Mastering Project Governance

The biggest challenges around project governance today come down to finding the right level.  With the growth of hybrid approaches, and the recognition that teams need to be empowered to adapt how they work to meet the needs of each initiative, there can’t be a ‘one size fits all’ approach to governance.

The problem is that not many organizations have been able to adapt to a more flexible governance model and they are worried that any relaxation of oversight will result in problems.  That’s often made worse in industries where regulatory frameworks haven’t kept up with the realities of modern working, making it hard to balance governance with effective and efficient delivery. 

Project governance is crucial. It is crucial to manage all your resources and your projects that are created to deliver value. When we look at why we need to have project governance, projects are more complex and governance should be followed. Organizations are being asked to deliver faster and with value with the right solution for the right clients. Risk management is important to have structure around. We need to manage risk in our projects. Organizations need to comply to standards and ensure stakeholder engagement to ensure everyone is speaking the same language. You need transparency. These things are key to establishing governance in your organization. 

This may be a bit of a hot take, but I don’t think project governance will look the same in the future. That said, it’s still absolutely important to have some form of project governance in organizations. I say that it’s going to change because the need for organizations to be agile and flexible with project and portfolio delivery. I think the PMO has already shifted from a project police role specifically focused on project governance, project tracking and reporting to a greater focus on strategic alignment, adaptability and business strategy. With this shift, project governance becomes a part of the role of the PMO for organizations, but not its sole purpose. Organizations are realizing that in order to deliver the outcomes they desire, they need to remain nimble with their operations which doesn’t necessarily mean a strict project governance approach. 

The first step has to be to determine the three to five things that really matter.  No more than that because you won’t be able to control them properly and you’ll alienate teams.  Understand where problems are most likely to happen, where the impact of those problems will be severe, etc. and focus there.

Also, focus on prevention.  Governance shouldn’t be about finding things that are wrong and penalizing the people deemed responsible.  Rather it’s about understanding where problems are likely and taking steps to minimize the chance of things going wrong – think of it as risk management with monitoring to ensure that risk management is working.

When you look at the main goals of governance, there are number of key points to consider.

• Choosing the right projects at the right time aligned to strategy
• Resource Management
• Prioritization

Project governance is important for oversight, fairness and protection.  Oversight of the governance allows a thoughtful process that shares an agreed upon way of “How” projects are selected. This process avoids someone getting their way just because they are the loudest and most powerful, therefore, it creates an environment of fairness of how projects are selected. Finally, the best way to protect your business is to ensure key components are discussed and resolved. For instance, requiring a security review before a project is selected to be implemented. Another is the funding mechanism – ensuring that dollars are thoughtfully spent.  Good project governance avoids “rubber-stamping” projects without careful deliberation on the impacts the project will have on the system environment, customers, business processes, and key business financial concerns.  Good governance also avoids overlapping work, the opportunity to consolidate and get scale on similar projects with similar benefits and helps the PMO to say “NO” to projects that should not be approved or to wait until an appropriate time for approval and execution.

Governance is an area where less mature organizations tend to take the ‘more is more’ approach.  In the absence of maturity in project delivery they want to exert greater management control over how work happens.  That serves to slow down project delivery, hurt employee motivation, engagement and productivity, and reduce overall performance.

While less mature organizations don’t have the skills and experience to rely on a trust-based governance model, it is still important that they focus on areas that really matter to avoid creating an environment where teams feel that the organization doesn’t believe in them.  It’s also important to have the appropriate level of oversight.  It’s perfectly fine for less mature organizations to monitor financial performance, resource utilization, and so on.  But not every day, and not independently of project managers.

The main goal of project governance is to ensure that a project is aligned with the organization’s strategic goals and delivers the desired outcomes within the constraints of time, budget, and quality. Project governance provides a framework for decision-making, accountability, and risk management, ensuring that all stakeholders are aware of their responsibilities and that resources are used effectively and efficiently. The ultimate objective of project governance is to increase the chances of project success, improve organizational performance, and achieve a positive return on investment. By establishing clear roles, responsibilities, and processes for managing projects, project governance helps organizations to deliver projects that meet the needs of their stakeholders and contribute to the overall success of the organization.

