Most credit unions are undoubtedly familiar with an annual strategic management cycle and planning session. What is perhaps less familiar is how to convert planned strategy into a prioritized execution plan to deliver maximum results.
Execution is critical because the realized strategic impact for the organization equals the sum of all completed projects during the year, not necessarily what was planned in a prior strategic session. Disconnection can and does occur when less strategically desirable projects are selected, resources are misallocated, or resources run out prematurely before important projects are complete.
As a rule of thumb, it takes less time to contemplate strategic ideas than it does to implement them effectively. Therefore, evolving strategic choices quickly exceed resource capacities, conflicts arise, and less optimized decisions occur.
Tenets, goals, objectives and capabilities clearly help senior management articulate high-level strategy and these can also be used for aligning initiatives. For example, high-level strategic tenets could certainly include creating lasting community value, managing market share, managing cost, managing talent, leveraging technology for innovation and efficiency, improving internal communication and collaboration, and maximizing revenue.
Goals might include such worthy realizations as advocating for the community, operating more cost efficiently, attracting and retaining knowledge workers, becoming an employer of choice in the local community, and building a scalable and flexible member centric technology platform. Objectives might include increasing mortgage market share, replacing obsolete desktop technology or increasing employee knowledge in savings products by the end of the year.
More granular business capabilities that support strategy could include world-class member experience capabilities with core integration, online/mobile access account opening, personalized online/mobile access marketing campaigns, ability to offer individualized products or services, ability to offer ongoing education workshops for community organizations, or even data analytics capacity to collect, aggregate and analyze member or product data for improved marketing.
Credit unions, like all organizations, desire to achieve their strategic objectives and attain their strategic capabilities, and most typically do so from a living backlog of future initiatives that supports, in varying degrees, the overall strategic plan. Of course, a credit union should further divide these strategic objectives and capabilities into even shorter-term goals, objectives and metrics, and ultimately translate them into actionable programs and projects.
Strategy, as defined by the unabridged dictionary.com, is a plan, method or series of maneuvers to attain a specific goal or objective. As we can see in the preceding paragraphs and in the definition above, there is pluralism and complexity of action. How does a credit union transfer a diverse roadmap into ongoing operations? How does a credit union minimize the potential disconnection between what it says it wants to do and what it actually does?
The most common method for implementing a strategic plan and introducing organizational change is through project management. Projects are often the means to execute strategy such as a project for a new home banking system.
However, a common reason why strategic projects fail to deliver their desired benefit is due to competing project priorities and limited resources such as time, money, and people. This is especially true in lean organizations such as credit unions.
The inherent problem lies in the fact that projects compete with other projects, perhaps from other functional areas, and for shared resources. Most readers of this article will have experienced the issue of trying to force 10 pounds of projects into the proverbial five-pound knapsack. It simply does not fit elegantly, and something, often scope or quality, must give. Peter is robbed to pay Paul, or the seams burst.
The solution is an enterprise project portfolio management framework, which aligns all projects and resources with strategy. In the simplest form, an enterprise project portfolio is a holistic inventory of all projects and prioritized against their respective strategic value, presumably measured from the aforementioned strategic elements.
This framework helps ensure that scare resources are applied first to projects with the greatest strategic impact and that there is unified organizational agreement on what comprises the most valuable projects. PPM frameworks deliberately review active and pending projects in order to maximize organizational value for a given level of time, money, and people outlay. (Please note that detailed discussion of designing, implementing, and managing a PPM framework is outside the scope of this article.)
Organizations without a PPM framework invariably have too many projects, projects that do not add value, projects that do not link to strategy, critical resource shortages, conflicts, and a potential waste of member money.
Conversely, organizations with a robust PPM process will prioritize and select projects based upon a shared organizational strategy, allocate adequate resources to the most valuable projects, increase internal alignment between business areas and technology, increase overall strategic impact, and eventually provide greater member value.
In summary, PPM provides a centralized enterprise method for prioritizing all project initiatives and an objective decision-making process. PPM is a key organizational capability and top management should consider PPM as a means to help achieve strategic realization, business results and greater value.
Anthony W. Montgomery is a senior director for a global non-profit in Nashville, Tenn., a former credit union executive, and currently pursuing a doctoral degree in interdisciplinary leadership from Creighton University in Omaha, Neb.