The Wiley Guide to Managing Projects (Morris/The Wiley Guide to Managing Projects) || Strategic Management: The Project Linkages

206

CHAPTER NINE

STRATEGIC MANAGEMENT:THE PROJECT LINKAGES1

David I. Cleland

‘‘There is nothing permanent except change.’’

HERACLITUS OF GREECE, 513 B.C.

The purpose of this chapter is to present an overview of what is involved in the devel-opment of project strategy. Project strategy does not stand alone; rather, it is an integral

part of the overall strategic plan for the management of change in the enterprise. A generalphilosophy of what project strategy is, as well as how and where project strategy falls in theoverall scheme of the strategic management of the enterprise, is presented.

This chapter also provides an overall perspective—a philosophy—to guide the designand development of project strategy. A philosophy is defined as a system of thought based onsome logical relationship between concepts and principles that explains certain phenomena,and supplies a basis for rational solutions of related problems (Davis, 1951). A philosophy,taken in its most basic sense, is simply a way of thinking about a field of endeavor. A soundphilosophy of project strategy is a precondition of starting the project planning process.

The dictionary defines strategy as ‘‘The essence of art or military command as appliedto the overall planning and conduct of large-scale combat operations; a plan of actionresulting from the practice of strategy, the art or skill of using stratagems, especially in politicsand business (Webster’s II New College Dictionary, 1999).

The details of project strategy, such as scheduling, networking techniques, scope plan-ning, risk assessment, resource planning, cost estimating, life cycle planning, project speci-fications, and so forth, will not be presented in this chapter. Rather, what will be presentedis an overall description of project strategy, including how it fits into the overall scheme of

1 In the development of this chapter I have drawn material from David I. Cleland & Lewis R. Ireland,Project Management: Strategic Design & Implementation, 4th Edit., McGraw-Hill, New York, NY 2002.

The Wiley Guide to Managing Projects. Edited by Peter W. G. Morris and Jeffrey K. PintoCopyright © 2004 John Wiley & Sons, Inc.

Strategic Management: The Project Linkages 207

enterprise strategy, and some general guidelines on the ‘‘work packages’’ that should bedeveloped in the preparation of project strategy.

We tend to live, worship, work, socialize, and so forth, based on some philosophy—some way of thinking about our world. Such a philosophy may be nebulous and fleeting,or it may be well defined and provide the performance and behavior standards of our life.

The key question that the reader needs to ask is this: What philosophy do I haveregarding the development of project strategy? Can the philosophy that is presented inthis chapter help me—and the people with whom I work—in the development of projectstrategy?

Background

Project management is currently being used worldwide in a wide range of applications, bothin developed and developing countries. Theses applications include the following::

• Industrial. For new or improved products, services, or organizational processes• Social. To support new or enhanced programs for society• Economic. For stimulation of local, regional, national, and international economies• Technological. To advance the state-of-the-art of organizational products, services, or proc-

esses• Legal. For the development of new or modified laws and their application• Political. Governmental initiatives to support local, regional, and national strategies• Military. For campaigns to support military strategies• Discovery. To find new territories and worlds

Pinto has stated: ‘‘Many of the products that are being created today in a variety of indus-tries, from children’s toys to automobiles, are becoming more technically complex to de-velop, manufacture, and use. Technologically driven innovation presents a tremendouschallenge for organizations in the areas of engineering, design, production, and marketing.As a result, many organizations are relying on project teams composed of cross-functionalgroups to create and move to market these products in as efficient a time frame as possible’’(Pinto, 1998).

Project teams are being applied to a wide variety of uses within the individual organi-zation. These uses are shown in Table 9.1 (Cleland, 1996). It should be noted that four ofthese teams are ongoing rather than ad hoc, as would be expected of a traditional projectteam. However, setting up the ongoing teams is often handled through traditional projects.The continuous challenge of coping with the inevitable changes facing contemporary or-ganizations will likely expand the use of these teams in the future.

A broad definition of a project is that it is a combination of organizational resourcesbeing pulled together to create something that did not previously exist and that will, whencompleted, provide a performance capability to support strategic management initiatives inthe enterprise. Four key considerations are always involved in a project:

208 The Wiley Guide to Managing Projects

TABLE 9.1. CLASSIFICATION OF TEAMS.

