Portfolio management can help companies to thrive

How to improve business performance and impact organizational culture

To deploy strategies companies need to focus on their business processes in order to reach their goals and create value. The culture of a company is part of its processes as a result of its established values, behaviors, and beliefs. As organizational culture changes over time, companies need to consider it when they need to align their strategies. Improving strategy alignment can improve business performance and impact organizational culture through increased job satisfaction.

The benefits of engaged employees

Companies can benefit from engaged employees. Employees are one of the largest stakeholder groups in most companies. For this reason, engaged employees can help drive company business performance. Companies that are able to create a strategic fit between human resource strategy and business strategy, in a consistent way across the organization, will improve organizational performance by motivating and retaining their employees. In addition, by doing so they obtain a competitive advantage over competitors.

Studies report that to better hire, keep, and motivate employees, organizations have to link their reward system to the overall strategy of the organization. This will help to improve employee engagement and performance, considering that employees have a tendency to show behaviors that lead to rewards. A productive way to engage employees in the strategy of the organization is to align human resource strategy and reward systems with the overall goals of the organization. As a result, this will help to improve employee engagement and performance. Alignment also extends to job characteristics and skills required to implement the organization’s strategy. Companies should look for aligning organizational strategy with both the job and the employee. It is critically important to create the conditions for engagement through alignment, not just seeking an outcome. Alignment should involve the entire organization, not only executives, but also employees, teams, and departments.

Shuck and Rose (2013) note that aligning the human element helps to optimize processes in a way that creates purpose and meaning. To reach their goals through their strategies companies need to create an environment that is safe and allows employees to experience meaning in their jobs. In addition, alignment and communication of strategy can also help to connect external stakeholders with the strategy of the organization.

Developing the right culture

Companies are unique. Each company operates in its own way to achieve a competitive advantage. How companies structure themselves varies from one to another. Clearly there is no one best way to structure a company.

One of the biggest challenges for leaders is fitting strategy into the context of the current culture in their organization (Morden, 2007). Management should consider existing culture when developing strategy, as well as shape it for the future. Studies report that the change that comes with a new strategy alters how things are done within a company creating potential opposition. For this reason, organizations should develop a culture that fits with the strategy of the organization in order to support the goals of the organization and ensure effective and efficient strategy execution. Effective strategy implementation and execution can help companies create a sustainable organizational culture and competitive advantage.

Some experts believe that the most effective culture for implementing a new strategy is clan culture, which is family-like, with a focus on mentoring, nurturing, and “doing things together”. While the least effective culture for implementing strategy is a hierarchical culture. It is important to consider that the more flexible the culture, the more open those cultures are open to change.

The importance of PPM

Company culture plays a role in the strategic orientation of the organization. Project Portfolio Management (PPM) can help companies manage it.

PPM helps companies create a competitive advantage by incorporating a complete framework for managing business strategy. In addition, PPM is not only useful to select projects, but it also helps shape the structure of the organization. In fact, it has been proved that companies that align strategy, and structure, with information requirements are more efficient in implementing their strategies. So, alignment within the organization goes beyond just effective strategy execution, but it also has a significant impact on the organizational structure.

Managing a portfolio of projects, its interdependencies and resource needs is complicated for many companies. To assess the complex dynamics of PPM and organizational culture, it could be useful to understand how cultural values are impacted when PPM is introduced.

Keep in mind

We all know that strategy is identifying goals and objectives; but it is more than that. In fact, a key element of strategy is affecting change through strategy execution within the organization. During their life companies face changes due to external and internal forces. This requires companies to adapt and develop new capabilities. When it comes to changes in strategy, the right strategy could be to consider the current capabilities of the organization, it’s competencies, and an agreed upon model for managing the change needed in the organization Crawford (2013). Each of these elements is impacted by the culture of the organization.

Francesco Pecoraro

Francesco has extensive experience as a project, program and portfolio manager, project management officer (PMO), digital transformation and strategic consultant. He is also considered a communication, public speaking and leadership expert.

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