In a business environment where you have too much demand for project dollars, how do you know which projects to prioritize? Fortune 500 clients typically have more demand for capital projects than they can fund, so they set up project portfolios and processes to review and analyze which projects should get done. The problem is most project funding often goes to the most influential people. Is that the best way to allocate capital?
Your long-range plan reveals your need for strategic change over time, and each year you have to decide how to balance this with whatever your current-year needs are. This year, you may need to increase sales, but you’re going to need two new leaders on your team in three years. Which demands your attention? A division manager may need to have plant upgrades made to meet their productivity targets, but a CIO may also have similar needs for infrastructure. What’s the right way to allocate capital? Who represents the enterprise as the customer?
You may be unfamiliar with the term “Governance” unless you’ve sat on a public company or non-profit board. While management focuses on doing things right, the focus of good governance is doing the right things. Many of us have informal governance: an attorney, a family member, a key business partner. Your business may not formalize it, but you still need someone helping determine the right things to do.
Which is more important: lowering the cost of goods or increasing utilization? You should have a point of view on how to evaluate the relative value (benefits net of costs, factoring in risks). What about risk and compliance projects (e.g. cybersecurity)? They don’t have a clear payback, should you undertake those? Depending on your risk appetite, this is where you assert your leadership role.
Perhaps you are considering postponing that investment in cybersecurity because you need to upgrade your CRM software. That might be the right answer, but you have to assess the relative impact and live with the consequences. In companies with Boards, this evaluation and acceptance of risk are where they often play. In serving as a Board member, you essentially agree to “represent the enterprise (and shareholders) as the customer” from your perspective. Business and function-line leaders? You have to assume they are more interested in the performance of their own organization (which is how the bulk of their compensation is determined).
Do you strive to improve your business through project planning and management? Let me or one of the BKM Sowan Horan partners know if we can help with the process. We are happy to assist.