Implementing Strategy

Through Projects zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHG

Sergio Pellegrinelli and Cliff Bowman

s TRATEGY FORMULATION
of much managerial
HAS BEEN THE
and academic interest, both in
SUBJECT Senior managers spend a great deal of time and effort
formuldng and promoting their chosen strategy, but all
defining exactly what is meant by strategy and in too often find that very &tle changes within the
developing appropriate concepts and techniques for organization. The strategy does not have the impact
its formulation. Ground breaking work has been expected: somehow the original objectives ere
undertaken by Ansoff,’ Porter,2,3 Hamel and dissipated aa the strategy moves into implementation
Prahalad4,5 and many other distinguished writers. and the in&E momentum is ioat before the expected
However, the issue of implementation has received benefits are realized.
less attention. Once a strategy has been developed, This failure to implement strategy is often a result of
its implementation appears to be seen as a matter of senior management trying to use the organizatiun’s
operational detail and tactical adjustment. existing systems and structures, its ‘status quo’, to
change the ‘status quo’.
This arricfe sets o& the underlying causes of poor
The Challenge of Strategy performance in ~m~leme~ting strategies, and out&es
Implementation how en organkation, by adopting a project and
programme orientated approach with ita associated
Where an implementation framework is put forward, management framework, can ensure much greater
for instance by Hrebiniak and Joyce,‘j it primarily SWXW.
involves clear communication about strategic
objectives, against which line managers then devise
their own operating targets and plans. The strategy
implementation process is entrusted to the organiza- ‘incremental’ approach to strategy formulation and
tion’s internal systems and procedures. Conse- implementation, as described initially by Lindblom7
quently, senior management is limited by existing and later developed into the concept of ‘logical
conventions and protocols in its ability to monitor incrementalism’ by Quinn.R A lack of formal strategy
and accelerate progress. Such translation of strategy formulation, planning and implementation is
into relevant action plans for individual business ‘normal’ if strategy should and does emerge in an
units, functions and departments requires a high unplanned manner as the organization responds,
level of corporate discipline: a consistent under- instinctively, to its environment as suggested by
standing of the strategy and its implications is Mintzberg and Waters9 and later Mintzberg.‘O
required throughout the organization, and staff have Incremental and emergent change typically occurs
to be willing and able to take the necessary actions. within or at the boundaries of the existing paradigm.
Although most organizations use structures and A paradigm, as defined by Johnson,” is the set of
procedures, such as steering committees and plan- beliefs and assumptions held in common and taken
ning systems, strategic initiatives tend to be unco- for granted in an organization. The concept encom-
ordinated and some are never realized. This may not passes the forces of inertia, stability and strategy
cause a problem if the organization is adopting an zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
within the organization.

Long Range Planning Vol. 27, No. 4, pp. 125 to 132, 1994
Copyright 0 1994 Elsevier Science Ltd
Printed in Great Britain. All rights reserved
0024-6301194 $7.oo+.oo
 Paradigms, however, can fall out of line with the choosing to implement a revolutionary strategy
external environment-the concept of strategic through the existing structures and hierarchies,
drift-demanding a more revolutionary strategy or senior management is, in essence, trying to use the
change.” For such revolutionary change to occur existing paradigm to redefine the paradigm. To put it
senior management must first identify and accept another way, senior management is trying to use the
the need for the change, then actively intervene in ‘status quo’ to overthrow the ‘status quo’.
the process. For senior managers to diagnose The conflicts and difficulties faced are significant
effectively the need for and appropriate nature of and can be summarized as follows:
revolutionary change, they have to bypass the a Smooth FIOLV of Operations vs Step Change to
preconceptions of the existing paradigm.11,12 Seize Opportunity: Much of a line manager’s
The specific experience of senior managers imple- working life is spent in making sure his
menting revolutionary strategies with whom’ the functional area or department runs smoothly and
authors have worked is that initiatives tend to that changes, where necessary, are introduced
dissipate as they are implemented by line managers gradually with minimum risk. This is fundamen-
and staff. This experience is common to organiza- tally different from making a step change such as
tions in different industries and of different sizes. adopting a new technology, reorganizing work
Intended outcomes and desired benefits are only practices or possibly abandoning certain cus-
partially realized, as illustrated in Figure 1. The rest tomers. There is a natural inclination to reduce
of the organization has not thought beyond the the scale and urgency of the change and to create
paradigm and consequently finds the strategy alien a sense of security by using established, but
and is reluctant to take the actions required. potentially inappropriate, organizational arrange-
The need for senior management to overcome the ments and procedures.
inertia of the organization to implement strategic
change is well documented.‘3-15 However, by a Efficient Execution of Tasks vs Securing of
Desired Benefits: Typically, a functional organiza-
tion allows technical specialization and creates
economies of scale and scope. However, the
efficient execution of tasks tends to become an
Intended Strategy
end in itself and not a means of achieving the
I overall goals. If the existing hierarchy is used to
implemented implement the strategy, the person responsible
through
for on-going processes has to address the issue of
their effectiveness in relation to the new strategic
direction. The pressure to compromise is both
Existing Structures, powerful and hidden.
Processes and
Culture a Current Way of Doing Business vs Future Way of
Doing Business: An organization gradually adapts
its structure and style, and hence its practices,
methods and value systems, to match the way it
does business. Making a strategic change
requires managers to conceive and accept new
Intentions diaorted practices. However, the current environment con-
and reinterpreted; ditions their responses and limits what they are
absorbed into existing
prepared to contemplate. ‘Best’ practices and
rwtines
‘common sense’ funnel the strategy so it con-
forms to the prevailing beliefs and attitudes. For
instance, despite the fact that many initiatives cut
across functional and department boundaries,
implementation plans tend to mirror the existing
structures.

