A couple of questions we will be faced with as business architects are the following:
- Should we authorise this new idea and start up a new project on the road-map?
- One or more projects are in conflict; which one should we stop?
Now, there are various dimensions to these questions including (but not limited to): code or environment contention; availability of skilled resource; business case; and legislative or regulatory directives. However, there is another dimension that is less easily measured and that is “What contribution would this project make towards achieving our strategy?”
Now, that can be a difficult question to answer. Very few projects are mission-critical in the sense that the strategy cannot be achieved without them. Added to which, strategies tend to be multi-faceted so it’s not always clear which project should take priority if they are making contributions in different areas. The technique I discuss below is one that I have used to address these types of issues.
Step #1 – Distill your strategy
Review your strategy and identify the key drivers. You need to get it down to 6 strategic drivers, preferably less. Those drivers should be approximately equal in weight but don’t sweat it if there are 1 or 2 make-or-break drivers that dominate the others. Talk to everybody at the top table to get a consensus that these drivers encapsulate the strategy. This last step is vital – you will be asking them to make decisions based on these criteria so they have to agree on the measures.
Step #2 – Decide on a measurement scale
The scale is arbitrary and you can have as many points on it as you like. At the top end, the rating means that the strategic driver can only be achieved if this project is delivered. At zero, this project has no impact on the strategic driver. Don’t forget to include a negative rating; some projects can actively work against achieving a strategic driver e.g. launching a new product when one of your drivers is cost reduction. A basic scale is -1 to 3 but you may want to extend the top range to 5 depending on your circumstances.
Step #3 – Review the projects on your road-map
You’re looking to rate each project with a score against each of your strategic drivers. Some of your projects may be so small that they’re not worth worrying about and that’s fine. You’re also looking to gather the latest estimate of cost to completion. This way you have a snapshot of each projects bang-for-buck strategy-wise. You can convert this into a measurement by adding the strategy scores and dividing by the cost if you like.
Step #4 – (Optional) Consolidate the results
Adding up the strategy scores for the individual projects can give you insights into what you are doing for your strategic drivers at an overall level – including the bang-for-buck strategy score. This can be helpful in a number of ways:
- It may reveal under or over weightings against a particular strategic driver – this can be useful in aligning the overall change portfolio;
- Publishing this to the change team can be helpful in two ways: firstly, communicating or reinforcing the strategic drivers; secondly, motivating people that they are making a real difference by working on their individual projects.
So, you now have your strategy contribution framework in place. How do we use it?
Use case #1 – Do we commission a new project?
Assessing a new project against the strategic drivers gives you an assessment (via the bang-for-buck score) of whether this project is worth doing on its own merits. This assumes that the change is a voluntary initiative and not mandated by regulation or legislation. If the bang-for-buck score is low or there are other warning signs (e.g. no strategic contribution or even negative strategic contributions) then the indicators are not good. On the other hand if the indicators are positive and we have the bandwidth to deliver it alongside the existing change portfolio then it’s looking good.
Use case #2 – Which project do we stop?
Code, schedule and resource contentions are normally the drivers behind having to make these decisions. Unfortunately, all they are able to say is “Pick one but I can’t tell you which”. This is where the strategy contribution framework comes into its own. It can directly compare apples and pears through the bang-for-buck strategy score. If they are significantly different then that’s a strong indicator.
If they are quite close then that’s when you bring into play the overall strategic contribution from the change portfolio. If one of the projects is contributing to under-weight strategic drivers compared to the other then that is a positive indicator.
Caveat: Sometimes the decision is made for non-strategic but perfectly logical reasons. Your MD or Sales Director may be betting that if they do this they can turn it to advantage later on “Yes, I know this is totally throw-away and of no value, but prospect ABC wants it and I think I can win the business if we do it”. This may not be overtly stated but be aware of it and run with it. Your responsibility is to advise, their responsibility is to decide.
A strategy contribution framework:
- Allows you to compare apples and pears between any two projects;
- Gives you a measure of bang-for-buck contribution to your strategy at a project and change portfolio level;
- Helps you to decide whether to commission a new project;
- Helps you to decide between two projects that are in conflict;
- Can help motivate your change team.
PS: It can also get you extra brownie points if your boss uses this in her annual appraisal to demonstrate the value-add of the change team – as my boss did!