To improve project governance, the following steps can be taken to:

1.  Define the governance structure: Clearly define the governance structure for your projects,  including the roles and responsibilities of key stakeholders, such as project, including the roles and responsibilities of key stakeholders, such as project sponsors, project managers, and governing bodies.
2. Develop governance policies and procedures: Develop policies and procedures that set out the rules and procedures for project governance, including decision-making processes, risk management processes, and communication protocols.
3. Communicate the governance structure and policies: Communicate the governance structure and policies to all stakeholders to ensure that everyone is aware of their responsibilities and understands how decisions will be made.
4. Monitor and review governance processes: regularly monitor and review governance processes to ensure that they are being followed effectively and to identify areas for improvement.
5. Encourage active stakeholder participation: encourage active stakeholder participation in project governance by providing opportunities for stakeholders to contribute to decision making and provide feedback.
6. Foster a culture of accountability: Foster a culture of accountability by holding stakeholders responsible for their actions and decisions, and by ensuring that governance processes are transparent and fair.
7. Regularly assess project performance: regularly assess project performance against agreed-upon metrics and KPIs, and use the results of these assessments to inform continuous improvement of project governance processes.

By taking these steps, organizations can improve their project governance practices, increase the chances of project success, and achieve a positive return on investment.

It looks lean and efficient.  It shouldn’t be bloated by huge numbers of metrics tracked at the project or work package level.  Rather it should be portfolio or program level monitoring of key metrics.  The focus of the framework should be on identifying trends, not snapshots and on implementing measures to improve future performance.

Sometimes that means carrying out analyses of what happened in the past so that the root cause can be established and something can be done to correct things, but the organization should always be managing governance through the windshield, not the rearview mirror.  That means training people, not blaming people, and improving processes not measuring processes.

The PMO at Solenis is doing project governance very well. To start, the PMO has settled on a great tool in KeyedIn Enterprise, after reviewing the top portfolio management tools as reported by Gartner.  The process of governance starts with the intake of all project Demand even if it is just an idea.  This demand is reviewed with each stakeholder function to prioritize the demand in 4 categories: Critical, High, Medium, and Low.  The Business Relationship Managers bring these priorities to governance after they have scoped the project, ensured all resources are available and received permission from the sponsor to charge their cost center or an approved capital request.  There is a bi-weekly meeting to review these demand items that are ready for active approval through a 5-part review and approval process, for taking projects active. A follow-on monthly re-prioritization and project portfolio review with stakeholders is held by the PMO and BRM’s. Finally, a quarterly review with the CFO to also assist with “tie-breakers” where there are too many top priorities and not enough resources to support. Finally, an annual review with the functional leaders to help with a backwards look of what was accomplished against the investments made and a forward look on how best to plan project investments ahead against the overall corporate strategy.

In today’s world, the focus for governance should be on lean, relevant oversight.  Today’s PPM software solutions should have enough workflow and reporting to cove the organization’s governance needs, and those tools should be used to create an environment where leaders have control and workers have the freedom to operate.

That means applying governance at the investment level – the same as funding and then allowing individual work teams the freedom to operate within a reasonable framework.  Highly regulated industries will still need to have audits for every element of work, but that shouldn’t get in the way of effective and efficient delivery.  Governance must be a safety net, a support for effective education, information and context.

First, start with developing a set of goals and objectives.  Why is it important for you to have good project governance?  What is happening now and why is the current process not working or resonating with stakeholders.  After you understand your “Why?”, start with research. Look internally at your current tools (if you have any) and determine if these will meet your needs? Use Gartner as a guide, but also understand your own business culture and your available investment in a new tool. This will be the baseline that helps you and others with a process for governance.  Next determine your demand intake process. What is the threshold for defining a project in your organization? For me it is 40 man-hours. Anything above this would trigger a change order from my managed services provider for technical resources.  Anything below 40 man-hours would be handled as a ticket.  Next determine the governance process for how a demand becomes a project. Engage key stakeholders who are impacted by any project. In my case – SAP Operations, Information Security, System Architecture and Technical Resource availability and capability were my baseline approvals as each of these groups can be affected. Finally, I added a financial component to ensure the money was available and approved by the sponsor to execute the project.  Try developing this organization and develop a meeting cadence with roles, responsibilities, and expectations. I started the governance process weekly, then moved to bi-weekly – deliberately to slow down the demand as we didn’t have enough resources to move at a faster pace.

KeyedIn provides us with a single definitive source of the portfolios, programs and projects all in one place. It gives us the ability to capture key data on each of the portfolios, programs and projects to allow for robust reporting by strategic initiative and by client, which is an important data point for us. KeyedIn gives us the ability to leverage filters to define different insights and rollups of portfolios which gives us immediate transparency into key indicators we are tracking against.

