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A linkedin question recently was about the integration of the Balanced scorecard framework and the Project hierarchy.

The questioner desctibed their situation like this:

“We have a top level strategy map for company-wide usually contains 15-25 main strategic objectives (for example: Regional sales growth). We are able to cascade each main strategic objective into functional or process level strategies in a hierarchy structure (for example Region A sales growth, Region B sales growth, …). This may continues to lower levels.

Based on the PMBOK standard, we have a hierarchy structure for projects: Portfolio, Program, and Project. Each Portfolio includes a number of Projects or Programs, and each Program may contain different projects. Each project also includes different activities/tasks.

A BSC covers valuable information regarding main strategic objectives and main projects (initiatives). Bearing this in  mind, how we can relate Strategy hierarchy with Project hierarchy in order to align each staff to strategic objectives, or involve in strategic jobs (here Portfolio, Program, and Project). “

Answer

This is a common problem, one we have seen frequently, and is easily sorted. Don’t try to make an explicit link between the project hierarchy and the cascade of balanced scorecard strategy maps. There may be one, but not as clear as you think.

Lets start at the beginning.

a) remember that the projects are mechanisms of change that are designs to improve the performance of the objectives (in the process & learning & growth perspectives) of the balanced scorecard and the strategy maps.

b) Collect your portfolio of projects. Then apply the basic test against the objectives.

– is this project necessary to achieve this objective?
– Is this project (or set of projects) sufficient to deliver this objective?
– Are the set of projects justified (economically)?
– Can they be delivered? Are there sufficient resources?

There is an example of this on my website. Look in the case studies under both the manufacturing video and the retailer. The retailer example is explicitly about project alignment.  The manufacturing case study also includes references to the projects that support the strategy  and change. (see other case studies)

c) You will see now that the “Granularity” of a project is no longer whether it is a portfolio, programme, project, but whether the scope of a project is sufficient to alter the performance and achieve an objective.

d) What you might have at level 3 of the cascade is a set of projects (or part projects) that all support a set of objectives. As you move up strategy map cascade you might find that these form a natural group of projects and could start to collect them together to be managed as a programme under a single responsible owner.

D) It all comes down to natural groupings.

You can read a detailed explanation of how this works in my book, Strategy mapping for learning organisations, chapters 17 and 18. (Chapter 17 is about project alignment and chapter 18 is about the cost implications of projects, operational budgets and revenues.)

https://www.excitant.co.uk/product/strategy_mapping_book.html

The trick is to ensure that how you have divided up your programmes is consistent with the strategic cascade, themes and ownership of your strategy map. Just don’t make the tail wag the dog.

I hope this helps.