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The activities in the strategy planning model are not in any particular sequence. In fact, they are to some degree interactive, since the information derived from one analysis may require going back to another step and digging out more information. Note that two of the components in the strategy planning model are contained in the model for developing a mission statement, presented in Chapter 4. These are the identification of the expectations of major inside and outside interests, which are called stakeholders in the mission development model (Figure 4.1). This means that, if a mission statement has been developed in accordance with the model, stakeholder expectations have already been identified. Also, for a project team, some of those stakeholders listed in the strategy planning model may be relevant while others may not. However, the team should be careful not to dismiss a party as irrelevant without considering whether that conclusion is correct. Stakeholders are identified by whether the project may impact them in some way or whether they may have an impact on the project. If either is true, they should be considered important to the analysis.
Conducting the database analysis is limited in some organizations by a lack of good historical data. In that case, the analysis depends on the memories of individuals, and is subject to all the biases and inaccuracies to which human beings are prone. Those limitations should be noted in making use of remembered data.
Analysis of the current situation should be easier, assuming that the project team members have access to vital information on thebusiness, its competitors, and so on.
Forecasts are based on environmental scanning. They should include examination of technological developments, economic trends, pending government regulations, social trends, and so on. Naturally, forecasting is very difficult and is limited by what information is available on competitors and other key entities.
Finally, we have the evaluation of environment and company for some specific variables. This evaluation is generally called a SWOT analysis. It prescribes that the team examine the company's Strengths and Weaknesses as well as the Opportunities and Threats presented by the environment. These factors are clearly not independent. For example, forecasting is based on evaluations of the external environment and on understanding the expectations of stakeholders. The current situation is also influenced by the environment and the expectations of stakeholders. For that reason, the model is drawn to indicate that interdependence.
CONDUCTING THE ANALYSES
The major environmental factors that may affect a project are economic, technological, government or legal, geographic (including weather or terrain), and social. The economic variables can affect a project in many ways. During a recession companies tend to run "leaner" than in more prosperous times, making resources more scarce and conflicts among projects almost inevitable. When the project spans national borders, currency fluctuations can be a significant factor. In addition, the economies of the host country and home country will be considerations. For those projects that have long time frames, inflation becomes a factor: Will inflation affect the project and, if so, what parts?
Technological changes can be the most difficult to forecast and deal with. One of my own projects, for example, called for designing a new 1000-watt linear amplifier with totally solid-state devices (no vacuum tubes). However, a feasibility study showed that current devices were not capable of meeting all the technical requirements, so a conventional vacuum tube design had to be implemented.
Projects are increasingly affected by government regulations and legal issues. Product liability suits in the United States have grown to such an extent that companies are very cautious in their handling of new products and services. No one wants to make sports helmets, for example, because of the possibility of being sued if a player is injured. Environmental regulations have forced many businesses to change their way of running projects. According to one test engineer at the NASA facility near Las Cruces, NM, rocket components were once tested with minimal concern for the effluents. However, because of population growth near the test facility, NASA has had to take measures to contain toxic gases so that no danger is posed to nearby residents.
Geographic factors certainly play a part in how some projects are run. Many companies are now global, and colocation of project participants is impossible. Fortunately, with modern communications technology, they are able to achieve what is called virtual colocation, whereby members of the team "meet" as often as necessary through teleconferencing. Naturally, geography also affects strategy in construction projects in terms of terrain, material resources available, and so on. Human resource availability plays a role as well. I recently saw the construction of a large Shell refinery in Bintulu, Sarawak. Ten years ago, Bintulu was a small...