Implementing Strategy Through Projects

cl zyxwvutsrqponmlkjihgfedcbaZYXWVUTSRQPONMLKJIHGFEDCBA
Established Distribution of Power vs New Dis- way of organizing and managing construction and
tribution of Power: Organizations are inherently high technology activities.lfi While the basic
political, having complex structures of influence approach and disciplines are appropriate, for project
and power which the strategy is likely to disturb. management to be effective in implementing
The paradox is that the most powerful managers, strategy, the concept of a project has to be under-
who may have the most to lose, are of pivotal stood in a wider sense: as a vehicle for achieving
importance in implementing the strategy. change. In this context, most strategic initiatives can
be conceived and handled as projects; from the more
These and other conflicts are observed in their
tangible issues such as new product development to
various guises by many of the commentators already
the ‘softer’ aspects such as organization redesign
cited.
and management development. This concept of a
The contention of this article is that the conflicts
project as a vehicle for change is gaining greater
encountered are not endemic to strategy implemen-
recognition and appreciation, for instance by
tation but to the approach adopted. Just as the
Buchanan and Boddy.17
formulation of a revolutionary strategy requires
The project approach acts outside the existing
senior managers to bypass the paradigm in the way
processes and culture to transform the way an organ-
they think about the organization and its environ-
ization operates and helps embed new behaviours
ment, its implementation requires them to bypass
required by a revolutionary strategy, as illustrated in
the existing systems, structures and hierarchies. The
Figure 2. This is achieved through the creation of
framework for initiating, direction and realizing
roles and responsibilities distinct from the estab-
change should be separate from the procedures born
lished hierarchy, performed usually by existing
of the prevailing paradigm. Such an alternative
managers in addition to their routine work, and a
approach to strategy implementation is offered by
‘zero-based’ starting point to defining and realizing
projects and the associated disciplines of project and
the project objectives.
programme management.
This view emerges from consulting experience in
helping organizations formulate and in particular
implement revolutionary strategies. A selection of
relevant case material is used to support, develop
and illustrate the principal arguments. These cases
represent evidence of the success of the approaches
advocated in the article and link general concepts to
real world experience. As with any findings based on
case material, it is impossible to be definitive or
conclusive. Nonetheless, the experience of com-
panies and managers can provide valuable insights
into the practice of management.

Translating Strategy Into Action

The challenge facing senior management seeking to
implement revolutionary change within the organ-
ization is to manage that change outside the strait-
jacket of the existing bureaucracy, procedures and
norms. Projects and project management help senior
management to do precisely that.
Project management is a systematic, phased
approach enabling organizations to undertake
complex changes outside the scope of their on-going
business. In the past, projects were regarded as a

