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This chapter introduced the important concept of strategy formulation and its role in developing business and project objectives. Strategies interact to provide the maximum benefits from operating in a project mode. Business strategies are matched with relevant project strategies through a set of business and project values. They can be aligned in a hierarchical or cyclical approach. Business/project strategy is further aligned with project risk strategies for the dual purpose of value-protecting and value-creating. A range of project risk response strategies is identified to prevent the loss of business value or realise the opportunities that project risks can provide.

Example of Business and Project Interaction at ABC University

This is a continuation of the fictitious example of ABC University. The university conducts a range of projects, some of which were outlined in Chapter 1. An indication was provided of how these projects support the university's objectives.

ABC University's core business is teaching and learning and research. In its teaching and learning activities, ABC has to balance a number of objectives. One is to satisfy the demand from students to be 'job ready' once they complete their courses. They expect to get a return on their 'investment' of time and money spent on studying. The teaching programme therefore has to impart technical skills, desired by employers, and provide industry experiences. The latter are typically gained during the teaching period in an appropriately termed 'industry project' unit to reflect work done by students for an outside client. The business objective of the university (getting students job ready) are aligned with those of the project (giving students skills and experiences). Both have a set of value metrics attached. For the university it is 'graduate employment', i.e. the rate at which its students find employment after graduating. For the course it is the satisfaction expressed by the client with the tasks performed by students.

A more subtle objective for ABC University is to instil the desire of life-long learning in its students. This will encourage them to come back to the University for further education over the following years. To motivate students requires excellence in teaching. The university has therefore developed programmes about effective teaching strategies. Each of these programmes is a project since pedagogical experts have to be consulted in their design and experienced facilitators identified to lead the programmes. The outcome of staff training should be reflected in positive student satisfaction surveys.

The second core mission of any university is to produce significant research outcomes. These are reflected in financial grants, publications in prestigious journals and being invited to consult to government or major organisations. Being successful in winning and utilising a research grant constitutes a project. There is the requirement to identify the team of researchers qualified to meet the grant conditions, the writing of the grant application, quality control to ensure that there remains no financial or legal exposure for the university, and submission. Should the application be successful, the research is completed in project mode. The achievement of its objectives is monitored, a budget is maintained and controlled, time schedules are prepared and so on. The university measures the value of grants by their number and size. For the researcher, who provides the project leadership, the measures are the prestige of the grant and the impact of the completed research.

The above are a few examples of how the university's strategy aligns with those of the projects it initiates. From a project risk response perspective each project has its own strategy. When developing the practicum project, the university seeks to protect its reputation as an educator with an applied approach. It faces a 'complex-induced risk' and therefore collects as much information as possible about the task students will perform for the client. This includes a precise scope of the work to be done and expected deliverables. In addition, information will be obtained about the time the academic supervisor can give to the project and to what extent the client is willing to engage with the students.

For the project to instil the desire of life-long learning, a value-creating approach is available. The opportunity exists to have recurrent students enrolling in courses provided the university takes on the risk of training its staff to become better at motivating its students. A 'risk exploitation' strategy is applied in which resources are spent on developing staff training programmes to 'grab' the opportunity that is available. The outcome of the project is perceived to be of high value since returning students sustain the operations of ABC University.

A 'risk sharing' strategy could be chosen when applying for a high-value research grant. Grant allocating bodies tend to favour applications that have been developed across a number of universities because it diversifies overall risk. Researchers in ABC University would therefore collaborate with researchers in other universities when submitting their application. This provides greater depth of research expertise but also requires sharing the rewards when winning the grant.

The above examples demonstrate how business and project strategies align and how project risk strategies can be applied to not only protect university values but also to enhance them.

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