003 Why do companies execute projects

Summary

Companies 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.