3 Steps to Improving Project Governance: Little Things Can Have a Big Impact

Posted by Kevin Lewis on 7/30/15 11:01 AM
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3 Steps to Improving Project Governance: Little Things Can Have a Big Impact

One of our clients recently learned how what seemed like a small change in how they operate lead to both big improvements in organizational behavior and improved realization of their strategy objectives. While they had been in business for a number of years and had been generally successful in implementing many large engineering/construction projects, our customer was experiencing a particularly large growth event. 

In the past they had “line of sight” to their project performance, they were now simply trying to stay on top of the volume of work and were losing focus on performance.  As a result they began missing deliverable deadlines, overspending capital budgets, and not meeting their strategy implementation objectives.

What is the solution?

Our client decided to implement what was a fairly rudimentary but quick to deploy portfolio management tool to catalog all of their projects across the company.  The cost and schedule data that they had was far from perfect but the visibility they gained almost immediately began to show results.

Executives could begin to ask questions about spend rates, due dates, and prioritization of work.  This in turn caused the engineering managers to “tighten up” their reporting data and begin to drive more rigid accountability in the organization around project performance.  As a side benefit, in some cases, capital dollars that had been requested by various functional teams were not being used and could be reallocated.

Additionally, it became apparent fairly quickly that the organization had attempted to do too much. Too many projects were listed that had no resources assigned and were not being executed. This drove prioritization discussions and a subsequent reduction in the portfolio to a manageable size.

Going forward, they have the opportunity to continue to improve the credibility of their data, drive towards improved project performance and predictability, and implement a more formalized portfolio governance process that will further enhance their decision-making.

The Steps You Can Take

With that said, this case demonstrates how starting with a small step can quickly lead to big benefits and improve your ability to implement your strategy. 

Here are some steps that you can implement quickly that will enable you to start to get governance control of your project portfolio and begin to ensure strategic alignment.

1. Catalog all the projects that are in progress in your organization.

Initially this doesn’t have to be in expensive software.  A spreadsheet can be used as a start but you will probably want to move to a more robust project portfolio management tool as time goes by.  The important thing is to get visibility as to what is going on.

2. Don’t be afraid to stop projects that don’t support the strategy.

Make sure that every project has some tie to your strategy or supports current and on-going activities. If you are uncertain, have the project sponsors/owners explain how it supports the strategy and why it is necessary. Doing so may free up resources for those projects that do support the strategy. If you can’t find a sponsor, it’s probably a good indication that a project can be shut down.

3. Implement a project governance process for new projects.

Initiation approval should be minimally contingent on providing reasonable cost, schedule and deliverable explanations as well as how it is in support of the strategy.

In future blogs I’ll expand on how to continue this process.  Organizations that have mastered project governance greatly increase their chances of realizing their strategic vision.  Executives can be assured that the organization’s resources are focused on the most important initiatives and that extraneous and non-supporting work is not being done.

Portfolio governance is critical to master but it exists within a broader framework of processes that enable an organization’s project delivery capability. We call this framework the Project Capable OrganizationSM (PCO), learn more about the PCO by tuning into my webcast:

 Watch the PCO Webcast

Topics: Portfolio Management, Executive Playbook