The Synergy: How Strategy and Project Management Overlap
Estimated reading time: 5 minutes
In the dynamic and fast-paced world of business, the successful execution of projects is crucial for organizations to achieve their strategic objectives. Both strategy and project management are essential components of effective organizational performance.
For some organizations, strategic decision-making and project management occur in different places in the business hierarchy. Some organizations are strategic top-down and project management is done at the middle management level — where execution is happening. Unfortunately, this results in the two being created and launched in silos – often excluded from the other.
The reality, though, is that strategy and project management overlap in several key areas and should be done together. Understanding the interconnectedness between these two disciplines can significantly enhance an organization’s ability to accomplish its goals. In this article, we will explore the connection between strategy and project management and look at how they benefit each other.
Table of contents
Introducing business strategy
A business strategy is typically a comprehensive plan and framework that guides a company towards achieving its goals and objectives. It incorporates a set of decisions and actions taken by top management to define the direction, scope, and competitive positioning of the company. These things are intended to guide the day-to-day.
Company strategy involves analyzing internal and external factors, assessing market opportunities, understanding customer needs, and leveraging the organization’s capabilities to gain a competitive advantage.
It provides a roadmap for allocating resources, making critical business decisions, and adapting to changing market dynamics. A well-defined and effectively executed company strategy enables an organization to navigate challenges, capitalize on opportunities, and ultimately succeed in its chosen industry or market.
What is project management?
Project management could be explained as, “the disciplined practice of planning, organizing, and executing tasks and activities to achieve specific project objectives within defined constraints.”
More simply, project management is the activities that help you get from point A to point B within a desired timeframe and budget. Here, we believe project management encompasses so many elements and is something that is core to everything. That said, though, the Project Management Institute (PMI) defines project management with greater complexity.
Overall, it involves the oversight and coordination of interconnected activities, resources, and eager team members to execute the work.
Project management encompasses 5 phases including: initiation, planning, execution, monitoring, and closure.
It requires defining clear project goals, scope, timelines, and deliverables, as well as identifying and allocating resources, managing risks, and ensuring effective communication among team members and stakeholders. Project management provides structure and control, enabling teams to navigate complexities, meet deadlines, and deliver high-quality results. It emphasizes the efficient utilization of resources, adherence to budgets, and mitigation of risks and issues throughout the project lifecycle. Effective project management plays a crucial role in driving success, fostering collaboration, and achieving desired project outcomes.
Strategy & Project = Shared Goal Alignment
At their core, both strategy and project management aim to achieve organizational objectives. Strategy establishes the direction, goals, and long-term plans for an organization, while project management ensures the execution of those plans through the successful completion of projects.
The link between strategy and projects lies in their shared goal alignment. Projects are simply abstract terms to describe the work that carries out the strategic plans. They are the point in which strategic initiatives are implemented, and project managers must align their efforts with the overall strategic direction to maximize the chances of success.
Unfortunately, what we’ve seen here, is that projects are often void of both strategy at the project level and at the company level. It makes “squirrel” moments more likely and a lack of focus can occur.
Planning and Scope are both in Strategy & Project
Effective strategy development involves careful planning, identifying market opportunities, analyzing competition, and determining the scope of operations. Similarly, project management requires meticulous planning to define project objectives, deliverables, and scope.
By viewing them as like-things (rather than separate or isolated concepts), project management and strategy formulation, when working together, can ensure that their strategies are realistic, actionable, and aligned with available resources and capabilities.
Strategy & Project Management both include Risk Management
Both strategy and project management involve risk assessment and mitigation.
Strategic decisions often involve evaluating potential risks; such as market uncertainties, technological disruptions, or even regulatory changes.
Project managers, on the other hand, focus on identifying and managing risks specific to the project’s execution, such as resource constraints, technical challenges, or unforeseen obstacles.
These risks often overlap — if it’s a risk to the execution, it may be a risk to the overall strategy.
By sharing risk management practices, organizations can identify potential risks at both the strategic and project levels, developing comprehensive risk mitigation strategies that address uncertainties from both perspectives.
This creates a much broader risk mitigation plan — and one that can lead to better success by incorporating.
They both need Resources
Efficient resource allocation is critical for both strategic implementation and project management.
Strategy defines the allocation of resources across various business units, functions, and initiatives to achieve the desired outcomes. Project management further refines resource allocation by identifying and assigning resources specific to individual projects.
Collaboration between strategy and project management enables organizations to better plan and optimize for resource allocation. Ultimately, when working together, it ensuring that projects receive the necessary support while aligning with the overall strategic priorities.
You have to assess for outcomes and impact AKA Performance Monitoring and Evaluation
Both strategy and project management involve performance monitoring and evaluation to measure progress and make informed decisions.
Strategy performance is often assessed through key performance indicators (KPIs), balanced scorecards, and other metrics. At the same time, project managers rely on project-specific metrics: such as milestones, budget adherence, and quality standards.
Integrating project management methodologies into the strategic evaluation process allows organizations to track the implementation of strategic initiatives.
Incorporating the two together gives the teams the strategic vision while helping them make good choices in the project execution part of business. When we separate these two, we’re doing our businesses more harm than we are doing them good. This is often part of the reason that many strategic initiatives fail.
In fact, 60-90% of strategic initiatives never even launch and they fail.
Now ask yourself: What are your teams focusing on?