Business Modules

Introduction

This business report tackles the 2nd question “Using examples where relevant, demonstrate how understanding strategy is key to the role of the project manager.”

Strategy is essential in the success of any project. Project managers require understanding and incorporating strategy in their activities (Collis & Rukstad 2008). This paper discusses the importance of strategy to a project manager in conducting their role in an organisation. In business, a project can be defined as a temporary group activity designed to produce a unique result, service or product. A project is temporary because it has a predetermined initiation and closure time. Hence, it has a defined scope and resources to use. Its uniqueness results from the fact that it is not a routine operation of the organisation, but a precise set of operations designed to accomplish a predetermined goal. As a result of the different operations combined in order to accomplish a project, the project team members may be people from different organisations and geographies. They may not be working together, hence it is essential to have an efficient project manager. A project could be a natural disaster relief project, seeking new geographical markets to expand sales, construction of a road or a building, or even development of software to improve an organisation’s business process (Patanakul & Shenhar 2012). Any project requires expertise in the management, so as to deliver results on time, work with the budget, and integrate the results into the organisation’s program. This paper will relate more with business projects than the other projects.

Project management entails the application of understanding, techniques and skills to execute projects efficiently and effectively. Project management requires a strategy to enable organisations relate the project results to business goals (Depperu & Gnan 2006). This will enhance their competitiveness in the market. Project management has five distinct processes. They include initiation, planning, implementation, monitoring and evaluation, and project closure. In addition, there are several elements that are very essential in project management. They include integration, scope, and communication, management of stakeholders, risk management, time, quality, resources, cost, and procurement. Project management focuses on these essential elements guided by their goals, schedule and the resources available (Teece 2010). Project management has grown efficiently throughout the world. This proves its value in projects and organisations. A project manager conducts project management. This person has the responsibility of defining the project, ensuring on time delivery of project’s results, to the budget, and they meet the set standards. He ensures that a good working relationship exists between the different departments and groups of people working in the project. The performance of a project manager is a great determinant in the project’s success (Longman & Mullins 2004). Consequently, a project manager has to understand the importance of strategy. Strategy refers to a contingent plan of action designed to achieve a preset goal. In other words, it is a detailed plan for achieving success. One essential element of strategy is management’s set of committed choices. Strategy involves making high order choices whose impact can be analysed through the competitive outcomes.

Strategy Elements in a Project

Project managers need to figure out how to achieve and how to make it happen through the use of available products, operations and customers. Strategy is continuous, repetitive, and fluid. It can be sub-divided into reasonable steps or elements (Brady & Hobday 2011). The project managers should incorporate these elements of strategy in the project.

• The first step in incorporating strategy in the projects is goal setting. The goals and objectives of the project should be quantifiable, realistic, precise, achievable, and time bound. The objectives should maximise the value of the project within the set time. Incorporating strategy ensures that the project has both long-term and short-term goals. Regular monitoring and assessment should be carried out to ensure the achievement of short term objectives. The project’s objectives should also be in line with the organisation’s mission statement. In addition, the strategic plan in the project should be flexible, so as to modify together with changes of circumstances.
• The second step is the strategy development process. The strategy development focuses on answering three vital queries: Where is the organisation now? Where should it go? How will it get there? Answering these questions creates the strategy process. Project managers focus on the current issues affecting the business environment and evaluate the current performance of the organisation (Casadesus-Masanell & Ricart 2010). The evaluation should cover the industry, company, as well as the SWOT analysis. In addition, the project manager should evaluate the resources, risks, requirements, and returns.
• The third step involves analysing the benefits of the project on the organisation’s customer base. This will be essential in determining the action plan to initiate, so as to ensure that the organisation retains its customers and wins its competitors’ customers. Consistency and validity of information is essential to the success of a project.
• The next step involves the analysis of internal business after analysing the customer base. This will analyse the financial and operational results of an internal audit. This should involve a SWOT analysis that will identify the strengths, weaknesses, opportunities, and threats. Prioritising and narrowing down to a smaller set of the most significant factors will utilise the SWOT analysis (Yip 2004).
• The fifth step involves making strategic choices. The project manager should make comprehensive strategic choices. The formulation of these strategic choices contains implementation and positioning components. The efficient strategy must align between positioning and implementation. Positioning articulates the organisation’s strategic approach in the project in order to achieve the set goals and objectives. Execution puts into consideration the required resources, operational competence, and organisation of the project team members to support the direction. Project managers should ask the question “how?” to be able to enhance the strategic choices (Shenhar 2004). They should develop a strategy through methodologies, such as divestiture, penetration, integration, diversification, and development.
• The sixth step involves strategic thinking. This encompasses asking the right solution-oriented queries, as well as conducting suitable analysis to formulate plans and strategies. One essential section of the business that the project manager should focus towards involves asset optimisation. This will ensure that the project will utilise the available assets efficiently. The project manager could also focus on the core business of the organisation. This includes the products, customers, technology, and processes that can create competitive advantage.
• The final step involves the execution of the strategic decisions. Many projects fail as a result of commitment, attitude and communication problems. The management should ensure that the project team works together. All communication channels should be open. Incorporation of strategy in the implementation of the decisions monitors four perspectives of the project’s impact. These perspectives include business processes, financial, learning and progression, and customers (McGrath 2010). The project manager should understand the strategic drivers of the project or program, required governance level to enhance change, and the benefits of the program or project. Project managers should identify strategies during feasibility and case studies that they review (Kujala, Aaltonen, Turkulainen, & Artto 2010). Project management and corporate strategies can only be linked when the project manager understands the driving business strategies.

