« Strategy Breakdown Structure? | Main | Strategy, Strategic Initiative, Strategic Objective: What is the term? »

Thursday, March 23, 2006

Comments

It is certainly important to discuss "how to decompose a strategy" but so far we have not done that. We have spent the entire time talking about whether or not the term "Strategic Initiative" is valid. LOL

It has seemed pretty clear that what you call a strategy and what I called a strategic inititive were the same things with different names. i would very much like to get to the part where we talk about how to decompose a strategy. I agree that terminology and usage is important but as this discussion shows often such terminiology disucssions end up being more about preference and opinion than about the true substance of the meaning of the words.

Brian,

This may reveal a core issue. That terms and defintions are at the heart of many important topics. When the term "strategy" is mentioned, it seems to be difficult to proceed without some disucssion of "what do you mean." Is it "A" strategy that is decomposed into elements - the SBS. Many strategies that are themselves individual measureable elements being part of a "Scorecard" approach or possibly some other framework, with decomposition of the collection or the individual element of this collection.

These are serious topics in the literature and significantly impact how an IT organization goes about identifying and delivering value.

I have two clients at the moment that struggle with "terms" regarding strategy and execution. Add to this measurement of the strategy's performance in the context of large ERP rollout and you've got the makings of a real mess.

That said, the issue of "how to decompose a strategy" is important. You've brought up an issue that needs more discussion, espically in the context of project management.

Again I am not suggesting that we are connecting individual WBS elements to the strategy. I included WBS only as a point of reference.

My comments on terminology were meant to point out that if including the word initiative on the end of the word strategic is going to cause that big a problem then it was likely that there was going to be a problem anyway. I think way too much time and effort get spent micro-disecting words in realtion to the time that gets spent actually making progress. just look at this discussion: 15 comments and most of it about the terms rather than the concepts.

Brian,

1999 standards for 2nd generation BSC. The current 4th generation looks much different. Again your experuience in this area guides your efforts. Mine is too limited.

Regarding the WBS. There are better elements of the project that connect to stratgey than the WBS. Accomplishments and the Project Events that deliver specific levels of maturity of the capabilities for two.

Regarding Strategic Initiatives, it's been my experience that confusion is created, but your experience sounds like it is different.

Regarding little things like terminology, contract officers and lawyers might have something to say about the "little things like terminology." This becomes "big" when the strategy fails to deliver and the Board asks "what did you mean when you said X, after spending $200M?"

Again just from my little experiences in this area, your's may be different.

The BSCOL seem to feel that "Strategic Initiative" is a term important enough to include in the following document:

https://www.bscol.com/pdf/Standardsv10a.pdf
Where in the section covering what a certified BSC application would include it says:

6. Strategic Initiatives
Strategic initiatives are those action programs (discretionary investments or projects) that drive strategic performance.
These are the activities that groups will focus on to ensure attainment of strategic results. All initiatives underway in an
organization should be aligned with the strategy in the Balanced Scorecard. A compliant package will allow for a set
of strategic initiatives to be linked to at least one objective.

The use of the term Strategic Initiative makes sense to me because there is a strategy for an organization. There are then several initiatives undertaken to bring about that strategy. Those initiatives then become "strategic initiatives" since they are initiatives that are designed to bring about the coming true of the strategy.

It certainly mixes noun and verb but then again, from the biased view of my training in Mrs Willouby's 3rd grade class at Roxhill Elementary in Seattle so do all well formed sentances. ;-)

Im not sure the separation you mention is that important. If a little thing like terminology and a vague semantic connection between the strategy and the initiatives that support it is what is going to get in the way of the strategy makers then something was bound to get in their way anyway! LOL

With regard to the WBS I only included it as a point of reference. Im not suggesting that individual WBS elements be aligned to specific Strategies, though I suppose if the WBS was constructed in the right way it would be possible. Im operating under the assumption that if a Project is seen as supporting a strategic initiative then the WBS would by definition also support that initiative since the WBS *IS* the project.