Governance requires a level of maturity and most organizations will not put the time or money into make it happen. Most companies want an easy button and they want governance, but won’t put the processes, won’t put the budget or the resources to make happen. The other big point of why there is a ton of objections to governance is because of the time, it takes a while and it takes trial and error, it takes leadership buy in and support and ongoing up keep and rigor to make happen. Many times just won’t put that level of commitment into Governance these days.

Governance is only a part of effective portfolio, program and project delivery.  The PMO is accountable for ensuring every element is effective and efficient and as such it must ensure that the level of governance that is being applied is appropriate for the needs of the business.  If there are areas that are causing problems then greater governance may be needed – both to help understand the issues and to help resolve them.  But if things are working well, the PM needs to ensure that the governance model has a lighter footprint.

That’s important because resources invested in governance are taken away from delivery – if those resources aren’t improving performance, then they are hurting the ability of the organization to deliver.  PMOs have historically viewed governance as a necessary element and have tended to have more of it in place than is needed.  As those PMOs develop more of a business performance focus, so they need to apply lighter governance models that help ensure success without acting as a drag on that performance.

A PPM tool improves overall project governance, look to me, that’s the purpose. To create a way for everyone to understand how work gets done, how it gets done, when it gets done, who does it and when should we put our money aside for when these things happen. A PPM tool with that type of reach into the organization really allows for you to decide how you are going to execute projects. I’ll give you example. There are about 65 active projects in my current portfolio with over 200 projects waiting in the wings. How I execute governance is working with all the functional leaders and understanding what their top 3 strategic goals are. That’s how we make our selections. We then select critical and high projects that is agreed upon by them. We tie their goals and our selection process and then we look at if the process requires us to look at legal or lifecycle management driven. Below that are the process improvement and efficiency plays. In addition to that any project that provides ROI in less than 2 years gets our attention. So, with that process, making sure we have the foundational elements. That’s the governance process that we run on a regular basis – twice a week. It’s helped tremendously because it creates a fair way of how projects are selected. It’s not the squeaky wheel. It’s a great democratic process. We even have tie breakers set up with our CFO and CEO.

The biggest roadblocks are psychological.  There is a tendency to believe that if there isn’t governance in place teams will ‘go rogue’ and jeopardize the success of the business.  Things have improved after the COVID-19 pandemic forced virtual work to become the norm and organizations found that even with less governance they were still able to achieve their goals without exposing themselves to additional risk.

Organizations must realize that “better governance” likely means less governance.  The oversight that is in place must be appropriate, and for many parts of the business that means a very light footprint.  That frees organizations up to focus their governance where it is really needed – the high risk areas of project delivery.

The way that I got internal buy-in for proper project governance wasn’t easy. I knew it was something we needed because I had it at previous companies, but I never got it to the level that I wanted it or the level that actually resonated with C-level executives. Then we had a changing environment where PowerPoint was sort of running out of style and people wanted to do from a Mobile perspective. It had to communicate the information quickly and visible from a mobile device and it had to tell the right story. It took me a few years to understand what is the right story. The number one thing that people wanted to know was how much have I been spending and how much am I getting from that spend. Essentially, am I getting the value? The second thing is speed. Nobody wants to hear anything about methodology, they want to hear how fast things are going, so with the process of the PMO we push for areas of how to get things done faster and report on it accordingly. The way that the information presented itself, we got away from PowerPoint presentations and now people can look right in the system to see real-time data on their computers or on their mobile devices as well. So that real-time information and the tying to strategy has really allowed us to get the senior executive buy-in for our organization. That’s where you have the most impact because then they start to drive everyone to the project and portfolio management tool because they know if the information is fed in properly they have access to trustworthy information when they want it. 

I think when you see organizations seeing levels of success in governance you see that happening from the very top. You hear from top leaders on a daily basis that governance is critical to the success of the organization and without that level of commitment at the leadership level it won’t work. What do you see specifically when Governance is in place, that includes:  

• Strong Governance models – doing the right projects to move the organization forward
• Strong resource management models – Balance resources across programs and projects with proper work life balance
• Strong financial models in place. We know what we are spending and why we are spending.
• Strong Benefits Realization models in place. Not only are projects benefits realized there are ongoing models in place to realize those benefits for years to come.

This actually seems like a silly question to me, but project governance should include all stakeholders. Hear me out on this one. Project governance historically has been strictly the role of the project management office (PMO), but with the role of the PMO changing and shifting to focus on business outcomes organizations are realizing that project governance remains important. However, with the PMO shift of focus it’s no longer the sole purpose of the PMO and again showcases the need for everyone to do their part to contribute and monitor project governance. With a solid project governance framework, organizations are empowered to all play a role in contributing to project governance decisions.