Life used to be simple. Leaders got together once a year and set priorities for the business, and those became goals and objectives. Departments developed project proposals, with the “best” of those proposals (or the ones with the best sales pitch) approved as the initiatives that would help to achieve the stated goals and objectives. Except that really wasn’t so simple, was it?
The trick is aligning all that execution with strategy
In this not-so-distant-or-simple-past, the projects approved rarely aligned with what was really needed. And they were only ever managed to the triple constraint of time, cost and scope. Which meant that scant attention was paid to how well they aligned to the goals (more on that in a later post). More projects were usually approved than could be delivered, changes happened throughout delivery, and goals and objectives were frequently missed. It was a broken system, and fixing it meant that something had to change.
You need both top-down and bottom-up controls
The good news is that those changes are now happening, with two separate, but related things. First, planning is shifting from an annual cycle to something more frequent, which will be covered in our next post. Additionally, organizations are now seeking to better connect the work being done – execution, with the work that is needed – strategy.
Recently there has been a lot of talk of evolving from projects to products. The idea is that you are more solidly connecting the work you are doing with the purpose for that work – you are investing and managing where the benefit will be delivered. This happens by decomposing strategy into products, programs, or initiatives. That’s the level where funding and governance happens – shifting those elements higher up or closer to the strategy piece, and then teams are given the freedom to define and deliver the execution of the work.
Evolving Your Digital Model
This helps to embrace the tri-modal reality by effectively making it irrelevant at the funding and governance level and allows the organizations to adjust and reallocate funds at the program or product level based directly on strategic need. However, this isn’t the silver bullet that some claim. For a start, there’s nothing new about this approach – programs have been around for decades and have been funded and managed at that level with program managers defining the underlying projects. And secondly, this still only focuses on discretionary investments. Call them products instead of projects if you like, but they don’t represent everything the business does.
True SPM requires the business to go beyond product aligned approaches and embrace a capability aligned investment approach. Now a business can truly consider, invest in and execute against all of the business and IT assets it has. You still deliver and execute the work using a variety of approaches, but now you are directly connecting what you are doing – the execution piece, with the reason for that work – the capabilities you are delivering and / or enhancing.
With that connection much more direct it becomes far easier to make decisions to adjust or pivot in response to new threats and opportunities, much simpler to understand the impact of such decisions, and far simpler to execute on the changes that are approved. Leaders can now see their business in 360 degrees – operational and discretionary spend are connected and there is complete visibility to everything through the lens of strategy delivery.
Developing the right capabilities to deliver on your strategy
Every strategic investment you make has to generate the best possible return for your business. It must contribute to the immediate goals and objectives while contributing to longer term success. You need the control that ensures all of your investments are driven from the top – keeping governance and oversight close to the strategic drivers. But you also need the freedom to execute on that strategy in the way that works best for each individual circumstance. And if you want to successfully drive digital transformation – and you do, then you need to have this perspective on everything you do.
You may still choose to deliver some of the work using projects. You’ll want to evolve some delivery to a product-based investment model with permanent, or semi-permanent, agile teams driving them forward. But capability-based investment management gives you the ultimate alignment between what you’re doing and how you’re benefitting and that’s how you need to manage your business. Then all you need to do is plan effectively. Cue the next blog entry on continuous planning!