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A look at the role Governance plays in ensuring the effectiveness of Project Management. (c) START[pm] 2010

A look at the role Governance plays in ensuring the effectiveness of Project Management. (c) START[pm] 2010
Presented at the PM Showcase, Adelaide, SA 2009.

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Governance  - Ensuring the Effectiveness of Project Management Governance - Ensuring the Effectiveness of Project Management Presentation Transcript

  • Governance – Ensuring the Effectiveness of Project Management PM Showcase, Adelaide, 6 November 2009
  • Objectives and Contents
    • Background: A Time to Re-think Project Management
    Copyright © START[pm] consulting 2009 Explore the rationale and function of Governance in the Enterprise , and in Portfolio, Program and Project Management Establish the relationship between Governance and effective Project Management Evaluate how Project Managers can add value through fulfilling their Governance obligations
    • Actualizing Effective Project Management
    • Conclusions
    • Questions
    • A new Model for Effective Project Management
      • Value Proposition
      • Tenets of project manager effectiveness
      • Dimensions of application
    • Governance as the “engine” of Change
    • Contexts of Governance
  • Copyright © START[pm] consulting 2009
  • A Need for Governance, now more than ever
    • Poor Governance - Root Cause of the GFC ??
    • Large-scale corporate failures
      • Lehman Bros., GM, Enron, WorldCom , OneTel, HIH …
    • Renewed focus upon Corporate Governance
      • Monitor and control behaviours and decisions of senior executives
      • Essential and integral to addressing shareholders’ and stakeholders’ interests
    • Many organisations depend upon projects – and project management - to deliver value
      • Entrusted with utilising valuable resources to generate organisational benefits and capabilities
    • Need for effective governance at project and program level
      • Vitally important part of any corporate governance framework
    • Governance is ultimately effected through people
      • Need to ensure that the model is aligned to the situation
    So...why, in the eyes of many, do Project and Program Management struggle to fulfil their governance obligations? Copyright © START[pm] consulting 2009
  • Re-thinking PM in the context of Governance
    • We need to ask, what is the Value Proposition for Effective Project Management as custodian of the organisation’s future ?
      • How does our profession make a difference to Governance?
    Copyright © START[pm] consulting 2009
    • The following Model for Effective Project Management
      • presents a holistic view of what it takes to realise the value of project management in organisations
      • is method- and methodology-independent
    • It integrates:
      • Tenets - the ‘ how ’: dependence upon the project manager to adhere to core principles
          • with
      • Dimensions - the ‘ what ’: scope of project management responsibilities
  • Copyright © START[pm] consulting 2009
  • A New Model for Effective Project Management Value Proposition for Effective Project Management C ontrol B ehave A rticulate … the value of project management endeavours in terms of delivering to business outcomes … as a business person, focussed upon value generation, not just ‘technical’ outputs … the resources (time, capital) to achieve the mandated deliverables within set constraints Tenets “ Project Management is an integrated set of specialised management disciplines focused upon the application of scare resources to achieve specific, quantifiable business outcomes within defined constraints ” Copyright © START[pm] consulting 2009 Copyright © START[pm] consulting 2009
  • A New Model for Effective Project Management Value Proposition for Effective Project Management C ontrol B ehave A rticulate
    • Accommodating diverse stakeholders’ interests, views and influences
    • Ensuring adequacy of ongoing diligence
    • Maintaining alignment of resource usage to desired outcomes
    Dimensions
    • Facilitating understanding of project activity
    • Managing internal and external threats and opportunities
    • Managing allocated resources to generate required outcomes
    Focus of Tenets
    • Project Management responsibilities are distilled into 4 Dimensions
    Focus of Dimension
    • Each Dimension has a specific relationship to each Tenet …
    Copyright © START[pm] consulting 2009 Copyright © START[pm] consulting 2009 Risk Management Risk Management Value Delivery Management Value Delivery Management Governance Governance Stakeholder Management Stakeholder Management Governance Value Delivery Management Risk Management
    • Independent and integrated oversight of project / program
    • Providing transparency of project / program activities
    Stakeholder Management
