-Saving your company by closing the gap through every project you manage
“Companies typically realize only about 60% of their strategy’s potential value because of defects and breakdowns in planning and execution.”- Harvard Business Review
Today’s challenging economic climate forces every company across the globe to keep a laser focus on the bottom line, and executives are under close watch to deliver key strategies. While most companies are focused on cutting back and looking for new ways to make their budgets stretch further, very little time is spent on ensuring that those strategic investments a company makes are managed as well as they could.
While companies are optimizing and adjusting, they are also establishing new visions and strategies that they believe will position them well for success. Once completed, they look to the project and program management teams to execute their strategies to help realize their vision and right the ship. So why is it that so many companies continue to suffer from a strategy-execution gap? And what can the PM do to help close the gap?
To shed some light on the situation a few data points are in order. According to Forbes Magazine, “82% of Fortune 500 CEO’s feel their organization did an effective job of strategic planning. Only 14% of the same CEO’s indicated that their organization did an effective job of implementing the strategy.” This would suggest that while the vision is clear and understood, those implementing it are not able to implement it effectively for one reason or another.
Furthermore, according to a study, which surveyed the gap between strategy and execution, by OnPoint Consulting[i], found that 49% of those surveyed “perceive a gap between their organizations’ ability to develop and communicate sound strategies and their ability to implement those strategies”, and that “64 percent don’t have full confidence that their companies will be able to close the gap.”
The easy conclusion here is of course that the strategies defined and communicated are unrealistic and “pie in the sky”, however according to the survey “The majority of respondents (75 %) believe their companies have clear and inspiring visions.” In addition “among those who perceive a gap, 69 % believe the strategies are realistic and 63 % believe the visions are clear and inspiring.” This would suggest that the gap is not likely to be a result of unrealistic, poorly articulated visions or unclear or unattainable strategies.
So what is the culprit? What is the missing link that creates this costly gap which drains our companies of resources, time and energy? I believe the answer is in the ability for those responsible for strategy and execution to find common ground and communicate for success to realize the potential of their skills and opportunities, as well as the ability to continuously monitor through an agreed upon lense.
For companies that have a well established PMO or Project Management Framework, this is the true value proposition of its existence, the linkage between strategy and execution and the team’s ability to maintain the link is the lifeblood of the profession. Helping the management team to communicate, monitor and course correct on an ongoing basis throughout the execution process is absolute key in minimizing or eliminating the gap. While communication of the strategies and vision is important, the ability to establish reasonable SLA’s and an agreed upon a set of metrics that drive the right behavior is even more critical. (Note: for more on metrics, read my previous post here and here.)
According to Gartner[ii] “By 2013, we see a new function evolving in many organizations, which crosses the IT business boundary and is concerned with optimized and actionable investments, aimed at achieving strategic organizational goals, typically implemented as large-scale programs.” This would suggest that the role of the project and program manager is key to realizing the successful execution of strategies.
The project and program managers are the stewards of execution, the link that eliminates the gap, if we leverage our ability to communicate up, down, and across through metrics that drive behavior and ensure thorough & continuous monitoring of the process. We as a community have the ability to not only close the gap, but in turn be our organizations opportunity to gain ground and become a competitive advantage by helping to realize the vision of our leadership team and our stakeholders.
[ii] Gartner Research Paper – Publication Date: 5 December
2007 ID Number: G00153349