Part one: Defining programs – top down or bottom up?
In recent years, as organizational undertakings increase in complexity and scale, the benefits of adopting a program management approach rather than engaging in isolated individual projects have become apparent for many companies. Program management consulting typically oversees an initiative across a business, cross-functionally. This horizontal focus allows the program manager to ascertain the financial viability of the overall initiative, track the business benefits and adhere more closely to the overarching strategy.
We are still in the relatively early days of this discipline, however. As we rush to climb aboard the program management bandwagon – are we doing it the right way? For example, should these large complex undertakings be developed using a top-down approach or a bottom-up approach?
When it comes to starting up programs, there is a best practice. Ideally, programs should be defined top down and not bottom up.
What’s the difference?
Top down: In this scenario, we begin with a stated organizational strategy and set related targets, objectives and goals. Then, we formulate a program specifically designed to achieve these goals and objectives and map alternative combinations of paths (projects) to support the program.
Bottom up: In a bottom-up method, multiple projects are either envisioned or already underway. We discover dependencies or synergies between these projects and then create a program to pull them together.
Why is top down a better approach?
In my experience, top-down programs beget four compelling advantages:
- Strategic alignment: When we start with a specific strategy and related objectives, the alignment upstream to strategy is clear and strong; the question ‘why are we doing this initiative’ is easily answered. In addition, a top-down approach mitigates the risk of being out of sync with organizational goals and objectives.
- Program design alternatives: Designing a program from the top down allows different alternative paths to be explored towards achieving desired outcomes – for example, buy versus build a component. Program managers examine alternatives through criteria such as potential risks, speed of delivery, associated cost of investment and organizational capabilities in support of work required. Following this process ensures the best combination of component projects are selected.
- Flexibility in component project planning: A top-down style allows us to slice and dice the program in the most logical manner. It allows us to:
- Identify and invest in foundational projects; these may not produce an immediate benefit, yet serve as critical pre-requisites for projects that do. For example, invest in technology infrastructure projects that prepare the environment for business driven applications to be developed. This leads to more accurate business case development.
- Horizontally combine similar functions for multiple projects to achieve better consistency, quality and economies of scale. For example, define a project to undertake all change management activities, or quality assurance activities for the entire program, irrespective of component projects.
- Define a high-confidence roadmap that takes into account foundational or pre-requisite projects, component project dependencies and strategic targets.
- Realistic benefits planning: For top-down benefits planning, we start with overall targets – both financial and non-financial. During program design, we break these down and select the best combination of projects to maximise benefits, clearly identifying each project’s contribution. Therefore, when the program roadmap is developed, it is clear when benefits will be realized and to what extent, which eliminates ‘double-counting’. Importantly, when a project’s contribution is clear and realistic, its leaders develop higher confidence to deliver.
Irrespective of whether we take a top-down or bottom-up approach, managing initiatives as programs instead of individual projects leads to significant benefits for an organization. Designing and planning programs using a top-down methodology provides additional advantages and increases effectiveness in meeting strategic objectives.