Type Output/Contribution Time Frame

Reengineering teams Handle business process changes Ad hocCrisis management teams Manage organizational crises Ad hocProduct and process development teams Handle concurrent product and process

developmentAd hoc

Self-directed production teams Manage and execute production work OngoingTask forces and problem-solving teams Evaluate/resolve organizational problems/

opportunitiesAd hoc

Benchmarking teams Evaluate competitors/best-in-industryperformance

Ongoing

Facilities construction project teams Design/develop/construct facilities/equipment

Ad hoc

Quality teams Develop/ implement total qualityinitiatives

Ongoing

General-purpose project teams Develop/ implement new initiatives in theenterprise

Ad hoc

Audit teams Evaluate organizational efficiency andeffectiveness

Ad hoc

Plural executive teams Integrate senior-level managementdecisions

Ongoing

New business development teams Develop new business ventures Ad hoc

Source: David I. Cleland, The Strategic Management of Teams (New York: Wiley, 1996, p. 10).

1. What will be the expected cost of designing and creating the expected project results?2. How much time is required to develop, produce, and place the project results in an

operational environment?3. What capability will the project results provide the project owner?4. How will the project results fit into the operational or strategic capability of the project

owner’s enterprise?

Project Evaluation and Selection

In this chapter it has been assumed that the decisions concerning which projects to developto support strategic management initiatives have been made by the responsible executivesof the enterprise. Indeed, the selection of projects to support strategic management initiativesis a most important decision—certainly an important decision in the development of projectstrategy.

The proper choice of how enterprise resources will be used to support the strategicmanagement is crucial to the long-term survival and growth of the enterprise. Many of theexisting texts on project management suggest procedures and processes for how projects canbest be selected. A few criteria to use in determining which projects to select to support


strategic and operational initiatives in the enterprise are suggested. These criteria are pre-sented in the form of questions.

• Will there be a customer for the expected results of the project?• Will the project results provide the enterprise a competitive edge?• Will the project results make a distinctive contribution to existing products, services, or

organizational processes?• Will the enterprise be able to handle the risk and uncertainty likely to come forth as the

project is undertaken?• What is the probability of the project being completed on time, within budget, and at

the same time satisfy its technical performance objectives?• Will the project results provide value to the expected customer?• Will the project provide a satisfactory return on investment to the customer’s organiza-

tion?• Will the project have a high probability of supporting the enterprise’s strategic initiatives?

These are key questions to be considered during the project selection process. In addition,these questions should be examined for each project during its life cycle, particularly duringmajor reviews of the project’s status.

Relationship to Strategic Management

Strategic management is the management of the organization as if its future mattered. Strategicmanagement has two interrelated elements: (1) strategic planning and (2) strategic imple-mentation.

In the design and execution of strategic management initiatives, an early assessment ofexpected real and potential environmental changes is required. This assessment should con-sider the general environmental conditions that currently exist and what should be expectedfor the future. In addition, the current and expected strengths and weaknesses of the com-petition should be evaluated. Once a meaningful database has been established regardingthe present and forthcoming environmental conditions, the strengths and weaknesses of theorganization should be compared to what is expected in the competitive future in whichthe enterprise will exist.

The assessment of current and expected environmental change is usually done in thefollowing areas:

• Political. What political conditions might have an impact on the development of theproject? For example, a Department of Defense (DoD) defense contractor would carefullywatch the political developments in Washington, D.C., as such developments might im-pact an existing or expected DoD market. The current debate under way regardingwhether or not the United States military force should buy or lease military transportaircraft is being watched carefully by aircraft manufacturers and lessors.


• Social. What social and cultural considerations might have an impact on the developmentand use of the project results in an emerging country?

• Economic. Will there be sufficient resources available to develop and sustain the projectresults in its operational environment?

• Technological. Will the project be supported by the required state-of-the-art resources inits development? For example, a project to build a new manufacturing plant wouldinclude a consideration of the current state-of-the-art in design and production processes.

• Legal. What legislation might exist, or can be expected to develop, regarding the use ofthe project results? Enterprises that develop projects in the construction industry need tobe mindful of what environmental impact requirements need to be satisfied in the use ofthe project.

