Leveraging Strategic Initiatives to Capture the Future

Coming off the heels of our recent blog post on scenario planning, Steve and I thought that we should do a second post on strategic initiative management. Strategic initiative management is vital for moving your organization from where it is now to where you want it to be in the future. However, initiative management is a process that is often misunderstood or neglected far, far too often.

What is Initiative Management?

In brief, initiative management is the planning, overseeing, and sometimes culling of projects meant to move beyond the status quo – or beyond business as usual. These projects or, better yet – initiatives, are focused on strategic change fueled by exploiting current advantages or exploring new opportunities. In any case, the initiatives are trying to bridge the gap between where you are now and where you want to be to reach a new strategic position in the future.

For instance, if a giant online retailer believes demand for same-day delivery will increase, they may want to start an initiative to open more distribution centers closer to where their current or potential customers live. The retailer might also consider another project to optimize tracking and prediction of customer demand by product to ensure that they keep the most popular products in stock. Even if the retailer is not yet seeing a lag in their revenue because of this lack of capabilities, their strategic vision suggests that they need to be the consumer’s most convenient choice. Building these capabilities now will let them achieve their vision tomorrow.

For simplicity’s sake, in this post, we focus on strategic initiatives that generally require special funding and attention to get rolling. These kinds of projects typically fall under the purview of the executive team or a specially designed project management office (PMO). We are separating these strategic initiatives from the small, continuous improvement projects that divisions throughout an organization are devoting themselves to – and are also important but require different kinds of oversight.

Why is Initiative Management Crucial?

Strategic initiative management is especially important in the volatile environments that proliferate today, where technology and geopolitics can shift rapidly, and new competitors constantly seek to disrupt entire industries. Business as usual might be good enough for today, but new projects need to be carefully planned and executed to keep a company out in front of the crowd.

Of course, even the most successful companies don’t have the resources to run an infinite number of new projects, so good initiative management is needed to choose the most promising ones out of the countless possibilities. In addition, good follow-through is needed to ensure each change project, itself, gets beyond the “promising” stage and is shepherded through to fruition. And, as unpleasant as it may be, shepherds sometimes must cull the flock—making the tough decision to drop a project if it is clear the project cannot deliver on its initial promise or it is no longer needed.

All of these aspects of initiative management are necessary for a company that truly wants to maintain its competitive edge. These companies are adept at plotting their course and implementing the measures to navigate toward a specified destination on the horizon.

What Is the Initiative Management Process?

There are many different ways of dividing up the stages of initiative management, but we see the following as the most important parts of the process:

1. Strategize: Strategy comes first. This might seem obvious, but before any decisions are made about individual projects, an organization should have a clear strategy. The strategy should articulate the vision of where the organization wants to go, how it wants to serve its customers, and what its position will be in its industry. Without an overarching strategy, you’re like a scene from Alice in Wonderland. She didn’t know where she wanted to get to. Any way would do, since she was bound to get somewhere. However, with no vision and limited resources, somewhere is not good enough.

2. Mind the gap: Once your organization has its strategy, it can identify gaps between where it is currently and where it wants to go. Does it need better penetration of existing or new markets? A new customer-facing division? A more efficient workforce? Whatever these gaps are, identifying them will let the organization begin to conceptualize and choose the strategic initiatives it really needs.

3. Build a portfolio: Now the organization can work on creating its portfolio of initiatives, carefully selecting the projects that align with its overall strategy, address important needs, and offer the possibility of a substantial return on investment. (Timothy J. Galpin offers a simple tool to begin choosing among potential initiatives: the Strategic Priorities Map which is a 2X2 grid that lets you categorize possibilities according to their potential impact on the business, the level of investment/effort required, and their degree of risk.[i])

4. Plan for success: For each initiative, sit down and come up with a detailed roadmap. What will success look like for this project? What indicators along the way will help you know you’re on the right track? Marking out measurable milestones will allow you to gauge success—or to correct course earlier on![ii] Surprisingly often, companies don’t invest resources in measuring progress on the strategic initiatives themselves, let alone their longer-term impact on the business. Make sure to do both: create measurements to see if the project is progressing on schedule and on cost, and also to see how it eventually returns value to the business (sometimes in indirect ways).

5. Deliver the Projects: This is the most important step. You must deliver on the change initiative. Too often, the actual project is imagined, designed, planned, and resourced – but not pushed through to completion. The change can’t happen if the projects that drive the change are not pushed through to completion.

6. Cull the herd: Even the best-laid plans may go astray, and as with any other portfolio, not every single bet will be a winner. It is crucial to pay attention to early indicators of failure and, if it becomes clear that course correction can’t save a project – then, pull the plug. Remember: investing a great deal of time, effort, and money does not mean a project cannot be abandoned. Review what happened, learn what you can, and move on.  A good executive must be prepared to make tough decisions and cut losses, redirecting funds to initiatives with a better chance of success.

What Should be Avoided?

From the process described above, here is a summary of the traps that should be avoided:

• Failure to identify and review initiatives when the strategic plan undergoes a major update
• Failure to harmonize a net new project with the current portfolio of initiatives, which squanders resources and reduces focus on priority projects
• A lack of clear, measurable milestones, which makes it hard to know whether you’re succeeding, failing, or in need of course correction for the initiative itself
• The sunk-cost fallacy, which allows failing projects to keep draining resources uselessly—and endlessly. Managers too often become attached to a project (or become allergic to failure) and buy into the “sunk-cost fallacy” of remaining committed to those initiatives that had prior investment.
• The tendency to not track business change or impact as initiatives are implemented

Two final pitfalls are especially common and deserve special note.

Lack of Buy-in and Commitment: Initiatives can fail for many reasons, but one of the most common is a lack of buy-in from key players. If your organization kicks off a bold, innovative project, but C-level executives never invest sufficient money or talent in it, it’s probably doomed. Similarly, the resistance of rank-and-file workers can also sink an initiative, especially if the necessity for change or related advantages haven’t been communicated well, or the initiative seems to threaten entrenched employees. Buy-in and commitment to initiatives from all levels of an organization are paramount.[iii]

Initiative Overload: Good management requires careful marshaling of limited resources to stop decision-makers from getting too trigger-happy in spinning up new initiatives. Focusing on a handful of key strategic initiatives is vital. The PMO (or other relevant parties) must keep a bird’s-eye view on the various projects being started and running across the organization, which stops duplication of effort, eliminates unnecessary spending, and reduces burnout from overtaxed employees.[iv]

It may not be easy, but organizations that can sidestep these common pitfalls while spearheading an intentional, judicious initiative management process are likelier to achieve the kind of long-term adaptability and success that puts the company at the top of its industry.

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[i] “Realizing your strategy’s potential: A seven-step model for its effective execution” by Timothy J. Galpin
[ii] “Strategic initiative management: The PMO imperative” by the Boston Consulting Group’s Perry Keenan, Jeanne Bickford, Annabel Doust, Jennifer Tankersley, and Chris Johnson, and Project Management Institute’s Jennifer McCaffrey, Jason Dolfi, and Gaurav Shah
[iii] “Changing change management: A blueprint that takes hold” by Perry Keenan, Kimberly Powell, Huib Kurstjens, Michael Shanahan, Mike Lewis, and Massimo Busetti
[iv] “Too many projects: How to deal with initiative overload” by Rose Hollister and Michael D. Watkins