By Jen L. Skrabak, PfMP, PMP
Most portfolio managers are aware of the importance of aligning their portfolio to the strategy of the organization.
But what exactly is strategy?
Strategy is commonly misunderstood. Sometimes it is used to denote importance or criticality, for example, a “strategic program.” Other times, it may be used to convey an action plan—an organization may say that their strategy is to launch a new key product.
In reality, however, strategy does not denote importance or complexity; rather, it represents the collective decisions that enable the organization to amplify its uniqueness in order to win.
It’s important to think of strategy as having three components:
Definition: The intent of the organization over the long term.
Plan: Clear, concise and compelling actions expressed through a strategic plan and roadmap. Visualization helps to articulate the strategy and align it with objectives and measurements. Frameworks and tools such as a strategy map, balanced scorecard and activity map help plan the strategy.
Execution: How the organization will achieve its defined plan through its portfolios (and corresponding programs and projects). The portfolio represents the decisions that the organization has made in order to execute on the strategy.
What Strategy IS:
Future/Long term (3+ years)
Different (Innovation)/Sea change - New product
An unique position relative to competition
Responsive to environmental changes
What Strategy IS NOT:
Current/Short term (1-3 years)
Continuous/Incremental Improvement - Product feature releases
An endeavor to improve operational efficiency
Static
The strategy should define for the organization and individuals:
-Where are we going?
-Why are we going there?
-What’s my role?