• Competitive. What are the strengths, weaknesses, and probable strategies of competitivefirms performing in the same marketplace? Benchmarking of competitive firms is partic-ularly important in the defense and construction industries.

As the assessment of the possibilities and probabilities of the expected future facing theproject results is carried out, key decisions can be made through the project planning processthat will provide a strategy for the project results..

Strategic management is inextricably interwoven into the entire fabric of the manage-ment process; it is not something separate and distinct from the process of management ofthe organization. Strategic management keynotes the shift of organization management fromoperations to long-range strategy. Stated another way, strategic management should not bedistinguished from the rest of the organization management process, in particular the projectmanagement process where the strategic management of change is carried out.

In earlier times the managerial emphasis was primarily on operations being sufficientlyefficient to maximize the return on investment in operational resources. Then came theneed to develop organization strategies to deal with the growing turbulence and rapidlychanging environments facing the enterprise. Today, there is a continuing emphasis oneffective strategic management and efficient operational management, but an increasingemphasis on the use of project management to better facilitate the management of bothoperational and strategic change.

Organizational Changes

Strategic management provides a focus for the development and providing of support forthe future product, service, and organizational processes of the enterprise. It is in these areas thatcompetition becomes most critical for the enterprise through providing a capability for thefollowing:

• New or improved products offered by the organization• New or improved services offered by the organization


FIGURE 9.1. BALANCE MUST BE ACHIEVED AND MAINTAINED AMONGSTRATEGIC MANAGEMENT CHALLENGES.

OperationalCompetence

FunctionalExcellence

Strategic Effectiveness

Source: David I. Cleland/Lewis R. Ireland, Project Management: Strategic Design and Implementation, 4thed. (New York: McGraw-Hill, 2002, p. 8). Reproduced with permission of the McGraw-Hill Companies.

• New or improved organizational processes used to support the organization’s products and ser-vices. This would include marketing, manufacturing, financial, R&D, and other organi-zational functions required to maintain the enterprise functions as entities capable ofcompetitive performance in the marketplace.

As an ongoing entity, the competitive enterprise needs to maintain a balance in its utilizationof resources. The key is to maintain a balance between operational competence, strategiceffectiveness, and functional excellence. Figure 9.1 portrays this balance (Cleland, 1996).

Operational competence concerns the ability to use resources to provide customers withquality products and/or services that are delivered on time and provide value for customers.Operational competence requires the ability to use resources in a cost-effective manner toproduce and deliver products and services that exceed what competitors are offering.

The final measure of operational competence is profit or, in the case of a not-for-profitentity, greater value to the customers than was required to develop, produce, and deliverthe products and services to the customer. To maintain operational competence, the enter-prise depends on the strategic effectiveness with which the enterprise is managed.

Strategic effectiveness is the ability to assess what may be possible and probable in theenterprise’s future products and services, as well as the organizational processes required to


FIGURE 9.2. CHOICE ELEMENTS OF STRATEGIC MANAGEMENT.

Mission

GoalsObjective

Strategies

Programs Projects OperationalPlans

OrganizationalDesign

Vision

Facilitative Services:

Policies Procedures SystemsProtocols

Source: David I. Cleland/Lewis R. Ireland, Project Management: Strategic Design and Implementation, 4thed. (New York: McGraw-Hill, 2002, p. 8).

support future purposes. Strategic effectiveness is concerned with doing the ‘‘right things’’to prepare the organization for its future. Project teams are crucial in preparing the enter-prise for its future, thereby contributing to the strategic effectiveness of the enterprise.

Functional excellence is the use of state-of-the-art resources in the disciplines that supportthe enterprise’s organizational processes. Functional excellence includes ongoing improve-ment in employees’ capability as well as other organizational resources so that the effectiveand efficient use of resources is sustained for the organization. Project teams can be usedto develop employee training programs, improve the use of resources, and design and de-velop new initiatives in the application of functional resources to the enterprise.

The bottom line of strategic management is to maintain balance among strategic ef-fectiveness, operational competence, and functional excellence. Project management canprovide critical support to the maintenance of this balance.

