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Governance Thinking – Structure of Program Management Governance (#1 in the series Structure of Program Management Governance)
By Robert Prieto

This is the first part of a five part series looking at the governance structure that should be applied in the use of a program management delivery form. This part sets the stage by reviewing governance thinking and presenting a “structural” model for the implementation of such governance.

Program management in the engineering & construction industry represents a fundamental re-allocation of responsibilities and authorities between the traditional owner organization and an engaged program manager. The readiness of the owner organization to adopt such a delivery strategy will be governed by many factors including overall capital project delivery volumes; prior experience, if any, with program management delivery approaches; inherent organizational capabilities and depth of staff; and, perhaps most importantly, degree of recognition of the level of self-change that adoption of a different delivery and management methodology will require.

From the program manager’s perspective, a key factor for success will be the degree to which its responsibilities can be clearly defined and responsibility and authority allocated consistent with these responsibilities and the owner organization’s own readiness. A well developed contractual and implementation framework are therefore key ingredients for success but in many cases, even the best developed frameworks are undermined by a poorly defined governance regime and inadequate contract administration capabilities within owner organizations. This later factor sometimes reflects passive resistance to change while in other instances it reflects inadequate organizational maturity to adopt the new delivery regime.

This series is not intended to dwell on the failings of either the program management contractor or owner organizations but rather outline some of the governance features which are hallmarks of successful program management implementations.

Program Management Governance Thinking

Program management governance thinking has developed across a wide range of industries ranging from government implemented healthcare transformations to enterprise wide IT delivery efforts. In the engineering & construction industry, attention to governance issues at the outset of program initiation has been to a large degree spotty and inconsistent. The evolving nature of programs delivered in the engineering & construction industry and more importantly the inherent risks that program manager’s increasingly assume gives rise to a necessary refocusing on governance issues. The engineering & construction industry can, however, draw not only on its own experience but on that of other sectors as well.

The papers that follow in this series look at a “structure” for such governance as reflected in the following figure.

Governance Outcomes: Confidence in the Program Management Strategy and Organization

Robert Prieto, Senior Vice President

Robert Prieto is senior vice president for Fluor, where he leads strategy for Fluor’s Industrial and Infrastructure group. Mr. Prieto focuses on the development and delivery of large, complex projects worldwide.

Prior to joining Fluor, Bob served as chairman of Parsons Brinckerhoff Inc. As head of PB’s board of directors, he was responsible for overseeing management performance, establishing top-level policies, and ensuring the firm’s continued long term success.

He is a member of the executive committee of the National Center for Asia-Pacific Economic Cooperation, a member of the board of directors of the Business Council on International Understanding, a member of the board of the Civil Engineering Forum for Innovation, and co-founder and member of the board of the Disaster Resource Network. He currently serves on the National Research Council’s committee framing the challenges on Critical Infrastructure Systems. Until 2006 he served as one of three U.S. presidential appointees to the Asia Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC) and served as chairman of the Engineering and Construction Governors of The World Economic Forum and co-chair of the infrastructure task force formed after September 11th by the New York City Chamber of Commerce. He is also a member of the board of trustees of Polytechnic University of New York, and was previously selected as alumni of the year by its New York Chapter.

He has had an executive sponsorship role in the World Trade Center Transportation Hub; West Coast Rail Modernization; Train Protection and Warning System; Level 3 Communications Long Haul Network and Superconducting Super Collider.

Prieto holds a master of science in nuclear engineering from Polytechnic University of New York and a bachelor of science in nuclear engineering from New York University.

Fluor Corporation (NYSE: FLR) provides services on a global basis in the fields of engineering, procurement, construction, operations, maintenance and project management. Headquartered in Irving, Texas, Fluor is a FORTUNE 500 company with revenues of $14.1 billion in 2006. For more information, visit www.fluor.com.

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