Project: Strategy

Helgi Thor Ingason, Haukur Ingi Jonasson

• Publisher: Routledge
• Year: 2018
• ISBN:
  9780429806247
• Edition: 1
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

Strategic planning is the starting point for projects and often the primary reason for a project's success or failure. It has the potential to enable every organisation to realise its ideals and actualise its values, whether it be a small start-up business, a large international company or even an entire society. Project leaders and project-orientated organisations need to understand strategic planning to recognise their position and environment, and make rational decisions when selecting and defining their projects and programs. But, those same principles can have broader, more profound, and more ambitious applications too.

Project: Strategy is a practical handbook that enables organisations of any size, and employees at all levels within them, to form strategic plans and actively contribute to them throughout a project's development. Rather than focus on superficial exercises, this book draws from knowledge outside of business and management – humanities, philosophy, psychology, technology, and engineering – to create a holistic view and a depth of understanding you would never achieve with SWOT analysis alone. Taking the reader on a pragmatic journey, it teaches self-reflexion, social responsibility and creative thinking with application to their projects and plans, but also to their working relationships and to their organisations.

This book is also an ideal introductory book to progressive programs on strategic planning, with a focus on collaborative work, open strategy, and open strategic planning on a social level. It provides a wealth of learning tools and case studies to demonstrate best practice. This is the ideal guide to project planning for anyone that wants their planning decisions to be as wise as they are savvy.

1 The nature and value of strategic planning

Anyone who professionally manages projects inevitably encounters obstacles. The future is difficult to predict – which means you will face situations that you have predicted as well as scenarios that take you by a surprise. This book will provide you with a structured approach to realise your future objectives and deal with future uncertainties – through a process called strategic planning. We use critical, creative and ethical thinking to enable you to use your organisation’s strengths to make the most of your projects. This reflective approach allows you to navigate your projects and programmes through uncertainty and changing circumstances and to lead them according to your planning.

Strategic planning is a process that produces a shared plan, informed by the values of the organisation. The plan provides a clear mission to engage everyone both emotionally and intellectually, and a well-defined set of directions explaining how to execute this mission. The discrete vehicles to implement the plan are your projects and your programs – which, collectively are organised into a portfolio. Our approach to project management – the discipline of managing projects, programmes and portfolios – follow the processes and require the competencies as they are described in the Individual Competence Baseline (ICB4) of the International Project Management Association (IPMA, 2015).

A project is a non-routine set of tasks with a scope (what you will and won’t deliver) and a description of the resources required to deliver a particular goal, usually a product or a service or, in this case perhaps, a strategic plan. A programme – such as implementing an organisational strategy – is a coherent set of projects to realise a set of goals. Thus, a project makes (something) whilst a programme achieves (something). Project management is a discipline within which there are defined principles and one that will greatly vary to reflect the context and needs of a specific endeavour. Strategic objectives such as at getting a candidate elected to parliament; reversing a decline in the number of migrating whales in an area; constructing and relocating to a new headquarters building; and launching a new TV channel are all examples of either – projects, programmes or portfolios. How each is defined will depend on the context and practice of the organisation that owns the strategy and the complexity and scale of the activities involved.

In this opening chapter we begin by defining the term “strategic planning” and discuss why it is crucial for the wellbeing of any organisation; businesses, institutions and non-profit organisations. We then provide some background to the different management theories that relate to strategic planning and give examples of how a strategic plan is then implemented.

What is strategic planning?

Strategic planning is an expression of what we want to achieve and how we intend to do it in order to manage our organisation into the future. Strategic planning is usually seen as a more long-term approach to planning that deals with achieving goals where multiple possible scenarios should be accounted for and/or is of a scale that affects the continuing success of the organisation as a whole. It is similar to more conventional planning. Strategic planning is unlike more conventional budget planning in the sense that it is all about designing a future, rather than planning by looking in the mirror. It may also involve a business plan which is something that defines the commercial rationale for a decision to invest time and resources in the form of a project or a programme.

