003 Why do companies execute projects

CONSTRUCTION MANAGEMENT

6 Apr 202103:32

Summary

TLDRCompanies execute projects to achieve strategic goals beyond routine operations, such as market leadership, innovative products, and societal improvements. Projects are a form of investment requiring financial, organizational, and temporal resources. They must be carefully selected to maintain competitive advantage. Successful projects transform these inputs into benefits like increased revenue, operational efficiency, and customer satisfaction, aligning with business strategies for long-term success.

Takeaways

🎯 Companies execute projects to achieve strategic goals beyond routine activities.
🚀 Projects are a tool for companies to become market leaders, create top-notch products, develop innovative technologies, and contribute positively to society.
💡 Strategic decisions require extra efforts and moves that cannot be accomplished by routine activities alone.
💼 Projects are a form of investment that utilizes financial, organizational, and physical resources to generate desired outcomes.
⏳ In competitive industries, the timely execution of projects is crucial to maintain a competitive edge.
🛠 Companies must carefully select projects to undertake based on their strategic importance and resource availability.
📈 Projects can yield financial benefits such as increased revenues from new products or markets, or operational benefits like cost reductions through efficiency improvements.
🤝 Customer satisfaction and societal impact are also potential benefits of projects, especially in the case of public or non-profit projects.
📊 From an investment perspective, projects can be visualized on a timeline with resources/benefits plotted on the vertical axis, showing the transition from consumption to generation of benefits.
🔄 The successful completion of a project changes the direction of the resource/benefit line as the project starts generating benefits and resource usage decreases.
🌟 Ongoing benefits from a completed project should align with business strategy to help the organization achieve its long-term goals.

Q & A

Why do companies undertake projects?
-Companies undertake projects to achieve strategic goals that cannot be accomplished through routine activities alone. These projects help them become market leaders, create innovative products, and contribute positively to society.
What are the types of resources typically invested in projects?
-The resources typically invested in projects include financial resources for goods and services, organizational resources such as experts and professionals, equipment, and time.
Why is it important for companies to focus on the right initiatives in competitive industries?
-In competitive industries, losing focus for even a short period can put a company at a significant disadvantage compared to competitors, making it crucial to carefully select which projects to undertake.
How do companies transform the resources invested in projects into benefits?
-Companies transform resources into benefits by successfully executing and completing projects, which then generate desired outputs that lead to financial gains, operational efficiencies, customer satisfaction, or other strategic benefits.
What are some examples of the benefits that projects can generate for a company?
-Examples of benefits include increased revenues from new products or markets, more efficient processes resulting in lower costs, customer satisfaction initiatives, and non-profit goals such as environmental or social welfare projects.
How can the benefits of a project be visualized from an investment perspective?
-The benefits can be visualized on a graph with time on the horizontal axis and resources/benefits on the vertical axis, where the line changes direction as the project outputs are created and resources are reduced or finished.
What should the benefits of a project be aligned with to ensure organizational success?
-The benefits of a project should be aligned with the business strategy to ensure that the organization achieves its goals and maintains a competitive edge.
Why is it necessary for companies to be cautious when deciding which projects to undertake?
-Companies need to be cautious to avoid investing resources in projects that may not yield the desired benefits or could put the company at a disadvantage if they fail to meet strategic objectives.
What is the role of strategic decisions in a company's pursuit of becoming a market leader or innovator?
-Strategic decisions guide the company's direction and resource allocation towards achieving aspirations such as market leadership or innovation, which often require projects beyond routine operations.
How can a project's timeline impact a company's competitive position?
-A project's timeline is crucial as delays can result in missed opportunities and allow competitors to gain an advantage, emphasizing the importance of timely project execution.
What will be discussed in the next lesson according to the script?
-The next lesson will review the typical reasons that may trigger a project, providing further insights into project initiation and strategic alignment.

