Does your Board exhibit good governance of project and change management? Tuesday 22nd September 2015 Farnborough APM Thames Valley branch and Governance Specific Interest Group by Martin Samphire and Miles Dixon

1. Does your Board exhibit good
governance of project and
change management?
Thames Valley Branch – 22 Sept 2015
1
APM Governance SIG
Martin Samphire and Miles Dixon

2. 2
Martin Samphire
Owner and MD – 3pmxl Ltd
MAPM, MIoD
Chairman of Governance SIG
Sectors –Central Civil Government,
Police, Defence, Energy, Financial
Services, Construction
Miles Dixon
Owner – Quartermoon Ltd
MAPM, MBCS, MIC
GovSIG Committee Member
Organisational change,
new business/product dev’t
and IT business systems

3. 3
Agenda
 APM Governance SIG
 What is Governance of PM and why is it important?
 Core principles of Governance
 Governance structure & key roles
 Where does Good Governance start?
 Case studies
 How to get involved
 Discussion

4. APM Governance SIG
4

5. 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
5
….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

6. Directing Change
2nd edition 2011
6
Co-Directing Change
2007 (being updated)
Sponsoring Change
2009
Free to APM members at www.apm.org.uk/memberdownloads
Gov SIG Publications
Agile Governance
(being developed)

7. What is Governance of
Project Management /
Change?
7

8. The silver bullet……?
Project success
Portfolio success
8
Good
Governance
Of projects
Of project management

9. Definitions
‘Corporate governance involves a set of relationships between a company’s
management, its board, its shareholders and other stakeholders.
Corporate governance also provides the structure through which the objectives of
the company are set, and the means of attaining those objectives and monitoring
performance are determined’
Organisation for Economic Co-operation and Development
OECD Principles of Corporate Governance 2004
www.oecd.org
9
“Governance of project management refers to the
set of policies, functions, processes, procedures
and responsibilities that define the establishment,
management and control of projects, programmes
and portfolios”
APM BoK 6th Edition
Linked but separate from Project
Governance!
(management framework within which project decisions are made and accounted for)

10. Overall Context
10
10
Mission
Strategy &
Objectives
Portfolio Mgmt –
Definition &
Monitoring
Operational
Planning & Mgmt
Programme and Project
Mgmt of authorised
P&Ps
Operational Mgmt
of on-going operations
(BAU)
Organisational and External Resources delivering tasks
Vision
10

11. Why is Good Governance important?
 The key success factor for project outcomes - #1 in APM’s
Project Success Factors research
 Competitive advantage for businesses
 Provides for internal controls
 Externally, it reassures stakeholders that their money is
being invested well
 Good governance is increasingly demanded by
shareholders, government and regulators
 To comply with external regulations and legislation (e.g.
the UK Corporate Governance Code and Sarbanes-Oxley
in the USA).
11
UK Code ….“comply or explain”

12. Purpose of Effective Governance
Ensure that an organisation’s project/change portfolio is
aligned to the organisation’s objectives and is delivered
efficiently (maximising value)
Ensure that the organisation is aware of risks, minimises
project failures and maximises the beneficial outcomes (value)
from their overall portfolio of projects in a sustainable and
transparent manner
It also supports the means by which the corporate board and
other major project stakeholders are provided with timely,
relevant and reliable information.

13. 13
“No such thing as failed projects, only failed governance”
Andrew Bragg – Former CEO APM

14. Case Study 1
Universal Credit Project
14

15. Key governance issues raised
Programme strategy
SRO longevity
Actions from assurance reviews
“Overambitious” timescale
End state and interim Blueprints
Use of Agile
Governance culture - “fortress mentality”
Matching spend to progress

16. Lack of a clear link between the project and the organisation’s key
strategic priorities, including agreed measures of success.
1.
Lack of clear senior management and ministerial ownership and
leadership
2.
Lack of effective engagement with Stakeholders3.
Lack of skills and proven approach to project management and risk
management.
4.
Lack of understanding of and contact with the supply industry at senior
levels within the organisation.
5.
Evaluation of proposals driven by initial price rather than long-term
value for money (especially securing delivery of benefits).
6.
Too little attention to breaking development and implementation into
manageable steps.
7.
Inadequate resources and skill to deliver the total delivery portfolio.8.
Factors in project failures (OGC)
16

17. 17

18. 18

19. Recent Research
19
“poor performance results in organisations
wasting $109m in every $1bn invested in
projects”
“high performing organisations
successfully complete 89% of their
projects, while low performers complete
only 36% successfully”
“Fit-for-purpose governance strongly
influences project and programme
success”
“higher performance is correlated with
higher maturity”.
“there is a highly
visible disconnect
between Executive
Teams and Project
Managers”
“C-Suite are often
missing in action”.
Misalignment of ‘Run the
business’ and ‘Change
the business’ results in
‘wastage’ of resources
“only 62% of programmes have an established
or mature link between programme objectives
and organisational strategy and only 50% of the
respondents felt that the boundaries of their
organisations portfolio were clearly defined and
decision making well supported”
“Just 42% of companies reported having high alignment of
projects and organisational strategy”
“Companies with high degrees of alignment have more
successful projects (69%) compares with companies with low
alignment (45%)”
“80% of the projects
with active sponsors
reported a success rate
of 75%, which is much
higher than the
average”
“actively engaged
sponsors is the top
driver of project
success”
Sources:
2014 PMI Pulse Survey
PwC 2104 Global Survey
PwC 2012 Global Survey
APM Factors for Project Success 2014
GovSIG Benchmarking
myProteus – Project Sponsor Insights 2015
“only 38% of programmes
had established processes
to identify benefits at the
outset”
“only 20% had robust
benefits measurement
processes in place during
implementation”
“lower value projects
are more successful
than large more
complicated projects”
“of the success
factors, ‘delivery to
time’ showed the
least success”
“62% of portfolios do not have
benefits in the sponsor’s personal
performance targets”
“Only 57% of sponsors had
received sponsor training”
Effective sponsorship is
THE differentiator between
project success and failure
Sponsor role has got
harder and
effectiveness is poor
– max 25%

