Program Strategy Alignment Tutorial

Program Strategy Alignment

Welcome to the fourth chapter of the PMI-PgMP tutorial (part of the PMI-PgMP® Certification Training.) This lesson will help you understand the first of the five program management performance domains, which is, Program Strategy Alignment.

Let us explore the objectives of this lesson in the next section of the program strategy alignment tutorial.

Objectives

After completing this lesson, you will be able to:

  • Define strategy

  • Understand how the strategy of an organization is expressed

  • List the tasks involved in strategic program management

  • Differentiate tactical approach and strategic approach

  • Discuss the processes, artifacts, and activities required to align a program with the strategy of an organization

Let us begin by understanding the meaning of strategy, in the next section of the program strategy alignment tutorial.

What is Strategy

A strategy is a long-term plan of action to achieve a goal.

The word strategy has its origins in military missions.

The definition refers to one of the original ideas about strategy. A strategy was used as a way of deploying various means to support the policies of a nation. One of the central ideas of strategy is that it refers to a plan to reach a definite goal.

A strategy can also be defined as the science and art of employing the political, economic, psychological, and military forces of a nation or group of nations, to afford the maximum support to adopted policies in peace or war. It is the skill of making or carrying out plans to achieve a goal.

A program manager must demonstrate a focus on the long-term and strategic goals. Now, we may wonder who defines the strategy of an organization. It is the executive leadership of the organization which comes up with the overall strategy.

The organization defines the strategy that governs its decisions around the investments it makes in various portfolios. The program delivers some of the benefits in line with these strategies.

Let us understand the migration from tactical to strategic in the next section of the program strategy alignment tutorial.

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Migrating from Tactical to Strategic

One of the fundamental aspects of transitioning from project management to program management level is the transition from the tactical to strategic. We have understood what strategic means. Now let us see what tactical is.

While strategy defines the “What,” tactics define the “How.”

In the military, it is said that troops on the ground determine the tactics, while the generals away from the battlefield define the strategy.

It is an interesting way to think about strategy because as a program manager, one has to provide the team with a sense of direction as to where the program is headed, and then trust the troops to come up with the right tactics.

So to become focused on the strategy, perform the following actions.

  • Focus on the long-term goals, not just on day-to-day problems and think of ways to solve them

  • Delegate the day-to-day issues. However, delegation does not mean handing it over to the team. It must be done by standardizing and fine tuning of the day to day work. This is where the program manager will work closely with the project managers

  • To become strategic, the program manager will have to develop more business intelligence, because the strategy will be decided based on what is relevant to the business

  • The program manager accepts responsibility and accountability to broader business goals, rather than specific deliverables within the program.

It is not that deliverables are unimportant – it is just that the program manager needs to think of the goal and not short-term milestones. It is rightly said that the first step to becoming a leader is to start thinking like one. So it is important to make this mental transition first.

In the following section, let us look into the mechanics of translating organizational strategy into the work of the program.

Organizational Strategy and Program Alignment

Typically, an organization determines its strategy through a planning cycle.

Strategic review

The strategic review is either pre-planned or calendar based, or it can be triggered by a change in business conditions.

In the strategic review, the organization looks at the vision and mission statements and translates them into a strategic plan within the boundaries of the organization’s capabilities and core values.

Creating a strategic plan

The strategic plan is made keeping in mind the business context. This includes market dynamics, specific requests from customers and partners, stakeholders, government regulations and mandates, and the plans of the competitors.

Outcomes of a strategic plan

The outcome of strategic planning is the portfolio decisions, i.e., decisions about where the organization would like to invest its resources. It also provides the program a definition of the expected outcomes and results that the organization is looking for.

Let us continue with the same in the next section of the program strategy alignment tutorial.

Organizational Strategy and Program Alignment (contd.)

This diagram given below illustrates how an organization’s strategy is expressed and gets translated into action.

Vision

At the top level is the vision. Vision expresses the goal of an organization.

Mission

The mission expresses the sense of purpose for the organization. The mission has to be such that it enables the organization to realize the vision.

The vision and mission translate into a strategy.

The portfolio and strategic planning occur; wherein, the strategy manifests itself in portfolio decisions. In line with the portfolio, the organization undertakes some operations and some projects.

Projects are aimed at creating additional value or increasing the overall value of the organization, while operations are meant to realize or produce the value.

Let us look into the elements of strategic alignment in the next section of the program strategy alignment tutorial.

Elements of Strategic Alignment

Having understood what strategy is and how it gets manifested, we will now understand how a program aligns itself with the strategy. We will start with looking into specific processes and artifacts that result in this alignment.

First, let us understand the program business case.  

Program Business Case

The business case provides an indication of the intent, the authority, and philosophy behind the program. The basic purpose of the business case is to establish why the program is needed or being proposed. It gives the direction in which a program is headed, in order to address that need.