Brian,

I poked around the web for "strategic initiative." Here's my take from the biased view of my training at the Balanced Scorecard Collaborative and our mentors Bob Gold and Paul Duran.
http://www.bscol.com/bscol/leadership/

BSCol is the home of Norton and Kaplan. Others have developed BSC businesses as well, but BSCol was who we were "trained" by.

The term strategic initiative mixes a noun and a verb. There are strategies and there are initiatives. Initiatives support strategies, as do portfolios, projects and the deliverables from those project - which may or may not be WBS elemenst. I'd prefer to have the bottom element be a "capability" delivered from the project that is put to work delivering measureable value for strategy. But that aside...

When a "strategic initiative" is used, the initiative becomes inseperable from the strategy. Which is a problem, since a strategy is a hypothesis that is "tested" through initiatives, portfolios, projects and capabilities. If the outcome of the strategy is not favorable, the initiative may still be viable - it just didn't result in a viable strategy.

This all sounds very obtuse, but turns out to be critically important at the strategy level. If there is no way to seperate the stratgey from the testing of the stratgey from the initiatives that test the strategy, then the owners of the strategy become reluctent to change strategies or even abandon the stratgey. This occurs all the time. Booz Allen's Strategy+Business journal and of course HBR talk about these types of problems.

While the term "strategic initiative" does appear "in the literature," it seems to be a term that orginiated in Europe. http://www.juergendaum.com/news/sap_sem_wp_bsc.pdf for example "productizes" the term while N&K seperate the terms.

Before proceeding see if the N&K approach to seperating them adds any clarity to the concepts of strategy as hypothesis and the testing of those hypothesis' through initiatives?

What litertaure refers to "Strategic Initiatives?"

Brian,

The term "program event" is probably too aerospace or large project centric. However in the heirarchy the next thing below the project should be a enetiy that has a measureable outcome connected to the strategy. I'm not sure WBS wodl be such a "thing."

This brings up the problem with "what does the project represent?" Is it a part of a collection of projects - a portfolio? How is the project connected to strategy? The WBS element - for it to be useful in the strategy context - needs to connect to a measure of the stratgey in some way.

In what way woudl a WBS element be connected to a stratgey?

I have not heard of the term "program event" ever used in the context of something that occurs within a specific project.

Since we are talking about heirarchies I figured that the next heirarchy under the project level would be that project's WBS regardless of if the WBS is used as a cost collection mechanism as in your projects or in the more common way of it being a decomposition of the work into smaller and smaller parts.

I have to disagree about the term "Strategic Initiative". I have seen it in use at several companies personally and it appears widely in the literature and in papers on across the Internet. It may very well differ from your preferred usage but I assure you it does exist. :-)

The WBS is not the next element. It is the Program Event that delivers a capability.

The WBS is a cost collection element in most government projects and a "component" of the solution is others.

A Capability delivered at a point in time - along the road to final maturity - can be connected back to a stratgey.

All the elements in the SBS need to connect both up and down the tree to and from the strategies in the Balanced Scorecard (or what ever is used to define the strategies). As a small point of order, there is not a term called "Strategic Initiative," but rather Strategies - Objectives - Initiatives - ...

Who says that a project could not exist under multiple nodes of the breakdown?

My feelings on it right now is that Im more interested in the idea of breaking a strategy down into the parts that sit between it and the project level, or at least examining if that seems useful to people.

The problem I see is that a single project can satisfy more than one strategic initiative.

Further, some projects are not part of a strategic initiative - they are more routine - yes, they ultimately fit in the strategy of making money, but not necessarily as an initiative.

You might consider putting the objective above the initiative... Isn't the strategy just an approach to fulfilling that objective?

I think that the hierarchical approach is a bit problematic as it implies a series of 1 to many relationships but is intolerant of many to 1 relationships.

How about flattening it out and just have strategy as a multivalued attribute. The sort of "tagging" approach that is so common right now.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been saved. Comments are moderated and will not appear until approved by the author. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Comments are moderated, and will not appear until the author has approved them.

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)