IAMOT2016, Orlando, Florida1 A Literature Review on Using Project Portfolios in Effective Strategy Execution: A Proposed Approach to Enhance Business Success. 1 The paper focused on the findings of the literature review, the proposed conceptual model and the salient factors for effective strategy execution through project portfolios.
Background to the Research
- Effectively executing strategy
- Problem statement
- Research objectives
- Research question
- Importance of the research
- Limitations and assumptions of the study
Further review of the literature indicated that the use of project portfolios in strategy execution is an area that needs to be understood. The appropriateness and correctness of the strategy are key starting points for effective strategy execution.
Literature survey
Introduction
It is therefore imperative that the strategic management process is supported by performance management processes to account for the achievement of the objectives and targets set out during strategic planning. The goal is to derive value from strategy execution, which can be judged by strategic intent to assess how effective the organization is in achieving business strategy.
Strategy execution for effectiveness
- Strategy and strategic management
- Strategic governance and leadership
- Strategy formulation
- Strategy planning
- Strategy execution
- Models for executing strategy
- Effective strategy execution
In addition, it is necessary for management to have a good insight into the capabilities of the organization. During the literature search, no formal definition of effective strategy execution was found.
Project portfolios in strategy execution
- The value of project portfolios in strategy execution
Literature suggests that the project management approach, particularly project portfolio management, could be used to execute strategy. There is a project portfolio management capability model that can be used as a standard to ensure effective management of the project portfolio function.
Project portfolio success
- The role of projects in strategy execution
It is therefore encouraged that management should consider and incorporate project management principles when implementing corporate strategy. Project management enables the visibility of what is done in the organization and the impact of the actions taken.
Business value
- Strategy evaluation
- Evaluation of performance
- Benefits realisation management to achieve business value
- Value creation and management
It is through the integrated approach that organizational leaders can foster logical or targeted thinking and expected performance outcomes. Key performance indicators are defined for each target benefit so that the organization can continuously monitor the achievement of the benefits. Therefore, the management of the benefits realization process, once a project is closed, needs to be improved.
Therefore, it has more to do with program and project management than the need to demonstrate value for quantifying the return on investment made.
Salient factors for effective strategy execution
The other elements of the "winning wheel" are interconnected to make the wheel work and steer the organization towards its mission and goals. The strength of the model lies in its integrative approach – there is no "start" or "finish" on the bike. The above factors, which could be linked to the keys to effective project management, provide insight into some aspects that must be observed, evaluated and taken into account during the implementation of the strategy in order to improve the level of performance.
The purpose of the study is to draw attention to some key factors identified in practice that had a significant impact on the effective implementation of the strategy.
Conclusion from the review of the literature
- Project portfolio management as an enabler of strategic alignment
- Effective strategy execution
- Value creation
- Approach and framework for effective strategy execution to realise value 77
Strategy implementation is about realizing goals, fulfilling a company's mission and achieving its vision (MacLennan, 2011). Proposals for integrated frameworks have been made, as effective strategy implementation is not a linear process (Okumus (2003), Kaplan (2005), Kazmi (2008) and Lukac and Frazier (2012)). The literature review found that researchers have made a number of important contributions in the areas of strategy implementation, effective strategy implementation, strategy implementation through project portfolios, and achieving business success through strategy implementation using project portfolio management.
The observations listed in Table 2.1 were made during the literature review, which indicates the relevant contribution of various researchers in the field of strategy implementation:
Gaps and deficiencies identified during the review of the literature
Kock and Gemünden (2016) state that they are not "aware of empirical studies evaluating the effectiveness of strategy execution through project portfolios". They further state that "there is little understanding of how the use of project portfolios in strategy execution varies between organizations". Srivastava & Sushil (2015) say "there are limited studies showing how performance measurement systems ensure effective strategy execution".
A review of the literature has identified a number of gaps that warrant investigation into improving strategy execution to create business value.
Envisaged contribution to the body of knowledge
In addition, there was a need to develop an integrated framework that would guide how organizations should effectively execute business strategy through project portfolios in the quest to realize value. There was also a need to gain insight into behavioral factors that contribute to the effective execution of the strategy and thus improve the outcome of strategy execution. The empirical approach taken for the study is seen as a way to validate the observations from the literature and to propose new methods to be applied to improve the effective implementation of the strategy, while aiming to achieve of value by the organization.
It was the aim of the researcher to propose a tested framework to accelerate the realization of business value and success as a result of the effective execution of strategy through project portfolios.
Conceptual Model
The proposed conceptual model
- Strategic intent
- Project portfolios approach
- Project portfolio success approach
- Business value
- Salient factors for effective strategy execution
This is due to the observations of the review of the literature on project portfolio success. Project portfolios are linked to the strategy to enable the realization of the expected value. The evaluation of the market and commercial performance as a result of the project portfolio accepted by the firm (Meskendahl, 2010).
It is the long-term vision of the organization divided into short-term goals.
Proposed propositions for the research
In light of the proposed conceptual model built on the conceptual framework proposed by Meskendahl (2010) and the conceptual model proposed by Lukac &. However, the review of the literature also points to the need to also consider factors that are essential for effective strategy execution. The review of the literature resulted in a model that includes the link between strategy execution and execution structure.