Long Range Planning Vol. 27 August 1994

 The Two Key Project Roles are those of Client and process of undertaking complex, usually unique,
Project Manager changes for which an organization has no depth of
The client, usually a senior manager (if not the chief experience or established set of procedures. The
executive), defines the business requirement and the definition process seeks to clarify the project
project’s role in implementing the overall strategy. objectives, constraints and assumptions, thereby
Senior managers who have been intimately involved avoiding the trap of presumption and unquestioning
in creating the revolutionary strategy are charged adoption of the existing way of doing things.
with defining the concrete actions and changes Similarly, techniques such as work breakdown
necessary to effect the strategy. The project may structures, networking and resource allocation
represent a discrete initiative or the means of group- provide an unbiased methodology for planning and
ing and bounding a set of actions. The project undertaking the necessary activities. The project
manager ensures that the project, once defined, is plan formalizes the scale and the nature of the
executed efficiently by managing the day to day change, the schedule indicates the timing and
activites, reporting directly to the client on project urgency of the changes required, the responsibilities
related issues. This project organization separates for individual activities are pinpointed. The
these potentially divergent decision making roles problems of dissipation are reduced significantly,
within a project. The senior manager (client) acts as albeit to be replaced, in part, with the more overt and
the guardian of the new vision and resulting strategy manageable problems of non-compliance.
in the face of possible implementation difficulties. The power of the project approach has been
This duality of role and formality of the relationship demonstrated in practice. A core element of UK
enables the new strategic thinking to be preserved Insurance Company’s strategy was to change the way
and articulated precisely as the project moves from it supported and serviced its intermediaries;
the concept phase through the feasibility and independent financial advisors (IFAs). The existing
detailed definition phases, so implementation is branch network exhibited high cost/ low productivity
unambiguous. relative to its competitors, yet provided little dif-
The client role is there to prevent any operational ferentiation. The Sales Division was given the task of
compromises to the ideal from being driven by the restructuring itself. The solutions proposed involved
project manger’s preoccupation with ease of some manpower and cost reductions, but within the
implementation and to ensure that the underlying same branch framework. These recommendations
strategic objectives of the project are achieved. were not radical enough to solve the cost problem
Importantly, this role needs to be performed but at the same time threatened to compromise the
throughout the life of the project and after its Company’s growth ambitions. Nothing happened.
completion, to ensure that the project delivers the A year later a project was established to address
benefits sought. Clearly, an intimate understanding the issue of the branch structure, cliented by the
of the strategy and its internal logic is required for General Manager and project managed by a line
this role to be performed well. In summary, the client manager from the Marketing Division. After some
role cannot be vested in the project manager nor time spent understanding the nature of the problem
given to junior managers. The role of project and the constraints, a ‘market oriented’ approach
manager is usually performed by a manager within was adopted. The requirements of the IFAs were
the organization, either as a full time role, or more researched and an ideal support and servicing
frequently, in addition to his or her routine work. In organization devised and costed. Using this ideal as
general, a dedicated project manager or project team a blueprint of the end goal, the plan to transform the
is allocated to a project only if the project is very branch network was developed, relatively painlessly
large or strategically very important. In most and without too many compromises, as a series of
organizations the project manager draws on the logical stages.
resources from different parts of the organization to The power of the approach lay in the fact that the
carry out the activities required. project created the context to challenge the
Company’s conventional thinking, to assimilate
Project Management is Designed for Major Changes previously ignored ideas and to test the viability of
The disciplines of project management facilitate the and reaction to various scenarios. The project

