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How can you influence your Board to adopt good governance of project / change management?

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What is the Board's role in governance and do they follow good practice?

What does good look like?

Are there good practice guidelines available?

And in particular how can you influence your board to adopt good practice in governance of project management?

These are some of the questions answered at the latest evening session of the APM Governance SIG.

This was one of a series of sessions that the Governance SIG is presenting to enable good practice to be shared.

Poor governance of projects and project management is a major cause of project failure. Recent research (by both PwC and APM) has shown a direct correlation between organisational and project success and good governance. So good governance is the key success factor in delivering successful project outcomes. Shouldn't Boards take note and make improvement of governance a strategic objective?

Published in: Business

How can you influence your Board to adopt good governance of project / change management?

  1. 1. How can junior project members be empowered to influence their Board to adopt good governance of project / change management? 1 APM Governance SIG
  2. 2. Governance SIG Objectives  Be the UK focus  Advance understanding  Contribute to good practice  Influence national and international standard making authorities  Influence those operationally responsible  Develop ambassadors and exemplars of excellence 2 ….in the governance of project management (change) Activities  Engagement – CxO level as well as APM members  Conferences and Seminars  Publications  Influence of, and contribution to, standards
  3. 3. Directing Change 2nd edition 2011 3 Co-Directing Change 2007 (being updated) Sponsoring Change 2009 Free to APM members at www.apm.org.uk/memberdownloads GovSIG Publications Agile Governance (being developed) To get involved http://bit.ly/apm-agile-governance-preregister
  4. 4. Getting Involved with GovSIG  APM GovSIG  Blogging  Research  Committee 4
  5. 5. Don’t forget our annual conference on 1st October See www.apm.org.uk for details 5 APM Governance SIG
  6. 6. How can junior project members be empowered to influence their Board to adopt good governance of project / change management? Scott Bryce, Matt Foley & James Beck 16th September 2015
  7. 7. PwC Objectives for the session Discuss the challenges and consequences of organisations failing to operate good governance for project / change management Identify how junior project team members can influence their seniors to adopt good governance of project / change management 7
  8. 8. PwC 4th Global PPM Survey Do those who commission change get what they want? View the full survey results here: http://www.pwc.com/gx/en/services/advisory/consulting/portfolio- programme-management/global-ppm-survey-2014.html 8
  9. 9. PwC To what extent do you agree or disagree with the following statements? 14 18 13 3 4 3 44 41 46 9 20 24 Decision making across the portfolio is supported by objective criteria and quality data to ensure alignment to the organisation's priorities There are clear decision accountabilities (RACI) within the programme/project that enables delivery There is an appropriate sponsor/client/leadership representation on programme/project steering committees (%) Neither/ nor DisagreeStrongly disagree Strongly agreeAgree Don’t know 9 Base: 1,774 4th Global Portfolio and Programme Management Survey The survey highlighted the importance of effective governance, through appropriate leadership representation at committees, clear RACI, and decision making supported by quality data 13% 16% 23% 1% 1% 7%
  10. 10. PwC Which factors do you consider to be the top three contributors to programme/project delays? 10 4th Global Portfolio and Programme Management Survey Base: 1,774 0 4 3 6 6 8 10 11 12 15 15 21 23 24 27 30 39 41 Don't know Other Lack of management information Ineffective procurement/ supplier… Change in environment Change in strategy Not the correct skillset Poorly designed/ executed governance Inadequate risk planning Lack of executive sponsorship Lack of Change control management Weak project planning Poorly defined goals/ objectives Lack of stakeholder involvement Poor communication Insufficient resources Poor estimates in the planning phase Change(s) in scope mid-project (%) Poor governance is a root cause contributor to programme / project delays
  11. 11. PwC Regular verbal updates/presentations and clear exception based documented status reports are the most popular ways in which C-suite respondents like to be briefed 11 4th Global Portfolio and Programme Management Survey 4 31 36 37 37 41 46 63 Other Live 'portal' to see programme updates A plan on a page A 'RAIDD' log* Financial reports Data driven reporting Clear exception based documentated status reports Regular verbal updates/ presentations 2 20 16 17 10 8 18 10 1 15 15 14 15 10 16 15 1 7 8 7 12 14 30 22 Other Data driven reporting Financial reports A 'RAIDD' log* A plan on a page Live 'portal' to see programme updates Regular verbal updates/ presentations Clear exception based documentated status reports Rank 1 Rank 2 Rank 3 % ranking% ranking 1st, 2nd or 3rd 81.74 80.12 80.0 76.81 68.57 70.14 67.31 71.43 Mean score NB. Only C-Suite answered this question *Risk, Assumptions, Issues, Dependency log and Decision Register Base: 193
