What do Your Critical Projects Reveal About Your Strategy?
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Too many strategic initiatives are a risk. But, let's not get fatalistic about execution. Leaders have the success of their strategic priorities in their hands.
‘Half my strategic priorities will succeed, but I'm just not sure which ones yet' said the leader with a quizzical look.
Now you are probably thinking that any leader who would say such a thing would have to be out of their mind. But such a leader might not be far off the mark given the success rates for strategy generally.
One often quoted study puts the gap between performance and strategy at 37% – in other words strategies typically only deliver 63% of the goals set for them. However, for one third of organizations the figure is below 50%.
What is your organization’s batting average when it comes to successfully executing strategic priorities?
However, the leader’s ‘toss of a coin’ odds may be optimistic if you define success as delivering to budget, schedule, scope and so on. According to research up to 86% of projects globally fall short on these criteria (2).
Statistics are interesting, but whatever number you settle on, it is clear that too many strategic priorities are at risk. Indeed, there could be 20 or 30 struggling strategic initiatives within a typical large organization at any time (3). Not only does this project pandemic undermine the ability to deliver on strategy, it can also retard the performance culture of the organization – its confidence too.
Which of your strategic priorities are most are risk?
The success of many strategic priorities rests on a knife-edge – it could go either way. Launching any strategic initiative is a high-risk activity and should only be done with the utmost care. Leaders need to have their eyes wide-open!
We are continually tracking leader confidence regarding the execution of strategic priorities. Confidence starts off high – perhaps too high – and then goes into decline as the ambition regarding the strategy gives way to anxiety about execution. Indeed, there is often a fatalism regarding execution (4).
Is there a fatalism regarding execution of strategy within your organization?
What is an acceptable rate of project failure when it comes to delivering on key strategic initiatives? What is the threshold level below which it no longer makes sense to launch another strategic initiative?
In the drive for progress and innovation organizations can find themselves with a long shopping list of projects and priorities. But as every additional project is added, the risk of any project struggling is increased – not because the people involved are not capable or committed, but because they have too much to do. Also because resources are limited and can only be spread so thin.
Could your team be juggling too many strategic initiatives?
Chances are most organizations would be better advised to launch fewer strategic initiatives and work to ensure that they are more successful. That means better managing the process by which strategic ambition is translated into key strategic priorities and their related projects.
In particular each potential project needs to be vetted in terms of the business need, project scope, business case and validation/proof of concept.
For those projects that get through the selection criteria and represent real strategic priorities, the focus then turns to ensuring that projects and the people to execute them are set up for success – that means the right performance desing, performance dynamics, leadership and execution principles.
How well are strategic projects vetted and planned in your organization?
Better vetting, set-up or even better planning of initiatives will reduce risk, but they won’t eliminate it. Indeed, a false confidence regarding the robustness of a project plan or Gantt Chart can be dangerous, especially in a fast-changing environment.
The ability of projects and their teams to flex and adapt to changing business and stakeholder needs is key, that requires ongoing reviews, iterative cycles and fast learning. Projects don’t run themselves, they need people who are wholeheartedly committed to successful execution. They must be vested with autonomy – empowered and responsible for making success happen.
References & Notes:
- Michael Mankins and Richard Steele, Turning Great Strategy into Great Performance, HBR July–August 2005 Issue. This study is a little dated, but it is interesting because it attempts to quantify the cause of the strategy-performance gap (e.g. 7.5% comes from failure to ensure right resources and 4.5% due to poor planning). https://hbr.org/2005/07/turning-great-strategy-into-great-performance
- The 2015 Global Project Portfolio Survey suggests that 86% of projects will fail to deliver against their budget, schedule, scope, quality and benefits baseline. See: https://www.slideshare.net/assocpm/pw-c-global-ppm-survey-the-case-for-doing-things-differently
- As a guide 45% of organizations completed more than 50 projects in the past year – ‘The State of Play in Project Management Survey 2018’, AIPM and KPMG Australian Management Survey, 2018. https://www.aipm.com.au/images/news/report.aspx
- Of course, execution as a term makes a clear diagnosis of success or failure difficult. That is because it is a catch-all label covering a multiplicity of factors incl. weak leader sponsorship, poor stakeholder engagement, inadequate resources or poor planning, changes in business needs or priorities and so on.
Inspired by “The Execution Premium: Linking Strategy to Operations for Competitive Advantage” by Robert S. Kaplan, David P. Norton –
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