“Projects” are certainly vital – a big part of Cisco’s past success came from its power as a ‘serial-acquirer’ of new technologies, each of which was a project. And a white-goods manufacturer recently specified a project process for entering each in a sequence of national markets.  But strategic management is not all about projects – the critical foundation is a robust set of policies for the repeated decisions that keep the plan on track, about pricing, product development, marketing, staffing and so on. Only if this is sound can we embark on the bigger steps that need project discipline.

[1] Executing your Strategy by Mark Morgan, Raymond Levitt and William Malek, Harvard Business School Press.

It was not at all trivial to get these benefits - heavy input by their project mgmt experts, detailed modeling of how  projects actually work and get revised or blown off-course, then design of a powerful but usable control system that every project leader can use, and intensive training to embed it. Click here for their paper. [Any problems, it is also here.]

… but look at the benefits. So confident is Fluor in the system that they now work it through with their clients, not just as projects start, but also as changes arise. 

The terminology may be a bit confusing, because ‘portfolio’ in strategic management usually refers to the set of businesses in a multi-business corporation, and the word ‘corporate’ generally refers specifically to companies made up of multiple business units – so Ryanair is a ‘company’ or ‘business’ and Shell is a ‘corporation’. CPM seems to refer to the portfolio of projects, whether within a single business unit or across a multi-business firm.

There may be a few important links for strategic management.

1. The topic must clearly dominate the strategic management of firms who are largely engaged in delivering projects to clients … which projects to bid for, how much to invest, how to price, how to build and sustain staff, experience and capability, and so on. I don’t see much on this in the usual strategy books and frameworks.
2. It must also be a vital element of strategic management in firms for whom large projects are a major part of what they need to do to function – oil and mineral companies, for example.
3. It seems also to be significant specifically in the R&D and product development functions in e.g. pharmaceuticals or car making. And of course it is critical in IT.

And it is the issues that arise from IT portfolio management that raise the intriguing extension for strategic management generally. A common issue in IT is the interdependency between projects – we can’t automate activity X until we have good quality data, and we can’t get that until we have done project Y to restructure our databases, but when we have done that, we can redesign business processes A, B, C, which means we can reduce costs there and spend more on activity Z …. A short and simplified framework for this appears in a section of chapter 9 of my book, developed and tested with one of the IT-service firms.

Generally, the way I have written about strategy focuses on continuous policy issues – pricing, marketing, hiring etc. Strategy for many firms, though, especially in fast-changing sectors, features more strongly a sequence of projects, e.g. in new product development, new market entry, alliances and acquisitions. So it looks like this will need addressing in the 2nd edition.

The really interesting question is what happens when you take a portfolio view of both projects and continuous policy – when you have to choose, prioritise and sequence both discrete initiatives such as product launches and IT investments with with continuing choices on pricing, marketing etc. Much to work on here I think.

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