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Strategic Project Management
Alex S. Brown, PMP
Mitsui Sumitomo Insurance (MSIG USA)
Session ADV09
What is a Project Nightmare?
• Over budget?
• Late delivery?
• Poor quality?
• Even worse: on-time, on-budget, great quality, but delivering something your organization does not need
Case Study
• Mitsui Sumitomo Insurance Group USA– 400-person subsidiary of MSI Japan– Property & Casualty insurer, mostly
commercial– Largest book is the US risks of Japanese
companies
• One-person Strategic Planning Office
Session Overview
• What is strategic planning at MSIG USA?
• How does project management complement strategic planning?
• How do senior executives participate in projects and strategy at MSIG USA?
• What project management trends support strategic planning?
What is “Strategic Planning”?
• Definition debated for years among academics and business leaders
• Typically a one- to five-year plan at MSIG USA– What projects to launch, what to continue– Align with medium- and long-term business
plans from USA and Tokyo
Key Concepts for MSIG USA
• Executive Steering Committee– Was an actual committee in the past– Changed to become the President and CEO– Approve changes, provide executive oversight
• The Strategic Plan– By definition, a collection of projects– Projects are essential to strategy at MSIG
What is the Strategic Plan?
• A collection of 15 to 25 active projects, plus more planned for the future
• Monitored by a Strategic Planning Office
• Authorized by top management
• Cross-departmental impact
• Relevant to medium- and long-term plans
Strategic Planning Office
• Combination of a corporate planning function and a PMO
• “Project Portfolio Administration” function
• Mentor all project managers
• Audit and monitor budgets, schedules, results
Partial Organization Chart
CEO
Office of the CEO President
SPO and othersUnderwriting, CIO,Ops, Finance, others
Internal Audit
How Project Management Complements Strategic Planning
• Strategic Planning provides ideas
• Project Management achieves results
• Projects drive strategic changes
• Feedback loop for continuous change
Strategic Planning – Ideas
• Projects are based on ideas and objectives
• Strategic planning creates them– SWOT (Strengths Weaknesses Opportunities
Threats)– Competitive Analysis and other studies– Market share goals– Vision statements
Project Management Achieves Results
• How to execute strategy?
• Project management provides a robust way to execute change
• Assign project manager, defining accountability and responsibility
• Avoid creating strategy that is never realized or even attempted
Project Results Drive Change
• Each project advances one or more strategic goal
• Some projects investigate an issue, creating new strategic goals at the end
• Some projects fail, but all are relevant
• Failure often uncovers key information
Continuous Feedback Loop
Ideas
Projects
Strategy
Change
Staff Feedback and Ideas
Organizational Plan Updates
Events that Join Strategy and Projects
• Project start-up
• Project closure
• Budget and resource authorization
• Resource conflicts and priorities
• Organizational crisis and strategic change
Project Start-Up
• Most strategic moment of a project is right when it is authorized
• Strategy helps answer, “Why should we do this?” or “What is the goal?”
• PM helps you climb the ladder, strategy helps make sure it is on the right wall
Project Closure
• A time to gather new ideas
• Teams see unsolved problems and issues
• At MSIG these ideas become new project proposals
• Ensure that good ideas are not lost
• A gift to the strategic planner
Budget and Resource Authorization
• Projects constantly fight for resources and funding
• Tying projects to strategy allows PMs to explain their need in strategic terms
• Examining all project resource requests in terms of strategy helps eliminate “pet projects”
Project Prioritization
• Often project conflicts arise, requiring a decision
• Organizational strategy can provide a more relevant way to score and rank projects
• Strategic planners are accustomed to scoring systems to set priorities, and can help design an appropriate system
Crisis and Strategic Change
• Any crisis or critical event causes project uncertainty
• Strategic planners face uncertainty as well
• These times call for coordination– Practical, tactical ideas from project managers– Industry trends and top-down perspectives from
strategists
Involving Senior Management
• Tie project management to something they must do
• Decision making
• Training
• Constant reinforcement
Project Management Tied to Strategy
• At MSIG USA, medium- and long-term plans were required by Tokyo
• Project management easy to support as a way to implement these plans
• Project practices have become an ordinary way of doing business for executives
Decision Making
• At MSIG USA, projects have become a way for executives to see progress more clearly
• Each status report is a chance to provide input
• Provided a formal, documented decision-making process
• Easier for senior managers to control
Project Management Training
• Over 10% of the staff, including senior management, was trained in project management
• Many managers accepted roles as project managers or sponsors
• Middle and senior management reinforce training by using the terms regularly
Constant Reinforcement
• Projects appear everywhere now– Company intranet– Bimonthly reports to senior management and
staff
• Continuing education for project managers
• Projects are now normal business
Trends in Project Management Related to Strategy
• Project Management Maturity Models
• Standards and Books
• PMI Goals and Marketing
Project Management Maturity Models
• An explosion of models
• Hard to measure process maturity without organizational strategy
• OPM3: “Transform Strategy into Results”
• Executive-level focus of these models encouraging project managers and strategists to meet and talk
Portfolio Management Standards and Books
• How long can we focus on “selection”?
• Strategy encourages “start up” and “creation”
• Design new projects to fill voids in the portfolio
• Do not just select projects from a fixed list
Many Books “Selection-Focused”
• Standard for Portfolio Management (PMI)– “priority” & “select” appear 70 times– “new component” appears 10 times
• New books account for the creation of the project and organizational strategy– Heerkens, The Business-Savvy Project Manager
– Dinsmore & Cooke-Davies, The Right Projects Done Right!
PMI Goals and Marketing• PMI is promoting project management at
the executive level– “Worldwide, organizations will embrace, value
and utilize project management and attribute their success to it.”
– “Making project management indispensable for business results.”
• Achievable in partnership with strategists
Summary
• MSIG USA made “project management” inseparable from “strategic planning”
• Reinforced from start-up to closure
• Strategic planning and project management support and reinforce each other
• Industry trends support integrating them
Challenge: Link Strategy to Project Management at Your Organization
• How could the MSIG USA example help?
• What can you change? Whose help do you need?
• Are your projects already strategically aligned? If not, why not?
• PMI has set a vision for all of us – achieve it in your organization!
Contact Information• Alex S. Brown, PMP
Mitsui Sumitomo Ins. (MSIG USA)
• Phone 908-229-0202
• Email [email protected] or [email protected]
• Session ADV09
• Website http://www.alexsbrown.com