Aligning all Execution with Strategy

A purely objective approach drives the right decisions to help orchestrate transformation

Align all execution with strategy with an objective approach that drives the right decisions to help orchestrate transformation

Whether they use Agile or waterfall execution methodology, chances are that the top-down planning techniques most organizations are using are sub-optimal. This means that demand and innovation are misaligned with strategic imperatives. To successfully align execution with strategy, organizations typically turn to one of the following investment approaches:

Project-driven planning

This is the most common approach, and for years has been used in support of traditional annual planning processes. It involves defining and prioritizing business strategy with the key stakeholders, which often occurs in silos. During the annual planning window, project requests are captured across the enterprise, but again, because they happen in silos, they’re typically disconnected from the strategy. A business case is completed, including an impact assessment against the prioritized strategies, and semi-sophisticated techniques are then used to prioritize, optimize and select the best portfolio under varying budgetary constraints.

This is a good approach, but it does have one main frailty. The execution is generated disconnected from the strategy, and the strategy was only used to select what was considered to be the best of whatever was teed up. In this situation, there’s really no way to know with certainty whether the right demand has been identified. In essence, this process simply selects the best of what could potentially be a bad list of projects. The next two techniques overcome that particular frailty.

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Program-driven planning

This approach relies on the systematic decomposition of corporate or strategic objectives into actionable and measurable business strategies. Programs are then created to deliver on that strategy and further decomposed into the underlying execution (i.e., projects). In this model, programs are independent investment entities (created independent of – but completely integrated with – the underlying execution), and as such, provide a natural bridge between strategy and the execution. This model is commonly used as a way to govern the bi-modal reality. A program could be 100% agile, 100% traditional, or a hybrid of both. In this model you can say with some certainty that the execution was derived from the strategy.

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Capability-driven planning

The most advanced approach, this is the framework that an organization should adopt to orchestrate business transformation. As shown in the graphic, this approach introduces the concept of business capabilities, which represent the core operating functions of a business. Capabilities can be broken down into the people, processes, and technology that are responsible for enabling each of these key functions within an organization.

By understanding the mapping between strategies themselves and the key capabilities needed to realize each strategy, it’s possible to generate the right demand and/or execution. For example, if there is a strategy that has no supporting business capability, then a new capability can be introduced by funding a program. If a strategy is dependent upon a poorly performing capability, then projects and programs can be funded to enhance that capability and knock the strategy out of the park.

In turn, this approach truly acknowledges and connects the business, IT assets and products that all execution is funded to transform. Any type of change can have major repercussions. For example, an IT portfolio manager can engage the business in a discussion around improvements they wish to make to each capability, revealing the supporting IT environment – apps, services or technology – that automates each capability, making it possible to drive the changes needed to deliver on business requests. In this scenario you can more quickly cost out the impact and quickly make trade-off decisions.

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These three approaches are often discussed as distinct and separate from one another. In reality, the capability-driven approach is a superset of all three. There will always be bottom-up demand generated throughout the year - this model gives you a more expansive framework to validate and triage that demand and assess both its relevancy and redundancy. The program-driven approach is built into the framework and can be used to harmonize execution across the enterprise, and across different project execution techniques

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