Strategic Issues

In project management, there is a possibility for contentions or issues to arise. These issues have a significant impact on the purpose fulfilled by the project, and the manner in which the project should be managed. The project’s success or failure depends on the consideration of these issues during the planning and implementation of the project. The concept of strategic issues in project management widens the project manager’s role, as well as the role of the project team members. Once the project has identified the issue, it analyses the real or potential impact on the project. Strategies’ establishment and implementation deal with the issues likely to have a vital impact on the management of the project and its outcome. The owners of projects should be aware of the probable and possible impact of strategic issues.

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The project managers should address the strategic issues through three main aspects. They should be aware of the strategic issues affecting the project they should have an approach for the strategic issues’ assessment, and they should have a clear technique for the strategic issues’ management (Porter 1996). Existence of strategic issues in the industry has fostered changes in the techniques of project management. For example, the United States automobile industry has faced strong foreign competition. This has prompted the manufacturers of automobiles to develop and incorporate innovations in designing their vehicles. They are also facing strategic issues in cutting their costs and reducing the amount of time spent on developing new designs of the cars. They have used project management techniques the form of organisational alignment, and use of product design teams. This has resulted in short cycles of product development, hence reducing the costs incurred and improving quality. This has resulted in the production of competitive products, in the world car market.

In another example, when Nissan, a Japanese automaker, considered constructing a production plant in United States, they identified the local community and worker’s adaptability to the Nissan culture was a strategic issue of concern. They initiated a project to tackle the issues. This project involved careful selection of employees, orientation sessions at the plant in Tennessee, USA, and interchange trips to the Japan plants. This resolved the strategic issue resulting in the success of production facilities. The plant has a model employee-management relationship. The strategic issue is usually either an internal or external condition of pressure in a project. Strategic issues may arise from different stakeholder groups, such as the suppliers, government, public, customers among others. In another example, the managers of the US Supersonic Transport Program did not consider the environment-related strategic issues surrounding the program. This resulted in environmentalists succeeding in stopping the program. The strategic issue may arise from the employee attitude (Ross 2006). For instance, when George Fisher was Eastman Kodak’s CEO, he had a three phase plan to turn Kodak around. The first plan included reconfiguring of Kodak by selling all business unrelated photography, isolate the digital electronic imaging operations from the old-style silver halide photography division, and repay most of the debts. The second plan included setting of strict financial goals, including achievement of virtual perfection in the quality of manufacturing. His third plan involved accelerating the growth initiative of the company. To accomplish this, Fisher believed that his most urgent task involved the elimination of employee resistance to change.

Strategic issues can emerge at any stage of the lifecycle of the project. Ignorance of such issue at any stage may result to the failure of the project. The following illustration shows how costly ignorance can be to the organisation. During a large nuclear power plant project, there was a discovery of an offshore earthquake line a few miles from the plant. This happened midway during the project’s lifecycle. Senior project managers did not make in-depth inquiry or receive satisfactory accounting on the implications of the issue. The project management team should have asked for immediate, detailed study of probable and possible implications to the project. They should also have conducted a full-scale audit of the plant’s status. When the project was almost in completion, the project owners incurred heavy costs of redesigning the plant so that they would incorporate safety measures due to its poor location. The public through various stakeholders and interveners acted through the court calling for safety reassessment of the plant. If the project managers had put into consideration the possible implications of the issue and formulated a solution, they would have saved the plant owners from incurring the additional costs.

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The growth of business relies on strategic management. Mott MacDonald, a global management, development and engineering consultancy, uses business acquisition and staff recruitment from different fields as their development strategy. In 2007, in their development project, they acquired an environmental firm in Netherlands, an educational consultancy in Romania, and a power engineering company in United States of America. This strengthened their market presence in these countries. An organisation can employ Asset Optimisation (AO) programme as their development project strategy. Anglo American, a mining company, uses an AO programme that is holistic. They encourage employees to work together and initiate innovations to improve businesses. They have also introduced an internal process called Operation Reviews. It assists in assessing the project regularly to ensure that the project succeeds.

Conclusion

In conclusion, the success of any project relies on identification and management of strategic issues surrounding all aspects of the project, including social, legal, economic and political aspects. In addition, the technical performance, cost and schedule of the project should also be put into consideration. When setting up a strategy statement, the project managers should consider scope, objectives and benefit accrued from the strategy. The project should also be in line with the organisation’s mission statement. The project manager has many roles in running of the project (Maylor 2005). Therefore, he should understand the importance of incorporating strategy in his actions. This will create a good working relationship between the workers, stakeholders and all the beneficiaries of the project. It is also necessary to note that strategic issues in a project may arise at any stage in the project’s life cycle. This could be during the initiation, planning, implementing, evaluating or during the project’s closure. The project managers should check internal and external issues that could affect the project. One significant issue that should be considered when introducing a new strategy is the organisational environment. The environment should be modified to encourage conversion of the strategy into action. The workplace culture should be aligned with the project’s strategy. When a project manager understands and incorporates strategy into the project, it will focus on set objectives, utilise the set budget, and deliver results on time.