All projects have the potential of getting into trouble, but generally, project management can work well as long as: 1) the requirements do not impose severe pressure on the project manager, and 2) a project sponsor exists as an ally to assist when trouble does appear.
Unfortunately, in today’s chaotic environment, this pressure appears to be increasing because:
- Companies are accepting high-risk and highly complex projects as a necessity for survival
- Customers are demanding low-volume, high-quality products with some degree of customization
- Project life cycles and new product development times are being compressed
- Enterprise environmental factors are having a greater impact on project execution
- Customers and stakeholders want to be more actively involved in the execution of projects
- Companies are developing strategic partnerships with suppliers, and each supplier can be at a different level of project management maturity
- Global competition has forced companies to accept projects from customers that are all at different levels of project management maturity and have different reporting requirements
These pressures tend to slow down the decision-making processes at a time when stakeholders want the projects and processes to be accelerated. One person, while acting as the project sponsor, may have neither the time nor the capability to address all of these additional issues. The result will be a project slowdown, which can occur because of:
- The project manager being expected to make decisions in areas where he/she has limited knowledge
- The project manager hesitating to accept full accountability and ownership for the projects
- Excessive layers of management being superimposed on the project management organization
- Risk management being pushed up to higher levels in the organizational hierarchy, resulting in delayed decisions
- The project manager demonstrating questionable leadership ability on some of the nontraditional projects
The problems resulting from these pressures may not be able to be resolved by a single project sponsor, at least easily and in a timely manner. These problems can be resolved using effective project governance. Project governance is actually a framework by which decisions are made. Governance relates to decisions that define expectations, accountability, responsibility, the granting of power or verifying performance, and relates to consistent management, cohesive policies, processes, and decision-making rights for a given area of responsibility. It enables efficient and effective decision making to take place.
Every project can have different governance even if each project uses the same enterprise project management methodology. The governance function can operate as a separate process or as part of project management leadership. Governance is not designed to replace project decision making, but to prevent undesirable decisions from being made.
Historically, governance was provided by a single project sponsor. Today, governance is a committee and can include representatives from each stakeholder’s organization. Exhibit 1 shows one such governance approach. The membership of the committee can change from project to project and industry to industry. The membership may also vary based on the number of stakeholders and whether the project is for an internal or external client. On long-term projects, membership can change throughout the project.
Exhibit 1: Typical Governance Structure
Governance on projects and programs sometimes fails because people confuse project governance with corporate governance. The result is that members of the committee are not sure what their roles should be. For governance to work correctly, each member of the governance committee must clearly understand the committee’s responsibility and decision-making authority in relation to the project team’s responsibility and decision-making authority. If significant overlap exists, confusion will reign and problems will occur. If clarification is not made, the project team runs the risk of micromanagement by the governance committee. This understanding must be made early on in the project, preferably before the project actually begins.