  • Stakeholder, Risk and Value Delivery Management Copyright © START[pm] consulting 2009 Containment (or promotion) of stakeholder power and influence over outcomes Mechanisms applied to ensuring ongoing, appropriate engagement of each of the stakeholders, e.g. communication channels Analysis and mapping of the stake to deliverables Understanding of the core stake of each of the stakeholders in the project, program or enterprise T: arising from appropriateness of tactical initiatives and programmes (which give rise to projects), to realize the intended objectives O: arising from the current and target operational environments, such as readiness for change, and ability to adapt while maintaining operational integrity S: generally originating in the organisation’s external environment, reflecting the feasibility and/or appropriateness of proposed strategies P: arising from the project parameters and characteristics e.g. project delivery system impacting ability to produce the outputs necessary to deliver the desired outcomes The metrics and processes which allow the value generated to be measured, recognised and responded to. Addresses how inputs (resources) are utilised to deliver the desired outputs and outcomes. Captures, prioritises and reconciles the diverse definitions and expectations of “value”. Enabling outputs to be operationalised to generate value in the target environment. Copyright © START[pm] consulting 2009 Copyright © START[pm] consulting 2009 Copyright © START[pm] consulting 2009 Impact Management Stake identification Engagement & Integration Stake Analysis and Mapping Operational Strategic Tactical Project Allocation & Alignment Value Definition Measurement & Control Realization
  • Focus on Governance The ‘ what ’: Supports appropriate articulation of project status through consistency of data and information presented The ‘ who : Supports the consistency of individuals’ behaviours ( “we know what we are supposed to do” ) The ‘ how ’: Supports consistency of controls (application of policies; the internal and the external interfaces and their management) The ‘ where’ and the ‘ when’ Defines situational mechanisms that bind the other elements to effect Governance
    • Dimension Focus : Independent and integrated oversight of project / program
      • Tenet Focus : Providing transparency of project activities
    Copyright © START[pm] consulting 2009 Copyright © START[pm] consulting 2009 Structures Standards Roles & Responsibilities Policies, Processes and Procedures
  • Copyright © START[pm] consulting 2009
  • Governance is the ‘engine’ ...
    • Pull: Monitor, collate and filter (but not interpret) stakeholder information needs
    • Push: Provide consistent, but appropriately tailored, understanding of project / program activities
    • Pull: Capture risk data
    • Push: Undertake independent monitoring and analysis of risks and risk provisions Risk policy compliance
    • Push: standards for value and benefits’ measurement;
    • Corrective action interventions in response to variations to expected performance
    • Pull: Capture metrics associated with delivery of value, asset utilisation and benefits realization
    Copyright © START[pm] consulting 2009 Copyright © START[pm] consulting 2009 Governance Value Delivery Management Risk Management Stakeholder Management
  • ...at the heart of project integration
    • The PMBoK Knowledge Areas can be considered ‘ proxies ’ for the ‘specialised disciplines’ of the Value Proposition for Effective Project Management
    • The PMBoK Knowledge Areas also align with the Dimensions
      • The Dimensions emphasise the interdependencies and overlaps between the PMBoK Knowledge Areas
    Copyright © START[pm] consulting 2009 Governance Value Delivery Management Risk Management Stakeholder Management
  • Governance is critical for “ Change Management ”
    • “ Change Management ” often used as a by-word for range of activities undertaken to drive towards a desired state
      • Conventionally , emphasises the “ people side ” of change
    • Ironically, “ management ’ in any formal sense is often absent or ad-hoc
      • Environments often highly dynamic
      • “ Project management ” confined to delivering “ technical outputs ”
      • But expectations remain of realisable benefits
    • So, the challenges for Governance are to:
      • Assure the right outcomes ( benefits realisation )
      • Avoid imposing rigidity which will impede responsiveness
    • Governance Mandate achieved through:
      • Recognising the context and significance of the change impact
      • Verifying the congruence of the change with the organisation’s strategic objectives
      • Applying “ just enough ” Governance – light touch, but heavy emphasis on change integrity
    Copyright © START[pm] consulting 2009 Copyright © START[pm] consulting 2009
  • Copyright © START[pm] consulting 2009
  • Governance is applied at different levels
    • Enterprise:
      • Strategy determination
      • Strategic alignment
      • Strategy oversight
    • Portfolio/Program:
      • Strategy implementation
      • Asset allocation
      • Benefits’ realization
    • Project:
      • Cost control
      • Resource utilization
      • Capability delivery
    Structures Standards Roles & Responsibilities Policies, Processes and Procedures Copyright © START[pm] consulting 2009 Copyright © START[pm] consulting 2009
  • Governance is applied at different levels Programme / Portfolio Project Enterprise
    • Organisations have to address governance and compliance criteria specific to industry or business-type.