Context of Project Strategy

The development of project strategy has to be done in the context of the strategic manage-ment of the enterprise. Projects do not stand alone in the enterprise. Rather, they are partof the overall organizational initiatives. Thus, project strategy has to be developed to supportlarger organizational plans. In Figure 9.2, projects are portrayed in this larger context ofthe enterprise—essentially as building blocks in the ‘‘choice elements’’ of the enterprise. Inthe material that follows, these choice elements are briefly described. A more detailed ex-planation can be seen in the source cited in Figure 9.2.


The choice elements are as follows:

• Vision. The development of intelligent and relevant foresight of probable future oppor-tunities. One company sees its vision to be a ‘‘world-class competitor and we keep it thatway—we have programs and projects in place to do just that.’’ Another company statesits vision as ‘‘People working together as a global enterprise for aerospace leadership’’(Boeing, 2002). Another company included in its vision statement: ‘‘We will enhance ourcompetitiveness by being first in the development of advanced technology that supportsour world-class products and services.’’ A statement of the vision of an enterprise is amental image of that organization’s current and future reason for existing.

• Mission. A broad, enduring intent that an organizational entity pursues—essentially the‘‘business’’ that the organization pursues. One drug manufacturer stated its mission as‘‘The development of model drug absorption systems for therapeutic companies thatprovide distinctive benefits for the physician and patient.’’

• Objectives. The desired future destination of the enterprise stated in quantitative and/orqualitative terms. A computer company describes one of its objectives as ‘‘Leading thestate-of-the-art of technology in our product lines.’’

• Goals. Specific time-sensitive milestones to be accomplished using organizational re-sources. Attainment of a goal signifies that progress has been made toward attaining anorganizational objective. One company stated that ‘‘We will, by the end of 2002, com-plete the transition from a predominantly R&D services company to an industrial man-ufacturer.’’ Goals are supported by projects within the organization.

• Strategies. The design of the means through the use of resources to accomplish organiza-tional purposes. Strategies include designation of the use of resources to design and im-plement organizational programs, projects, operational plans, and organizational designarrangements. Sometimes a strategy for an enterprise is stated in general terms. Forexample, one major aerospace company described their overall strategy as ‘‘...to excel inall principal aerospace markets to reduce our dependence on the cyclical commercialairplane market.’’

• Facilitative services. Those plans for the development of policies, procedures, protocols, andsystems to support organizational resources. For example, many companies have pub-lished a project management guidebook to provide guidance on how projects will bemanaged within the enterprise.

Every failure in the development and implementation of resources directed to these choiceelements will impact the other choice elements. A failure in the development of credibleproject plans can cause problems in the execution of these plans and will ultimately impactother choice elements, in particular the goals of the enterprise. From an organizationalperspective, completion of a project means that an organizational goal has been completed.Indeed, the breakdown of the choice elements for the enterprise where the relative positionof the vision, mission, objectives, goals, programs, and projects could be considered a con-ceptual work breakdown philosophy for the strategic management of the organization. Forexample, if a project (an organization goal) is not being developed and produced, then


• the objective of the organization will be adversely affected;• the organization mission can be compromised;• failure to obtain a full realization of the vision can occur; and• the overall performance of the organization in its marketplace will be impacted.

Truly ‘‘everything is related to everything else’’ in the management of an organization aswell as in the management of the appropriate supporting choice elements in the organiza-tion.

In the material that follows, the role of project planning is presented.

The Importance of Project Planning

Writers in project management have recognized the importance of project planning:

During the early 1960s, after hundreds of projects had been completed, it becameapparent that many projects successfully achieved their basic project objectives, whereassome failed to achieve budget, schedule, and performance objectives originally established.The history of many of these projects was carefully reviewed to identify conditions andevents common to successful projects, vis-a-vis those conditions and events that occurredfrequently on less successful projects. A common identifiable element on most successfulprojects was the quality and depth of early planning by the project management group.Execution of the plan, bolstered by strong project management control over identifiablephases of the project, was another major reason why the project was successful (Duke,1977).