The program manager may participate in the creation of the business case, in collaboration with the program sponsor and various other stakeholders. The program manager lays down how the program is beneficial in line with the overall strategy.

The business case, along with the executive mandate to start the program, forms the key inputs for the establishment of the program charter and to authorize programs. Throughout the life of the program, the validity of the business case must be reviewed; is the business case still valid and is it still in line with the strategy of the organization?

Next, we will understand the program management plan.

Program Management Plan

The program management plan provides the program level vision, mission, goals, and objectives. These are derived from the charter and are the mandate given to the program.

The plan answers the question, how are we going to achieve these goals?

The program management plan should set up measures that enable us to track whether and to what extent the program has succeeded in meeting the organization’s strategic objectives.

Let us now look into various key terms related to strategic alignment in detail.

Key Terms Related to Strategic Alignment

We have referred to terms like vision, mission, goals, and objectives in the previous sections.

Let us now understand what exactly they mean and the role they play in articulating the strategy.

The vision is a description of the goal. It describes the long-term direction and future state.

For example, the vision of a program may be that it aims to deliver a certain financial outcome (like revenues or margins).

The program vision needs to establish what the goal is, in a way that it should be possible to answer the question “Have you reached there?” at the end of the program. A vision will typically be a one-liner.

The mission, on the other hand, answers the question “why do we exist?” It establishes the philosophy, the values, and the overall environment in which the program operates.

It is typically a narrative in the form of “we shall try to improve the profitability of the organization; we shall provide rewarding careers to employees; we shall maximize the returns to the shareholders.”

The goals are clearly defined outcomes that the program is expected to realize. The outcome could be tangible (e.g., specific deliverables) or intangible (e.g., improved team morale).

Objectives specify the success measures for the program.

For example, the objective could be an efficiency or productivity figure that the program strives to achieve.

The goals and objectives are cascaded to the components of the program and form the basis of component level planning.

In the next section of the program strategy alignment tutorial, let us understand these definitions better by considering an example.

Example of Strategic Alignment Terms

Let us take the case of XYZ Inc., a healthcare provider.

Look at the section to understand how the vision and mission translate into strategic goals, which become specific initiatives (or activities – like programs and projects) and specific success measures (or metrics).

Vision

The stated goal of the organization (expressed in the vision statement) is to become a top-rated provider of specialized health care services in the United States of America.

Mission

The mission expresses the philosophy and intent. It says (for instance) that the organization believes in providing an excellent experience to the patients and caregivers.

It says how it will build the teams based on their professional qualifications and their passion for health care. It further states that it will provide rewarding careers to the team members and establish world-class infrastructure.

Strategic Goals

The strategic goals are in the context of mission and vision. The goals expressed here are as follows:

  • One is to establish a nationwide presence (in line with the vision to become the leading provider)

  • The next is to provide a unified experience irrespective of which facility is visited which means, all the facilities must be integrated and standardized in order to be able to replicate the experience.

  • The last goal is to set a specific goal with respect to the number of customers and revenue.

To realize these goals, specific initiatives are set up.

The initiatives are as follows:

Standardization of Infrastructure

First is standardization of the service infrastructure. This involves activities like training for the caregivers, suppliers, and procurement of equipment.

Establishment of Franchise Model

Next is the establishment of a franchise model (presumably to facilitate rapid expansion) and in turn the setting up of evaluation criteria, standard contracts, and specific design of facilities to be given to the franchisees.

Running Advertising Campaign

Running an advertising campaign through various media.

Lastly, let us discuss the list of metrics or success measures. Some of the measures that may be useful are:

  • Number and size of facilities

  • Number of patients treated per year

  • Revenue generated per year

  • Customer satisfaction scores

The next section of the program strategy alignment tutorial would detail the tasks involved in strategic program management.

Strategic Program Management Tasks

Let us now take a quick look at the high-level strategic program management tasks to understand the workflow involved at this domain level.

Define the Program

The first activity involved in the strategic program management tasks list is to define the program objectives, requirements, and risks.

Derive the Program

The next task is to derive the program charter with key milestones and cost and time estimation for approval from the stakeholder.

Identify Organizational Benefits

After the approval from stakeholders, extensive effort is made to analyze the stakeholder's concerns and expectations and also identify organizational benefits for the program.

Market and Cost-Benefit Analysis

Following this, thorough market analysis and cost-benefit analysis are done to ensure the development of program scope and evaluation of program objectives.

Approval from Authority

Soon after this, approval from organizational authorities has to be obtained.

Identify Integration Opportunities

Just before the program is initiated, integration opportunities and needs are identified. These could include finance, human resource, skill sets and so on.

Using Strategic Opportunities

The last task that winds up strategic program management is using the strategic opportunities for alteration.

The strategic opportunities are used to make the most of the knowledge gained through organizational benefits.

