Project and Organizational Governance
By Lynda Bourne
One of the themes running through several of my recent articles is the importance of effective Governance. Both organizational governance and its sub-set project governance.
Good governance is a synonym for ‘good business’, structuring the organization to deliver high levels of achievement on an ethical and sustainable basis. This requires the optimum strategy and the right approach to risk taking supported by sufficient processes to be reasonably confident the organizations limited resources are being used to achieve the best short, medium and long term outcomes.
Project governance focuses on the portfolios of programs and projects used by the organization to deliver many of the strategic objectives. This process focuses first on doing the right projects and programs constrained by the organizations capacity to undertake the work – Portfolio Management; secondly, creating the environment to do the selected projects and programs right- developing and maintaining an effective capability; and lastly systems to validate the usefulness and efficiency of the ongoing work which feeds back into the selection and capability aspects of governance.
Within this framework, portfolio management is the key. Strategic Portfolio Management focuses on developing the best mix of programs and projects to deliver the organizations future within its capacity to deliver. This means taking the right risk and having sufficiently robust system in place to identify as early as possible the ‘wrong projects’, so they can be either be reframed or closed down and the resources re-deployed to other work.
It is impossible to develop an innovative future for an organization without taking risks and not every risk will pay off. Remember Apple developed the ‘Apple Lisa’ as its first GUI computer which flopped in the market, before going on to develop the Apple Macintosh which re-framed the way we interact with machines.
Obviously no organization wants to have too many failures but good governance requires ‘good risk taking’. Apple had no guarantees the i-Pod and its i-Tunes shop would succeed when it started on the journey of innovation that has lead to the i-Phone, i-Pad and Apple becoming one of the largest companies in the world based on capitalization. As Richard Branson says – “you don’t bet the company on a new innovation” but if you don’t innovate consistently, obsolescence will be the inevitable result.
The balance of project governance focuses around creating the environment that generates the capability to deliver projects and programs effectively, effective sponsorship, effective staff development, effective and flexible processes and procedures, simple but accurate reporting and good early warning systems to identify issues, problems and projects no longer creating value (a pharmaceutical industry saying is that if a project is going to fail it is best to fail early and cheap!).
Good questions outrank easy answers! Every hour and dollar spent on governance processes is not being spent on developing the organization. The challenge of good governance is to have just enough reporting processes embedded in an effective culture of openness and accountability to provide an appropriate level of assurance the organization’s resources are being used effectively; whilst at the same time allowing innovation and development. Restrictive and burdensome governance processes are simply bad governance – they restrict the organization’s ability to achieve excellence.
Dr. Lynda Bourne DPM, PMP.
Lynda is the Managing Director of Stakeholder Management Pty Ltd. This business is focused on improving the capability of organizations to effectively manage their stakeholder relationships to the benefit of both the stakeholders and the organization’s projects. She is also the Director of Training with Mosaic Project Services Pty Ltd, where she is responsible for the development and delivery of OPM3, PMP, CAPM, Stakeholder Management and other project management training.
Lynda is a recognised international author, seminar leader and speaker. She is a SeminarsWorld® presenter and an accredited OPM3 ProductSuite Assessor and Consultant who has led a number of commercial OPM3 ProductSuite assessments.
She graduated from RMIT University Melbourne as the first professional Doctor of Project Management in 2005. Her research on defining and managing stakeholder relationships has lead to the development of the Stakeholder Circle® tool set and the SRMM® maturity model. Lynda blogs regularly on the Mosaic Projects blog.