Benefits realization: is our portfolio of projects contributing to our strategic objectives?

3 minute read

Across industry today, the success and health of projects are typically measured against the binary response to the following questions: Was the project completed on time? Was the solution delivered under budget? Generally speaking, project success is rarely measured against the extent to which underlying strategic objectives were actually met at completion.

Critical questions such as - did our bottom line improve after we implemented the ERP system? Are we realizing benefits from the (insanely) expensive technology stack we implemented to support knowledge exchange? Are our portfolio of projects aligned with our strategy? - are not being posed or asked only after project completion (a potentially expensive and wasteful option).

So, how do we better monitor the congruence between projects, their outcomes and organizational strategy? In this article, we will first explore two common challenges that organizations face in this context . We will then review change management approaches to keeping a pulse on the harmony between a project portfolio and organizational strategy.

Preamble

Before diving in, we must acknowledge a common trend in some organizations today. Some organizations lack focus and are overcommitted to a copious number of projects at any given time. Think about an an individual who has overcommitted her/his time to a dozen daily meetings, multiple social events, projects and engagements. This individual will struggle to doing any one thing well. Similarly, an organization that fails to focus its portfolio on truly strategic projects will likely falter. Functioning in this state will aggravate the challenges and hinder the recommendations presented here.

Common challenges

Sponsorship involvement is critical to ensuring the alignment of project outcomes with organizational strategy. In fact, the most important factor in the success of a project is an actively engaged project sponsor. While it’s an important factor, it is also one of the toughest factors to maintain. It is common to see sponsors show up to a kick-off meeting and not have an presence beyond that. This may be for a variety of reasons including the fact that the sponsor is not fully bought in and/or the sponsor is stretched thin with oversight of numerous projects at any given time (see preamble above).

In order to ensure alignment with overall strategy, communication between sponsors and the change management/execution teams need to be in lockstep with the direction of the project. Open, frequent lines of communication will ensure everyone is on the same page regarding the current portfolio of work, creating greater buy-in and the level of understanding across the organization. Communicating with purpose will highlight deviation from the true project objectives, outcomes and strategy.

So how do we do this practically? Sponsor-change/execution team communication component can be built into the change management plan, ensuring that sponsors are exposed to frequent updates about the project, ensuring its on track. And to be clear, ‘exposure’ would involve a thorough overview that goes beyond generic product updates. An alternative is to hold weekly or even bi-weekly updates exclusively with the sponsor/steering committee, with a summary of whats working and whats not. Sponsors and project teams should constantly be critically questioning project alignment with strategy and bottom-line impact before, during and after the project.

A second common challenge is that incentives are not linked to the desired outcomes that would make the project a real success. For example, when a new customer relationship management (CRM) system is installed and deployed to an organization, do sellers continue to be reimbursed for sales leads managed outside of the CRM?

Lets looks at this from two angles. From angle one, the set of measurable indicators that are congruent with the (CRM) strategy must be first defined.

From angle two, there must be a clear and discernible link between incentives, metrics and the strategic goals of an organization. If these are misaligned, the odds of success are limited. Using the CRM example, a combination of communications, training and face-to-face conversations can be useful in nudging sellers adopt the new system. Also, the incentives the sellers receive should factor in the new CRM as a means to achieving the benefits. When defining incentives, it is important to remember that inertia is a powerful thing. Behaviour change has impeded even the most well-intentioned projects and solution. Incentives alone are almost never enough.

In summary, change management, strong sponsorship involvement along with strongly linked incentives will ensure the project/strategic outcome alignment we as leaders seek as we manage change.