The Indispensable Role of Strategy Management in Realizing Outcomes

Strategy Management - Bridging Project Outputs and Strategic Outcomes

Leaders, managers, and aspiring managers often ask, “what's the difference between Project Management and Strategic Management?” The answer, while seemingly straightforward, unlocks the key to transforming tactical actions into impactful, long-term success.

Alright, so project management is fundamentally about taking a specific and perhaps more tactical goal and making it happen. It involves a structured approach – knowing what you want to achieve (clear objectives), working within limitations like time and budget (agreed-upon constraints), and using the right resources and methods to get there (applying knowledge, skills, tools, and techniques). Ultimately, it's about successfully delivering a unique output that meets everyone's expectations.

While proficient project management is undoubtedly crucial for delivering outputs, its impact on achieving outcomes is maximized when viewed through the lens of strategy management. Strategy management is the ongoing process of formulating, implementing, and evaluating cross-functional decisions that enable an organization to define and achieve its long-term objectives, or outcomes. It provides the overarching direction and rationale for all organizational endeavors, including the projects undertaken and their outputs.

Integration of Strategy Management and Project Management is Key

The effective integration of strategy management with project management is essential for ensuring that the outputs of projects translate into meaningful progress towards strategic goals and their outcomes. Without this integration, organizations may find themselves efficiently executing projects that, while successful in isolation, do not contribute optimally to the broader organizational strategy.

From Siloed Projects Landscape to Outcome Focused Approach

Let’s illustrate the impact of integrating strategy management with project management: 

The Siloed Project Landscape

First, consider "The Siloed Project Landscape." 

In this scenario, we see projects (Project A, B, and C) being managed by different teams (TeamAlpha, Dept Beta) and often in different tools (Jira, Smartsheet). 

These projects, while potentially successful on their own – even delivered on time and within budget – operate in silos, lacking a clear connection to the organization's overarching strategy. This can lead to a lack of alignment, where individual projects don't contribute to the overall goals, and inefficient resource allocation, as different teams pursue their own objectives without a cohesive plan.

Ultimately, even with successful project delivery, this disconnected environment

The Output Pile-Up

makes it difficult to achieve strategic outcomes. This often results in an "Output Pile-Up": a situation where the organization generates a large number of project deliverables – reports, software features, completed tasks – but struggles to translate these outputs into meaningful business outcomes. 

The fundamental question, "So what?", remains unanswered. While teams are busy delivering, the organization lacks a clear understanding of how these deliverables are contributing to strategic objectives, hindering overall progress and return on investment.

The Outcome Gap

There's a failure to bridge the "Outcome Gap" – the critical missing link between project outputs and the organization's desired strategic outcomes, such as improved market share or increased customer satisfaction. This gap highlights the disconnect between project-level success and organizational-level achievement. 

While projects might deliver their intended outputs, there's a lack of clarity or a breakdown in the process of translating those outputs into tangible benefits that contribute to the company's strategic objectives. This can result in a collection of completed projects that don't drive the organization closer to its ultimate goals.

In contrast, Strategy Management takes an "Outcome-Focused Approach" and

The Outcome-Focused Approach

provides a more effective model to achieve outcomes. This approach, as illustrated in the "StratifyPro Solution" diagram, starts with defining Viewpoints – the high-level focus areas that guide strategic thinking. These viewpoints inform the setting of Goals, which represent the desired outcomes the organization aims to achieve. Contributing to these goals are Contributing Goals, often from different departments, fostering collaboration and alignment. Actions, the specific tasks and activities (potentially managed in tools like Jira or Smartsheet), are then integrated and undertaken to achieve the goals. Progress is measured through Key Results (KPIs), ensuring that actions are aligned with achieving the desired outcomes.  

Critical Linkages between Strategy Management and Project Management

The critical linkages between strategy management and project management include:

• Strategic Alignment of Projects: Strategy management establishes the organization's strategic priorities. Project management then becomes a mechanism for executing these priorities by selecting and defining projects that directly support the achievement of strategic objectives. This alignment ensures that project efforts are focused on activities that contribute to the overall organizational direction. The outputs are focused on achieving the outcomes.

  
  

• Strategic Resource Allocation: Organizations operate with finite resources. Strategy management provides a framework for prioritizing projects based on their potential strategic impact. This enables informed decisions regarding resource allocation, ensuring that initiatives with the greatest strategic relevance receive the necessary support.

  
  

• Translation of Project Outcomes to Strategic Results: The successful completion of a project yields specific deliverables - outputs. Strategy management focuses on ensuring that the benefits derived from these deliverables – the project outputs – actively contribute to the desired strategic outcomes. This requires a clear understanding of how project results will impact key strategic indicators.

  
  

• Strategic Adaptability and Portfolio Management: The business environment is dynamic. Strategy management involves continuous monitoring of the internal and external landscapes to assess the ongoing relevance of strategic priorities. This informs the project portfolio, allowing organizations to adapt their project investments and terminate initiatives that no longer align with the evolving strategy.

In conclusion, while project management provides the essential capabilities for delivering specific outputs within defined constraints, strategy management provides the overarching framework that ensures these outputs are strategically relevant and contribute to the organization's long-term success in achieving outcomes. Effective strategy management guides project selection, prioritizes resource allocation, and ensures that project outcomes are directly linked to the achievement of strategic objectives. Therefore, for organizations to realize the full value of their project investments and achieve sustained success, a robust and well-integrated approach to both project and strategy management is indispensable.

For more information on implementing an outcome-focused approach to strategy and project management, please contact StratifyPro:

Talk to a Strategy Expert: https://www.stratifypro.com/talk-to-an-expert]

Review our Online Strategy Training: https://www.stratifypro.com/strategy-academy