The Keys to Effective Project Governance Leadership

  • Written By: Jed Simms
  • Published On: December 10 2007



Business executives tend to approach project governance with good intentions, but with few governance-specific skills, and with little knowledge or education on the process. It is assumed by all parties involved in a project that no such expertise is needed. This is a false assumption.

Between 2003 and 2005, Project Sponsor.com conducted an in-depth project governance study on more than 40 major Australian organizations. The study involved detailed interviews with over 130 executives, as well as surveys and reviews of governance materials and training.

Project governance is the process by which executives direct, enable, lead, and control a project to achieve specified business outcomes, benefits, and value, without actually managing the project. Governance is a hands-off management process, yet it requires full commitment and ownership, and comes with a full set of accountabilities. Unfortunately, it also comes with little support or education.

Project governance was introduced some 25 to 30 years ago as a means of transferring accountability for projects from the project (and IT) team to the business. But this hasn't worked out well, as people generally don't take on accountabilities when they don't know what they're doing.

To illustrate, just about every major IT project disaster in the past 20 years has had a governance team (or sponsor and steering committee, as it is also known as) of experienced executives who, in this context, did not know what it was doing. And when their projects failed, they fired the project manager!

To ensure the success of the project and full realization of the business benefits, project teams must communicate and transfer accountabilities effectively to the governance team, but the prerequisite is that the governance team knows what it's supposed to be doing.

Few Executives in Governance Roles Have the Necessary Skills, Knowledge, and Experience

Most governance team members are reliant on bringing their brains and business acumen to their governance roles in order to make a contribution to the project. This means that they tend to see things in terms of operational management rather than in terms of project governance—an approach that leads to the wrong type of leadership.

Here's an example, taken from Project Sponsor.com's research, to illustrate the above point. When the number of outstanding issues for one company's project had escalated to 87, the following discussion took place: “Eighty-seven issues outstanding! We need to get this down! I want no more than a dozen by the next meeting, all right?” This is an operational management approach.

A more appropriate and relevant approach would have been this: “Eighty-seven issues outstanding! Why so many? Is this number still increasing? Why are these issues not being resolved quickly? Are there any that could seriously jeopardize the success of the project? What's the level of unplanned workload required to resolve them? Will this affect the timeline or budget? If we were to dedicate resources to ‘hit' (resolve) them this month, what specific resources would be required? What could suffer as a result? What's the best way forward?”

This latter approach, which is considered one of true project governance, is focused on the nature and impacts of the issues; it is based on the understanding that unresolved issues can destroy project timelines, budgets, and effort estimates.

But to know how to take the project governance approach requires an understanding of the role and nature of project governance—an understanding that most executives in this study reported they do not have.

Few Executives Have Had Any Formal Training for Their Project Governance Roles

The most support and guidance a project governance executive usually receives is a list of accountabilities. Few ever receive any guidance on how to be a sponsor or steering committee member.

Some project teams try to be helpful by providing steering committee charters to inform executives about their roles, but in my experience, these are written from the wrong perspective—that is, from the project's rather than that of the business. Indeed, this leads us to another issue with governance—that few project managers actually understand what the governance team is supposed to do. To some project managers, the governance team is a godsend (as it takes the onus off the project manager), while to others, the governance team is a pain in the neck, always asking the wrong questions and avoiding the key issues.

The formal governance training that the few executives in our study have received has mostly been in the form of quasi-project management training, taught with the belief that if executives understand project dynamics better, they'll be better at project governance. To be frank, this type of instruction is the equivalent of teaching people how a car's engine works in order to make them better drivers. They may become more economical drivers as a result, but knowing how the engine works does not help them reach their destination, nor does it add much to their safety en route.

Overall, the vast majority (83 percent) of executives surveyed had no formal education for their project governance role, but of these, only 57 percent saw the need for any training. However, when these executives were asked to define their role, a high correlation was found between those who didn't see the need for training and those who perceived their role very narrowly, as merely “project control and oversight.”

All Executives Who Had Been Involved in a Project “Gone Bad” Recognized the Need for Training

These results all point to the one major challenge with project governance: the worse your executives are at governance, the less likely they are to be aware of what they don't know, and therefore, the less likely they will be to recognize the need for education and support—a “catch-22” (a no-win situation).

