CHAPTER 6
Overall Conclusions From the Case Studies
A number of the key findings of the case studies are summarized below.
Business Models
Two of the companies used business models that are equivalent to the McKinsey model outlined in the literature (Chapter 1). These top-level frameworks were used to manage the activities of all the business units of the companies concerned and included strategy management, portfolio management, and program and project management processes.
The aerospace company had a very powerful business process model in which program management (and project strategy) played a prominent part. The international transportation company also had a strong business process model, though project management had a more diminished role. The pharmaceutical company had a process model that was dominated by the drug development process. (This is not the same as a business model per se, but was clearly the major business process.) Project and portfolio management (program management to a lesser extent) are important aspects of this process. The financial services company had a high-level business process, but this did not translate as smoothly into the project development level as did the other three case studies’ business models.
Cascading corporate strategies into projects and strategy plans
The companies created corporate objectives, goals, and strategies using processes that are typically like those strategic management processes described in the literature. Like Turner's (1999) model, objectives, goals, and strategies were cascaded to the strategic business units (SBUs) or equivalent organizational entities, which—in turn and in conjunction with corporate strategy planners—developed their own objectives, goals, and strategies. In some instances, these SBUs (or equivalent business entities) used additional processes that were fully integrated with the business strategy processes. The international transportation company, for example, had an extensive process of cascading strategy by way of its OGSM (Objectives-Goals-Strategies-Measures) technique.
The SBUs subsequently developed objectives, goals, and strategies with—and for—their respective program and project teams. In some instances, this meant again using fully interconnecting business and project management processes. In all four cases, the program and/or project teams developed strategies that aligned with the SBU and corporate strategy using project strategy or similar processes. The outputs of the processes containing the objectives, goals, and strategies included strategy plans, business plans, deployment plans, and project plans, the hierarchy of which—in most cases—was similar to Archibald's hierarchy of objectives, strategies, and projects (Cleland, 1990) (Figure 1.4, Chapter 1) and SRI's system of plans (Mintzberg, Ahlstrand, and Lampel, 1998). The most comprehensive case is shown in Figure 1.10 (Chapter 1).
Portfolio management
The importance of project portfolio management was recognized by all of the companies. The pharmaceutical company had a dedicated project portfolio management practice that played a very important part in project development. Within the companies, portfolio management was used primarily to select and prioritize programs and projects and not to manage programs or projects. Project and program management are ongoing management functions—quite active and dynamic. Portfolio management is more analytical and less hands-on.
As we see in the case studies, corporate and business units assemble a strategic portfolio of programs and projects and measure the strategic contribution of a program or project using strategic management and project management processes, tools, and techniques. Company management boards or committees of senior managers (governance) adopt or reject projects based on this information.
Program management
Program management was also practiced by the majority of companies, primarily within the context of managing a (large) group of high value projects with a common aim or delivering regular benefits over a protracted period of time. In the aerospace company, program management was positioned primarily as the management of a number of interrelated projects. In the financial services company, there was much more emphasis in program management on managing multiple, interrelated projects for business benefit. In the pharmaceutical case, the emphasis was on asset management, in the sense that the program represented a basic chemical entity (a technology platform in Wheelwright and Clark's phrase (1992)), which can be promoted as a brand. Program management was hardly recognized in the transportation (construction) example; if anything, it was seen as a collection of interrelated projects.
Program management and project management activities were carried out using the same set of common processes, variously called integrated program management, program management, or even project management. Accordingly, the development of program strategy, and its alignment with corporate and business strategy, was achieved in a similar way to that for projects.
Business cases and project strategy
The creation of business cases was a key element of the business and project management interface within all the companies. This happened very early in the project development process. For example, the “Bid/No bid” stage in the aerospace company (see Figure 2.6) and “Define operational vision” and “Plan solution” stages in the financial services company (see Figure 3.4). In both cases, an outline strategy is developed for a project that aligns with corporate and business strategies. Subsequently, business strategy, in most of the companies, was translated into a comprehensive project strategy using project management processes similar to those used in Figure 1.9. None of the cases documented project strategy in a single comprehensive document, but instead used a diversity of management plans and project plans. Managers did not see the point (the benefit) of doing so and resisted another bureaucratic task.