Please refer to Table 4.1 in the next chapter on the mapping of the research questions to the propositions derived from the conceptual model in an attempt to illustrate the relationship between the research questions and the propositions.
Conclusion
Research Design and Methodology
- Case study research
- Case study application
- Logic of designing a case study
- Criteria for judging the quality of research design
- Research questions
- Selection and review of case organisations
- Approach during research
- Field procedures
- Document review (archival, published and company based)
- Semi-structured interviews
- Observations
- Data analysis techniques
- Data and information storage
It is clear from the review of the literature that there is a science behind case study research. This requirement is central to the outcome of the research given the rigor applied by the researcher. Thus, the recommendations of Yin (2014) were embedded in the research approach to improve the effectiveness of the study.
Included in the research methodology are the case protocols that were embedded in the data collection and analysis steps of the study.
Summary of case organisations
Freight
The corporate strategy of the Merchandise Company depends on the business environment and its changes which would inform the direction of the business. The assessment of business and market performance showed that the freight company needs to change its strategy. Assessing the trajectory of the digital revolution and how to grow outside of the commodity company's current areas of business focus.
However, poor conditions in the domestic economy adversely affected the Freight Company in most segments of its general freight business (GFB) with total general freight volumes falling by 8% year-on-year (Freight Company SOC Limited, 2010).
Research and Development
Vision 2020 focuses on R&D and Technology, Research and Development Company 4.0 which focuses on repositioning the business and acquiring skills of the future. The corporate strategy is centered on research and development as this is the primary activity of the organization and will be in line with the Research and Development Company's mandate. A Research and Development company representative will deliver a presentation on the outcome of the market scan and assessment to contribute to the strategy development process.
The review of the integrated reports shows that in 2011 the Research and Development Company focused on strengthening good business principles as a basis for growth in the organization.
Mining
A mining company usually develops an RDP in the context of where the company wants to be as a business. The mining company has adopted a portfolio approach, which is used to select and execute projects that are key to implementing the company's strategy. During the interviews, it was found that The Mining Company has a formal project portfolio structure that is used to select projects to implement the company's strategy.
The Mining Company (2007) reported that the company's project schedule was healthy and balanced, with projects in the Northern Cape, elsewhere in South Africa and Africa offering.
Telecommunications
The outcome of the two-day planning session is the strategic drivers (big bets) for the organization, i.e. the program managers in the BUs will be aware of the program and reporting requirements. In reviewing the Telecommunications Company's annual reports, it was noted that the company had implemented projects over a number of years to achieve the themes shown in Table 5.5 below.
It was further noted that these projects were central to the organization's strategy at the time.
Results
Profile of the participants
They had experience in the corporate strategy and project environment of between five (5) and more than twenty (20) years. Five (5) participants were at the senior executive (C-suite) level, while eight (8) were at the tactical level in operations, as shown in Figure 6-2. Most of the survey participants are senior in their organizations and their experience is long enough to enable them to make a meaningful and appropriate contribution.
Leadership and governance
It was shared in all case organizations that there is a formal risk management committee that is accountable to the board of directors that has been established to oversee the management of business risks through a formalized risk management process. During the interviews, it was agreed that the effectiveness of the risk management structure is well defined and appropriate for all business risks. The importance of the effectiveness of the case organizations in achieving their business strategy was critical in realizing the organizations' business model.
Participants from R&D and transport companies believe that the business model is adequately defined, as shown in Figure 6.5 below.
Strategic intent
Areas that were prominent during the literature review were largely less prominent during interviews. This may point to the direct and focused testing of the research element (Strategic Intent) at the case organizations. It was noted from the review of the documents prepared and published by all four case organizations that the company's strategy was indeed formalized, as evidenced by the responses of the participants during the interviews.
It was noted that there was purposeful involvement of managers in finalizing the corporate strategy in one of the case organisations.
Project portfolios approach
The projects identified as key in the execution of the corporate strategy for the case organizations are recorded in Table 5.1. This may indicate the direct and focused testing of the research element (Project portfolio approach) with the case organisations. It was reported in Section 6.2 that all four case organizations adopted risk management as a component of the governance structures adopted by the organization.
Controlling the realization of the expected value from the implementation of projects is therefore necessary for the implementation of the strategy.
Project portfolio success approach
It was noted from the review of management reports and responses given during interviews that governance structures played an integral role in the way projects were managed and delivered. Governance processes differed between the case organizations, with others having project committees chaired by managers to oversee the delivery of strategic projects, in others project support offices (PSOs) were established, while in others PMOs were used . The nature of the governance structure and how it was put together depended on the size, priority and complexity of the project.
The observation was that project committees and PSOs were established for large capital projects, while PMOs were mainly used to oversee the delivery of small and operational projects aimed at routine activities.
Business value
Salient factors
Conclusions and Recommendations
The value of the selected case organisations
The quality of the corporate strategy
Key leadership roles
The importance of purposeful management of the business model
The strategy execution enablers
The use of project portfolios in strategy execution
Recommendations
Contribution to the body of knowledge
- Tested conceptual model
- Salient factors in the use of project portfolios in effective strategy execution
Ethics clearance
Research consent letter
Research field procedures
Research questionnaires
Code family structure and codes grounding
