1. December 2014

1. Project Management vs Strategic Management

The above title is an interesting notion as it can imply that Project Managers need to be strategically aware or have a saying in the strategic directions of the Project(s) they are involved.

We best know that in most cases, The Executive Board that oversees the Project execution sets the strategic direction of the project or in some cases the Steering Committee, however, what if the Project is small and the funding does not allow the bells and whistles of a large corporate wide Project implementation.

Before we can answer the above question, we need to know what is Project Management (PM) and then what is Strategic Management (SM) and the people who are responsible for the performance of these two Sciences, then we can simply answer the above question.

According to the Project Management Institute (PMI), Project Management:

“Is the application of knowledge, skills and techniques to execute projects effectively and efficiently. It is a strategic competency for organizations, enabling them to tie project results to business goals and therefore better compete in their markets. It began to emerge as a distinct profession in the mid-20th century. PMI’s A Guide to the Project Management Body of Knowledge identifies its recurring elements of Project Management processes that fall into five categories:

  1. Initiating
  2. Planning
  3. Executing
  4. Monitoring and Controlling
  5. Closing”

Therefore, we can argue that a Project Manager is the person who fulfils these stages based on a number of factors, in particular:

  1. Integration.
  2. Scope.
  3. Time.
  4. Cost.
  5. Quality.
  6. Procurement.
  7. Human Resources.
  8. Communications.
  9. Risk Management.
  10. Stakeholder Management.

Additionally, a Project Manager runs any given project based on a given methodology such as Prince 2, Agile, Scrum etc., which in turn comes with its own set of values, constraints, and outcomes.

On the other hand according to Dess, Gregory G., 'Strategic Management: Creating Competitive Advantages'; 2005,

“Strategic Management consists of the analysis, decisions, and actions that an Organization embarks on in order to create and sustain a Competitive Advantages (CA). This definition captures two main elements of Strategic Management:

1. The Strategic Management of an Organization consisting of three ongoing processes: analysis, decisions, and actions. That is, Strategic Management is concerned with the analysis of strategic goals _(vision, mission, and strategic objectives) along with the analysis of the internal and external environment of the organization. Next, Owners must make strategic decisions.

These decisions, broadly speaking, address two basic questions:

a) What industries should we compete in?

b) How should we compete in those industries?

These questions also often involve an organization’s domestic as well as its international operations. Last are the actions that must be taken. Decisions are of little use, of course, unless they are acted on. Corporations and Companies must take the necessary actions in order to implement their strategies. This requires the Stakeholders and the Owners to allocate the necessary funds and resources and to design the organization to bring the intended strategies to reality.

2. The essence of Strategic Management is the study of why some firms outperform others. Thus, managers need to determine how a company is to compete so that it can obtain advantages that are sustainable over a lengthy period. This means focusing on two fundamental questions:

a) How should we compete in order to create competitive advantages in the marketplace?

b) How should we compete in order to sustain competitive advantages in the marketplace?

For example, managers need to determine if the firm should position itself as the low-cost producer, or develop products and services that are unique, which will enable the Company to charge premium prices or some combination of both.

Managers must also ask how to make such advantages sustainable, instead of temporary in the marketplace. That is: How can we create competitive advantages in the marketplace that are not only unique and valuable but also difficult for competitors to copy or substitute?”

We shall not go too deep into these questions, which are not in the scope of this blog, however, it is quite clear from the above two definitions of PM and SM that a Project Manager is involved in the running of the project(s) he/she is involved and to some extent in the strategic directions of the Project(s) with the full knowledge and blessings of the Project Board / the Executive Board. On the other hand, a Strategic Manager(s) is involved in a much larger capacity of the strategic direction of the entire Organisation, which could also involve the Projects being undertaken by the Project Managers.

In recent years, a new Management Science has evolved entitled The Strategic Project Management, which is a new and powerful methodology intended to manage complex large-scale projects such as Telecom base projects spanning several years by combining traditional Business Analysis with Project Management tools and techniques.

The aim of this interesting and important methodology is to equip all managers – of whatever discipline – to manage projects more effectively. This Strategic Management process contains five key elements:

  1. Managing strategic business projects
  2. Linking projects with business strategy
  3. Strategic project definition
  4. Project strategy and planning
  5. Strategic project control and learning

The methodology will enable the PMs and SMs to apply Project Management tools successfully not just at the level of business strategy but also to operational change programmes and even to more strategic programmes aimed at improving short-term performance.

We hope this simple discussion has been of benefit to the Project Managers and the Strategic Managers out there. At Ksathra Systems however we have always taken into account the Strategic direction as well as the Project direction of our Clients at heart and have always delivered to scope, time and quality that is expected of any professional boutique organisation out there in the Industry.