Structured approach to create and manage project strategy
This said, two of the companies—the aerospace company and the pharmaceutical company—used a very structured approach to create and manage project strategy. The aerospace company had institutionalized a project strategy management practice that was equivalent to, for example, risk management or technical management. The pharmaceutical company had a process for identifying specific project strategy-related issues for each phase and stage of the project development process, in line with the sequence shown in Figure 1.9. Both companies assigned roles and responsibilities for the execution of these processes. The other companies used a less structured approach, and although they developed management plans for their projects, they tended not to summarize the plans or develop a single project strategy statement from them. They also tended not to use the term project strategy in their project management processes.
There is a research issue left open here, namely whether it would be beneficial to manage project strategy as a more formal, single document and process. Mintzberg and Quinn (1996) describe strategy in terms of a pattern or plan that integrates an organization's major goals and policy.
It would seem that while companies may have such strategy documented (at the corporate, portfolio, program, and project levels), there is uncertainty as to how detailed such documentation need be.
The aerospace and pharmaceutical companies managed project strategy effectively for the entire project lifecycle, and not just at the front end of a project. (Both companies are clearly in the business of developing larger and more complex projects; and like the aerospace and pharmaceutical companies, the transportation company also developed large and complex projects.) At the time of our study, the financial services company was debating whether it should extend its formal project strategy review process further into the project development cycle.)
Processes and practices
Of the processes identified in the case studies, the ones that were most consistently used were those in which the structure and content were described at a practical level (e.g., flowcharts with inputs and outputs for key processes) and those where accountability and responsibility for carrying out the process activities were identified. Conversely, when the procedures for these processes were described in too much detail, staff tended not to use them.
The best examples of the deployment of the business models and associated processes were those that were fully documented and incorporated within a company's quality management system, and which were Web-based and available online throughout the organization (see Artto and Dietrich 2004). The companies that had not implemented such sophisticated systems or extensively integrated business and project management processes nevertheless linked the activities of their business units and projects to ensure alignment of strategy.
Strategy was consciously and systematically value-managed in the case of the pharmaceutical company. The transportation company had a strong value for money orientation, but did not use value management as a special practice.
All the companies integrated other key project development practices into their strategy development processes, such as risk management, safety management, and technical and commercial management.
Roles, responsibilities, and accountabilities
All of the companies specified the roles, responsibilities, and accountabilities of those involved in the business management and project management processes within the process documentation and used formats including sets of tables and matrices that were linked directly to the processes. In the cases of the aerospace, financial services, and transportation companies, these tables and matrices covered in detail all the phases and stages of the project management process and project lifecycle, including those for creating and maintaining project strategy (including the business case process) and identified who does what and when at any point along the process. In the financial services company, a family of project management job descriptions was used in conjunction with the tables and matrices. These identified the jobholder's roles, responsibilities, and accountabilities for specific project management process activities and outputs and provided an unusually high degree of integration between the process and the individual or team. The pharmaceutical company and transportation company had detailed RACI and RASI tables respectively.
In the pharmaceutical company, project leaders are distinguished from project managers. The former, in the Kotter mold (Kotter 1990), typically see their role as being more concerned with shaping project strategy, while the latter are more concerned with managing operational aspects of the project. (However, there is, in practice, an obvious overlap.) Interestingly, the international transportation company had also recently elevated its designation of project managers to project leaders, though there was less explicit emphasis on the role of creating project strategy.
Competencies and frameworks
The companies also employed a number of other methods to identify and specify the skills, knowledge, behaviors, and experience required to manage projects and project strategy. These included, for example, company-wide competency frameworks that defined: the competency requirements for all the key jobs and families of job descriptions, including those for project management staff; the core behavioral competencies for senior project management staff, such as managing vision and strategy; and the project management functional competencies, which cover knowledge and experience of strategy-related areas, such as scope management.