In essence, strategic planning is a systematic attempt to determine the future of an organisation by: (1) identifying strengths, weaknesses, opportunities and risks in line with the values of an organisation; (2) creating a clear vision for future direction that entails clear goals and (3) outlining the path to be taken to achieving these goals. For example, a tourist business that starts to suffer frequent late-stage cancellations by customers might have a strategic goal to set up a booking and payment system that ensures that non-refundable deposits are paid and losses are hence minimised. The same business may spot an opportunity for increasing sales in the form of large group bookings and their strategic goal then involves realising this through expanding capacity, networking with the right people, and devising a new marketing approach. For larger organisations, in particular, strategic planning can often mean devising ways to maintain uniqueness, effectiveness, efficiency, dynamism and growth. Figure 1.1 shows three different levels of forward-looking planning.

Figure 1.1
Three types of planning and their relation to time.

A business plan is mainly made in relation to new business opportunities, new projects or an innovation of some kind. As part of the process of business planning, the planners will explain the purpose of a new business idea; how it will be implemented and estimate the possible outcome over the life of the idea. Business plans are typically intended to persuade the Board or investors to support a new business idea. The creation of a business plan is a good way to elaborate a business idea in a form that allows investors to understand the risk and the commercial returns.

A strategic plan serves a different purpose for a business plan. It deals with what to do, rather than specifying in detail how to do it. It is a tool used by organisations to express a future purpose and direction; the emphasis lies on improvements, adjustments and long-term growth and development of the organisation. Organisations need to plan strategically on a consistent and regular basis, for instance every three years, or more frequently if the environment – competition, regulation, labour markets and so on – is highly dynamic. Strategic planning involves articulating the strengths and weaknesses of an enterprise; exploiting strategic opportunities and mitigating risks; and developing solidarity, enthusiasm and belief by enabling employees/members to participate in forming the future. A strategic action plan is the output of the strategic planning process and expresses clear and measurable objectives to be reached within a specified time. It should also address the requisite measures to be taken in order to reach the objectives within the time frames and with defined responsibilities for their implementation.

Implementation and budget plans deal with how to implement what needs to be done. Budgets are usually made annually to give an overview of costs and income (sales or some other measure of success) across the whole respective period of the plan. The budget can then be used to compare actual income and cost throughout the year, with what was estimated. Traditionally, budgets are created from the actual results of the previous year, allowing for foreseeable changes and incorporating some of the observable trends of the longer term. These changes may be the result of decisions taken in relation to the company’s strategic planning.

A healthy enterprise, whether it be a company, institution or non-profit organisation, must be capable of preserving its identity and growing its assets in the face of the inevitable challenges that arise. Strategic planning is where the most important thinking and planning are carried out in this regard. For example, look at the dynamic field of air travel. The past few decades have seen enormous changes from what was once a very restricted market monopolised by national airlines and travel agents. Whereas before air travel was seen as an exotic luxury for the wealthy businessperson and traveller, it is now generally viewed in far more pragmatic terms as a “no-frills” way of getting from A to B. Deregulation of the skies and the development of airports outside of the major established hubs have played a key role in accelerating these changes. A number of airlines foresaw opportunities in their respective markets and have, through ongoing strategic planning, positioned themselves to avail of these opportunities and increase their leverage and ability to negotiate favourable deals with every step. Strategic actions including: (1) the use of new – and often more remote – airports; (2) online booking and check-in, bulk purchasing (or leasing) of aircraft; (3) increased efficiencies in staffing and scheduling; (4) playing one jurisdiction off another; (5) separating luggage and other charges; (6) fuel hedging and (7) marketing headline low fares; were used to increase competitiveness and market share. In contrast, many former national flag air carriers have lost significant market share and have struggled to adapt to the commercial and practical realities of this new market. Their own strategic planning has focused on downsizing and operational cost reduction as they belatedly adopt some of the methods pioneered by their low-cost competitors but struggle to find competitive innovations of their own.

