The relationship and disconnect between business and projects

In an interview a few years back for a project management role, the interviewer asked me what project management was. I was taken aback a bit. First of all that’s too generic a question to ask an experienced candidate. Second, project management is such a vast area that it is not possible to explain in a minute or so what it is unless I were to record and playback what is known as industry standard definitions. So I replied that project management is the management of execution of business strategies. The interviewer looked lost for a moment and for a very good reason.

The evolution of the IT industry has created mayhem and consternation in the understanding of business and projects. The mid section of the IT industry has swelled up with managers and is bursting at it’s seams. The hierarchy and designations are complicated and ridiculous. Even more confusing are designations that are total mismatches to the roles. I have worked with the designation of Senior Consultant and the role had got absolutely nothing to do with consulting. Then there are companies with Project Manager designation but the role would be as an individual contributor. What would make sense is that a project would have a team and the manager of the project would also manage the team. The designation of Business Analyst is even more bewildering. Fundamental requirements are to have in-depth knowledge of some software applications.

In one of the case studies during my MBA program I had read about a company whose founder and CEO had approached a venture capitalist (VC) for investment. After due diligence, one of the conditions put forward by the VC was to appoint a new CEO for the company. The founder refused and walked away. Six months later, he came back to the VC and agreed. The VC had wanted him to focus on the products and services his company was offering and let someone else handle the business and financial aspects. So every company has a top management team that walks, talks and breathes only business and money.  It is here that business strategies get created with the objective of better financial outcomes.

I use a simple analogy when talking about business strategies. If I get stamped on my foot, my foot doesn’t cry. The sound comes from my mouth. Similarly if there is a problem in business the red bulb may not necessarily be flashing from the problem area. This is why understanding the business problem is so crucial. Business problem could also be a new venture for the company without proper understanding of moving ahead. Digging deeper into the business problem has direct impact on the quality of business strategy development. But having the best business strategy amounts to nothing without taking action on it and execution of business strategy is a different beast altogether.

One critical aspect of having different functions inside organizations comes into focus during execution of business strategies. The business strategy could have a strategy for the sales team which in turn could result in a strategy for the finance team and so on. Once strategies for different functions are established, then comes their execution. It could be as minimal as a small change without any consequences. But where there are financial outcomes then there would be accompanying risks as well. This is where the whole premise of project kicks in. So projects are essentially execution of business strategies with the objective to create positive financial outcomes. The execution of a business strategy can be broadly visualized as a change management program with several projects managed and executed within its boundaries.

Every project is intended to create a positive financial outcome so I visualize every project manager as having a small cloud of money over his/her head. A senior manager who manages several project managers would then be having an accumulated bigger money cloud over his/her head. Scale this up and the CEO will have the biggest money cloud over his/her head. The divide between creation and execution of business strategies has given rise to the concept of outsourcing. MNCs develop the entire premise of projects before shipping out to their factories and back offices where the projects are executed to create products and services.

Better understanding of business strategies and organizational requirements has a direct bearing on project management. But project managers usually do not get their sights that far and are not expected to stretch their understanding beyond the boundaries of their projects. This is why I believe projects either fail or project outcomes do not result in positive business outcomes. Outsourcing has only complicated and compromised the purpose of projects. A project manager in another corner of the world may not have any idea about the intended outcomes of the business strategies which has given rise to the project he/she is managing. Early in my career I had to resolve a problem with an IT application of a client and according to the SLA with the client I had 3 hours, so I worked on other more important issues. When I finally reported the resolution, the client’s staff lamented about how their work was stuck and the amount of business they lost in those 3 hours. Poor understanding of client’s business environment and requirements coupled with poorer understanding and communication were the reasons.

The relevance and importance of projects and project managers should never be undervalued. In India business degrees are not required to manage and execute projects. This in itself shows the disconnect between business strategies and projects. This is why the growth of project managers gets restricted to the project and program management levels and very few get to break into the top management. This can be observed from how companies hire for executive level positions from other companies rather than their own employees growing through the ranks into those positions.

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About Ranjeet
Nature lover, knowledge seeker, active blogger, perpetually bit by the travel bug, aspiring to be a professional wildlife photographer and a life coach.

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