  12. 12. PwC Analysis of the PwC PPM Global Benchmarking Tool highlights that governance is one of the top priorities for successful portfolios and programmes in seven industries 12 1 2 3 Aerospace and Defence Clear Scope Smart Financing Managed Risk Banking and Capital Markets Governance Enabling Managed Risk Smart Financing Communications and Technology Smart Financing Delivery Enabling Integrated Support Energy, Utilities and Mining Agile Change Governance Enabling Clear Scope Entertainment and Media Integrated Support High Performance Smart Financing Governance, Education and Enterprise Governance Enabling Clear Scope Engaged Stakeholders Health, Pharma and Life Sciences Governance Enabling Managed Risk Clear Scope Industrial Products Governance Enabling Clear Scope Smart Financing Insurance Governance Enabling Clear Scope Smart Financing Retail and Consumer Goods Integrated Support Governance Enabling Smart Financing • Governance is one of the strongest themes emerging from the Benchmarking Tool, appearing in the top three for seven of the industries analysed PPM Global Benchmarking Tool
  13. 13. PwC Why do organisations fail to operate good governance and what are the consequences? 13
  14. 14. PwC Case study: the cost of poor governance About: BP is Britain's largest producer of oil and gas. It is an integrated oil and gas company which operates in more than 80 countries around the world. BP's oil rigs are run as the equivalent to a portfolio of projects. In April 2010, BP’s Deepwater Horizon oil platform exploded in waters off the Gulf of Mexico, killing 11 men and unleashing an estimated 176m gallons of crude into the water. After settling federal and state claims totalling $18.7 billion, the total pre-tax charges associated with the spill for BP amount to $53.8 billion. US district Judge Carl Barbier found that BP made decisions during the drilling of the well that led to the deadly blowout. “These instances of negligence, taken together, evince an extreme deviation from the standard of care and a conscious disregard of known risks.” "A large number of decisions were made that were highly questionable and potentially contributed to the blowout of the Macondo well... . ” Prof Donald Winder, Chairman of the National Academy of Engineering investigation 14 Note: this case study is based on analysis of publicly available information only
  15. 15. PwC What are the key indictors of poor governance? 15 Unclear roles and responsibilities Lack of delegated authority Information overload from programme teams to leadership Lack of clear sponsorship / sponsors unclear of their role and responsibilities Culture prevents juniors engaging with leadership for fear of doing something ‘career-limiting’
  16. 16. PwC The APM guidance on Directing Change makes the case for the benefits of effective programme governance, as well as highlighting the consequences of poor governance The APM has found that poor governance of portfolios, programmes and projects leads to:  Lack of a clear link with key strategic priorities.  Lack of clear senior management and, in government projects, ministerial ownership and leadership.  Lack of effective engagement with stakeholders.  Lack of skills and proven approach to project and risk management.  Lack of understanding of, or contact with, supply industry at senior levels.  Evaluation of projects driven by initial price, rather than long-term value for money.  Too little attention to breaking down development and implementation into manageable steps. 16
  17. 17. PwC How can junior project members be empowered to influence their Board to adopt good governance of project / change management? 17
  18. 18. PwC Case study: Influencing upwards in a transformation environment Conditions for success:  Leadership courage to challenge the Board  Data backed justification of the ‘art of the possible’  Organisation creates the right culture for constructive challenge  Leaders listen to their subject matter experts  Provide explicit opportunities, both formal and informal, for people to have their voices heard “I will always challenge my senior managers to deliver, it is up to them to prove to me that I am asking the impossible” CEO 18 “I have seen change ‘done’ to organisations by senior leadership and it rarely ‘sticks’. Involving staff and empowering them to contribute to the change secures better buy in and a greater probability of success” Director of Transformation Learning Points  Be clear with staff what is expected of them  Have a very clear narrative for what change will deliver – and how people will benefit  Organisation creates the right culture for constructive challenge  Leaders listen to their subject matter experts and use them to co-create solutions
