Governance is not the most exciting topic. Conversations about governance often are dry and boring. Dull topics are the ones we tend to avoid. But governance is an important subject for anyone involved in projects.
Project governance relates to the mechanisms by which appropriate decisions are made on a project. These decisions relate to a range of issues. Typical governance issues concern project objectives, scope, approach, priorities and budget.
Essentially, governance is there to try and ensure the right project decisions are made. There are two aspects to this decision making which rarely are explicitly separated. They are:
- Decisions which relate to the direction and progress of the project. Let’s call this governance type 1 – which can be thought of as governance in the organization for the program.
- Decisions which relate to aligning the project with wider organizational needs, priorities, strategies and rules. Let’s call this governance type 2 – which can be thought of as governance in the program for the organization.
Examples of governance type 1 actions include approving the project plan or approving a request to spend some money on an external supplier which is beyond the project manager’s authorization level. Examples of governance type 2 actions include insisting that an IT solution is in line with architectural guidelines or ensuring that a project is consistent with an organizational policy.
Project managers are naturally mostly concerned about type 1 governance. The thinking is – “how can I get the decisions made that are needed for the project to progress to plan?” Achieving this can be a headache, and many business projects stumble on timely decision making. Good governance can be well planned to avoid project delays, but it is rarely completely painless. And that is just governance type 1! Organizations must also be concerned that projects have adequate governance type 2. This can add more overhead in terms of time and decision making. Given the needs of modern organization governance type 2 risks being an open ended series of issues to consider.
Whilst projects sit outside of the normal business-as-usual operations of an organization, the result of the project has to work within that business-as-usual organization. This point can often be forgotten. A project, which from the viewpoint of the project team is a success, can be a failure from the viewpoint of the wider organization because of weaknesses in type 2 governance. Examples of the sorts of things I am thinking of are:
- Projects with outcomes that diverge significantly from organizational strategy.
- Projects which are run in conflict with agreed standards or rules of operation.
- Projects that deliver new IT systems which are not in line with IT architectural or operational standards (so are expensive to run and maintain).
- At worst, projects that fail to be compliant with mandatory regulatory or legal requirements.
Governance cannot take account of everyone’s perspective. It is not stakeholder management. As a part of governance it is appropriate to check that appropriate levels of stakeholder management are being undertaken. But governance needs to be effective and efficient. It cannot afford to get bogged down trying to balance the opinions of every stakeholder.
A challenge is that unless the small group of people acting as the governance body have encyclopaedic knowledge there is always a risk that a project fails to pick up every governance requirement and nuance of the organizations wider needs. Those with experience know that a zero risk approach to governance is almost impossible to find, and if not impossible, time consuming and costly.
One answer to this is to include people on governance boards with broad experience of the organization - and with interests broader than merely the success of the project - like a bishop trying to guide a monarch to consider a broader perspective. These individuals should have a sense for context and implications. A second answer is to develop checklists about key aspects of governance that need to be considered on every project. Balancing this is being mindful that governance type 2 is about risk mitigation not perfection. Just being aware that governance has to consider a wider agenda than simply project delivery is a strong starting point. Successful governance needs to provide an appropriate level of guidance to a project relative to the level of risk.
Project sponsors and project managers need to work together to ensure project governance is in place. There can be a conflict of interest for sponsors if they are primarily rewarded for achieving the delivery of the project and hence are interested solely in governance type 1. In this situation, governance type 2 may, through ignorance, be missed out, under-estimated, or worst of all deliberately ignored. Then all that happens is the project leaves a mess and someone has to come and sort it out afterwards. This is never accounted for in project business cases – and if it was the projects probably would not have been pursued.
The answer? Think about governance broadly. Engage with the wider organization. Capture learning from past projects in re-usable governance checklists. Most of all, think about the context and implications of your projects. The aim is to find the most appropriate balance between control and risk.