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Project Management: The Extensive Guide For Strategy Managers
Project management is much more than making sure “stuff” gets done. Learn more about strategic project management and why it matters.
Project management is a priority at nearly every organization today because of its effectiveness at setting proper expectations around what can be delivered, by when, and for how much money. It unites teams and coordinates efforts to achieve results—without it, projects can veer off deadlines and out of scope.
Because of the extreme need for good project management within organizations, detailed bodies of knowledge exist to offer instruction on how to best manage projects, and people dedicate their entire careers to building this expertise. When projects are managed successfully, teams are able to do much more than deliver what’s been promised. The end result is often a full strategic alignment between teams, departments, and the entire organization.
If your organization is trying to learn more about project management, this article can be your “getting started” guide. Over the next few weeks, we’ll publish five chapters that explain everything strategy managers need to know about this discipline.
Table Of Contents
Chapter 1: What Is Project Management?
Project management is the application of skills, knowledge, and tools to plan, launch, execute, manage, and close the work of a team to achieve specific goals within specific timeframes. This “work” is a project. It will be important for your organization to define what a project is and how to separate an individual project from a program or portfolio, both of which require differentiated methodologies for managing.
Project Vs. Program Vs. Portfolio Management
With similar spellings and common misuse of the terms, it can be easy to confuse projects, programs, and portfolios. Yet these are not the same things and it will be counterproductive to lump all efforts in these areas under the project management discipline. Here’s where the differences lie:
A project has a start date, end date, percent complete indicator, and a budget. It also has an owner. Projects can range in size—it can be something as small as redesigning a sales process or as large and capital intensive as building a bridge. Ideally projects are linked to strategic objectives, but sometimes they are not.
Are your projects linked to your strategy? Should they be? Download our Project Management Field Guide to find out.
A program is a group of projects aimed toward a particular goal. For example, if you are a municipality with a goal to improve safety, you may have a program related to one land corridor comprised of projects to improve lighting, repair the streets, police neighborhoods, etc. Projects are a subset of a program. A Program Management Dashboard allows you to understand how your projects are impacting your program.
A portfolio is a group of projects within one business unit or department. The portfolio owners (or office) are responsible for managing the budget and resources, while ensuring projects are strategic and will help the entire organization execute its initiatives. The owners answer questions like, “How much money are we spending on our projects?” and “How do we prioritize our spending?” The portfolio office must also be aware of potential conflicts, like redesigning a sales process for a product or service that will soon be discontinued.
While some overlap exists, there are distinct differences between projects, programs, and portfolios, and the management of each requires specific skill sets and tactics. For the purposes of this article, we will only be focusing on project management.
Project Management Basics
In organizations worldwide, project managers are typically required to get one of two certifications: the Project Management Professional (PMP) from the Project Management Institute, or PRINCE2, which was originally developed by the U.K. government. Each certification teaches a different approach, but there are basic elements of project management that span both the PMP and PRINCE2 frameworks.
Here are the three foundational components of project management:
- Determine all the steps involved in a project and put them into a timeline. This methodical, step-by-step process is the basis for everything that comes next.
- Identify resources needed (human, technological, financial, etc.) and their interdependencies. For example, don’t schedule one person to be in two different places, or try to begin erecting a structure in a construction project before the foundation is built in the prior phase. Finding and balancing resources is one of the most challenging parts of a project manager’s job.
- Plan for contingencies. The project scope may change over time, perhaps due to priority shifts handed down from senior leaders or politicians. Or you may run into unexpected problems, like bad weather, dwindling raw materials, or inspection failures. No project goes perfectly to plan, so it’s important to prepare for the unexpected.
These basics are fairly straightforward for simple projects, but as your projects increase in volume, size, and complexity, it will become critical to choose either a PMP or PRINCE2 framework to ensure successful execution.
Stay tuned for the next chapter on how and when to tie projects to strategy!
Chapter 2: When & How To Tie Projects To Strategy
Strategic project management always starts with the strategic plan (no surprises there), but not all projects are going to tie to your plan in a clear way. In fact, it can be counterproductive to link certain projects to strategy. In this chapter, we’ll explain how to be smart about which projects you categorize as strategic and how you can build a solid framework around them.
