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    Project-Driven Technology Strategy

Robert N. McGrath, Ph.D. / PMP 

Project Management Institute

2012

 Available on Amazon and Barnes & Noble

 

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"Buddy" Molediver 

 

 

  • Economic Philosophy: "Entrepreneurship is the Essential Fact of Capitalism."

  • Entrepreneurship is about elevating - not maximizing - a prudent investor's risk/return comfort zone.

  • Entrepreneurship can happen in any organization regardless of industry, market, technology, age, or size.

  • Early in the 20th century, Economist Joseph Schumpeter called Entrepreneurship "the essential fact of Capitalism," including the systematic corporatization of entrepreneurship as an economic phenomenon.  

  • In Capitalist doctrine, Capital ultimately equates to Technology. To pool capital is to invest in technology. Even Marx saw this.

  • If a capital investment does not deliver a fair return to the true owners, managers have failed the firm and its investors.

  • The "I" in ROI refers to the true owners as investors, to whom managers owe a binding, legal, fiduciary responsibility.

  • Strategic Philosophy: Competitive Advantage means Organization-wide and Organization-specific Superiority.

  • Winning isn't everything, but losers get fired.

  • A Business Strategy is the way an organization seeks to realize its vision and accomplish its mission.

  • Creating and Sustaining a Competitive Advantage should be the goal of every Business Strategist.

  • Economic Value Added is the best and specific measure of Sustainable Competitive Advantage.

  • Sustainable Competitive Advantage is very rarely seen, especially in technology-driven industries.

  • Any strategy should have a unique value-proposition. Otherwise it cannot claim Sustainable Competitive Advantage.

  • Industrial Economics explains profitability. Appropriability explains firm-specific profit.

  • Strategists need to identify firm-level and firm-specific competencies, capabilities and routines that are

  • Value-adding

  • Rare

  • Difficult to imitate / copy

  • Difficult to obviate

  • For a Capability to be sustainable, it must also be Dynamic.

  • Technology Philosophy

  • Technology  -- is --  human knowledge and competence. 

  • The appropriability (e.g., defensibility = profitability) of a technology is key to its potential for competitive advantage.

  • Appropriability depends on the dynamics of knowledge transfer.

  • Tacit knowledge is essential to creating and sustaining a competitive advantage.

  • Market and Industry Philosophy

  • Consumers don't need technologies; they have needs which technologies might satisfy.

  • The Performance / Price ratios of competing products provide the best insight about their adoption, diffusion, and evolution.

  • Product Technology must co-evolve with Process Technology in order to produce a commercially-successful total product.

  • Almost all industries subsume many products and their evolutionary product life cycles.

  • Industry evolution includes institutional (governmental, industrial, commercial, etc.) markets prior to early consumer niches.

  • Organizational Philosophy

  • "Organization" applies to everything from the unplanned results of the "invisible hand" to active managerial discretion within firms.

  • The econom-ic reason we organize is to affect economic-al value transactions.

  • The rareness of complete, timely, riskless, and cost-free information - i.e., perfect information -- is why we organize.

  • An organization is a "nexus of contracts" that balances costs and risks of opportunistic behaviors.

  • As managers follow these truths, they determine the structure of internal Value Chains and external Supply Chains.

  • The nature of competition is shifting from the firm to the Supply Chain, where the firm is one unit in a value-adding system.

  • Appropriability and Profitability are characteristics of Supply Chains that must be optimized at the firm-level.

  • Project Management: A Dynamic Capability

  • A project is strategic if it has an effect on Competitive Advantage.  Capital Projects first and foremost represent a risk taken with investors' capital.

  • Capital Projects can present conflicts of interest between managing the Value Chain v. the Supply Chain.

  • The stronger the link between a Capital Project and firm-level EVA, the greater the justification for using ROI.

  • ROI hurdles should be derivative of the firm's capital structure, with the fiduciary, legal, and ethical implications therein.

  • Every Project Management challenge is an opportunity to add value, as opposed to manage value-added.

  • The organization of a Projectized firm is as important as any other form of economic organization.

  • A PMO should help create and manage a Project Portfolio for synergistic effects that will add value and increase overall EVA.

  • A PMO should itself, by managing itself, become or become a part of an organization-wide Dynamic Capability.

  • A Dynamic PMO must be a Learning Organization and center for Knowledge Management and Project Management Maturity.

  • Global Project Management

  • Govern-ance, not govern-ment, is the real organizational issue as it concerns global technology transfer.

  • This applies especially to the governance of intellectual capital, which is the key "factor of production" in innovation.

  • Firms, not nations, are proper units of economic competition.

  • Yet firms generally are not successful globally if they are weak at home.

  • Technological innovation should be managed where advanced economic factors are most productive.

  • Global Projects are almost always Capital Projects.

  • The flow of Capital in the global context follows the same principal as in the Industry context - it will always flow to the firm that serves it ... best.

 

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