Strategic Issues in Project Management

An issue is something that has happened and either threatens or enhances the success of a project. Issue management is the process for recording and handling any event or problem. Some of the issues can be dealt within the project. However strategic issues may require a change in order to keep the project viable. The concept of “strategic issues” has emerged as a way to identify and manage factors and forces that can significantly affect an organization’s future strategies and tactics. Project owners need to be aware of the possible and probable impacts of strategic issues. The project team leader has the primary responsibility to focus the owner’s resources to deal with project strategic issues. In a project, a strategic issue is a condition of pressure, either internal or external, that will have a significant effect on one or more factors of the project, such as its financing, design, engineering, construction, and operation.

One of the basic steps in deciding about a project is to confirm that it is driven by benefits, which support strategy. Strategic fit should be assessable from the beginning. The less clear the strategy, the more likely projects are to pass the initial screening; so there will be more projects competing for scarce resources resulting in the company losing focus and harming overall performance. In this regard the types of strategies that are implemented through project management are required to be understood.

Managing Project Strategic Issues

Project strategic issues often are nebulous, defying management in the literal sense of the word. It is important that the project teams identify the strategic issues the project faces and deal with them in terms of how they may affect the outcome of the project. In the assessment of the issues, some may be set aside as not having a significant impact on the project. These would not be reacted to but would be monitored to see if any changes occur that could affect the project. Of course, some significant issues may not be subject to the influence of the project team. The project team requires a philosophy on how to manage strategic issues.

1. Identification of an Issue

Identifying some of the issues often can come about during the selection of the project to support the organizational strategy. During the selection process the following criteria can be addressed to determine if the project truly supports organizational strategy:

  1. Does the project support a strength that the enterprise holds?
  2. Does it avoid a dependence on something that is a weakness of the enterprise?
  3. Does the project support an organizational need?
  4. Is there a customer who is willing to pay for the project?
  5. Can the project owner assume the risk that is involved in the project?
  6. Are the resources and management skills available to bring the project to completion on time and within budget?

2. Assessment of an Issue

The act of assessing an issue entails judging its importance in terms of its impact on the project. One author has suggested four criteria for first assessing an issue as strategic and then moving to subsequent states of management of the issue.

  • Strategic relevance
  • Action ability
  • Criticality
  • Urgency
  • Strategic relevance

The strategic relevance of an issue relates to whether it will have a long-term impact (more than one year) on the project. Strategic relevance addresses the questions:

  1. Will this strategic issue influence the project strategy? Or
  2. The likely consequences of the strategies that are being followed in the project?

If an issue is strategy-relevant, then the project manager has two basic courses of action:

  1. Try to live with the issue’s impact or
  2. Do something about the issue.

But some strategic issues will be beyond the authority and resources of the project manager to resolve. In such situations a third course is open to the project manager. Elevate the issue to senior managers for their analysis and possible evaluation. Even though senior managers are aware of the issue, the project manager retains residual responsibility to see that the issue is “tracked” and given due attention.

3. Ability to take Action

The ability of a project issue deals with the capability of the project team and the enterprise to take suitable action about the issue. For example, the issue of licensability of a new nuclear power plant is critical to the decision of whether to fund such a plant. A project may face strategic issues about which little can be done. Keeping track of the issue and considering its potential impact on project decisions may be the only realistic action the team can take. Key project managers should always be aware that there are issues that may be beyond their influence.

4. Criticality

The criticality of an issue is the determined impact that the issue can have on the project’s outcome. The issue of growing congressional disenchantment with the
U. S. Supersonic Transport Program arose from the concern of the environmentalists over the sonic boom problem. If a preliminary analysis of an issue indicates it is non-critical, then the issue should be monitored and periodically evaluated to see if its status has changed.

5. Considering Urgent Issues Emerging during the Project Planning

The urgency of an issue has to do with the time period in which something needs to be done. Or else being equal, if an issue should be dealt with immediately, it must take precedence over other issues. Urgent issues emerging during the project planning should be considered as a “work package” in the management of the project. Someone should be designated as the ‘issue work package manager’ to look after the issue, particularly during its urgency status.

6. Analysis of an Action

The issue has to be managed so that its adverse effect on the project is minimized and its potential benefit is maximized. The issue work package manager is in charge of collecting information, tracking the project and ensuring that the issue remains visible to the project team. That manager should also coordinate decisions made and implemented regarding the issue. In the analysis of action required to deal with an issue, seeking answers to a series of questions like the following can be helpful:

  1. What will be the probable effect of the issue in terms of impact on the projects schedule, cost and technical performance and the owner’s strategy?
  2. Who are the principal stakeholders who have an interest in the project?
  3. What will be the impact on their probable strategy?
  4. How influential are these stakeholders?
  5. What strategy should the project team develop to deal with these issues?
  6. What might be the real cost in relation to the apparent cost to the project owner and will other projects being funded by the project owner be affected?
  7. What specific action will be required and what will it cost the project owner?

The action developed to deal with the issue may, at the minimum, consist of simply monitoring the issue and giving status reports to the project team. Some issues, however, may require a more aggressive approach. The issue work package manager may find it useful to think of the issue as having a project life cycle, with such phases as conception, definition, production, operations and termination, and to identify the key actions to be considered and accomplished during each phase. The manager should be specific and should stipulate what will be done, when it will be done, how to do it, where, and who will be in charge of implementing the action leading to resolution of the issue.

7. Implementation

However it is dealt with, the resolution of an issue or the mitigation of its effects requires that a project plan of action be developed and implemented. Indeed, the resolution of a strategic issue can be dealt with as a mini-project requiring the execution of the management functions – planning, organizing, direction and control – and all these functions entail some degree of work-breakdown analysis, scheduling, cost estimating, matrix-responsibility, design of management information systems, monitoring and control and so on. What resources are to be used to resolve the issue? and who should take the leadership role in resolving that issue is the crucial questions to be answered.

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