The author of what is believed to be the first book on project management stated: ‘‘Noother aspect of project management is so essential to success as planning. Most of thetroubles that confront project management on the rocky road to completion of the projectare traceable directly to faulty planning—unrealistic, incomplete, too-broad, or just plainlack of plans’’ (Baumgartner, 1963). Several hundred books on project management haveappeared since Baumgartner published his leading contribution to the project managementdiscipline. No other books have stated the importance of project planning any better thanthis first book in the field.

Basically, project planning is a process for achieving success in the future of the projectand of the organization. It is a plan of action for getting the best return from the resourcesthat are going to be used on the project during its life cycle. The project plan is an expectedarrangement for dealing with the ever-changing environment facing the project and theenterprise. Project planning starts with the development of work breakdown structure (WBS).

The Work Breakdown Structure (WBS)

The most basic consideration in the development of project strategy is the WBS. The WBSdivides the overall project into work units that can be assigned either to the organization


FIGURE 9.3. WORK BREAKDOWN STRUCTURE CODING SCHEME FORAIRCRAFT (EXAMPLE).

1. System1.1 Airframe1.2 Tail Section1.3 Wings1.4 Engine1.5 Avionics

2. Documentation2.1 Operator’s manual2.2 Repair manual

3. Test and Demonstration3.1 Static system test on ground3.2 Dynamic air test

3.2.1 Initial flight for aerodynamics3.2.2 Initial flight maneuver test3.2.3 Endurance flight test

4. Logistics4.1 Maintenance tools4.2 Repair parts (spares)

X-33 Aircraft


or to an outside agency. The underlying philosophy of the WBS is to divide the project intowork packages that are assigned for which accountability can be expected. Each work pack-age becomes a performance control unit; it is negotiated and assigned to a specific organi-zational professional or manager. The person to whom the work package is assignedbecomes the ‘‘work package manager.’’ The process of developing the WBS is to establisha scheme for dividing the project into major groups and then dividing these groups intotasks, subtasks, and so forth. Projects should be planned, organized, monitored, and con-trolled around the lowest level of the WBS. If a small work package is not on schedule oris running over its budget or has failed to provide the expected performance objective, thequestion can be raised concerning the impact on the overall project.

With an aircraft project the WBS might look like the model that is shown in Fig-ure 9.3.

A WBS can also be portrayed as shown in Figure 9.4.The WBS provides for the following:

• Summarizing all products, services, and processes that make up the project• Displaying how the work packages are related to each other, to other activities within

the organization, including support, as well as to outside agencies such as contractorsand other stakeholders

• Providing the basis for establishing the authority-responsibility patterns in the organiza-tion, usually reflected in some form of matrix structure


FIGURE 9.4. WBS IN A GRAPHIC DIAGRAM (EXAMPLE).

X-33 Aircraft Project

4.0 Logistics3.0 Tests and

Demonstration

3.2 Dynamic test

3.1 Static system test

on the ground

3.2.1 Initial flight foraerodynamics

3.2.2 Initial flight test

for maneuver test

3.2.3 Enduranceflight test

4.1 Maintenance

tools

4.2 Repair parts(spare)

1.0 System

1.4 Engines

1.1 Airframe

1.2 Tail section

1.3 Wings

1.5 Avionics

2.0 Documentation

2.2 Repair manual

2.1 Operator’s

manual


• Estimating cost• Performing risk analysis• Scheduling the work packages• Building the project management information system• Monitoring, evaluating, and controlling the application and use of resources on the

project• Providing a reference point for getting people committed and motivated to support the

project

Work packages are the goals to be accomplished on the project. There are a few key criteriathat should be applied to the WBS work packages:

• Are the work packages clear and understandable?• Are they specific?


FIGURE 9.5. PROJECT PLANNING WORK PACKAGES.

ProjectPlanning

StakeholderManagement

Project Audits

AdministrationPolicies

State-of-the-artGuidelines

Team Development

Project Control

Cultural Ambience

InformationSystemsOrganizational

Design

Cost AccountingSystem Interfaces

Budget ResourcePlans

Risk Analysis

Cost Estimates

Strategic Issues

Logic Networks

Work PackageSchedules

Subcontractor WorkPackages

PerformanceObjectiveFunctional Work

Packages

Work BreakdownStructure

Strategic Fit

• Are they time-based and capable of being scheduled in the assignment of work on theproject?

