Establish project governance is key to the overall success and communication of that success.
Establish Strong Project Governance
Project governance is the management framework within project decisions reached. Project governance is a critical element of any project since while the accountabilities and responsibilities associated with an organization’s business as usual activities laid down in their organizational governance arrangements, seldom does an equivalent framework exist to govern the development of its projects. Therefore, the role of project governance is to provide a decision-making framework that is logical, robust and repeatable to govern a project.
Three pillars of project governance
Three pillars support the decision-making framework:
This refers to a project board or project steering committee. Additionally, there may be a program, governing a group of related projects of which this is one, and possibly some form of portfolio decision-making group. The decision power of the committee must laid out in policy and procedural documentation. In this way, the project’s governance integrate within the wider governance arena.
Committee membership is determined by the nature of the project, which in turn determines which organizational roles should be represented on the committee.
This concerns the information that informs decision makers and consists of regular reports on the project, issues and risks that need escalation by the project manager and certain key documents that describe the project, foremost of which is the business case.
Project governance principles
Project governance frameworks have core principles in order to ensure their effectiveness.
Principle 1: Ensure a single point of accountability for the success of the project
The most fundamental project accountability is accountability for the success of the project. A project without a clear understanding of who assumes accountability for its success has no clear leadership. With no clear accountability for project success, there is no one person driving the solution of the difficult issues that beset all projects at some point in their life. It also slows the project during the crucial project initiation phase since there is no one person to take the important decisions necessary to place the project on a firm footing.
Principle 2: Project ownership independent of asset ownership, service ownership or other stakeholder group
Often organizations promote the allocation of the project owner role to the service owner or asset owner with the goal of providing more certainty that the project will meet these owner’s fundamental needs, which is also a critical project success measure. However, the result of this approach can involve wasteful scope inclusions and failure to achieve alternative stakeholder and customer requirements.
The benefit of the doubt goes to the stakeholder allocated with the project owner responsibility, skewing the project outcome:
- Project owner requirements receive less scrutiny, reducing innovation and reducing outcome efficiency.
- Different skill sets surround project ownership, asset ownership and service ownership placing sound project decision making and procedure at risk.
- Operational needs always prevail, placing the project at risk of neglect during such times.
- Project contingencies are at risk of allocation to additional scope for the stakeholder allocated project ownership.
The only proven mechanism for ensuring projects meet customer and stakeholder needs, while optimizing value for money, is to allocate project ownership to specialist party, that otherwise would not be a stakeholder to the project.
Projects have many stakeholders and an effective project governance framework must address their needs. The next principle deals with the manner in which this should occur.
Principle 3: Ensure separation of stakeholder management and project decision making activities
The decision-making effectiveness of a committee is inversely proportional to its size. Not only can large committees fail to make timely decisions, those it does make are often ill considered because of the particular group dynamics at play.
As project decision-making forums grow in size, they tend to morph into stakeholder management groups. When numbers increase, the detailed understanding of each attendee of the critical project issues reduces. Not only is there insufficient time for each person to make their point, but those with the most valid input must compete for time and influence with those with only a peripheral involvement in the project. Not all present will have the same level of understanding of the issues and so time wasted bringing everyone up to speed on the particular issues discussed. Hence, to all intents and purposes, large project committees constitute more as a stakeholder management forum than a project decision-making forum. This is a major issue when the project is depending upon the committee to make timely decisions.
Principle 4: Ensure separation of project governance and organizational governance structures
Project governance structures established precisely because it recognizing that organization structures do not provide the necessary framework to deliver a project. Projects require flexibility and speed of decision-making and the hierarchical mechanisms associated with organization charts do not enable this. Project governance structures overcome this by drawing the key decision makers out of the organization structure and placing them in a forum thereby avoiding the serial decision making process associated with hierarchies.
Consequently, the project governance framework established for a project should remain separate from the organization structure. Recognize that the organization has valid requirements in terms of reporting and stakeholder involvement. Dedicated reporting mechanisms established by the project can address the former and the project governance framework must itself address the latter. What should be avoided is the situation where the decisions of the steering committee or project board are required to be ratified by one or more persons in the organization outside of that project decision making forum; either include these individuals as members of the project decision making body or fully empower the current steering committee/project board. The steering committee/project board is responsible for approving, reviewing progress, and delivering the project outcomes, and its intended benefits, therefore, they must have capacity to make decisions, which may commit resources and funding outside the original plan. This is the final principle of effective project governance.
Adoption of this principle will minimize multi-layered decision-making and the time delays and inefficiencies associated with it. It will ensure a project decision-making body empowered to make decisions in a timely manner.
There are clearly defined criteria for reporting project status and for the escalation of risks and issues to the levels required by the organization. The organization fosters a culture of improvement and of frank internal disclosure of project information. Project stakeholders engage at a level that is commensurate with their importance to the organization.
Project governance will:
- Outline the relationships between all internal and external groups involved in the project.
- Describe the proper flow of information regarding the project to all stakeholders.
- Ensure the appropriate review of issues encountered within each project.
- Ensure that required approvals and direction for the project obtained at each appropriate stage of the project.
Important specific elements of good project governance include:
- A compelling business case, stating the objects of the project and specifying the in-scope and out-of-scope aspects.
- A mechanism to assess the compliance of the completed project to its original objectives.
- Identifying all stakeholders with an interest in the project.
- A defined method of communication to each stakeholder.
- A set of business-level requirements as agreed by all stakeholders.
- An agreed specification for the project deliverables.
- The appointment of a project manager.
- Clear assignment of project roles and responsibilities.
- A current, published project plan that spans all project stages from project initiation through development to the transition to operations.
- A system of accurate upward status-, and progress-reporting including time records.
- A central document repository for the project.
- A centrally held glossary of project terms.
- A process for the management and resolution of issues that arise during the project.
- A process for the recording and communication of risks identified during the project.
- A standard for quality review of the key governance documents and of the project deliverables.
- Establish a project steering committee.
- Agree standard management information, reporting, distribution list and frequency.
- Determine and document the escalation matrix.
- Create and publish project governance document.
Hints and tips
- The project manager must operate as agreed in the project management system and stick to commitments made.
- Creating management information is vital and help create stakeholder confidence.