How To Know When A Project Is Strategic
A project is strategic if it’s put in place to drive the execution of the strategy itself and, if implemented correctly, brings your organization closer to achieving its key goals and KPIs. These projects are tracked within your strategic plan and reported on at the executive level.
Projects that aren’t considered strategic are typically operational or tactical in nature—in some cases, they might even be called tasks or tactics. They only loosely tie to the strategy and don’t need to be discussed with leadership teams. Why? Generally speaking, these projects are inexpensive, don’t require budget approval, and can be managed deep within the organization.
For example, improving a maintenance program on capital equipment is a project that will generate time and cost savings for a department, but it wouldn’t be constructive (or logical) to tie it to the strategic plan.
Other non-strategic projects are regulatory in nature, such as changing an accounting process to comply with a new tax code or implementing environmental safeguards to meet updated standards. Yes, these projects are important and will require resources, but they don’t link closely to any strategic goals and therefore shouldn’t concern the entire executive team.
You may have another group of projects in your organization that can’t be categorized—the most dreaded of these is the pet project. Handed down from someone on the leadership team, this project has no clear reason for existing and lies far outside the strategy. You should use the framework below to call out these projects for what they are. Think of this as an opportunity to focus the organization on what really matters.
All projects need to be managed with an appropriate process (as described in Chapter 1) and will have budgets and timelines, but the trick is knowing when a project is strategic and when it is not. Once you determine which projects qualify as strategic, then you need to know how to actually link them to your strategy.
A Framework For Linking Projects To Strategy
Strategic projects should primarily be linked to your internal and learning and growth (people/culture) perspectives. These are the areas of your scorecard or strategy with leading indicators. In the for-profit world, a strategic plan includes both leading and lagging indicators. While projects are typically tied to the goals of your strategic plan, it’s important to understand leading and lagging indicators as they guide how projects link to your plan.
- Leading indicators help organizations predict trends or changes. Common examples occur within operational, learning and growth, and capability perspectives. Leading indicators typically measure the inputs or particular processes that drive strategic change. If you are very clear on what drives true change in your organization, then tracking leading indicators can be very powerful.
- Lagging indicators assess what happened in the past, such as the previous year or quarter. These include your finance (revenue, expenses, profits) and customer (growth, retention, satisfaction) perspectives.
Leading indicators impact and drive changes in lagging indicators by creating or improving processes to reach specific goals and KPIs.
For example, a municipality might link a project to build a new bridge with its goal to improve safety and transportation, and thereby improve customer (citizen) satisfaction. A for-profit company can link product development research projects to its goal to improve product innovation, which would then drive revenue. Or strategic projects around building better work environments or creating career paths can tie to learning and growth goals and increases in employee retention rates.
Another important element to keep in mind when linking projects to strategy is to keep your scope realistic. Within one planning cycle, we typically don’t see more than 8-12 projects tied to the strategy at any specific level within an organization, such as the operational (business unit) and strategic (executive) level. So, while the organization might have 40-50 strategic projects, each leadership team would only be focused on the top 8-12.
You will have a lot of additional projects at the department level that ultimately link to the strategic plan, but these projects should be discussed and managed within the business unit and won’t ever be exposed to the executive team. Certain projects, however, may be executed at the business level, and monitored at the executive level. For example, if a nuclear power plant is being pulled offline for regular maintenance, that project will be handled by the operations department, but tracked by the leadership team because of the significant impact to the overall business.
When thinking about projects, ask yourself which ones need executive-level attention. You should be able to link those projects to the goals of your strategic plan, and have a method of reporting on progress to your leadership team.
For projects that don’t need executive-level attention, you still need to manage them well within your departments and project management office. You should also question if these are critical from an operational standpoint, or if they are pet projects that should be rationalized. Don’t get overwhelmed—there’s software to help you manage projects at multiple levels and report to the leadership team. We’ll walk you through it all in the next chapters.