  19. 19. PwC Case study: start with the end in mind About: The client is a major UK banking player with international links. The bank is currently restructuring its operations in the United Kingdom and worldwide, involving significant jobs cuts in an attempt to reduce costs and improve profitability. We supported a multi-year transformational change programme, leading a number of work streams, supporting others, and having no involvement in other areas. We noticed that a key work stream was not contributing to the desired outcome. However, the reporting was showing positive progress and the sponsor insisted everything was alright. In a catch up 18 months later, the client revealed that the work stream in question had delivered little in the intervening time, despite positive progress reporting throughout. “While project teams are good at delivering processes and activities, all too often people are unclear about the outcome required from the project. As a result, a project team can deliver and yet still close without having achieved its objectives.” PwC Partner Learning Points  Good governance should review progress against delivering the outcomes/objectives and remind teams to focus on this, and not focus on delivery of the outputs and activities  To support this, reporting should be against outcomes/objectives rather than activities as is the norm  Junior team members need to be empowered through clear MI and data, with a clear escalation process to reach senior stakeholders  Rather than just receiving a report, to support good governance leaders should move away from formal channels to get under the skin of the programme – and give their people a clear view of what good looks like  Programme managers need to have delegated authority and be held accountable for delivering the desired outcomes 19
  20. 20. PwC Observations from the banking sector and portfolio management experience Common Key challenges to good governance Ineffective and often opaque governance model Poor quality of reports including limited traceability along with fear of bad news – avoidance of ‘red risks’ Spans of command often too broad, complex or ill- defined – i.e. poor scope Resource management – particularly of key personnel – often overlooked Perceived challenge is in balancing value add activities (portfolio planning, dependency identification, thematic risk management, etc.) with control activities (quality control, investment & benefits management, change management, etc.) Stakeholders often asked PfMO to translate ivory-tower standards into project management realities. There is strong appetite to share best practice Learning Points  Governance structures, with cleared terms of reference, that get the right voices heard and provide the necessary intelligence to the right decision making boards  Team charters and portfolio, programme and project mandates – that can be revised!  Management of key resource supported by a clear resource strategy and plan  Deliberate and holistic continuous improvement plans contribute to establishing effective and stable teams over the long term “The trick is to separate the change agenda from the day to day business creating organisational capacity to deliver both” CEO
  21. 21. PwC Portfolio Capability: Framework 21 The 12 Elements of Portfolio and Program Management Excellence are underpinned by four outcome- orientated principles: Insight, Alignment, Control and Efficiency Connect execution with the organisation’s strategic direction driving aligned investment priorities across all key parts of the bank unifying goals and expertise across functions. Review and recalibrate the portfolio where necessary as plans change and ensure projects are aligned with enterprise architecture Well calibrated reporting that allows effective progress tracking of all strategic change initiatives with effective communication to all key stakeholders. Key performance indicators are accurately reported to the relevant governance body board at an appropriate level of detail. Mature, and consistent, portfolio and program management delivering controlled implementation in agreed timelines. Risk management is effective with risks identified owned and managed. Changes to plans are transparent and controlled. . Optimized delivery across the portfolio to identify and eliminate overlap or duplication and exploit synergies leading to efficiencies and savings. Efficiency enhanced by use of standard best practice project management processes and common tools. The 12 Elements of Delivery Excellence
  22. 22. Efficiency • Programs generally struggle to obtain and maintain resource e.g. SME time, and stable IT teams • Lower performing programs generally have lower levels of process automation through tools • Most PMOs are distracted from delivery through excessive manual reporting and ad hoc low value administrative requests from central functions • Multiple examples of under- resourcing were identified across the programs Findings & observations: Programme management 22 Alignment • At the program level there is a lack of visibility of the Group strategic objectives • Most programs focus on deliverables and not benefits • At the program level it is difficult to determine the aggregated business impacts given lack of visibility and poor interdependency management Stronger areas of program management tend to be early lifecycle and oversight activities e.g. Governance, and Stakeholder management. Benefits management stands out as an area where perceptions are higher than industry