Strategic Alignment Model

The first model we study is the Strategic Alignment Model. This model makes good sense because it attempts to align projects with the direction the enterprise has decided to follow. In other words, it aligns projects with those things that are important to the enterprise. Figure 20.2 graphically depicts that model.

Figure 20.2 Strategic Alignment Model.

Value/Mission

This value/mission is a very brief statement of why the enterprise exists. It could be stated in terms of an end state that the enterprise desires to achieve or simply be a statement of who the enterprise is. Whichever form is used, this statement is unlikely to change, at least not in the foreseeable future.

Goals

To achieve its end state or accomplish its mission, the enterprise has to engage in certain major efforts. These are likely to be multiperiod or multiyear efforts designed to accomplish major results. They might never be attainable (eliminating world hunger, for example), or they might be achievable over long periods of time (finding a cure for cancer or a preventative for the common cold, for example). Any of these are good examples of goal statements. The important thing to remember is that they must be stated in a fashion that links them directly to one or more of the corporate objectives.

Objectives

There will be many approaches to the realization of each goal. Each approach is called an objective, which could be a one-year effort but might also span several years. Again, take the example of the preventative for the common cold. Objectives might include investigating possible food additives or modifying the immune system or finding a drug that establishes immunity to the cold. All three of these objectives can launch a number of tactics.

Tactics

Tactics are the short-term efforts, usually less than one year in duration, and are designed to meet one or more objectives. These are the projects that will be proposed for the portfolio. A project that relates to only one objective will be less attractive to the portfolio manager than a project that relates to several objectives. Similarly, a project that relates to a lower-priority objective will be less attractive than a project that relates to a higher-priority objective. Later in the chapter, in the section titled Selecting a Balanced Portfolio Using the Prioritized Projects, we look at how this works out with some examples.

How Are You Going to Allocate Your Resources?

The application of this model is quite straightforward. The enterprise must decide what resources will be allocated to each goal and to the objectives that support that goal. With that decision made, the enterprise accepts project proposals from its various departments as to what projects they wish to undertake and how those projects relate to the goals and objectives of the enterprise. Obviously, there won't be much interest in supporting projects that do not further the goals of the enterprise.

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