Chapter 3: Project Management Template (& An Example)
Our team at ClearPoint has reviewed hundreds of strategic plans that attempt to tie projects to goals, with varying degrees of success. It’s challenging in part because projects can differ widely within a single organization—building a road, launching a new product, and reducing the time it takes to complete a routine process could all be projects. Some projects are even framed differently than others, identified by their intended outcomes, like “X% improvement in Y” or “Reduce time to accomplish Z.” The wide range of project types makes it difficult to establish consistency, which is why it’s important to use a standardized reporting template.
Project Management Report Template
Project management report templates can vary in look and feel, but all should have these important elements:
- Start Date and End Date
These dates are self explanatory, but you’ll often see them at the top of project management report templates for a reason: Defining the timeline creates a foundation for all other template elements.
Also called the scope or charter, this is where you clearly define the project from a strategic standpoint. Why are you doing it? What do you hope to accomplish? How does this project tie to the strategy? (It might not...see Chapter 2.) There’s no need to write a novel, but be sure to communicate your justification for the project and its “features and benefits.”
Clearly stating who’s responsible for the project will prevent confusion and ambiguous expectations. The owner is accountable for the execution and management of a project, from scheduling to resource planning. The owner will likely have others who assist with the execution and take charge of individual milestones. Regardless of what duties are delegated to others, the owner bears ultimate responsibility for the project.Separately, a project “champion” should sit at the leadership table. This person will report on a project’s high-level progress, providing context and details. The champion should also be able to communicate down to the team if priorities, budget, or timing shifts. If a champion is not included in executive meetings, that project invariably gets deprioritized or defunded.If all these roles are neatly defined, you’ll have the proper level of leadership for projects.
Every project must be measurable in some way—you can’t show progress otherwise. Your project management plan template should include milestones that track the status of a project along all its phases. In a perfect world, you’d display milestones in multiple views, such as in summary lists and Gantt charts.
Creating a project matrix will help you with your milestones and objectives. Learn how to build one in this Project Management Field Guide.
Each project should have a budget before it is initiated. If you hope to start a project and find the money later, the project is likely doomed. The budget should include money for project management and contingencies (risk factors).Whoever is creating the project management report template needs to understand where the budget originates and how it fits into the way your company strategically budgets. Why? Budgets can change from year to year; knowing where the money is coming from will help you maintain funding for your project. For example, if your project is funded by an operational budget, you need to partner with that department’s finance executive. This will ensure you’re not overspending or underspending, and keep the project appropriately budgeted for the next planning cycle.Projects are typically funded from one of these three budgets:
- Strategy Execution—Not all companies have a StratEx budget, but it’s a great way to track spending on strategic projects. This approach aligns a portion of your organization’s budget directly to strategic projects or initiatives. (This is different than putting a budget against each of your divisions or departments.) If you don’t have a StratEx budget, you still need a way to budget for your projects, either within work plans, department budgets, or other areas. Some StratEx budgets are aligned by departments and others by strategic goals.
- Operational Expenses—The OpEx budget is a common source of project funding because most projects can easily be categorized as part of a company’s day-to-day business operations. It’s hard to plan for long-term projects using OpEx, but some organizations make it easier by doing multi-year budgeting.
- Capital Expenditures—Many people use CapEx as a way to track large, expensive projects, such as construction projects. CapEx are asset purchases and categorized as investments, which means there has historically been a beneficial tax treatment for these types of expenses. Be aware that not all projects fit into this category, so you need to understand exactly what would qualify as a CapEx to ensure your organization is tax compliant.
Project Management Plan Example
It’s easier to understand how all the pieces of project management templates fit together when you see what one would look like. Here is an example from the fictional Upward Airlines. This Employee Satisfaction Survey project has all the elements we just described: start and end dates, description, and budget. You’ll also see how the milestones can be displayed in two different formats, with aids with both organization and readability.
Now that you know what a project management report template looks like and why it’s important, what do you do with it? We’ll explain next steps in Chapter 4—you’ll learn about the methodology of managing projects using this template. We call it our method to the madness.
Chapter 4: Methodology For Managing Projects
Strategic planning and project management shouldn’t exist in separate worlds, but often do. Projects drive real change for organizations and are key to executing strategic plans, making the art of strategic project management an important to skill to master. In this chapter, we discuss the methodology behind this art, which blends the technical project management process with high-level strategic planning.