Elements of your strategic plan may only offer a temporary advantage as competitors or customers adjust to the changes. For example, it is interesting to observe that Ryanair – long associated with low prices but poor service – has recently made a strategic decision to value customer experience more and has been implementing several changes to its policies and mode of operation to bring this about. The overall trajectory seen in the airline industry is reflected in other sectors such as manufacturing and service where many activities have been outsourced to low-cost jurisdictions in order to increase profits. In the “race to the bottom,” however, few strategies are without downside risks, not least because customers and clients adapt their habits and so change the commercial context on which the strategy may have been predicated. This theme is explored in more detail in later chapters where specific strategies are discussed and analysed.

It is a fact of life for most private enterprises that they constantly need to look ahead and apply strategic thinking aimed towards attracting new business and consolidating their position in their respective markets. Those who lead engineering consultancies, for example, typically need to devote considerable time and resources to follow commercial leads and submit tenders for projects in order to keep their employees busy and ensure future profits. The tendering process itself can be strategic and enterprises need to be aware of the different markets that exist and the opportunities, risks, and capabilities associated with each. Global connectivity and the breaking down of various barriers to trade have meant that many enterprises of all sizes operate in multiple jurisdictions. In all sectors, intellectual property – perhaps best expressed as commercial insight – and the strategy around knowledge to create and maintain value is a major consideration, both for existing businesses and new investors.

For project managers who work in the field of information technology (e.g. computer hardware, software, internet, telecoms), strategic planning is an essential part of deciding what technology and software platforms to use and the extent to which they are compatible with surrounding systems and of value to users. No other sector struggles as much with the issue of obsolescence, or the challenge of integration. Another key aspect is the overall strategy employed to ensure information is kept secure. For example, high-profile leaks of company emails and personal data leaks have made users very wary of what is communicated and stored online.

Thus, strategic planning is a complex and demanding process of analysis and critical thinking that covers many areas and that needs to be carried out regularly and consistently to find the common area between the needs, ability and identity of an enterprise (see Figure 1.2).

Figure 1.2
Strategic planning as the search for a common area.

The white area shown in Figure 1.2, where all three elements overlap is drawn deliberately small to reflect the difficulty represented by the search for the common area between these three elements in practice. For an enterprise to prevail in the long term, all the factors shown must be present: a real need for what the enterprise has to offer; the ability to meet this need; and a clear idea about its identity. Imagine, for example, a business that has an established identity and operates in an environment where the need for its services exists. This counts for little if the business lacks the capability to fulfil its role, to live up to what it aspires to be. Alternatively, imagine an enterprise that has a clear idea about its identity, and the ability to fulfil this role, but for whose products or services there is no market. Brand and identity, likewise, are of importance, as others need to be aware of the existence of an enterprise and its abilities in order to avail of its services or products. Consequently, it is vital for every enterprise to position themselves in the small space in the middle of the picture, common to all three sets. This is the major role of strategic planning and the key aspects of this will be discussed in more detail in the following chapters.

In some cases, strategic action plans can involve small changes in others, radical and controversial transformation. Minor redesigning of a product, rebranding of an enterprise, small organisational changes, exploratory ventures into new markets or limited budget changes are all less likely to provoke strong resistance from those closely involved, whereas decisive change in the form of major restructuring or directional change is very likely to stir up the stakeholders. Fear of losing employment and entitlements or of seeing many years’ work go down the drain is very common and those whose role it is to carry out wholesale restructuring, directional change and/or liquidation of assets can be faced with very hard decisions. Strategic planning is therefore as much about emotion and behaviour as about process or technology. This emotion can also apply to the projects which drive these changes that will have a significant impact on external stakeholders.

In summary,...

Table of contents

• Cover
• Half-Title
• Title
• Copyright
• Contents
• List of figures
• List of tables
• Acknowledgements
• Preface to the series
• Foreword
• 1 The nature and value of strategic planning
• 2 The strategic planning process
• 3 Understanding your stakeholders and sources of organisational capital
• 4 Understanding your organisation structure, operations, and financials
• 5 Understanding the business landscape: the supply chain, competitors, and regulators
• 6 Market models
• 7 Direction finding
• 8 Bringing it all together
• Appendix: Working as an external strategy consultant
• Index