    • Influence Strategic decisions, and have an Enterprise-wide impact.
    Effective Delivery Governance ensures that implications are cascaded down through all levels of change initiatives.
    • Responding to changes in a dynamic environment is critical.
    • Need to ensure planned benefits are still realisable, or are adapted to changing circumstances.
    Effective Delivery Governance accommodates feedback from the organisation coal-face through ensuring necessary lines of communication are in place. Structures Standards Roles & Responsibilities Policies, Processes and Procedures Copyright © START[pm] consulting 2009 Copyright © START[pm] consulting 2009
  • Governance is applied at different levels
    • Each Level needs to maintain integrity to assure consistency in Governance...
    Structures Standards Roles & Responsibilities Policies, Processes and Procedures
    • ...through inheritance / alignment of each of the Elements across the Levels
    Copyright © START[pm] consulting 2009
  • Governance at the Project Level
    • Standards
      • Technical Standards e.g. ISO12207
      • Quality Standards e.g. ISO9001
      • Project Accounting
    … inherited from / aligned with… Structures Standards Roles & Responsibilities Policies, Processes and Procedures Copyright © START[pm] consulting 2009
    • Roles & Responsibilities
      • Deliver Work Packages (Scope, Quality)
      • Manage “triple constraints”
      • Capability development
    • Policies, Procedures & Processes
      • Lifecycle approaches e.g. Agile, Waterfall
      • Quality Control and Assurance
      • Status Reporting
    • Structures
      • Project Teams e.g. dedicated / cross-functional / matrixed
      • Project Support/Management Office
      • Change Control Boards
  • Governance at the Program/Portfolio Level
    • Standards
      • Change “roadmaps” e.g. Release / Change Management
      • Cost/Benefits Management e.g. capex/opex recognition
    • Policies, Procedures & Processes
      • Resource allocation / costing
      • Risk Management
      • Report consolidation
    • Structures
      • Steering Committees / Governance Boards
      • Program Office(s)
      • Change Approval Boards
    … inherited from / aligned with… Structures Standards Roles & Responsibilities Policies, Processes and Procedures Copyright © START[pm] consulting 2009
    • Roles and Responsibilities
      • Manage Portfolio e.g. project selection and prioritisation
      • Capability deployment , e.g. Operationalising, Benefits Realisation
      • Risk Provisioning e.g. contingency allocation
      • Direct Program(s)
  • Governance at the Enterprise Level
    • Standards
      • Compliance / continuous disclosure e.g. CLERP9, Sarbanes-Oxley
      • Financial / accounting e.g. AASB/IFRS
      • Industry-specific e.g. BASEL II
      • Internal e.g. Enterprise Architecture
    • Roles & Responsibilities
      • Set strategic direction
      • Key investments approvals
      • Capability utilisation
    • Policies, Procedures & Processes
      • Risk Policy
      • Internal controls and audit
      • Reporting (roll-up, consolidation)
    • Structures
      • Board of Directors
      • Enterprise Programme Office
    Structures Standards Roles & Responsibilities Policies, Processes and Procedures Copyright © START[pm] consulting 2009
  • Governance in Practice - Example Portfolio Copyright © START[pm] consulting 2009 Enterprise Program Office “ World Leader in Claims processing” Develop A/P – Assessment system real-time interface Assessment team re-structure and training PMO PSO Board of Directors Portfolio Management Project Board Program Steering Committee Project Team Strategy Assessment Dept BPR Prioritisation Mandates Business Case Scopes
    • Effective Governance assures:
    • Doing the right things – supporting strategy
    • Doing things right – achieving compliance and stakeholder expectations
    Structures Standards Roles & Responsibilities Policies, Processes and Procedures ... Roadmap Enterprise Architecture
  • Risk Management Risk Management Value Proposition for Effective Project Management Control Behave Articulate Risk Management
    • Articulate : Governance provides a ‘neutral’ unbiased voice of the project
    • Behave : Governance drives behaviours within the project, and across project interfaces
    • Control : Governance exerts controlling mechanisms which act as ‘safety net’ for project
    Governance: application of Tenets Copyright © START[pm] consulting 2009 Copyright © START[pm] consulting 2009 Value Delivery Management Value Delivery Management Stakeholder Management Governance Stakeholder Management Stakeholder Management Governance Value Delivery Management Governance
    • Governance elements generate requirements with regard to how project management is executed:
      • Implications for Actualizing Effective Project Management arise for each of the Tenets…
      • So, Actualizing Effective Project Management is a Critical Success Factor for Governance...
