The strategy competence describes how strategies are understood and transformed into manageable elements using projects. This competence is therefore defining a performance management system in which projects are seen and managed in light of their alignment with the strategy and the vision and ensuring it is highly correlated with the mission and the sustainability of the organisation.
The purpose of this competence element is to understand the strategy and strategic processes, thus enabling a certain management domain (project, programme or portfolio) to manage their project within the contextual aspects.
This competence element describes the formal justification of the project goals as well as the realisation of benefits for the organisation’s long-term goals. This encompasses the discipline of strategic performance management in which an organisation breaks up its strategic goals into manageable elements in order to:
- Achieve beneficial changes in the organisational culture, business systems nd processes
- Establish and pursue agreed strategic targets
- Allocate and rank resources
- Inform management of the need to change strategic objectives
- Stimulate continuous improvement
Strategic plans encompass long-term visions and mid- or short-term strategies and should be aligned with the mission, quality policy and corporate values of organisations. The strategy competence also includes the process of understanding the organisational environment and developing the desired state of benefits. Strategy alignment should therefore convey the organisation’s vision and strategy into project goals and benefits.
Throughout the strategic alignment processes, individuals may apply different models for disseminating and managing the strategic goals (e.g. the balanced scorecard, performance matrix, environmental analyses, etc). Thus the individual sets a performance management system, usually run by critical performance variables, i.e. critical success factors (CSFs) and key performance indicators (KPIs). Hence, each project is controlled through a set of CSFs and KPIs to assure the sustainability of an organisation.
Key competence indicators
Align with organisational mission and vision
The individual knows, reflects and can translate the organisation’s mission, vision and strategy into its project. The individual always needs to ensure that the project goals are in sync with the mission, quality policy and values of an organisation. If the relation between the project’s benefits and organisational purpose is vague, the individual still needs to perform periodic checking of the benefits against the purpose written in formal strategic documents. The alignment is usually done by utilising diagnostic management control systems and formal tools (e.g. critical success factors, success criteria, key performance indicators, etc).
- Reflects the mission and vision of the organisation
- Aligns the project goals with the mission, vision and strategy by using diagnostic control management systems (top-down approach and pre-set goals)
- Controls whether the project’s objectives and benefits are in sync with the mission, vision and strategy
- Develops and implements measures of strategic alignment (e.g. critical success factors, key performance indicators, etc)
- Checks whether the project is delivering benefits to the organisation
Identify and exploit opportunities to influence organisational strategy
The individual knows the strategy-making process, often done in a top-down fashion by the executive board/management board of an organisation. However, intended strategies are often not realised as the environment changes and, while pursuing a certain path, new opportunities and risks are emerging. Therefore, the individual needs to reflect not only the pre-set strategic goals, but also the tools and methods of questioning these goals and influencing the board to make the necessary improvements. These influences are managed through interactive control systems and by applying a bottom-up approach.
- Knows the strategy-making process
- Identifies new risks and opportunities which could alter the strategy
- Engages co-workers in questioning the organisational strategy by implementing interactive control management systems (bottom-up approach and stretch goals)
- Identifies strategic improvements
- Influences the strategy-making process by suggesting changes to strategy
Develop and ensure the ongoing validity of the business / organisational justification
The individual is able to provide a formal document which states the official reasons for a project, including the business or organisational benefits that the project has to deliver. This justification should also explain integration aspects with new elements in the project and should be the basis for the success criteria and benefits the project should deliver (the scope).
The individual can create or facilitate, interpret, update and sometimes realise (parts of) the business justification which should not be a static document, but should be periodically updated throughout the realisation and re-assessed for validity. Furthermore, the individual should constantly monitor or control the configuration and check if the project has redundant or strategically obsolete elements and perform the proper alignment, even if this means terminating the project.
- Reflects and defines the business and/or organisational justification
- Identifies objectives needed in a project to generate the planned benefits
- Validates and sells the business and/or organisation justification to the sponsors and/or owners of the projects
- Re-assesses and validates the justification within the higher context
- Defines and manages the project configuration (the integral completeness and functionality of the project organisation)
- Applies benefits realisation management to check whether the project configuration is generating the desired results
- Scans to determine whether there is a need to terminate the project because of redundancy or obsolete strategic importance and change the configuration
Determine, assess and review critical success factors
The individual is able to discern, define, interpret and prioritise critical success factors (CSFs) which directly relate to the project. CSFs are directly connected with the organisational objectives and business objectives of the project. Therefore by achieving the project’s benefits, the organisation fulfils strategic goals, tactical and operational objectives and ultimately organisational success. The individual can grasp both the formal and informal context of the factors and identify their influence on the final outcome of the project. The relative importance of the success factors may change, due to both contextual factors and the dynamics of the project itself. Personnel changes, both project-internal and project-external, may have influence, too. Therefore the individual should periodically be checking and assessing the actuality and relative importance of the CSFs and – when necessary – making changes in order to sustain success, even if this means the premature end of the project.
- Derives and/or develops a set of critical success factors (CSFs) for the strategic objectives
- Uses formal CSFs for strategic alignment, but also identifies their informal context
- Involves subordinates to question the organisation strategy while developing CSFs (interactive management control – stretch goals)
- Uses the CSFs for strategic alignment of or within a project
- Uses the CSFs for managing stakeholders
- Uses the CSFs for developing incentives/rewards and a motivated culture
- Re-assesses CSF realisation within the higher strategic context
Determine, assess and review key performance indicators
The individual is able to manage related key performance indicators (KPIs) for each CSF. KPIs are the core of many strategic performance management systems and are used for measuring or indicating the fulfilment of the CSF and achieving success. Usually KPIs are either pre-set by the organisation or developed by the individual using best practices or models (e.g. the balanced scorecard). KPIs can be used as leading measures (preceding a strategic event or milestone), lagging measures (following a strategic event or milestone) or real-time dashboards. Throughout the project, KPIs may change, due to both contextual factors and the dynamics of the project itself. Personnel changes, both internal and external to the project, may also influence KPIs. Therefore the individual should periodically be checking and assessing the actuality and relative importance of the KPIs and – when necessary – make the required changes in order to sustain success. KPIs should also involve soft aspects, such as motivation, communication within the team, personal development of team members, etc, which reflect the strategic objective, i.e. the benefit one wants to achieve. Moreover, KPIs should cover a broad range of other aspects, varying from adhering to certain governance and support processes (for instance on decision-making, reporting, acquiring resources and administrative processes), meeting standards and regulations, to complying with cultural norms and values, both of the organisation and of the wider society.
- Derives and/or develops a KPI (or set of KPIs) for each critical success factor
- Decides on the use of leading, lagging and real-time measures when developing KPIs
- Uses KPIs for managing strategic performance
- Uses KPIs to influence stakeholders
- Uses KPIs for developing personal development plans
- Uses KPIs for developing an incentive/reward system
- Re-assesses project configuration by employing KPIs and performing benefits realisation management