Implementing Strategy Through Projects

manager had a knowledge of the industry and learning achieved during implementation, under-
relationships with managers within the Company, pins the fine tuning of strategy to operating realities.
yet was not committed to any existing approach. The
role gave him the mandate and authority to question
the status quo and explore alternatives. In essence, The Programme Approach
the part of the paradigm on how best to service IFAs
The answer to these two difficulties lies in the
was bypassed. Importantly, the General Manager
emerging discipline of programme management. A
was able to exert a direct influence and to demon-
programme is a framework for grouping existing
strate his support of the process and final outcome
projects and defining new ones. These projects are
without seeming to ,undermine the authority of the
managed in a co-ordinated way either to achieve a
senior managers in the Sales Division. This import-
common goal or to extract benefits that would other-
ant role of creating a legitimate framework for
wise not be achieved if they were managed inde-
management intervention is only now being dis-
pendently. A programme differs from a project in
cussed in the academic literature.”
that it does not necessarily have a single objective,
The above case history describes the use of project
nor a finite time horizon.
management in achieving a major strategic objec-
The use of programme frameworks as a means of
tive. The experience of the authors is that organiza-
grouping projects is quite widespread, particularly
tions usually have a number of initiatives to
among organizations which incur high capital
implement which combine to deliver the competitive
investments, such as telecommunications, railways
advantage sought. Revolutionary strategies by their
and utilities. For instance, British Telecom, the UK’s
very nature tend to be unique and tightly integrated.
largest telecommunications company, has pro-
They cannot rely on cumulative improvements
grammes and programme offices which co-ordinate
associated with an incremental strategy which is
the work on the thousands of projects under way
both informed and constrained by the prevailing
within the organization at any point in time. The
paradigm. Mintzberg I8 has identified and called
Company uses projects, and their associated
these strategies ‘gestalt’. In general, organizations
management disciplines, extensively for all types of
are faced with two important and linked difficulties
changes, including major re-structuring. A recent
when using projects to implement their strategy:
example is the widely publicized Project Sovereign
aimed at reducing the number of management layers
The Interdependence of Projects within the organization. British Rail uses pro-
Implementing a strategy usually involves defining
grammes and projects to such an extent that it has
and undertaking a range of projects each addressing
instituted the post of Director of Projects, distinct
a component of the strategy. The relationship
from the functional directorates from which most of
between the components is usually complex, over-
the project team members are drawn as required, to
lapping and interdependent. For projects to be
create a centre of excellence. Programmes can do
effective, though, they need tight definition and well
more than simply group projects to facilitate co-
specified boundaries. The integration of the projects
ordination, they can act as a bridge between strategy
is often the root of successful strategy implementa-
and projects.
tion.
The programme management approach ‘opera-
tionalizes’ the strategy by:
Learning During Projects
A strategy, even a predetermined revolutionary one, 0 Creating framework for the strategy implementa-
is subject to modification during implementation as tion process: thereby ensuring critical elements
a response either to changing circumstances or to are identified and a complete set of actions is
new information on the feasibility or desirability of specified and assigned without crucial interfaces
certain actions. Project planning and implementa- being overlooked.
tion techniques, on the other hand, rely on fixed
objectives, constraints and timescales. The decom- cl Making project definition more systematic and
position of strategic initiatives into sequential tightly objective: thereby reducing the prevalence of long
scoped projects, which facilitate the incorporation of duration projects, which have a higher risk of

Long Range Planning Vol. 27 August 1994

 failure or obsolescence, and replacing them with business needs. Required organizational changes
shorter sequential projects defined and managed and re-assignment of responsibilities between head
within the programme framework. office and the operating units, and between line
management and the company’s technical functions,
The use of programmes as a means of managing
were also undertaken.
strategic change is becoming accepted and organiza-
This resulted in strengthened mechanisms for the
tions are now exploiting their potential.
planning of individual projects and for the monitor-
In the case of the Insurance Company referred to
above, the project to restructure the branch network ing, reporting and control of project and programme
was one in a number of strategic initiatives to trans- performance. Senior management is now confident
form the Company into a more market and customer that projects are delivering the improvements
focused organization. Other projects were set up to required by the Company’s strategy. The advantage
investigate the needs and attitudes of the target of such a strategic programme approach is that a
market, to improve the Company’s corporate image, direct link is created between the overall strategy
to look at the potential offered by new sales channels and the many individual projects and initiatives. In
and so forth. These projects were clearly inter- the case of the water company, should the strategy
dependent and, because of their exploratory nature, need to be amended to respond to new EC directives
involved considerable organizational learning. The on water quality, the implications for individual
core of a programme approach was established for projects can be readily identified. The strategic pro-
managing the projects: one of the authors acted as gramme framework is designed to cope with
programme co-ordinator to help identify and manage implementation delays and impasses that might
the dependencies and the General Manager reviewed otherwise jeopardize the achievement of the organ-
progress on individual projects and overall progress ization’s goals.
towards the wider strategic goals at a single meeting
attended by all the project managers.
Financial Services
A large UK Financial Institution faced with the need
to reduce costs substantially and to become more
Company Cases responsive to market pressures has taken on board
A few organizations are adopting a more formal and the project and programme approaches as the only
structured programme framework, as illustrated in visible means to achieve the corporate transforma-
the case studies below. tion within the timescales required. The concept of a
‘Strategic Change Programme’ has been formalized
A Water Company along with the procedures for initiating a strategic
A recently privatized Water Company was concerned project and the role of the ‘Strategic Change Project
that its approach to its investment expenditure, the Office’. An ‘Alignment Committee’, made up of the
platform for its strategic development, had not kept senior management team, has been set up to ensure
pace with the changes to the company’s environ- projects and sub-programmes are aligned to the
ment stemming from privatization. The focus had corporate strategic objectives. These are parallel
changed from the need to ‘spend’ whatever capital structures to the Company’s existing hierarchies and
was made available by the Government to the need procedures. Crucially, the organization understands
to achieve strategic, timing and ‘value for money’ that the structure and contents of the programmes
objectives. This required not only improved tech- are transitory, while being committed to the idea
niques for the management of individual projects, that projects and programmes are the appropriate
but also a new approach to the management of the vehicles for strategic change. Managers are seconded
whole investment budget. as project managers or on to project teams, on a full
The Water Company decided to adopt a strategic time or part time basis, with the assurance that they
programme framework which enabled the formula- can move back into line positions and the under-
tion and on-going maintenance of the investment standing that work done on projects is valued by the
expenditure against future strategic and current organization.