    Bringing it together: “Actualizing” is the key Copyright © START[pm] consulting 2009
  • Copyright © START[pm] consulting 2009
    • “ The whole discipline and art of project management is going to be the essence of management training, operational excellence and value added .”
          • Tom Peters
          • PM Network , January 2004
    Articulate: It’s all about the Value... Copyright © START[pm] consulting 2009 © START[pm] consulting 2009 Value Proposition for Effective Project Management C ontrol A rticulate B ehave
    • Most Project Managers are from technical backgrounds , cling onto their past , and stay in their comfort zones for too long
    • Need to step back and see the big picture …
    Articulate: the Big Picture...
    • Le Cirque , Georges Suerat, 1891.
      • Oil on canvas, 73 in. x 59⅛ in (185 cm X 150 cm); unsigned;
      • Musee d'Orsay, Paris
    Copyright © START[pm] consulting 2009 © START[pm] consulting 2009 Governance Requirement : Project managers have to ensure appropriate, contextual articulation and representation of the project status . Effective Project Management Implication : Understand how the parts of a project fit together to create the whole; Articulate the link from the external ( big picture ) to the internal ( detail ), and vice versa. Value Proposition for Effective Project Management C ontrol A rticulate B ehave
    • “ Always behave like a duck - keep calm and unruffled on the surface but paddle like the devil underneath.”
          • Jacob M. Braude (1896-1970),
          • American author
    Behaviour: Actions, as well as words Copyright © START[pm] consulting 2009 © START[pm] consulting 2009 Value Proposition for Effective Project Management C ontrol A rticulate B ehave
  • Behaviour: Keeping the balance…
    • It is important, as a Project Manager, to be able to “ deep dive ”…
    • … but remember to come up for air …
    Copyright © START[pm] consulting 2009 © START[pm] consulting 2009 Governance Requirement : Project managers have to satisfy themselves as to the relevance and materiality of issues to project conduct and outcomes. Effective Project Management Implication : Project Managers need to understand what’s happening in their projects; they just don’t need to spend all their time on the detail . Value Proposition for Effective Project Management C ontrol A rticulate B ehave
    • “ The most reliable way to anticipate the future is by understanding the present ”
          • John Naisbitt (1929-),
          • American Futurist & Author (‘ Megatrends ’)
    Control: Knowing where the buck stops Copyright © START[pm] consulting 2009
    • “ It's tough to make predictions , especially about the future ”
          • Yogi Berra (1925-),
          • US Baseball Player
          • (attributed)
    © START[pm] consulting 2009 Value Proposition for Effective Project Management C ontrol A rticulate Behave
  • Control: Beware of Prescriptions… 1 4 3 3 1 2 3 4
    • Methods and processes are support mechanisms, not intended as “ paint-by-numbers ” formulae
    • Common sense , seeking advice and attacking problems are of greater benefit to project outcomes
    2 X Copyright © START[pm] consulting 2009 © START[pm] consulting 2009 Governance Requirement : Mature application of project management methods and processes to assure control is executed consistently to the standards mandated by governance. Effective Project Management Implication : Project Managers need to “ engage brain ” in applying processes to control their projects; their ‘value add’ lies in overlaying sound judgement upon the process. Value Proposition for Effective Project Management C ontrol A rticulate Behave
  • Copyright © START[pm] consulting 2009
  • Conclusions
    • Governance and Effective Project Management have a symbiotic relationship
    • Governance provides for consistency of expectations and outcomes
      • Standards , Roles and Responsibilities , Policies, Processes and Procedures , and Structures combine to support Doing Things Right and Doing the Right Things
    • Effective Project Management focuses on what is important to project success , through
      • A rticulation of performance in terms of value-add to delivery assurance
      • B ehaviours centred upon value-generation
      • C ontrol within and at the boundaries of the project to deliver to expectations
    “ In business , words are words; explanations are explanations, promises are promises, but only performance is reality .”
          • Harold S. Geneen (1910 - 1997)
          • American Industrialist, CEO ITT (1959-1972)
    Copyright © START[pm] consulting 2009
  • Questions?
    • project management
    • change management
    • consulting services
    Copyright © START[pm] consulting 2009 E-mail: [email_address]