• Are the work packages measurable?

If an adequate and accurate WBS has not been established for the project, the projectcannot be effectively and efficiently managed.

Project planning can be carried out through a representative model of the work pack-ages. Figure 9.5 depicts these work packages. The subsequent discussion provides basicdescriptions of these packages.

Project Planning Work Packages

A project plan can be broken down into work packages. The following is a general guideto these work packages:

• Establish the strategic and/or operational fit of the project. Ensure that the project is truly abuilding block in the design and execution of organizational strategies and that it provides


the project owner with an operational capability not currently existing or improves anexisting capability.

• Create a WBS. Develop a product-oriented family tree division of hardware, software,services, and other tasks to organize, define, and graphically display the product to beproduced, as well as the work to be accomplished to achieve the specified results.

• Determine who the project stakeholders are and plan for the management of these stakeholders. Determinehow these stakeholders might change through the life cycle of the project.

• Plan for the nature and timing of the project audits. Determine the type of audit best suited toget an independent evaluation of where the project stands at critical junctures.

• Design project administration policies, procedures, and methodologies. Administrative considerationsare often overlooked. Take care of them during early project planning, and do not leavethem to chance.

• Integrate contemporaneous state-of-the-art project management philosophies, concepts, and techniques. Theart and science of project management continue to evolve. Take care to keep projectmanagement approaches up-to-date.

• Develop the project team. Establish a strategy for creating and maintaining effective projectteam operations.

• Assess the organizational cultural ambience. Project management works best where a supportiveculture exists. Project documentation, management style, training, and attitudes all worktogether to make up the culture in which project management is found. Determine whatproject management training would be required. What cultural fine-tuning is required?

• Provide for the project management information system. An information system is essential tomonitor, evaluate, and control the use of resources on the project.

• Select the organizational design. Provide the basis for getting the project team organized,including delineation of authority, responsibility, and accountability. The linear respon-sibility chart (LRC) is a useful tool to determine individual and collective roles in aproject-oriented matrix organization.

• Develop the project budgets, funding plans, and other resource plans. Establish how the project fundsshould be utilized, and develop the necessary information to monitor and control the useof funds on the project.

• Perform risk analysis. Establish the degree or probability of suffering a setback in the proj-ect’s schedule, cost, or technical performance parameters.

• Estimate the project costs. Determine what it will cost to design, develop, and manufacture(construct) the project, including an assessment of the probability of staying within theestimated costs.

• Identify the strategic issues that the project is likely to face. Develop a strategy for how to dealwith these issues.

• Ensure the development of organizational cost accounting system interfaces. Since the project man-agement information system is tied in closely with cost accounting, establish the appro-priate interfaces with the function.

• Develop the logic networks and relationships of the project work packages. Determine how the projectparts can fit together in a logical relationship.

• Develop the master and work package schedules. Use the appropriate scheduling techniques todetermine the time dimension of the project through a collaborative effort of the projectteam.


• Identify project work packages that will be subcontracted. Develop procurement specifications andother desired contractual terms for the delivery of the goods and services to be providedby outside vendors.

• Make provisions for the assignment of the functional work packages. Decide which work packageswill be done in-house, obtain the commitment of the responsible functional managers,and plan for the allocation of appropriate funds through the organizational work au-thorization system.

• Develop the project technical performance objective. Describe the project end product(s), services,and/or processes that satisfies a customer’s needs in terms of capability, capacity, quality,quantity, reliability, efficiency, and such performance standards.

• Develop project control concepts, processes, and techniques. How will the project’s status be judged?On what basis? How often? By whom? How? Ask and answer these questions prospec-tively during the planning phase.

The Project Plan

Of course, the size and organization of the project plan depends on the project. The key

essentials of a project plan, regardless of the size of the project should include the following:

• A summary of the project that states briefly how the project is to be developed and theprocesses and techniques that will be used. A clear statement of the expected results ofthe project should be provided so that these results can be identified and compared tothe standards used on the project during its life cycles.

• A list of tangible goals of the project, usually expressed in terms of a work element orwork package without ambiguity so that it can be easily determined that a goal has beenachieved.

• A brief outline of how organizational resources will be used to accomplish the projectends.

