Strategic initiatives often fall far short of their potential, on average organisations are able to execute their strategy according to plan only 56% of the time. This means 44% of their strategic potential is not realised. This is according to RPM Systems Corporation chairman Stephen J Garfein.
He points to strategic throughput as a solution for organisations to realise more of their strategy. “What are even just a few percentage points improvement in strategic throughput worth to your organisation and how do we measure strategic throughput?”
The performance is measured on whether projects are aligned to the organisation's business strategy; whether the organisation works on the right projects, whether project resources are allocated optimally, whether projects are completed on schedule and on budget; and whether the organisation's strategies are executed according to plan.
Local enterprise project management (EPM) solution provider, UMT Consulting SA, says success in strategic throughput is measured in terms of whether the organisation is financially successful and whether the organisation's shareholders and customers are satisfied.
UMT Consulting CEO Pieter Meyer says there is enormous room for improvement in strategic throughput. “Especially between an average organisation where strategies are executed according to plan, only 56% of the time, versus high performing organisations that achieve an 83% strategic throughput. What follows are 10 best practices in expanding strategic throughput.”
Ten best practices in expanding strategic throughput include:
1. Governance: Develop, and continue to emphasise enterprise-wide best practices in organisation governance. When throughput loss is analysed, problems with governance are frequently the root cause. Make the painstaking effort to develop a highly articulated strategic master plan.
2. Costs: Consider all organisation costs part of the strategic portfolio (R&D, overhead, direct, material, all expenses, dividends, etc). Simply put, money spent in one area is unavailable elsewhere. That is why all costs are on the table when looking for opportunities to expand strategic throughput.
3. Focus: Minimise noise and leakage by eliminating actions not aligned with your strategy. This may include items such as lawsuits that distract the executive leadership team, working on the wrong projects, capacity constraints, organisational immaturity, and in some cases, lack of earned value visibility into what is actually being accomplished.
4. Commitment: Gain the commitment of the executive leadership team to fully support the strategy, including, where appropriate, senior government and union officials.
5. Communicate: Communicate your strategy throughout the organisation to assure continuing commitment. Facilitate timely communications from the front lines of the organisation to assure plans are being executed in accordance with strategy.
6. Choice: Develop the freedom to choose the best partners and workers.
7. Collaboration: Insist on seamless collaboration within the organisation, with major subcontractors and suppliers, and with the customer when this is appropriate.
8. Closed-loop: Implement a closed-loop feedback mechanism with both hard and soft metrics that measure not only functional organisations and projects, but also end-to-end effectiveness incorporating the customer in the process.
9. Breakdowns: Monitor every gate in every series circuit in the organisation to identify and address breakdowns. Insist on transparency, traceability, and accountability. Employ risk management and other proven tools to minimise surprises.
10. Roadblocks: Intervene when necessary to remove roadblocks and obstacles. The key here is to have early visibility into potential roadblocks, and where appropriate develop contingency plans well in advance.
As a first step in expanding strategic throughput in one's organisation, companies are invited to participate in a survey about a rapidly developing new field - strategic throughput. This Strategic Throughput Analysis (STA) survey is a good starting point in the exploration of organisational resistance to change; it was developed by Garfein and only takes about 10 minutes to complete. When completed, one will be able to print a report identifying potential strategic throughput gaps in eight areas ranging from governance to corporate culture.
“A two-day intensive workshop will involve presentations, group discussions, shared experiences and real case studies where strategic portfolio management concept has been applied. To maximise the immediate benefit from this workshop, consider enrolling a team from your organisation, to work together during the team breakout sessions to complete a strategic throughput assessment and develop an actionable plan tailored specifically to your organisation,” says Meyer.
He says as a next step, companies should consider either or both workshops sponsored by the UMT Centre of Excellence. “The first workshop will cover strategic programme and portfolio management, case studies and simulation and leading organisational change initiatives. The second will look at expanding strategic throughput, organisational change and avoiding the pitfalls and development of an actionable plan to bring back to your organisation.”
Business leaders, who want to find effective ways to ensure that business strategies will deliver the expected benefits, must attend. Also, managers involved in integrating programmes and projects and establishing the appropriate governance mechanisms to manage them, and senior managers responsible for implementing strategies and policies through programmes and projects, as well as programme and project directors and managers.
The Strategic Throughput Analysis (STA) survey can be found at
http://survey.umtsa.co.za/sv.aspx?sc=ZWltZU1KV3k3TjhUYlFuQ2xWMHQ4dz09.
The workshops are being held in Johannesburg on 13,14,16 and 17 September.
For more information and to register, visit
http://www.umtsa.co.za/events/strategic-portfolio-management.html or e-mail rs@umtsa.co.za or Rozanne at +27 12 345 3518.
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