Having identified the tasks involved in strategic program management, let us now move on to understand what the program roadmap is.

Program Roadmap

Program roadmap is one of the critical artifacts produced by the program that depicts its strategic alignment and sets up a timetable for the delivery of strategic benefits.

A program is a chronological representation of the program’s activities and intended direction. The roadmap establishes the linkage between the business case (which represents the strategy) and the work that is planned in the program.

Let us take a look at the diagram below for an example of a program roadmap for the establishment of a factory.

It is broadly classified into three components (viz. civil works, engineering fixtures, and testing and commissioning). Within each component, there are sub-components that get completed at various points in time. We can see that some of the work of the components and subcomponents happens in parallel while others are in sequence.

Also, notice the timelines at the bottom of the chart, which provide an indication of when the specific component or sub-component would be ready.

Let us understand environmental assessment in the next section of the program strategy alignment tutorial.

Environmental Assessment

As we discussed earlier, the organizational and the program strategies are not prepared in isolation.

They have to take cognizance of the environment within which the organization and the program do their work. Some of those factors are internal (within the enterprise), and some are external (outside the organization where the work is getting done). Here are some examples of these factors.

Business environment

First is the overall business environment. This includes things like business climate, market dynamics, whether the business is booming or shrinking, etc.

The market represents the health of the overall market, including factors affecting the broader market, where the organization is placed about other players in the market, etc.

Funding

The funding available for the organization and the program is another factor. Sometimes, funds are easily available through the organization or financial institutions, while they may be difficult to get on other occasions.

Resources

Similar to funding, the requirement for resources and the availability of the resources is also a factor. How the organization is placed within the overall industry is an external factor.

Health, safety, and environmental issues

Health, safety, and environmental issues may be important in some industries. The broader economy may impact the organization and the program.

Culture

The culture of the organization is an important internal (enterprise) factor. The regulatory environment (government or non-government) is another factor.

Growth

The growth of the overall industry, market, or the organization’s goals around growth is an important consideration. The technology involved, and the organization’s access to the technology is to be looked into.

Risk

The riskiness of the business and the specific effort are also important. To summarize, there are a large number of variables that impact the strategy, and we need to analyze these factors to the device the strategy.

In the next section of the program strategy alignment tutorial, we will discuss some techniques for environmental analysis.

Techniques for Environmental Analysis

Let us now discuss some techniques for analyzing the environmental factors to guide the formulation of the strategy.

Comparative Advantage Analysis

This involves comparing the different alternatives to pursue an opportunity within or outside the organization. It also involves analyzing different scenarios (called “what-if” analysis).

Feasibility Studies

“Feasibility studies” are vital to establishing the viability of a strategy. Feasibility has to be established from a financial standpoint (whether we can find the funds and whether there will be sufficient return on investment), sourcing (who will provide the resources), the complexity (technical or otherwise), and whether the organization can complete the work with the prevailing constraints.

According to the outcome of the feasibility analysis, the organization may accept or reject proposals.

SWOT Analysis

“SWOT analysis” refers to analyzing the strengths, weaknesses, opportunities, and threats. In SWOT analysis, it is important to have a point of reference, i.e., the goal that we have in mind, and only in that context can the SWOT be analyzed.

Assumptions Analysis

“Assumptions analysis” refers to the analysis of the various assumptions that have been made in preparing the proposals; validating their correctness and making sure they are documented.

Historical Information

Historical information is an important mechanism for knowledge management and benefiting from the knowledge the organization has gained from past experiences. This includes lessons learned, past successes and failures, best practices established, etc.

It also provides information about specific artifacts, metrics, risks, and estimation data. These techniques are important to validate if the strategy evolved is viable and whether it will work in the prevailing conditions. It forms a key mechanism to ensure that the program is indeed geared to deliver the organization’s strategic goals.

Let us now summarize what we have learned in this lesson.

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Summary

Let us quickly summarize what we learned in this lesson.

  • A strategy is a long-term plan of action to achieve a certain goal. A strategy is expressed through the program business case, program management plan, program vision, program mission, and the program goals and objectives.

  • The program’s roadmap ties up the specific activities and components within the program with the overall strategic objectives.

  • The program has to constantly assess the internal and external environment to ensure continued alignment with the strategy and establish the capability of the program to deliver the strategic benefits.

  • The techniques used to analyze the environment include the comparative advantage analysis, feasibility analysis, SWOT analysis, assumptions analysis, and historical information.

Conclusion

With this, we conclude the discussion on the first of the five domains, program strategic alignment. In the next lesson, we will discuss program benefits management.

  • Disclaimer
  • PMP, PMI, PMBOK, CAPM, PgMP, PfMP, ACP, PBA, RMP, SP, and OPM3 are registered marks of the Project Management Institute, Inc.

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