Outlines

00:00

🚀 Strategic Project Execution for Business Growth

The paragraph discusses the rationale behind companies undertaking projects, emphasizing that while some goals are operational, others are strategic and require additional efforts beyond routine activities. Projects are presented as the 'magic tool' for transforming these efforts into tangible benefits. The importance of resource allocation, including financial, human, and equipment resources, is highlighted. The paragraph also underscores the competitive nature of industries and the need for careful project selection to avoid falling behind competitors. It concludes by explaining the project lifecycle from resource investment to benefit realization, aligning with business strategy for organizational success.

Mindmap

Keywords

💡Projects

Projects are temporary endeavors with a defined beginning and end, designed to achieve specific goals and objectives. In the context of the video, projects are the 'magic tool' companies use to transform extra efforts into desired benefits, such as becoming a market leader or developing innovative technology. The script mentions that projects require an investment of resources and are a strategic move beyond routine activities.

💡Strategic Goals

Strategic goals are long-term objectives that align with an organization's overall mission and vision. The video emphasizes that while some goals are related to daily operations, strategic goals require companies to perform extra moves. These goals are often the driving force behind initiating projects, as they represent aspirations that cannot be achieved through routine activities alone.

💡Resources

Resources in the video refer to the inputs required for a project, which can include financial resources for goods and services, organizational resources like experts and professionals, and equipment. The script illustrates that resources are consumed at the beginning of a project and decrease as the project progresses, ultimately leading to the generation of benefits.

💡Benefits

Benefits are the positive outcomes or advantages that result from the successful completion of a project. The video describes benefits as being financial, operational, customer-related, or even non-profit goals like environmental or social welfare. The script uses the term to highlight the desired outcomes that companies aim to achieve through their projects.

💡Competitive Advantage

Competitive advantage refers to the attributes that enable a company to outperform its competitors. The video script mentions that in highly competitive industries, failing to focus on the right initiatives can put a company at a significant disadvantage. Projects are a means for companies to maintain or gain a competitive edge.

💡Investment

In the video, an investment is analogous to a project, where certain resources are used as input to generate a return in the form of benefits. The script explains that, like any investment, projects require an upfront commitment of resources with the expectation of achieving desired benefits over time.

💡Efficiency

Efficiency in the context of the video pertains to the operational improvements that a project can bring, such as more efficient processes or faster and better results, which can lead to reduced costs. The script uses the term to describe one type of benefit that companies seek to achieve through their projects.

💡Market Leader

A market leader is a company that holds the dominant position in its market or industry. The video script mentions that one of the strategic aspirations companies have is to become a market leader, which can be achieved through strategic projects that set them apart from competitors.

💡Innovation

Innovation refers to the introduction of new methods, ideas, or products. The video script highlights innovation as a strategic goal that companies pursue through projects, such as developing new technologies or creating best-in-class products.

💡Time

Time is a critical factor in project management and is emphasized in the video as a resource that, when wasted, can put a company at a disadvantage. The script describes how the passage of time affects the consumption of resources and the generation of benefits in a project.

💡Alignment

Alignment in the video refers to the consistency of project benefits with the business strategy of an organization. The script explains that for a project to be successful, its benefits must align with the company's strategic goals to ensure that the organization achieves its overarching objectives.

Highlights

Companies execute projects to achieve strategic goals beyond their routine activities.

Strategic goals include becoming a market leader, creating best-in-class products, developing innovative technology, and improving the world.

Projects are a type of investment that requires resources as input to generate desired benefits.

Resources used in projects include financial, organizational, and equipment resources, as well as time.

In competitive industries, failing to focus on the right initiatives can put a company at a significant disadvantage.

Companies must carefully decide which projects to undertake, postpone, or abandon.

The benefits of a project can be financial, operational, customer-related, or non-profit goals like environmental or social welfare.

Projects can be viewed from an investment perspective, with resources and benefits plotted on a timeline.

At the beginning of a project, resources are consumed, including financial and professional inputs.

As the project progresses and is completed, the generated output starts producing benefits, and resource usage decreases.

Over time, the organization continues to enjoy the ongoing benefits created by the project.

The benefits of a project must align with the business strategy to help the organization achieve its goals.

The next lesson will review typical reasons that may trigger a project.