Identifying your best opportunities, leveraging your existing capabilities, and going all-in on your Focus Few initiatives is how organizations create the most significant impact. When resources are limited and market conditions are challenging, selecting the right projects becomes even more critical.
As part of this process, project portfolio management — the process of identifying, evaluating, and prioritizing the organization's projects — is an essential competency required to keep business agile and focused.
I've shared my project prioritization and evaluation methodology in another post, and I'd like to build on that and offer another dimension to consider when selecting projects.
That additional dimension is the balance of run-the-business vs. change-the-business initiatives and why the right balance matters.
Is Everything a Project?
If it seems like you are managing more and more projects, it's because you are. The volume of projects organizations are managing has exploded, and it's not slowing down anytime soon. Antonio Nieto-Rodriguez, a leading expert on project management and strategy implementation, predicts that within the next five years, “senior leaders and managers will spend at least 60% of their time selecting, prioritizing, and overseeing the execution of projects.”
He explains one of the biggest reasons for this massive shift is that “projects are the best, and the only model, that can exploit creativity and innovation on one side, as well as structure and discipline on the other.”
Project portfolio management is an essential core competency.
A big part of that capability requires that we understand the difference between run-the-business and change-the-business projects.
The Rise of Change-the-Business Initiatives
Run-the-business projects are those projects associated with the day-to-day operations and activities of the business. They are ultimately the source of the company's daily revenue and typically receive most of the management's attention and the organization's resources.
Change-the-business projects are those strategic initiatives designed to create sustainable growth, competitive advantage, or otherwise transform the business.
Change-the-business projects have become more numerous and more critical over the years, comprising over 40% of company initiatives. (Adapted from “The Focused Organization” by Antonio Nieto-Rodriguez)
The challenge as we shift to more change-the-business initiatives is we often manage them in the same way we would operational objectives or run-the-business projects.
Big mistake.
The Balancing Act
What is the right balance of run-the-business projects and change-the-business initiatives? That will depend on the goals, capabilities, and capacity of your unique business. However, understanding the difference between the two types of projects in terms of impact on your organization will help you make that determination.
- Run-the-Business projects are operations-focused and where most of the organization's resources are dedicated. They typically deliver marginal improvements with more predictable results. And often, they can be executed with only a few departments or functions involved.
- Change-the-Business initiatives are longer-term in nature with transformational results expected. They are more uncertain, often involving innovations, new processes, and new thinking. Because of their transformative nature, they require significant cross-functional involvement for successful implementation and very different leadership skills.
We typically underestimate the actual level of involvement required and the impact of disruption on our daily operations resulting from too many change-the-business initiatives.
We need to add this dimension of run-the-business vs. change-the-business projects to our project portfolio management process if we want to give ourselves the best opportunity to succeed.
If you'd like a copy of my Project Prioritization Evaluation Tool, contact me and I'll send it your way.
In my Project Prioritization Evaluation Tool, I recommend grouping your projects into run-the-business and change-the-business categories and limiting the company to just one or two change-the-business initiatives as part of your Focus Few.
As your capabilities grow and your relevant time horizon grows, you can always add change-the-business efforts. But during periods of economic uncertainty and scarce resources, I'd offer that going all-in on one or two transformative projects is the best course of action to get back to growth and on the path to profitability.
Please share your thoughts with me on this, and if you've found this helpful, share it with a colleague. Thanks!
Work well,
Adriana McLane
I help privately held distributors build strategy that holds up through growth, leadership transition, and what comes next. Fifteen years running Fulfilling Strategy — the last six spent deep inside distribution, working alongside the leadership of privately held distribution companies to build strategy that holds when a competitor moves in on your territory, when a President steps back, and when the next generation takes the lead. More about Adriana →
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