Top 10 Things Executives Should Think About Before Embarking on Strategic Projects

Studies have consistently shown the difficulties of successfully implementing strategic projects within organizations. The success rate hovers at a mere 10 percent. Strategic projects, unlike the tactical projects that address more immediate concerns, are complex because they can have a long-term and meaningful impact, lasting implications and complications with key stakeholders rarely agreeing, resulting in politics and adoption challenges taking center stage.

This is in addition to the many tactical challenges involved. Strategic projects involve significant investment of resources and assets. There are also significant risks associated with large projects (especially if they span longer time frames) and this scale of project requires the managing of changes that inevitably occur on more complex projects. At every juncture you are confronted with trade-offs and these kinds of decisions require strong leaders to direct the project.

Acquiring and motivating quality people and resources to work on these projects, proactively managing vendors and partners throughout implementation and planning, and managing the longer-term and what happens upon project completion requires a specific skillset. Even when projects are successfully implemented, they can still fail because of a lack of adequate support, cultural buy-in, adoption and training.

Examples of strategic projects abound. In recent years, here are some that made headlines.

g In merger and acquisition, the classic example of failure is America Online and Time Warner from 2001 in which $99 billion was wiped out just after a year.

g In more recent times, Twitter comes to mind. A recent Time article states that Twitter is now worth just 33% of what Elon Musk paid for it.

g In the complex project arena, the biggest failure in recent memory is the fiasco of the Boeing 737 Max. After two catastrophic crashes and sadly losing 346 people, Boeing’s cost from these tragedies is estimated at $19 billion of direct cost. This does not include the reputational damages. It is no wonder that Airbus wins the biggest commercial aircraft order in history with IndiGo’s 500 order in June 2023.

g Large internal projects may not fare better. Major companies such as GE and Ford poured $1.3 trillion into digital transformation initiatives in the last decade. Yet, in a 2019 CNBC article, about 70% or $900 billion was wasted on failed projects. The biggest reason: failure to effectively communicate their goals, strategy and purpose with their employees.

g And if you want to look at a more recent example, Meta has thrown about $40 billion at the metaverse with little to show for it.

These are just some examples of strategic projects gone awry. This doesn’t mean that all long term, strategic and complex projects are doomed to fail. Quite the contrary. But like most things, what is simple isn’t always easy.

Ten key issues

Know why. Why is your organization undertaking this strategic endeavor? How well does the project support the big strategic picture and specific goals and objectives? Who are the benefactors? Who will be affected negatively? It is rare that strategic projects have only winners and no losers. What are the biggest obstacles and risks? By developing a full and objective picture of the challenges and opportunities, executives can be far more grounded in the reality of the undertaking and be prepared to set the right expectations with employees, board members, investors, regulators and other key stakeholders.

Secure the right project leader. Strategic projects require strong leadership; someone who will make hard choices, fight the necessary battles to achieve progress, empower and motivate the team to reach new heights, and never lose the sight of the big picture at the expense of tactical wins. Finding the right leader is hard because there is no single leadership style that fits all situations. Finding someone who works well with people, possesses balanced temperament under pressure, focuses on the future strategic vision while grounded in tactical execution, and demonstrates a willingness to drive hard are good traits to start.

Engage stakeholders. Built off the first step, remember all projects are done for someone. The next step is identifying and evaluating stakeholders. It is now vital to think deeply about how to engage stakeholders. This is especially important with stakeholders who are against the project, but whose support is essential. By understanding their needs and wants early, there is more time to negotiate. Sometimes the solution is literally outside the box, which involves securing help from a higher level and enlarging the box by involving other strategic projects in which the contentious stakeholders have interests.

Drive clarity and be reasonable. By clearly identifying why and who, executives are better able to define clear objectives and scope of the project. One of the biggest strategic blunders is a lack of clarity on objectives and outcomes. It is important to remember that projects are more than future visions, they must be concrete and achievable. By engaging the right stakeholders, projects can now drive clear and sensible requirements.

Think big but act small. Strategic projects are often big, complex and messy. While thinking big is difficult, execution is much more difficult. Whenever possible, break up big projects into multiple parts and multiple phases that reduce the risk of big endeavors and leverage wisdom that comes with time. Too many organizations have a beautiful vision of the end, and their desires to reach the finish line makes them forgetful of the arduous journey. Organizations should shape their large endeavors into smaller pieces. Smaller projects can be more agile and easier to deliver; plus, failures are less detrimental. Along the way, organizations learn and improve the subsequent phases. It is like the old joke “how to eat an elephant?” The answer: “One bite at a time.”

Tackle conflicts early. Strategic projects inevitably have many sources of tension. When these tensions are not addressed properly, they can morph into conflicts of tasks and priorities, conflicts of processes (such as how to manage projects) and relationships. While it is by no means easy, creating a transparent process to openly acknowledge and discuss these tensions, challenges, conflicts and risks can create a more open environment that encourages communication. There will still be disagreements, but having a channel for sharing frustrations and concerns can go a long way to create an environment of collaboration and trust.

Establish the right governance. Governance is not just about making decisions, but about making decisions stick. Too often in organizations, especially those rife with politics, decisions are only effective when they are followed through in implementation. Good governance includes having the right roles, responsibilities, processes and tools to make and effectively carry out contentious decisions.

Determine the optimal approach. Given strategic projects are almost always complex, big and unique, it is important to develop a custom approach and method for implementing the project. Far too many organizations or executives are somehow talked into a particular method without understanding the deeper challenges. For example, in the last decade, the rapid rise of the “Agile” approach to project management has driven the mindset of most senior executives. After all, who wants to be stuck in a slow and meticulous, but heavy, method when there is the promise of light processes, adaptivity to new demands and changes on the fly, and speed of execution? It seems too good to be true, and indeed it often is. Executives should resist the temptation of buzzwords and trendy methodology, and examine carefully to determine the best approach for the strategic project.

Allocate Sensible Resources and budgets. One of the greatest pitfalls of strategic projects is unrealistic promises and expectations. One of the most pressing concerns is allocating appropriate resources; such as people, financial, technological and tools for the project. It is important for executives to establish a realistic budget and schedule, and monitor them closely through good governance, to avoid cost overruns and schedule slips. Trust the assigned project leader but also verify performance through audits.

Give it all you’ve got! Strategic projects make or break careers, so be prepared to give it all you’ve got! As an executive that is considering embarking on a strategic project, ask how much you are willing to fight for the resources, support and certain decisions. Assess who your co-champions are that are willing to battle alongside you. Strategic projects often experience Murphy’s Law on steroids: “Anything that can go wrong will go wrong, and anything that cannot go wrong may also go wrong.” Anticipate the unexpected.

Strategic projects are not for the faint of heart. Too many organizations and executives take on strategic projects because of an overestimation of their organization’s capabilities, and sometimes pride. But the dark side of these projects are many, and the cost of failure can be uncomfortably high. Success is never guaranteed, but by performing these ten assessments before you are knee deep in execution, you are far more likely to thrive.

Dr. Te Wu is CEO and CPO of PMO Advisory, a professional project management training and consulting firm. He is also an associate professor at Montclair State University and co-chair of Project Management Institute’s (PMI) Development Team. Te is certified in Portfolio, Program, Project, and Risk Management.