Why It’s Important + How to Do It

In today’s business environment, we face rapid changes in technology, complex business relationships, the relentless pressure of competitive success. We also face external stresses from global social and ecological challenges, Covid-19 being a prime example.

With all these factors at play, businesses must think and act strategically to survive. But how can we make sure that the strategy we want to follow is the strategy that’s actually achieved?

As Jennifer Tharp points out:

“For decades, organisational leaders acted as though that they only needed to design and communicate their strategy – that execution was the job of the rest of the organisation. When strategy was not realised, executives became frustrated, as they felt their strategic directives were ignored. However, the reason strategy was not executed was more complicated. Without determining a connection to execution, the strategy was merely loose words – pretty, perhaps, but without relevance to the worker’s day-to-day job and the company’s operations.”

So, how can we be sure that our overall business strategy carries throughout the organisation and is relevant to everyone?

Ensuring projects and business improvements are aligned to the organisation’s strategy throughout their entire lifecycle produces significant benefits for organisations. Precious time, money and resources are saved from delivering initiatives that don’t support the vision and mission of the organisation.

In this blog, we’ll look at the importance and many benefits of this alignment and how to achieve it.

Why Linking Projects To Business Strategy is Important

There are risks in having a top-down approach to strategy. It can allow disconnects to form between what’s spoken about in the boardroom and what’s taken on board throughout the rest of your organisation.

When managers don’t have incentives tied to strategy, often teams don’t understand it. So they will be unaware of how their role fits into the organisation and its performance. This can impact morale and lead to lots of energy, time and money not being used effectively. Employees that do understand how their role impacts the organisation’s strategy are more likely to be motivated. As well as engaged and mindful of how they can contribute to it in their day-to-day activities.

And there are other benefits the business would miss out on too…

Advantages of Linking Projects to Business Strategy

When an organisation’s portfolio is in alignment with its strategy, it enables the scope of initiatives to be easily defined and turned into actionable plans that are tied to results.

It also provides a framework for decision making, evaluating new initiatives thoroughly before investing time, money and resources. This ensures they align with the organisation’s goals and are prioritised accordingly in line with other strategic initiatives. Meaning less of the ‘wrong’ projects are initiated or prioritised and valuable resources are deployed on the ‘right’ projects.

To add to that, according to Villanova University, the benefits to this approach also include increased financial performance and the ability for the company to meet customer expectations and needs. As a result, customer experiences and retention rates also improve. These organisations are also more easily able to maintain a clear vision throughout their operations. Allowing them to be transparent and consistent and therefore avoid public and regulatory scrutiny. This helps maintain and even enhance the business’s public image and perceived brand value.

But how do we get there?

How to Link Projects to Business Strategy

Rather than assessing the projects you have lined up and attempting to crowbar your strategy into them, start with revisiting your organisation’s vision. If your vision is the ‘what’ you want your business to look like in 3 to 5 year’s time, your strategy should be ‘how’ you’re going to achieve that vision.

Your business’s performance (e.g. financial results, productivity, faster deployment, fewer defects, etc.) shouldn’t be seen as your business’s differentiators in its market and should not be the focus of your strategy.

Why? Competing against your peers based on these factors ultimately forces erosion, rather than success, in their business and yours.

Your strategy should focus on seeking to truly stand out by developing your own unique position outside of operational performance. This can be achieved by:

• Analysing all available data on the industry, market, and community
• Choosing different activities from your rivals
• Ensuring there’s synergy between the activities you’ve chosen

Once you’ve developed your strategy, the second step is to communicate it effectively to all stakeholders, particularly employees. Suppose your employees clearly understand your strategy, the key projects and initiatives you’ve chosen to achieve it, and how performance will be measured in realising it. In that case, they should be able to recognise how their work can contribute to achieving it.

Thirdly, for strategic goals to be met that boost the business beyond performative results, strengthen its competitive advantage, and mitigate risks, the measures used to assess projects against strategic objectives should go beyond financial indicators to include the project’s contribution to:

• Resource optimisation
• Customer satisfaction and retention
• Employee growth and learning
• Internal processes and innovation
• Active governance
• Effective communication

A crucial point to note on communication is to guarantee the strategy’s success. Also, create a balanced corporate culture, and boost employee motivation. The strategy mustn’t be delivered to team members in a top-down or one-way fashion. A feedback loop is needed. This should allow employees to communicate data, analysis, and fresh ideas for refining the strategy back up through the management chain. It’s equally important for management to reciprocate with a willingness and openness to hearing these ideas and considering them.

Steps in Aligning Projects with Organisational Strategy

So where do we start? Break down your strategy into more detailed themes, goals and tasks. You can then use these to assess, filter and select programmes and projects based on the organisation’s goals.

Our recommended approach for doing this is to produce a Prioritisation Matrix. This means all new and existing projects and business improvement initiatives are assessed based on the same set of criteria and are ranked based on the degree they align with the organisation’s goals. This can be used to support decision making going forward, ensuring the highest priority projects are given the focus they need to deliver against the organisation’s goals.

To do this, determine with key stakeholders how the organisation’s goals (both strategic and operational) can be translated into criteria that should be considered when assessing an initiative for its prioritisation.

Some examples:

• Strategic Alignment: which of the strategic themes are linked to the initiative’s goals
• Impact: what areas of the organisation the change will impact
• Resources: what’s needed and what capacities currently exist
• Funding: how much is required to implement the initiative
• Risks: what the organisation’s risk appetite is
• Benefits Realisation: what benefits the initiative might yield

Once your criteria have been defined, apply a scoring scale to each, based on the degree the initiative might meet it.  For example, you may score a 1 if the initiative aligns with one of your strategic themes, or a 3 if it aligns with all of them.

With an agreed scoring mechanism, each initiative will receive a total score and can be ranked against all other initiatives to get a priority order based on the organisation’s goals. You may also wish to apply a weighting to the criteria based on which should be considered more, or less. For example, the risk profile of a project may be more influential in an organisation’s decisions over funding if they are cash rich. The weighting can be tweaked, and the priority order updated should the organisation’s landscape change.

You will then have a prioritised list of initiatives based on their alignment with the organisations strategies, goals and decision making landscape.

Specific Mechanisms in Aligning Business Strategy and Project Goals

A common method in ensuring that projects and programmes continue to align with strategy is to implement enterprise project management offices (EPMOs). An EPMO is focused on planning new projects with the organisation’s strategy in mind, as well as implementing mechanisms such as Stage Gates to review a project’s continued business justification and strategy alignment at each stage of their lifecycle. EPMOs bridge the gap between executive-level planning and individual project management to encourage a cohesive company vision. To EPMOs, project success is defined by what the project achieves in terms of progressing the organisation’s overall goals.

Need Help with Aligning Your Business Strategy with Improvement Projects?

Do the time, resources, or headspace needed to consider your business’s strategic angles feel overwhelming? Would you like some help in figuring out how to integrate your long-term goals within the business improvement projects you have in mind?

No matter the size of your business, we’ve got your back.

We can work with you to refine your strategy, consider your options according to your available resources, and link everything seamlessly with the projects you want to prioritise. Contact us for a no-obligation chat today.