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After a Year of Consolidation, what has been learned?

It is a great time for studying the impact of consolidation and prioritization efforts within organizations. While, most organizations have acted on this over the past 12-16, the results are mixed.

Reflections for Leaders

Many organizations may have ended up with more projects, rather than less. Decisions have not always been well thought through. Think project ‘whack a mole’.

Focus and alignment is the central issue. But the challenge is often at the C-suite level.

Today’s priorities may not be tomorrow’s priorities. Alignment is dynamic not static.

It is reality, whether it is a problem or not. There will always be more projects, than resources. This is probably the most ambitious generation of leaders ever. So it is not surprising the number of projects is at an all-time time.

‘Consolidation is no slam-dunk’, says one of our consulting team. It is more like project-whack-a-mile.

Inevitably, leaders will find themselves juggling multiple projects and priorities. There is always going to be plenty of projects competing for scarce resources and even more scarce management time and attention. Moreover, decisions around projects and priorities (like any other complex decision made by leaders) are never going to be 100% perfect.

Project portfolios need to be pruned regularly regardless of economic conditions. However, the past 12 months is a lesson in what happens when cost-cutting and consolidation outweighs strategic considerations.

Our data suggests that many decisions regarding projects were not as considered, coordinated and consistent as they should have been.

The result is a project portfolio that may not fully reflect today’s key strategic priorities. After all, in playing ‘whack-a-mole’ it is inevitable that some projects will get whacked, that shouldn’t, while others get missed. Calm headed reflection on (and analysis of) the portfolio today is required.

At the root of the problem are fundamental challenges around strategic focus and alignment. These challenges are aggravated by an old-fashioned approach to strategy that is based on hierarchy, functional silos and an outdated approach to resource allocation (centered on traditional planning and budgeting cycles).  

Why is it so complex?

Why can’t organizations make more strategic decisions regarding projects? What is stopping them from making the tradeoffs – making the difficult decisions? Well, leaders tell us it is not that simple.

The issue of priorities, projects and initiatives is connected not just to strategy, but to many other complex aspects of the organization:

  • Structure – Project decisions may be made in silos with each department function or team having its own projects and initiatives to protect. The resulting myopia puts the interest of the department of function ahead of those of the business its needs and priorities.
  • Stakeholders‘A deli-counter approach‘ to senior internal stakeholders is a key factor shaping project decisions.
  • Resources – the traditional rigid approach to budget setting makes the dynamic realignment of resources (between projects and priorities) difficult.
  • Rewards – in some organizations projects are given out like scouts-badges – they are a source of honor or reward. Moreover, being associated with a failed struggling or scrapped project could have career damaging implications.

When you listen to leaders, it is clear that some difficult decisions have been made. For example, even some worthy project initiatives have been paused or scrapped.1 In reality, however, an leader’s freedom to maneuver is often limited.

Most projects and initiatives are not a ‘nice to have’, but rather a business must have – the organization’s stakeholders demand it. Many leaders don’t feel they can say ‘no’ or even ‘not now’. Here is how one business unit head put it:

‘Being enthusiastic or gun-ho about new projects or initiatives coming from corporate is expected. Whether they have been thought through sufficiently, the timing is right or all the resources are available, you may need to hide your caution or skepticism. If you don’t, you could be seen as negative, or even disengaged’.

A proliferation of projects and priorities is just a symptom of a much greater strategic opportunity or challenge.  That is how to dynamically ensure focus and alignment in the face of burgeoning ambition and the growing need for transformation. This is a complex c-suite issue with implications for the traditional approach to strategy, as well as planning and budgeting. Moreover, it is not just a driver of complexity, but has the potential for chaos.

More joined up thinking is required. Stand-alone or siloed decisions regarding Projects and initiatives is a key factor leading to project whack a mole. Leaders need to embrace a portfolio mindset as a framework for considered, coordinated and consistent decisions regarding projects and programs.

The one factor that would make juggling projects easier would be a process for prioritizing, planning and sequencing projects and initiatives. It sounds obvious, but not all projects can and should proceed and certainly not at the same time. This, of course, depends on the ability of leaders to say ‘no’ or ‘not yet’ to any new project or initiative. They have to be confident saying to any stakeholder ‘if you want this, we will need to delay that’.   

  1. As leaders point out – the fact that a project has been scrapped doesn’t mean that it was not worthwhile or necessary, but rather that there needed to be more budget. []

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