How to improve the design and execution of strategy
Aligning investment - avoiding worthless projects
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diseases
Likely symptoms of problems
Loads of projects around the organisation. Projects get completed
but seem to make no difference to the organisation. People complain
that cost cutting cuts back the benefits, not the costs, of projects.
Preliminary diagnosis
Our experience has been that, In most organisations, between
25% and 40% (by value) of the projects do NOT contribute to the
strategy. They need killing. Other projects will not deliver what
the strategy demands. They need re-aligning. The strategy relies
on other initiatives but they may not exist. Creating the right
set is vital to the strategy.
Case study
In developing the strategic balanced scorecard for a major UK
retailer we conducted an initiative alignment. The purpose was
to identify where costs could be saved and ensure that they were
the right project s contributing to the overall strategy.
The results were quite astounding. We found over 200 projects
within the organisation with a project cost of over £100m.
More importantly when we aligned them to the strategy we found
that nearly 40%, by value, or £40m worth, did not contribute
to the strategy.
Moreover, there were a collection of areas where projects did
not exist, yet were needed to move the organisation forward and
ensure that the strategy was delivered.
Our findings went immediately into a cost reduction programme
to eliminate the redundant projects, re-align the unfocussed ones
and ensure that the new ones needed were created with the right
agenda.
Underlying solutions
Good project and programme management are fundamental to success.
But if your projects are not aligned behind delivering the results
and changing the organisation, then your strategy will be unlikely
to succeed. The projects will deliver no value to the organisation,
on time and to cost.
Our investment alignment approach always finds projects that
save the organisation money. That in itself usually, more that,
pays for our fees. That is before the value from execution of
the strategy comes through.
It works at the organisational level ensuring that the logic
of the strategy is supported. It works at the project level ensuring
that the projects deliver what the strategy requires.
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