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Project Alignment and Operational Risk Management

The premise of most projects is that there is clarity around scope, timelines and budget before the project begins. The summary of these is typically defined in the project charter. But what happens when the charter is only used to meet the PMO's policy requirements or to get the approval for a project? I'll trust this premise is not a surprise to you.

I always remind project managers to keep two things top of mind above all else.

1. Have absolute clarity on what is the objective. (the "What")
2. Be absolutely clear on what it takes to execute each strategy independently of others. (the "How")

Achieving complete clarity for these statements will compel PM's to determine precisely what they need from the people, processes and systems they will need to engage in the project before they can make a valid assessment of whether they will meet the expectations with regard to scope, timeline and budget.

Expecting to do "Whatever it takes" to deliver on a project opens the door to untold risk. Charging ahead with multiple simultaneous strategies, inadequate resources and budgets leaves the organization exposed to unimagined operational risks that could result in unappetizing outcomes or dire consequences.

PM's have a responsibility to themselves, the project sponsor and the resources on the project to ensure they are continually aligned with the objectives and the strategies with every aspect of systems, processes and people, while being very aware of any external factors that could impact their project outcomes.

A simple example of an IT project objective might read like this: "Upgrade transaction processing accuracy"

Strategies to achieve the objective might be to:

1. Enhance warning features of transaction processing
2. Enhance error reporting
3. Identify system training requirements

Note the simplicity with which the objective is stated. It does not include any words that may suggest how that would be achieved. The "how" is left to be defined in the strategies.

Simple enough you think, but countless PM's get caught in the trap of limiting their options in the initial stages of the project when budgets, timelines and scope are being defined. The language we use can sometimes wrap objectives and strategies in a sentence or two. This confuses the clarity of what we're aiming to achieve and how. It is at this stage that the initial thinking of managing the operational components of the project also start to surface. 

By separating objectives and strategies PM's must separately define the specific criteria required to execute each of the individual strategies. In the above example let us agree that we'll clearly define the criteria (what will it take?) for just the first strategy alone before we tackle the second one - and so on.

Once the criteria is defined for each strategy, PM's can assess their current baseline for each strategy in terms how much capacity they have and the capabilities that exist in terms of the Systems they depend on, the Processes they will utilize and the People they can access. The baseline must be viewed as the organization's current capability and capacity to execute - NOT what it is lacking for execution. This thinking is necessary for each of the strategies that will deliver against the one objective. Why?

By comparing what you need to succeed on the project versus what capability and capacity you currently have, will determine what gaps you must work on or conversely this may expose an unknown asset or opportunity. If gaps are exposed, you can choose to close the gap, leave it alone or let it get larger. Your decision will expose you to various levels of risk. If this information is presented with this form of breakdown the communication can be far more directed and focused.

It is the gaps between what it will take for the project to be successful and the actual capability and capacity of the project team, their processes and systems that will determine where the PM needs to place a management focus in order to ensure the project is continually on track.

Going through the steps to achieve both strategic and operational alignment to ensure project success has saved countless dollars in not only IT or Telecom projects, but also in significant programs where multiple alignments had to be achieved among Program and Project Managers.

In my view, there's no such thing as a "small project" anymore, particularly as organizations continue to emphasize performance and results. The more that PM's can do at the outset to create awareness of where their gaps might be in regard to the people, processes and systems in the project the better equipped they are to have a successful outcome. But more importantly they will be able to identify emerging risks on the project much sooner rather than when a project may already have signs of difficulty.

When I work with our clients or our classroom participants in the Masters' Certificate in Enterprise Risk Management, I continually find that the perceptions of alignment differ depending on what their role is in the organization. By taking a view from the perspective of the 'objectives' mangers focus on the different aspects of managing a project rather than on the tasks of the project. The tool we provide allows project managers to establish their early warning system based on project strategic execution that might fail and allows them to zoom in on the area demanding their attention sooner rather than later. The methodology we refer to is leading new risk management practices that will support any organizationís efforts in ensuring they meet new ISO 31000 international standards in risk management practices.

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