In addition, many executives that requested training only did so because they believed that there must be more to the role they have in the project. The request wasn't based on their realizing that they lack knowledge.

At a minimum, executives need to learn the following:

  1. The true measures of project success.
    Because of the “on-time and on-budget delivery” mantra of most businesses, many governance teams are “seduced” (fooled) into measuring success using this as a gauge rather than using the delivery of measurable business outcomes, benefits, and value within the time and cost constraints. Indeed, in a benefits management survey of 57 projects, none of the governance teams had actually defined their projects' measures of success in business terms.

    The governance (and project) team needs to understand and agree on what the business measures of success are so that every dimension of the project can be considered and debated against these measures.

  2. The roles of the governance team.
    I remember one program management office (PMO) manager being quite embarrassed when he presented to me his organization's governance accountabilities—about 10 lines on a page.

    It seems amazing that this is still a subject of debate. Depending on your governance role (investment approver, sponsor, steering committee member), your accountabilities should be clear and known—not only to you, but to your project team and peers as well.

    I liken being a sponsor, for example, to teaching your child to drive. Your car, insurance, and life are in his hands, and he has control of the car. Your role is to ensure that you arrive at your defined destination safely and on time. Once sponsors understand this, they get the idea of what they are accountable for.

  3. The measures of governance team success.
    Although the success of the governance team is frequently measured, doing so by simply holding and attending governance meetings is not enough. The ultimate measure of governance success is the business results achieved. But waiting until the end of the project to gauge these results is too late.

    First, executives need to know the measures—their critical success factors, impediments to success, leading indicators of failure, the cash burn rate vis-à-vis plan, and so on. If executives are not in touch with and informed about their project, they're not likely to be successful.

    Secondly, executives must take appropriate action to ensure the project's success. If they're “fiddling while Rome burns” (wasting time with unimportant issues when they should be handling the more serious problems), the project will not be successful. Executives should not only be reactive to the project manager's requests, but proactive in ensuring no unnecessary obstacles exist.

  4. The governance actions and inactions that cause projects to succeed or fail.
    It often comes as a great surprise to executives that governance inaction can destroy a project as easily as wrong action can.

    At Project Sponsor.com, executives are usually given a booklet titled Understanding Project Governance, which spells out 24 dimensions of governance and explains, for each one, how inaction or wrong action can destroy the project or its value. You can almost see these executives sitting up straighter and paying more attention once they know how easily they can destroy the project from their positions.

  5. The necessary interactions and relationships with the project manager and the project.
    The project manager is the governance team's agent. The governance team, first of all, needs to trust him or her (if the project manager loses the team's trust, they're all finished—the project is practically guaranteed to fail). The project manager also needs to keep the team informed of what is happening with the project.

    Conversely, the governance team needs to keep the project team informed of what is happening in the organization (and sometimes in the market) that could have an impact on the project or its successful implementation. Many governance team members forget this.

    But most importantly (and perhaps most controversial), the governance team is a resource for the project manager. It is there to sort out problems in the business, remove obstacles, take pre-emptive action to prevent risks, manage critical success factors, and champion the project through to successful business adoption.

Only when these essential dimensions (although there are others) are known and understood, and when the necessary supporting and enabling processes and materials are in place, can the business executives effectively lead, contribute to, and govern their projects.

What You Can Do

Find out what education, training, and support are available to executives. Either get senior management's commitment to introduce governance education and training (rare but useful), or find someone in your organization who sees the need. Get that person to champion an introduction to education and training, and to talk about how it helped him or her.

Then measure your project success rate. Well-governed projects should be easier to manage and deliver greater benefits.

About the Author

Jed Simms has pioneered the focus on project governance, and has created web sites centered on the needs of project sponsors and the other governance roles (http://www.project-sponsor.com and http://www.beingaprojectsponsor.com). A specialist in increasing the value of projects, Simms has led research into the drivers and destroyers of value at all levels of the project value chain—developing a new approach to project delivery. He has authored three books, several e-books, and over 80 articles, to help spread the knowledge that consistently doubles (or more) the returns generated from projects.

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