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Project Strategies: Goal Setting (With Material from the Text Authors)

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Presentation on theme: "Project Strategies: Goal Setting (With Material from the Text Authors)"— Presentation transcript:

1 Project Strategies: Goal Setting (With Material from the Text Authors)

2 Overview Project Definition Goal Statements Resource Requirements
Managing Requirement Conflict Managerial Commitment

3 Strategic Management Process
Review/revise mission New goals and objectives Portfolio of strategic choices Strategy formulation Strategy implementation Projects External environment-- opportunities and threats Internal environment-- strengths and weaknesses 1 2 3 4 Strategic Management Process Includes Four Activities 1. Review and define the organizational mission. 2. Set long-range goals and objectives. 3. Analyze and formulate strategies to reach objectives. 4. Implement strategies through projects.

4 Strategy, Objectives and Project Linkages
Organization Mission Objectives Project Design 3 advanced, solid waste plants Engineering firm Design department Objective: “Diversify” Strategy: “R & D” Objective: “Waste plants” Strategy: “Design special purpose plants” Objective: “Design solid waste plant” Pull-type luggage with hidden, retractable wheels Luggage firm R & D department Objective: “Increase sales 40%” Strategy: “Specialize” Strategy: “Pull-type luggage” Objective: “R & D” Objective: “Pull-type luggage”

5 Cause-and-Effect Worksheet Example
Some projects not planned Duplicate priority systems exist Criteria are not commonly known No feedback Lack of project management skills Unknown project impact on other priorities Planning Overcommitted resources Unknown resources We don’t budget for resources Vague communications of resources required Projects are not achieving their desired impact Systems Little consistency Priority setting criteria are not consistently applied to all projects Different priority systems exist Someone else always approves projects Many approvals Priorities conflict with approval criteria Priority selection reasons not documented Project priorities can be received from all over with no central clearing house Name dropping People set own priorities Special interest has major impact on priority No feedback system New projects impact on existing projects Culture Organization power influences projects Name dropping for impact Changeable commitments Priorities set without regard to origin Acceptable to miss dates Priorities set without company plan relationships Priorities set outside chain of command Short-term vs. long-term thinking Communication Aversion to risk Resistance to change No personal political risk Functional area turf protection New project impact unknown Poor priority communications Perceived lack of direction from top management Project criteria not commonly known Vague communication of resource requirements

6 Project Definition Project Goal
Envisioned future state of solving a known problem Specifications Time Cost Integration of people, time, money, activities, and skills

7 Goal Statements Statement of the desired future state involving:
End Users Questions about utility Upper Management Question relationship to corporate strategy Engineering Functions Questions on design/development of solution Business Functions Payback period, cost objectives, financial measures

8 Strategy, Objectives, and Project Linkages

9 Project Goal Life Cycle
FEEDBACK LOOPS Develop Functional Specs Verify Specs w/ “Customer “Customer” IDs Need “Ballpark” Resource Estimates Design Specs to Engineer- ing Specs Functional Specs to Design Specs FEEDBACK LOOPS FEEDBACK LOOPS Develop “Prototype” Produce “Field” Prod/Svc Stakeholder Feedback FEEDBACK LOOPS

10 Strategic Management Process
2-1 Strategic Management Process

11 Financial Selection Criteria
Payback Model Time to recover project investment Investment $/Annual Net Savings = PB Widely used Emphasis on Cash Flow Net Present Value (NPV) Desired rate of return (Est. Annual Cash Flow/Project Cost) X 100 = RoR Compare “RoR” of project(s) to “target”

12 Project Screening Process
Project proposal idea Data collection and backup Self evaluation of project by criteria Priority team evaluates proposal and reviews portfolio for risk balance Assign priority Assign resources Assign project manager Evaluate progress Need strategic fit ROI/payback risk Abandon Return for more information Periodic reassessment of priorities Reject Hold for resources Pursue Accept

13 Project Screening Process

14 Portfolio of Projects By Type

15 Project Screening Matrix
Criteria Weight

16 “Selling” Commitment Accept “Multiple Realities”
Varying Impressions and Perceptions Develop Broadly Specific Goal(s) Enhances “Buy-in” Consensus over Compromise “Customer” trumps other Stakeholders Completely satisfy needs, profitably!

17 Resource Planning Establish realistic expectations Budget factors
People: #s, skills, authority Money: buy the “needs” first Time: plan backward, execute forward Budget factors Capital: physical plant and machinery Expense: payroll, travel, consumables Contingency: 10-15% for “Murphy”

18 Conflicting Project Goals
Market Conditions Windows of opportunity change Compatibility Conflicts between activities, goals, competing interests “Politics” Senior leader support (or lack thereof) Resource Availability Project prioritization/reallocation

19 Managing Conflict Influence Proaction Conflict Negotiation
“Sell”; “WIFM” around goal Proaction Invite criticism Adjust and communicate Conflict Negotiation Separate people from issue Maintain balance Communicate

20 Project Priority System
Long-range plan 1. Rank objectives 2. Weight objectives 3. Impact definitions and weights Project proposals for major projects Priority team Prioritize major projects 4. Project priority 5. Risk analysis Annually Ongoing Allocating resources Assign project managers Functional managers identify available resources Feedback status- ongoing projects Major project priority and status report Monthly

21 Rank Objectives Analyze objective independently in three dimensions
1. Seriousness - What is the current impact of the results of the objective on the organization? 10 Small impact Large impact 2. Urgency - Time factor. What will be the relative consequences of not taking action over the next 12 months? 10 Can defer Must take action 3. Future seriousness - What is the chance of the objectives seriousness changing over time? 10 Decrease or remain same Dramatically increase

22 Major Project Proposal
Date _______ Number _______ Project Title ______________________________________________________ Responsible Manager ________________Project Manager _______________ _______  General Support  Quality  Legal  New product  _______  _____________  Cost reduction  Replacement  Capacity  _______  _____________  ___________  __________  __________ YES  NO  The project will take more than 500 labor hours? YES  NO  The project is a one-time effort? (will not occur on a regular basis) YES  NO  The project proposal was reviewed by the product manager? Problem definition Describe the problem/opportunity. Goal definition Describe the project goal. Objective definition Performance: Quantify the savings/benefits you expect from the project. Cost: Labor hours, materials, methods, equipment? Schedule: Overall duration in months

23 Risk Analysis

24 Project Portfolio Matrix

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