Implementing Strategy Through Projects

Implications for Managers objectives into operating targets. They also
frequently claim knowlege or personal experience of
The argument put forward is that project and
‘managing’ projects.
programme management are superior to conven-
tional approaches to strategy implementation and
change management, especially when dealing with Pitfalls
revolutionary change. The pitfalls to be avoided are illustrated below.
Specifically: Any strategy needs to be broken down into
manageable pieces and whichever approach is
cl Managers seeking to implement revolutionary adopted, some generic techniques are applied. Con-
strategies should not use the systems, structures ventional approaches, for instance,” focus on defin-
and hierarchies associated with the status quo ing the relationship between the business strategy
they want to overthrow. and the functions or divisions in the organizations-
0 Projects and programmes are effective vehicles what does the strategy mean for manufacturing,
for change because they offer the opportunity to sales, etc? The programme management approach
operate outside the status quo but alongside focuses on defining all the projects or initiatives that
existing structures. comprise the business strategy and their relationship
to each other. Superficially, the process looks similar
0 The disciplines and rigours of the project and but the results are considerably different: pro-
programme management have to be applied for grammes typically cross functional boundaries,
the approach to be effective. initiatives are consolidated and rationalized, new
programme clienting responsibilities are created.
This third point has been implicit in the argument so
The Business Planning Group of an Irish Bank
far and is worth elaborating on here because of its
reckoned that their biggest challenge in getting the
implications regarding the behaviour of managers.
programme management approach accepted was
The basic principles and techniques of project and
convincing members of the Board that they should
programme management have been outlined above.
not each have ‘their own strategic programme to
Greater detail can be readily gained from published
run’.
material on setting up projects, facilitating the inter-
Once defined projects within a strategic pro-
action between project team members and re-
gramme framework need on-going senior manage-
integrating full time project team members into the
ment support. Projects are vehicles for change and,
organization, for instance Archibold16 or Cleland
as with any vehicle, they require a driver-the
and King.lg
project manager. The need for project flexibility and
However, this represents the substance but not
integration within the strategic programme demands
necessarily the spirit of what is required. Successful
active direction setting and navigation-part of the
application of the programme approach to strategy
client (or sponsor) role. Unfortunately, experience of
implementation requires senior managers to step
training project managers in numerous organiza-
outside the paradigm, just as they did to conceive
tions indicates that many senior managers pay lip
the revolutionary strategy. This means fundamen-
service to the client role and expect the appointed
tally re-examining their understanding of the
project managers to ‘get on with it’. Refreshingly,
implementation processes and personal managerial
one organization recognized the potential problem
behaviours.
and arranged for a group of senior managers to
Failure to benefit from the programme approach is
attend a workshop on how to be good project clients.
usually caused by perceived similarity and presumed
familiarity: perceived similarity of the programme
approach to existing organizational systems and
procedures and presumed familiarity with the
project and programme principles. Managers often
Summary
see commonalities between the techniques used to The choice of change mechanism and approach is
break down strategies into programmes and the critical for the effectiveness of strategy implementa-
traditional cascade method of translating strategic tion. While an evolutionary strategy can seek to

Long Range Planning Vol. 27 August 1994

change the organization from within, a revolutionary management. The case histories cited demonstrate
strategy does not have that option. Using the existing that project and programme management enable
organizational structures and procedures to imple- organizations to translate strategy into action.
ment a revolutionary strategy is tantamount to Projects are far superior to conventional approaches
asking the ‘status quo’ to overthrow the ‘status quo’. to strategy implementation and change management
An alternative is offered by projects and the associ- and offer a competitive advantage to the organiza-
ated skills and disciplines of project and programme tion which can master and apply them.

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Implementing Strategy Through Projects