1. Project Strategies: Goal Setting (With Material from the Text Authors)

2. Overview Project Definition Goal Statements Resource Requirements
Managing Requirement Conflict
Managerial Commitment

3. Strategic Management Process
Review/revise mission
New goals and objectives
Portfolio of strategic choices
Strategy formulation
Strategy implementation
Projects
External environment-- opportunities and threats
Internal environment-- strengths and weaknesses 1 2 3 4
Strategic Management Process Includes Four Activities
1. Review and define the organizational mission. 2. Set long-range goals and objectives. 3. Analyze and formulate strategies to reach objectives. 4. Implement strategies through projects.

4. Strategy, Objectives and Project Linkages
Organization
Mission
Objectives
Project
Design 3 advanced, solid waste plants
Engineering firm
Design department
Objective: “Diversify”
Strategy: “R & D”
Objective: “Waste plants”
Strategy: “Design special purpose plants”
Objective: “Design solid waste plant”
Pull-type luggage with hidden, retractable wheels
Luggage firm
R & D department
Objective: “Increase sales 40%”
Strategy: “Specialize”
Strategy: “Pull-type luggage”
Objective: “R & D”
Objective: “Pull-type luggage”

5. Cause-and-Effect Worksheet Example
Some projects not planned
Duplicate priority systems exist
Criteria are not commonly known
No feedback
Lack of project management skills
Unknown project impact on other priorities
Planning
Overcommitted resources
Unknown resources
We don’t budget for resources
Vague communications of resources required
Projects are not achieving their desired impact
Systems
Little consistency
Priority setting criteria are not consistently applied to all projects
Different priority systems exist
Someone else always approves projects
Many approvals
Priorities conflict with approval criteria
Priority selection reasons not documented
Project priorities can be received from all over with no central clearing house
Name dropping
People set own priorities
Special interest has major impact on priority
No feedback system
New projects impact on existing projects
Culture
Organization power influences projects
Name dropping for impact
Changeable commitments
Priorities set without regard to origin
Acceptable to miss dates
Priorities set without company plan relationships
Priorities set outside chain of command
Short-term vs. long-term thinking
Communication
Aversion to risk
Resistance to change
No personal political risk
Functional area turf protection
New project impact unknown
Poor priority communications
Perceived lack of direction from top management
Project criteria not commonly known
Vague communication of resource requirements

6. Project Definition Project Goal
Envisioned future state of solving a known problem
Specifications
Time
Cost
Integration of people, time, money, activities, and skills

7. Goal Statements Statement of the desired future state involving:
End Users
Questions about utility
Upper Management
Question relationship to corporate strategy
Engineering Functions
Questions on design/development of solution
Business Functions
Payback period, cost objectives, financial measures

8. Strategy, Objectives, and Project Linkages

9. Project Goal Life Cycle
FEEDBACK LOOPS
Develop
Functional
Specs
Verify
Specs w/
“Customer
“Customer”
IDs Need
“Ballpark”
Resource
Estimates
Design Specs
to Engineer-
ing Specs
Functional
Specs to
Design Specs
FEEDBACK LOOPS
FEEDBACK LOOPS
Develop
“Prototype”
Produce
“Field”
Prod/Svc
Stakeholder
Feedback
FEEDBACK LOOPS

10. Strategic Management Process
2-1
Strategic Management Process

11. Financial Selection Criteria
Payback Model
Time to recover project investment
Investment $/Annual Net Savings = PB
Widely used
Emphasis on Cash Flow
Net Present Value (NPV)
Desired rate of return
(Est. Annual Cash Flow/Project Cost) X 100 = RoR
Compare “RoR” of project(s) to “target”

12. Project Screening Process
Project proposal idea
Data collection and backup
Self evaluation of project by criteria
Priority team evaluates proposal and reviews portfolio for risk balance
Assign priority Assign resources Assign project manager Evaluate progress
Need strategic fit ROI/payback risk
Abandon
Return for more information
Periodic reassessment of priorities
Reject
Hold for resources
Pursue
Accept

13. Project Screening Process

14. Portfolio of Projects By Type

15. Project Screening Matrix
Criteria
Weight

16. “Selling” Commitment Accept “Multiple Realities”
Varying Impressions and Perceptions
Develop Broadly Specific Goal(s)
Enhances “Buy-in”
Consensus over Compromise
“Customer” trumps other Stakeholders
Completely satisfy needs, profitably!

17. Resource Planning Establish realistic expectations Budget factors
People: #s, skills, authority
Money: buy the “needs” first
Time: plan backward, execute forward
Budget factors
Capital: physical plant and machinery
Expense: payroll, travel, consumables
Contingency: 10-15% for “Murphy”

18. Conflicting Project Goals
Market Conditions
Windows of opportunity change
Compatibility
Conflicts between activities, goals, competing interests
“Politics”
Senior leader support (or lack thereof)
Resource Availability
Project prioritization/reallocation

19. Managing Conflict Influence Proaction Conflict Negotiation
“Sell”; “WIFM” around goal
Proaction
Invite criticism
Adjust and communicate
Conflict Negotiation
Separate people from issue
Maintain balance
Communicate

20. Project Priority System
Long-range plan
1. Rank objectives 2. Weight objectives 3. Impact definitions and weights
Project proposals for major projects
Priority team
Prioritize major projects
4. Project priority 5. Risk analysis
Annually
Ongoing
Allocating resources
Assign project managers
Functional managers identify available resources
Feedback status- ongoing projects
Major project priority and status report
Monthly

21. Rank Objectives Analyze objective independently in three dimensions
1. Seriousness - What is the current impact of the results of the objective on the organization? 10
Small impact
Large impact
2. Urgency - Time factor. What will be the relative consequences of not taking action over the next 12 months? 10
Can defer
Must take action
3. Future seriousness - What is the chance of the objectives seriousness changing over time? 10
Decrease or remain same
Dramatically increase

22. Major Project Proposal
Date _______
Number _______
Project Title ______________________________________________________ Responsible Manager ________________Project Manager _______________
_______  General Support  Quality  Legal  New product  _______  _____________  Cost reduction  Replacement  Capacity  _______  _____________  ___________  __________  __________
YES  NO  The project will take more than 500 labor hours? YES  NO  The project is a one-time effort? (will not occur on a regular basis) YES  NO  The project proposal was reviewed by the product manager?
Problem definition
Describe the problem/opportunity.
Goal definition
Describe the project goal.
Objective definition
Performance: Quantify the savings/benefits you expect from the project.
Cost: Labor hours, materials, methods, equipment?
Schedule: Overall duration in months

23. Risk Analysis

24. Project Portfolio Matrix