute pre-planning, development and project leadership skills.
In-depth understanding is needed of risk management and mitigation, along with excellent communication mechanisms, motivational factors, and negotiating skills. These are critical components in the project manager's armoury.
However, many companies lack the expertise to frame project deliverables, ensure governance, have adequate reporting procedures, maintain due diligence and undertake risk assessment.
For many, a basic framework such as PRINCE (projects in controlled environments), would be an excellent structure for governance and control.
In most of the organisations surveyed in the course of writing my book, Managing Projects, Managing People (Palgrave Macmillan, 2008), managers spent insufficient time thinking and planning for possible mid and longer-term scenarios. Until recently, very few considered the impact on their business model of the impending emissions trading scheme.
When asked what continuity planning actions would be available for implementation if, as a result of a serious long-term disruption or disaster, a revised business model were needed, most organisations admitted to having no specific contingency plans. And most did little scanning of their market environment. This admission was voiced while it was also acknowledged that they operated in a turbulent environment of changing demands and rubbery operating boundaries.
Conversely, in those companies that did undertake ongoing strategic planning and environmental scanning, most were project-based in structure and had pre-eminent project management capabilities.
Admittedly, while developing an ongoing scanning system is expensive and often difficult to maintain, the business opportunities can be enormous. For example, a steel manufacturing company surveyed, employed the services of Reuters, the specialist news-briefing agency, to identify any information that could affect its current and future business.
Hurricanes in the Caribbean, for example, may mean an unfortunate disaster for the people who live there, but for a steel producer, they could represent replacements to sea defences and inland infrastructure. It is often reported how British American Tobacco conducted extensive scenario planning prior to the banning of smoking in public areas, and it developed new business models in response.
So, armed with the knowledge that less than half of China's production capacity is given over to overseas manufacturing - and this is reducing due to increasing domestic demand within China - how many companies that rely on China at present have future alternative sources in their line of sight? First-mover advantage is there for the well informed.
For many organisations, the strategic planning activity is in itself a means to an end. All of those surveyed conducted regular strategy planning activities - recognising that conditions had changed substantially since the last strategy planning exercise and there was now a need to recast their strategic alignment.
However, the clear distinction between those that failed to fully implement their strategy and those that were successful was in their approach. The successful ones had clear targets, milestones, timelines and budgets. Preparation was seen as critical. Moreover, their strategic goals had been converted to project-based activities to ensure exacting alignment with corporate goals.
Organisations need to seriously consider converting to a project-based organisational structure, and pinpoint skills development for their executive management.
Introducing organisational change, new products, information systems, quality programs and similar "soft" applications needs advanced project-based management skills.
Stakeholder considerations are important requirements, as are conflict resolution, diagnosis and analytical modelling skills, communication competence, and the building of a collective mind.
David Parker, a senior lecturer at the University of Queensland Business School, is the co-author, with Michael Craig, of Managing Projects, Managing People (Palgrave Macmillan, 2008).
Fairfax Business Media