How to link investments and resource utilisation with strategic objectives?

Strategy and how to put it into practice are age-old issues for which there are endless theories and practical solutions. Our changing world, both in terms of technological development and the turbulent times we currently live in, has brought completely new challenges to it. Strategies must be unprecedentedly clear, transparent, and measurable in order for the companies of today to react to the rapid and unforeseen changes. Strategies must also be implemented in the desired manner, both in terms of investments and resource utilisation.

Strategic management is a skilled sport. All too often we come across situations where strategic objectives are not transparent enough. This erodes the motivation and everyday work of the entire organisation. Business governance might also not be at a sufficient level, which could mean that the indicators for value creation or risk management, for example, are not clear enough or do not exist.

These challenges may lead to a situation where the company cannot actually tell whether their current investments or ongoing projects are doing well or badly and whether something should be changed. Due to poor strategic management, companies make an exceedingly large amount of investments (up to 70% according to some studies) without any strategic value. In other words, projects might succeed on paper, but due to a weak strategic link, they ultimately do not create any value for the business.

The right tools and practices to support management

Wars, pandemics, and other extraordinary global events of the recent years have prompted the executive teams of many companies to reflect on their management tools. Many have been faced with a rapid and surprising need to change strategy, reduce costs, direct staff to do new things, or change the focus of investments to better support a new situation.

Rapid changes in strategy are easy enough to communicate to the organisation in a CEO’s letter, but what happens immediately after? How will ongoing projects and their respective budgets be quickly revalued and reallocated? What is the impact of the new strategy on near-term investments? How can the entire staff be quickly motivated to embrace the new strategy?

In the end, the solution is straightforward. For although there are some company and industry-specific differences, the basic principles of strategic, portfolio, and project management are relatively similar. The most crucial factor of agile management, the efficient utilisation of tools, can be quickly optimised with best practices.

In addition to the tools, other key aspects include defining an organisation-wide management policy and deciding on how to utilise the tools. The essential areas of the strategy portfolio and the ways to link investments to support them must be identified. Examples of essential areas include business growth, expansion into new markets, product innovations and their refinement into products, services and projects, or even a completely new offering.

Overly strict governance is often said to kill innovation, but from a managerial perspective, the opposite may be true. If an idea has been carefully refined into an investment or a new service, it may be easier for the executive team to get the entire organisation behind the new operations. It enables ideas to be linked to the goals of the projects at an early stage and, for example, rewarding those who have contributed to the idea along the way.

Examine your indicators!

Strategic management could be compared to piloting an aircraft. The autopilot largely takes care of the basic operation over the long haul, but the cockpit indicators must be in perfect working condition in order for the pilot to react quickly if necessary. This analogy does apply well to corporate management: when the destination and route (strategy) are clear to everyone, all that is needed are good indicators and operating methods for reacting to market or global changes. If the indicators shine yellow or red in the executive team, it must be ready to react – otherwise, the journey might come to an abrupt end.  

With the help of Sulava and our partners, corporate management can create a genuine and functional set of top-level indicators to measure strategy implementation and investments effectively and react to changes efficiently and at the required speed. The premise is that with our help, executive teams will be able to manage large entities with one clear dashboard. 

Is AI here to stay?

The rapid development of artificial intelligence has brought completely new dimensions to the regularities of corporate management. The underlying technology has of course been around for a long time, but the leap into using its capabilities to our advantage in everyday life is still huge. Asking the right questions and structuring data into the appropriate form now create actual value, and it is no longer a newsworthy event for a listed company to experiment with naming artificial intelligence as one of the members of their executive team.

Artificial intelligence has become ‘augmented intelligence’, with undeniable benefits for day-to-day decision-making and the creation of new content. The capacity of artificial intelligence and its unsentimental (in the most positive sense of the word) fact-based approach have raised it alongside human decision-making at almost the speed of light.

After discussing the topic with various executive teams we have come to the conclusion that one of the indicators of portfolio management and decision-making that should always be considered alongside risks, finances, etc. is, quite simply, feeling. After all, an experienced executive team should always have, based on their own past experiences, on opinion or a feeling of whether the investment under consideration is reasonable or not. It is then up to each company to decide how much weight to put on this criterion and how it relates to the information provided by the ‘augmented intelligence’.

Sulava helps in strategic management

Towards the end of last year, Sulava established a new business unit called Business Solutions. Similarly to our other business units, it relies heavily on Microsoft’s Dynamics 365 applications, which are by far the best products on the market, as well as on the superior combined expertise of Sulava and its sister companies in Microsoft technologies and work modernisation.  

The Business Solutions unit complements and leverages Sulava’s leading Microsoft consulting business. We will be able to provide our customers with expert services, continuity of service, and training covering the entire Microsoft platform.  

The portfolio and project management solutions we offer are based on the innovative whole of our Digital Neighborhood affiliate Projectum, which makes strategy-driven project work easy and unprecedentedly light to implement. As the solutions are based on Microsoft’s Power Platform and, for some modules, also on Microsoft Azure services, the solutions are also scalable to growing needs.

Text by Olli Lipsanen and Juhani Lassila