Set Scoring Rules
The project management report template we discussed in Chapter 3 provides you with a framework to get projects approved and ensure they are being reported on consistently. But you also need to create standards for tracking project KPIs. This involves setting scoring rules around your KPIs that will help generate an overall project score, which then accurately conveys progress to the leadership team. Here are some guidelines around each major element of your initiative to help you create scoring rules:
One of the first scoring rules you’ll determine is how the budget will be allocated. Will your budget be spread evenly over the timeline? Or will you align the budget with the work, allocating more money to the months that will require increased resources and expenses? For example, if a 12-month project has a total budget of $1.2 million, the budget can be allocated evenly at $100K per month or proportionally depending on where certain tasks fall on the timeline. Whichever option you choose, this rule will determine how you track spending and report whether the project is financially on track.
Easily keep track of your projected budget to the real cost of projects. Use a Project Budget Dashboard.
A project’s timeline is the span between its start and end dates; your timeline scoring rules establish standards for how you report on progress within those dates. If you begin on January 1 and end on December 31, then it’s a 365-day project timeline. In theory, you should be 50% complete around June 30, but some project phases may take longer than others and that will need to be reflected in the reporting. You may also start late or change the end date, in which case project managers must recalibrate the deadlines and then accurately report on the project’s updated timeframe. However you choose to report on the timelines, thinking through the project management process in advance will help you clearly communicate this metric with stakeholders.
Quality & Effectiveness
This is the hardest—but most important—dimension to manage. Whether or not your project achieves its goals is a combination of both quality and effectiveness scores. How do you know the project has been successful, beyond that it was completed on time and within budget? For example, if you build a bridge that collapses or needs repairs earlier than planned, it won’t matter if it was completed on time and on budget.
You need some objective way to assess quality and effectiveness, and then create scoring rules for it in your project management approach. In some cases, organizations have third-party inspections for quality assurance. Others use customer feedback. There are many different ways to score quality and effectiveness—the important part is that you create consistent rules for your organization to follow.
Also keep in mind that no matter how good your project management techniques are, some projects can be measured while they’re underway (such as testing a tutoring program or managing a drug trial), and some can only be measured when they’re complete (like building a bridge).
Many project management methodologies advise that the easiest way to track a project is by percent complete. The tricky part is creating an accurate scoring rule for this KPI because it is a combination of the budget, timeline, quality and effectiveness scores. In other words, the three previous scores “roll up” to this score to create an overall percent complete metric.
Each organization uses a different “formula” to calculate percent complete. It could be an average of all the project milestones, or some milestones could be weighed more heavily at different levels. For example, if you have a milestone that accounts for 50 percent of a project, it should theoretically weigh more than other milestones. Using the same Upward Airlines fictional example from Chapter 3, here’s what your project management template might look like when milestones are in progress and the percent complete metric has been calculated:
Remember to document your scoring rules once you finalize them. Once your scoring rules are set, your organization will have a more consistent (and honest) way to report your RAG statuses. This also creates a common language to communicate progress and help your leadership team have productive conversations about key projects.
Determine Reporting Frequency & Responsibility
The next step in your strategic project management methodology is determining when to report and who is responsible for it. This can be more complex than it sounds. Start by asking these questions:
- Are you going to report monthly? Quarterly?
- Will the executive champion be responsible for the reporting? The project owner? Or the milestone owners?
- Will you split the reporting responsibilities? For example, the project owner could report monthly on the percent complete, and the executive champion could report quarterly to the leadership team on the percent complete, budget, and quality.
Clearly defining who is responsible for reporting, and when, will be critical to the success of your project. If the reporting is overlooked or mishandled, your project will be at risk for losing funding and support. You also don’t want to have a budget or leadership meeting with only half your projects containing up-to-date information.
Plan For Changes
Projects exist within a shifting landscape—it’s inevitable there will be changes, and it’s important to be able to adapt. You can’t predict the future, but you can plan in advance for how you’d handle different types of changes.
Typically, these are the things that change in the middle of a project:
- Timeline—The start or end dates shift. A project might need to be completed sooner because of a competitor or product launch or be delayed due to the loss of a key resource.