but PwC rating is lower; to a lesser extent this applies to Scope management and Planning Insight • Program level teams in most banks struggle to implement common standards & processes and instead reactively develop bespoke practices • Lower performing programs tend not to be adequately engaged with governance structures and/or have lower capacity to engage stakeholders • The most effective programs have high quality plans, reporting and engaged leadership Control • Half of the client’s peers have focussed efforts on more robust program / project controls • PMOs across most peer groups find it hard to formally control quality and avoid surprises • Across all peers, programs experience a lag between the implementation of appropriate governance, central standards & systems and increased performance and benefits delivery Alignment Insight Control Efficiency Average Maturity 2.4 2.5 1.9
  23. 23.  Describes recommendations around portfolio and program management policies, frameworks and underlying processes such as risk and issue management, planning, cost control, portfolio prioritization, benefits management and quality to enable central control and efficient delivery of the portfolio Standards & Processes  Describes recommendations for enabling and supporting the people change agenda related to portfolio and program management capability across the organization (e.g. career models and training) to enable effective ways of working across the change organization People, Capability & Culture  Describes recommendations relating to organizational structures, governance and team roles including the GSCM functional responsibilities and how it interacts with the other change teams/functions across the bank to achieve an effective and efficient holistic model Organization & Interfaces Summary recommendations Recommendations are presented by operating model component touching upon policies and processes as well as the underlying information models and tools that support Portfolio and Program management. The recommendations also highlight the ‘softer’ change considerations critical to achieving sustainable results Organization & Interfaces People, Capability & Culture Standards & Processes Comms & Brand Systems & Technology Operating Model Components Reporting & MI  Describes recommendations relating to configuration, prototyping, build and rollout of portfolio and program management systems and other technology such as collaboration and knowledge sharing tools, to support efficient coordination, workflow, information and delivery Systems & Technology Reporting & MI  Describes recommendations relating to communications between GSCM and the wider change community across the bank. The communications plan also highlights how GSCM needs to clearly communicate their mission and values to interact effectively with other change functions in the bank Communications & Brand  Describes recommendations relating to decision making and how that is enabled by effective reporting and data standards and processes 23
  24. 24. PwC Overall approach The maturity of Executive Board reporting varies greatly across industry. Within Financial Services CEOs and Executive Boards, given the new pressures on margin are increasingly ‘shining a light’ on their ‘change the bank’ spend but the underpinning systems to provide high quality data are still evolving. 24 • Understanding the purpose of, and audience for, reporting and who needs what • Aligning the reporting with required governance to accelerate decisions and defining the level of reporting required at each level 1 • Refocusing reporting in line with the required decisions • Creating the reporting designs, including key metrics and dashboard designs required at Investment / Executive Board level 2 • Creating a flexible delivery model which evolves and flexes to the business need • Ensuring information is timely and robust and with helpful supporting analysis Reporting delivery model (data, process, systems, people) 3 • Establishing the critical attributes required to drive appropriate behaviours and informed actions • Addressing the capability gaps 4 Governance and reporting alignment Insights and metrics Reporting use, education and behaviours …understanding the audience for the reporting… …defining what is important to that audience… …defining the decisions for each audience… ...defining what the audience will receive… …how the data and analysis will be created… …how reporting is presented… …understanding where education is needed… …and which behaviours need to change…
  25. 25. PwC 25 Download our PPM Global Survey Report at www.pwc.com/ppmsurvey Scott Bryce Scott.bryce@uk.pwc.com Thanks for your time Connect with us www.linkedin.com Matt Foley Matt.foley@uk.pwc.com James Beck james.beck@uk.pwc.com
  26. 26. Don’t forget our annual conference on 1st October See www.apm.org.uk for details 26 APM Governance SIG
  27. 27. pwc.co.uk This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2015 PricewaterhouseCoopers LLP. All rights reserved. In this document, "PwC" refers to PricewaterhouseCoopers LLP (a limited liability partnership in the United Kingdom), which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

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