Constraints are inflexible limits organizations have to contend with in their strategy execution (Spacey, 2015, 2016). The examination and review of constraints is an important step in Risk Management processes of organizations since constraints are one of the drivers of risks (Horine, 2017). This Decision Model helps organizations identify constraints, classify them by categories such as People, Process, Technology, Financial, Compliance/Policy, Governance, Market, Infrastructure, Materials, Other and source (Internal/External), assess how critical it is to align with them and create plans to monitor them effectively.
The process consists of 5 simple steps conducted by a Risk Committee:
- Identify constraints your organization has to work within.
- Classify each constraint by category and source.
- Vote to verify agreement on validity of constraints.
- Rate each constraint based on how impactful it is, and provide insights and rationale.
- Discuss results, review alignment, and finalize constraint prioritization to ensure the right constraints are monitored going forward.
Given that constraints can affect an organization’s strategy and initiatives, it is important to document constraints and monitor them. Each organization has its own unique set of constraints that collectively influence its competitive position in its industry (Spacey, 2015). More often than not, the reasons why companies tend to manage significant changes poorly are tied to constraints (Boyd, 2017). Managers must be aware of organizational constraints to formulate useful strategies (Barnat, n.d.). Constraints and assumptionsi should be used to identify potential risksii that may have negative impact on an organization’s initiatives.
1) NOODLE & TAG: Identify the key constraints that the organization has to work within and classify them by category and source using the following tags (can be customized):
2) COMBINE: Consolidate duplicate and similar constraints to move forward with unique constraints.
3) VOTE: Use voting to verify there is agreement on validity of each constraint.
4) RATE: Rate each constraint based on how impactful it is. In the comments section, provide rationale for why each constraint is rated the way it was.
5) SHARE AND DISCUSS RESULTS: Review alignment and decide on priority of constraints. Identify high priority constraints for close and constant monitoring.
6) ACTIONS: Assign monitoring activities to individuals/teams.
- Agreement on validity of constraints
- Prioritized list of constraints for monitoring
- Valuable insight into how your people perceive constraints
- Shared understanding and alignment on constraints to initiatives/strategies
BENEFITS & IMPACT
This exercise will enable:
Quality- Gain critical insight into your organization and proactively monitor the constraints that impact achievement of strategic goals – no surprises.
Efficiency- Engage busy stakeholders when it’s convenient for them to contribute – 24/7, reducing meetings and bringing the right people to the table.
Engagement- Conversation analytics allow individual stakeholders to know how they rated constraints versus how others did, igniting rich discussion and deeper alignment. Provide a safe space for stakeholders to evaluate and provide candid thoughts and rationale.
Agility- Develop a shared understanding about the organization's key constraints. Evaluate and focus attention and resources on the most important constraints.
Spacey, J. (2016, January 30). 19 Types of Project Constraint - Simplicable. https://simplicable.com/new/project-constraint
Spacey, J. (2015, October 26). 10 Types of Business Constraint - Simplicable. https://simplicable.com/new/business-constraints
Horine, G. (2017). Absolute Beginner’s Guide to Project Management (4th ed.). Que Publishing.
Boyd, B. (2017, January 16). Strategy, Constraints, and Compulsions | Grayline Group. https://graylinegroup.com/strategy-constraints-and-compulsions/
Barnat, R. (n.d.). Strategic Management :: Strategy Formulation Constraints. http://www.strategy-formulation.24xls.com/en315