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Why Companies Don’t Do What the CEO Says

Why don’t companies do what their CEOs tell them to do? In an article for Forbes, Andrew Cave interviews the president of the Project Management Institute, Mark Langley. Surprisingly, the answer lies with better project portfolio management. Here it is in three parts:

A Three-Part Answer

  1. CEOs are too busy to be listened to. They’re simply “overtaxed” with other issues and expect the organization to carry out their requests with little oversight.
  2. Every project is unique, and when projects are too hard, the organization moves on to greener pastures or to business as usual.
  3. Organizations, however full of intelligent people, don’t simply “figure things out.” A change / project is hard work, and the CEO needs to participate in a process of building strategic competencies around the proposed projects. In other words, project portfolio management is needed.

Many projects (about 11 percent) fail simply because they run out of gas (budget overrun) or because they end up in the wrong place (misplaced objectives). The top eighth of organizations who risk only $20 million being wasted for every $1 billion must be doing something right, especially since organizations on the other end of the spectrum risk $280 million per $1 billion:

If you’re going to ignore your project management capability, you’re essentially ignoring the strategy of your organization…You can name it something different such as a strategic initiative, change program, management agenda or five-year plan but in the end it’s all delivered through projects and programs. I get amazed that organizations have not recognized the importance and value of project and program management. By ignoring it, they are essentially putting the future of their organization at risk because they may not achieve their strategy and even if they do, they may not achieve it in the timeframe they desire.

As Langley says, the takeaway from all of this hand-waving and analysis is, to become a competitive and cost-efficient organization, you need to get smarter and more proactive about project portfolio management.

Read the original article at: http://www.forbes.com/sites/andrewcave/2015/02/25/why-companies-dont-do-what-the-ceo-says/

About Eric Anderson

Eric Anderson is a staff writer for CAI's Accelerating IT Success. He is an intern at Computer Aid Inc., pursuing his master's degree in communications at Penn State University.

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