• A Gantt chart and activity network that shows the sequence and relationship of workpackages to provide a roadmap of how project work is to be done.

• Budgets and schedules for all the work packages of the project.• A description of how authority and responsibility is delegated to the project team mem-

bers, as well as other to project stakeholders.• Policy guidelines on how the project work will be monitored, evaluated, and controlled.• A list of the key project participants and their assignments relative to the project WBS.

The results of the development of project plans should be reflected in project and organi-zational documentation.

Project Strategy Documentation

Every project plan that is prepared requires documentation that provides a written recordof the content of the resources committed and the action initiatives required to start the


project and bring it to a successful conclusion through its life cycle. During the planningand implementation of a project, the required documentation should include the followingelements:

• Citation of resources required• A schema for the allocation of resources• A project plan• Individual and collective roles of project team• Assigned project responsibility and authority• Work breakdown structure• Cost estimates• Schedules• Anticipated contents of project guidebook• Summary of project planning work packages• Quotes or bids• Financial plan• User requirements• Marketing plan• Preliminary construction/manufacturing plan• Project evaluation, monitoring, and control strategies• Protocol for progress payments• Project team performance review strategies• Customer reporting strategies• Configuration baselines• Communication plan• A project risk assessment plan• Logistic support plans• Stakeholder support strategies

The initial documentation should include summary material about the project during its lifecycle. For example, the documentation required during the closeout of the project couldinclude such things as:

• Final report to project owner• Technical drawings• As-built drawings• User guidebooks• Project history to include ‘‘lessons learned’’• Closeout of resources used on project

Understanding Linkages

An effective and clear link between the strategic management and project management ofthe enterprise depends on several considerations:


• Recognition that strategic management involves a continued examination of how enter-prise resources can be used in the future.

• An understanding of the mutuality between strategic management and project manage-ment.

• Acceptance of a reference focus for the use of choice elements in allocating organizationalresources in strategic management.

• Recognition that project results are building blocks in the design of new or improvedproducts, services, or organizational processes.

• Acceptance that projects provide the most reasonable means for dealing with environ-mental changes facing the enterprise.

• The existence of policy and procedures documentation that clearly links strategic man-agement and project management—and provides a protocol for how such linkages canbe maintained and strengthened.

Project Planning Principles

This chapter concludes with the citation of a few principles of project planning. A principleis a basic truth, law, or assumption; a fixed or predetermined policy or mode of action; theessence or vital philosophy to deal with phenomena.

Henry Fayol, truly one of the founding fathers of modern management, put forth hisGeneral Principles of Management in his book (Fayol, 1949). He noted that

. . . I shall adopt the term principles whilst dissociating it from any suggestion of rigidity,for there is nothing rigid or absolute in management affairs . . . Therefore principles areflexible and capable of adaptation to every need; it is a matter of knowing how to makeuse of them, which is a difficult art requiring intelligence, experience decision andproportion.

It is in the spirit inherent in Fayol’s description of principles that the following principles ofproject planning are presented:

• Planning for projects is a key responsibility of project managers.• The project planning process should be carried out with those stakeholders that have an

interest in the project.• A project plan will typically require some change during the life cycle of the project as

new information becomes available or basic project requirements change.• Project planning is a process that pulls information from the organization as well as from

other key stakeholders.• The quality of project planning relates directly to the probability of success on the project.• All plans will require revision to meet emerging changes and new information.


Summary

This chapter presented an overview of a philosophy of project planning. Such a philosophyis a way of thinking about how project planning should be carried out to support projectand enterprise purposes. Project planning must support strategic management protocol andprocesses of the enterprise. Projects are building blocks in the design and execution ofenterprise strategies that provide for the principal means for dealing with the change facingthe enterprise.

References

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Englewood Cliffs, NJ: Prentice Hall.Steiner, G. A. 1979. Strategic planning: What every manager must know: A step-by-step guide. New York: Free

Press.Turner, J. R., ed. 1999. Handbook of project-based management. 2nd ed. London: McGraw-Hill.

Documents

The Wiley Guide to Managing Projects (Morris/The Wiley Guide to Managing Projects) || Strategic Management: The Project Linkages