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Book Preface
In Japanese mythology, the archipelago rests upon a giant catfish, or namazu. To prevent earthquakes, a carefully balanced stone pins the fish down. If the stone is not balanced, the fish thrashes and an earthquake results. While people try not to think about this precarious balance, their fate hinges on it.
Today, nearly every large organization across the globe is feeling the impact of its internal misalignment. Each company struggles to control its own catfish – its portfolio of projects. As billions of dollars flow into project- and technology-related investments, the ability to manage the portfolio is not keeping pace.
Individually, each project may appear to be adding value to the organization. But when projects are examined together, a different picture emerges. Some may be working at cross-purposes, others may be needlessly duplicating each other, still other projects may be aiming to meet outmoded objectives-but all are competing for scarce resources. This unintended disorder in a company's project portfolio consumes valuable time and energy, leaves good money on the table, and fails to provision the organization for the future.
This book aims to help managers harness their portfolios of disparate, proliferating projects into an efficient, coherent whole. Our prescription for achieving this ambitious goal is called alignment.
Alignment has several facets that each leads to greater business performance. It's about better matching the portfolio's objectives and the company's strategies to the realities of today's business environment. It's about creating greater value and efficiency by managing the relationships among projects. And finally, it's about building the organizational capacity to respond effectively to whatever future presents itself.
In this book, we will introduce you to something we call the "information frontier," a metaphor for the unpredictable business environment in which we all find ourselves. We'll explain how you can respond to today's uncertainty and how your project portfolio is a vehicle to increase shareholder value and confidence. The project portfolio, we argue, is your frontier currency, and an overlooked instrument for unlocking latent value.
To spend this currency wisely, managers must shift mind-sets and change the way they think about the future. Rather than targeting a specific future destination, organizations are better served by preparing for whatever tomorrow may hold—while still coping with today's realities. And they are also better served by adjusting the project portfolio to enhance the adaptability of the organization. In this way, alignment becomes dynamic, rather than static.
As authors, we bring complementary experiences and perspectives to bear on this task. Distinguished Professor F. Warren McFarlan, Senior Associate Dean and Director of Harvard Business School's Asia-Pacific Initiative, has been studying these issues and their antecedents for many years. His earliest research on this topic was first published by the Harvard Business Review in 1981.
Cathy Benko, Deloitte's Global e-Business Leader, has dual responsibilities. As a leader in a large organization, she, too, is confronted with the challenges of meeting today's objectives while preparing for the future. And as a practitioner in a global consultancy, she and her colleagues work with clients grappling with similar challenges every day.
The views and prescriptions in this book grew out of what we are witnessing in the workplace, channeled and confirmed by relevant theory. As we shaped an appropriate response to the challenges managers face today, we also drew upon lessons from history, technology, economics, and society to see how technology adoption impacts businesses.
Though there is strong theory underpinning our ideas, this is not a book of grand concepts. Primarily, we think of this book as a guidebook. It offers practical tools that companies can use to realize the promise and benefits of alignment.
Our guidebook offers a mutually-reinforcing blend of conceptual and practical thinking. In Chapters 1 through 3, we explore today's business context and outline a framework and approach specifically tailored for this environment. Chapters 4 through 7 provide in-depth discussion of our alignment prescription through a series of real-life case examples, a detailed composite company illustration, and an industry-level study and application. Although these sections may appeal to different audiences, together they deliver on the methods and promise of alignment. We invite you to immerse yourself in either, or both.
As a general rule, we avoid the "S-word": strategy. Revising an organization's strategy is a complex and time-consuming undertaking. Although our approach is clearly informed by a company's strategy–and can help shape strategy–we purposely avoid dwelling on strategic concerns. Instead, we concentrate on providing a no-excuses, in-the-trenches perspective.
Our aim is to help you play the hand you've already been dealt. Many business books extol the virtues of where you ought to be, without adequately dealing with the realities of where you are. We don't start from the clean slate of an unencumbered company. Nor do we offer ideas that ignore a company's realities or operating legacies. The truth is, you need to run your business today for your current customers, shareholders, and employees. Being mindful of this, our focus throughout the book is on what works.
This focus makes our approach reasonably straightforward and-we believe-accessible. But "straightforward and accessible" does not mean "easy and obvious." If implementing the fundamentals of our approach were easy and obvious, companies would already be doing it. By and large, they aren't. Our experience with dozens of organizations across a wide range of industries and geographies indicates that while progress is being made in the right direction, a coherent and generally accepted framework for dealing with these issues does not yet exist.
Based on our first-hand observations, the need for alignment is clear and palpable. Organizations are under increasing pressure to perform better and create more value. Alignment helps achieve both goals. It enhances shareholder value and confidence through its ability to better meet corporate objectives, increases efficiency, reduces risk, and provides options to hedge against an uncertain future.
So there's the charge, and the promise. Now, let's roll up our sleeves and get to work.
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