- Budget—The project loses or gains funds. If an organization experiences a financial crisis, the project’s budget might be cut; if a company gets a new round of investment, the project’s budget may increase.
- Scope—The goals or deliverables of a project expand or contract. What started as a project to build a single tunnel could expand into the Big Dig.
- External Factors—Factors beyond your organization’s control could impact a project. A trade war, hurricane, or labor strike could all affect a project in different ways, from interrupting a supply chain to limiting human resources.
If your project changes, then revisit your scoring rules and determine how they will be affected. Do you stick with your original targets and report that the project is behind and why? Or do you create new targets and report you’re ahead according to the new project plan? There’s no right answer—just be diligent about applying the same rules for all projects.
Projects are the primary means of executing your strategy, so developing an effective methodology for managing projects will determine if your overall strategy is on track or not. Spend some time up front getting your methodology (rules and processes) documented.
Our next chapter will take you further into the project management process and compare different types of software you can use to simplify everything from building reporting templates to tracking tasks and interdependencies.
Chapter 5: Project Management Software
When you Google the phrase “project management software,” over 9 million results appear, so it’s no wonder that this technology (and topic) causes confusion for many people. Narrowing down all the project management online tools is really about finding the right technology for your particular organization, based on how it handles projects. In this chapter, we’ll explain three different types of project management software, including the pros and cons of each, to help you navigate this complex subject.
Task Management Software
Task management software is characterized by tools that allow you to organize and prioritize tasks, while fostering collaboration. This type of software visualizes project elements like timelines and stages with bulletin board, checklist, or “card” layouts. You can usually roll up tasks into bigger categories and roll down tasks into various forms of ownership. Generally speaking, these platforms are very user friendly with a “clean” design.
Task management systems are ideal for marketing projects, or intangible projects like campaigns and process developments/improvements. Asana, Wrike, Trello, Hubstaff, and Favro are leading task management platforms in the crowded field of project management software.
Pro: Great for process flows and working within teams.
Con: Limited ability to managing resource constraints and link between strategic objectives and KPIs.
There are many ways to manage tasks within project plans. Here are some of the most popular project management methodologies.
Resource Planning Software
There’s no doubt that resource planning software can be incredibly useful for organizations. Tools like Microsoft Project, SmartSheet, and ProjectManager.com are superior at project and portfolio management from a resource allocation perspective. If you need to track budgets by task, owner, or moving interdependencies, this type of project management software could be perfect for you. It’s suited for capital projects and projects that have tasks running in serial and in parallel.
Pro: Ideal for managing resource constraints and capacity, and centralizing planning.
Con: Tools and concepts can be overkill for business projects with nebulous or thought-driven tasks.
Strategic Project Management Software
Strategic project management is where ClearPoint’s technology fits in. This type of software allows you to track hundreds of projects across your organization, including the tasks associated with each. Like the previous types of project management tools, you can assign ownership and accountability, and build Gantt charts. But ClearPoint’s software offers additional, unique strategy management features. You can:
- Give all projects and tasks red, amber, and green (RAG) status indicators for each reporting time period (typically monthly or quarterly).
- Measure and automatically evaluate projects by the strategic scoring rules discussed in Chapter 4.
- Link projects to KPIs or key goals. Even link the same project to different goals in different departments.
- Add an unlimited number of custom fields.
- Build flexible and filtered reports that can be exported to Excel or PDF, without back-end programming.
Pro: Efficient way to drive change by applying project management techniques to your strategic plan.
Con: Not as applicable for organizations without clearly defined goals and KPIs. Cannot handle resource planning constraints.
Start your project management software search by considering your needs.
When researching project management tools, think about what you really need to get out of the application. Are you tracking hundreds of tasks through stages and looking for intense collaboration? Are you centralizing and managing resource constraints and planning restrictions? Do you need to link projects to your strategic plan and demonstrate how the results are impacting your KPIs? Knowing what you really need will keep you from getting enamored with cool features in a short demo with project management software providers.
If you have any questions about project management or how ClearPoint’s technology can work for your organization, let’s talk.
If you’re not ready to chat and want learn more…