Objective Analysis

By Cathleen Benko  |  Posted 11-15-2003 Print Email

Objective Analysis

Collectively, these four traits—together with the short- and long-term projects that make up its specific portfolio—reflect your company's intentions. A quick way to assess the alignment of your organization's project portfolio with its intentions is to visually map its project investments onto an intentions framework indicating its objectives.


Figure 1 (left) shows a sample company result. To complete this exercise yourself, plot each of your projects on a similar grid. To keep it simple, just place your dots somewhere inside, outside or in the intersection of several shapes without worrying exactly where (to the far left, far right, top, bottom) the dot should fall. What do you see? If you see heavy overlap among your objectives and lots of dots clustering in the overlaps, your portfolio is well aligned in relation to your intentions. If you don't see all those overlaps, you are not alone. For example, many projects in Figure 1 are clustered narrowly around short-term objectives. For most companies, this means they've invested too much time, attention and resources into near-term projects. This might work for companies having financial problems because they can focus on maintaining their capital position and meeting short-term financial goals.

But for everyone else, it doesn't make sense. In this example, a company's long-term goals and its mind-set to change don't overlap as much as they should. When long-term strategies don't incorporate the creation of any of the traits required to ensure their ability to respond flexibly to change, it might mean that the company is being too rigid and its strategy might not hold in uncertain times.

Finally, several projects are not aligned with any objectives. Often, clandestine projects represent rogue efforts where the resources could be better deployed elsewhere. (This is particularly true of high-tech companies, where engineers abound.) But don't assume that all rogue projects are bad. Sometimes these rogue efforts are better tuned to where the market is heading; it's the corporate intentions that are in need of a rethink. Intel Corp.'s midlevel managers, using project selection criteria company-wide, for example, had pretty much driven Intel out of the RAM business in the 1980s before executives came to the same strategic realization.

For a look at an ideal project portfolio consider Figure 2. Here projects have multiple payoffs, supporting either short- or long-term objectives as well as moving the trait agenda forward.

Greater alignment is about getting greater returns from what you are already spending. And as Professor Warren McFarlan of Harvard Business School notes: "Better aligned companies simply achieve superior returns."



 

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