20. Core Principles of Good
Governance
20

21. Directing Change from APM
1. Portfolio direction
2. Sponsorship
3. PM Capability
4. Disclosure and reporting
21

22. Directing Change Principles - 1
22

23. Directing Change Principles - 2
23

24. Governance Structure
& key roles
25

25. The crucial role of the Board
26
“Governance
…depends crucially on culture…..
….Boards have responsibility for shaping the
culture, both within the boardroom and across the
organisation…..
……requires constant vigilance”
Developments in Corporate Governance
and Stewardship 2014

26. 27
Board
Sub-committee
Board
Sponsor
Supported
by Project
Boards /
Steering
Committees
Portfolio
Manager
Review
Panels
ProjectManagement
capability/
ExcellenceandCapacity
Shareholders and Stakeholders
Funders Audit
Committee
Programme /
Project
Managers
External
Teams
Internal
Teams
Strategy
Delivery
Key Governance Bodies

27. Competent people in every
project role
29
Even if we have “good people” are they fully competent in
the project role and “game” that we expect them to “play”?

28. Attributes of Successful Project Sponsorship
31
 Project Sponsor effectiveness = best single predicator of
project success or failure
 Appoint a named Sponsor early in the project lifecycle
 Critical success attributes:
1. Support
2. Continuity
3. Alignment
 Personal Attributes:
1. Understanding
2. Competence
3. Credibility
4. Commitment
5. Engagement

29. Case Study 2
BBC Digital Media Initiative (DMI)
33

30. BBC DMI Project
 The BBC was "far too complacent" in its handling of a
failed IT project that cost licence fee payers £98.4m.
 The Digital Media Initiative (DMI) was intended to move
the BBC away from using and storing video tape.
 But it was scrapped, with almost no results, after five
years of development.
 After investigating the demise of the project, the Public
Accounts Committee (PAC) has branded the programme
"a complete failure". Chairman Margaret Hodge said the
BBC needed to "overhaul" its approach to such
projects, to "safeguard licence fee payers' money".
34

31. BBC DMI Project
Where the money went
Contractors - £46.7m
IT - £37.2m
Siemens costs - £24.9m
Consultancy - £8.4m
BBC staff - £6.4m
Other - £2.3m
35

32. BBC DMI Project Failures
 After a series of delays, the project was brought in-house, There it floundered
until May 13, when the BBC's incoming director general, Tony Hall, admitted
it had "wasted a huge amount of licence fee payers' money".
 The gross estimate of the amount spent on DMI was £125.9m, although
the BBC claims to have recouped £27.5m of that.
 The BBC's technology chief, John Linwood, was sacked in July 2013 over the
project's demise.
 A previous report, by the National Audit Office (NAO), blamed "confusion and
a lack of planning" for the failure.
 It said that senior executives failed to take control of the project when it
ran into trouble and "did not appear to appreciate the extent of the
problems until a late stage".
 "The BBC was far too complacent about the high risks involved in taking
it in-house. No single individual had overall responsibility or
accountability for delivering the DMI and achieving the benefits, or took
ownership of problems when they arose."
36

33. Where does good
governance start?
37

34. Good governance has to
start at the top
The Board – the apex
Set the culture, ethics and ‘rules’
Best able to influence appropriate
behaviours
Can ask the difficult questions
38

35. Case Study 3 CrossRail)
41
Crossrail Route
(£14.8bn) Other Funding
(£2.45bn)
DfT
(£5.20bn)
Others
BAA plc
City of London
Direct Contribution
(£4.7bn)
TfL
(£7.15bn) GLA
BRS & Direct Contribution
Community
Infrastructure Levy
Land and Property
Developers
Contribution TfL
Direct Contribution

36. 42
Integrated Team
TfLDfT
Project
Partners
Crossrail
Ltd
Sponsors’ Agreement
Project Development
Agreement (PDA)
Shareholder
Agreement
Design
Consultant
s
London Underground
NR (on-network works)
Docklands Light
Railway
Canary Wharf Group
Berkeley Homes
Contractor
s
CTOC
Rolling
Stock /
Depot
Industry
Partner
Agreements
Delivery
Contracts
‘Crossrail Project’
Executive
Team
Operator
RfL
P Rep
Operating
Contracts
Framework
Contracts
JST
CrossRail Governance Model

37. Lessons from CrossRail
 Be clear of the importance of governance for project
success
 Ensure clarity of governance structure and roles
 Use Sponsorship Agreements to build relationships and
commitment
 Provide funding certainty
 Allow autonomy and delegation of power to manage risk
and take decisions – but allow it to mature over time
 Provide project champions both political and financial
 Ensure disclosure and transparency.
43

38. Gov SIG
Getting Involved
44

39. Getting Involved with GovSIG
 Blogging
 Research
 Committee
45
How to make contact:
Apm – Catherine.bowles@apm.org.uk
Martin – msamphire@3pmxl.com
Miles – miles.dixon@quartermoon.co.uk

40. This presentation was delivered
at an APM event
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upcoming events please visit our
website www.apm.org.uk/events