A crucial step in driving alignment with strategy after the strategy itself has been established is to capture the activities (projects, initiatives, call them what you will) that are already underway. A matrix of the strategic initiatives against the strategic objectives almost always reveals opportunities to improve alignment; initiatives that don’t map well to objectives, objectives with no initiatives, and in some cases, objectives with too many initiatives.

Unfortunately, many organizations struggle to even create the alignment matrix. With neither a centralized project management office (PMO) to capture and track the status of discretionary activity, nor any understanding of the labor actually being allocated to each initiative, leaders have little more than capital and expense budgets as a weak indicator of actual strategic initiative activity.Discretionary projects often have significant labor expense, but little or no capital budget. Labor is treated as a sunk cost that is allocated to business units and departments on the basis of full-time equivalent employees (FTEs), not to specific projects and initiatives. Middle managers have discretion to undertake operational improvement projects and strategic initiatives with limited senior level oversight beyond the capital budget process.

Managerial discretion is biased towards operational improvements, which tend to have more tangible benefits delivered sooner than strategic initiatives whose benefits are less tangible in the near term. The pool of labor available for discretionary efforts is the difference between total labor available, and the necessary effort to run the business everyday. Keeping the lights on always takes precedence. Whatever is left over is given over to discretionary activity, divided between operational improvement and strategic initiatives. It is generally the same people whose time can be allocated to each.

Large organizations become especially adept at optimizing the status quo; making current business processes as efficient as possible. Strategic change represents the unknown, and a greater risk of an individual manager being seen as mis-allocating his or her labor resources. So in the aggregate, little labor is left to devote to strategic change.

A more enlightened approach requires a comprehensive understanding of discretionary activity across the enterprise, captured and administered by a robust PMO function.Workforce time reporting enables executives to understand not just what projects are underway, but to manage the set of projects as an investment portfolio. When viewed this way, executives are able to reduce the total number of projects (many of which may consume resources with little progress to show for it), better balance FTEs between strategic and operational change, and drive a higher share of projects to deliver their intended value on time and on budget. In the absence of this more enlightened approach, it comes as no surprise when there is a failure to execute strategy.

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An easy way to think about initiatives is that they represent a minority subset of all of the work done within the organization. The majority of all work falls into the subset of process; activity that is accomplished to sustain the current value creation of the organization. Process activity tends to be repeatable (it is done over and over), perpetual (it is expected to be done implicitly until an explicit change is made), and mandatory (it must be done).

By contrast, initiative activity is discretionary (it is done as the result of an explicit decision), limited-term (it will end when a specified outcome is reached or it is cancelled), and unique (it is only done once). Many people think of projects and initiatives as synonymous, but it is more useful to think of an initiative as a grouping of one or more related projects.

Ideally, all work activity in an organization could be classified as either process or initiative. Both types of activities consume financial resources, explicit spending, or implicitly through the allocation of peoples’ time. In reality, people engaging in work may not know whether their work is process or initiative.

Initiative activity can be further classified as strategic or non-strategic. To be strategic, an initiative’s intended outcome must change the way in which the organization creates value. Non-strategic initiatives generally are intended to optimize the way in which the organization delivers under its current value proposition, or simply to accomplish an immediate operational objective.

With these definitions in force, there is much to be learned by examining your organization’s overall activities. To what extent are the organization’s leaders aware of initiative activity? What is the ratio of resources devoted to process vs. initiative activity? What share of initiative activity is strategic?  Is there any collective understanding of all initiative activity; can anyone see everything that is being done by choice?

This last question is critical. Each activity consumes precious time and financial resources. In the aggregate, initiative activity should be viewed as a portfolio of the organization’s investment of discretionary resources. Portfolio management of initiatives ensures that those precious resources are being invested in opportunities that are aligned with the leadership’s intent for change in the organization.

In those enterprises where the strategic management process is immature or non-existent, new initiatives (new investment of resources) are undertaken as a result of delegated management discretion, which means relying on locally-interpreted goals. Without effective coordination, the result is a portfolio of initiatives that are unaligned with strategy, initiatives that duplicate one another or work at cross purposes, and an inventory that is larger than the organization’s capacity to accomplish them. Because starting a new initiative is usually easy, members of the organization simply have more to work on than they have hours in the day. In organizations with effective strategic management, decisions to undertake initiatives are made more carefully, and in the context of the change agenda.

When facilitating strategic management with a new client, one of my most productive efforts is to simply talk with people in the organization. A more revealing question than “What is your job?” is “What are you actually working on?” The answers say a lot about the strategic management process.

What are you actually working on? How much of your time is spent in process vs. initiative activity? Do you know how your initiatives fit into the overall strategy for the enterprise? Please offer your comments and insights below.

In future posts, we’ll look at practical approaches to managing initiatives in the enterprise.

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Of course, this doesn’t happen overnight. And you can’t go straight from where you are now to where you want to be. There has to be a journey. The key is to not be sidetracked by the process of change.

Kurt Lewin (1890 – 1947) was the first to describe change as a 3-step process:

1. Unfreezing – dismantling the old way, creating a sense of urgency and a need to change
2. Changing – a period of transition, challenging the old way but not really knowing what the new way is
3. Freezing – a returning to a sense of normalcy and comfort, crystallizing the new way

A good example of this is in a case study I wrote called A Roundabout Path to Increasing Employee Suggestions – the roundabout part is exactly what I’m talking about here.

In the case, the three steps could be described like this:

1. Unfreezing – We started a steering committee separate from the executive team to collect and manage ideas. We challenged the concept of paying for ideas.
2. Changing – The steering committee collected ideas, and was proactive in the response and tracking. We started a weekly newsletter to keep idea-generation and problem solving at the forefront. Idea submission levels increased dramatically.
3. Freezing – Managers started holding regular meetings with their direct reports to identify and discuss opportunities for improvement, and to brainstorm on ways to address the issues that came up. The number of ideas, maintained by managers in a central database, increased even further.

If we had stopped with the centralized suggestion box as the final way for employees to submit suggestions, then we wouldn’t have followed through with the ultimate purpose of the change program: to increase innovation, not because employees submitted more ideas, but because managers asked for and valued them, and involved their teams in solving business problems.

Bottom line: It’s important to not get stuck in the change step, and keep in mind the final state and ultimate mindset change that you are going after. Plan to make your change initiative obsolete.

Inquiry: What will your organization look like when your initiative dissolves?

(Editor’s Note: This post first appeared in the Change Starts Here blog at Enclaria.com)

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