Project Management Institute

Top management governance

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BY JOAN KNUTSON

Above and beyond project coordination, management governance committees can have a significant impact on strategy.

A project management governance committee composed of top-level managers is not a new concept. With the expansion of the project management discipline enterprisewide, a single group of decision-makers became necessary as a coordinating body. In many cases, the governance committee is only that—a coordinating body. Its role includes prioritizing and coordinating a portfolio of projects, overseeing contention and coordination of resources, and calling for project briefings.

But the coordination effort really is only half the job. Because committee members make business decisions that affect current projects, project governance should be the committee's main function. Governance means establishing the laws, i.e., policies or standards, which control the environment being governed. To provide solid governance, a consistent group of people must govern by a consistent set of rules.

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Some of the policies that should emanate from this group are universal and are either in place or they're not. Others are defined by a quantifiable criterion. The following criteria are real numbers used by real firms. Disagreeing with the number does not mean that the concept does not have value. View this as a buffet table from which you can take and implement meaningful policies.

Re: Portfolio Management

SOLICITATION—Create a single request document (business case) consisting of predefined data required in a predefined format. This consistency makes it easier to compare various proposals and make an equitable choice.

SELECTION—Develop a list of objective, measurable project selection criteria. This list should be accessible to anyone who would be submitting a project for selection. Establish a court of appeal for those project proponents who feel unfairly rejected.

PRIORITY—Demand solidarity in adhering to the priorities. Each and every manager on the committee communicates down the chain of command that the allocation of resources will depend on where the project ranks in the priority list (no exceptions without returning to the committee). Because higher-priority projects will receive resources, lower-ranked projects should be given some concession. Since they will not have the resources to complete on time, a time contingency makes sense. If projects 1 to 10 are expected to meet their deadlines, projects 11 to 20 would get a 5 percent time contingency, for instance. Projects 21 to 30 would get a 10 percent contingency, and so on.

RESOURCE MANAGEMENT—No one works 100 percent of their day on work related to the project. That figure is more like 60 percent, so that percentage is used when determining effort allocation and duration estimating. The resource manager defines the functional work that must be allocated to accommodate the department's functional commitments. Whatever percentage or number of fulltime equivalents that are left become available for project work.

Re: Personnel Management

ROLES—Develop a unique job description for project managers, and expand the job descriptions of all titles that might be involved in project-related work to include their project management responsibilities. Also change the job descriptions of functional managers who supply resources to projects.

PERFORMANCE OBJECTIVES—Set performance objectives for those same people to include their project roles as well as their functional and/or managerial roles.

PERFORMANCE APPRAISALS—Evaluate these goals when conducting a performance appraisal of anyone who has been involved in a project. The project manager should provide official input to each team member's performance appraisal. Rewrite appraisal forms which are typically not applicable for project management efforts.

PERFORMANCE DEVELOPMENT—Establish a training/development program devoted to project management skills. The functional manager takes responsibility for developing their staffs' functional skills; the project management governance committee takes responsibility for project management professional development.

Re: Authority and Escalation

THRESHOLDS OF CONTROL—Establish thresholds which define when a project manager can make business decisions without asking the governance committee's permission. For example, the project manager has the authority to go over budget by five percent. Set the priority order of the triple constraint: If time is the most important variable, budget comes second and resource utilization, third. The project manager adheres to that order when making decisions and the steering committee will notify the project manager if these priorities change.

ESCALATION—Write a policy defining an appropriate escalation procedure, including when an issue is to be escalated, to whom and by what mechanism. This avoids some of the political end-running.

Re: Project Briefings

FORMAT—Do not encourage who-can-make-the-best-PowerPoint meeting. It is not how nice the graphs and charts can look but how meaningful the data is and if the project is meeting targets.

TIMING—Inform the team only two hours before the briefing. This will make it necessary for the project manager to stay on top of the current status. Tell each team member why they were chosen to present—and it should not always be because the committee thinks that the project is in trouble.

CONTENT—Predefine three to five metrics to be presented at each briefing. The project manager and the team need to feel that this is a safe environment in which management's role is to support rather than to cross-examine. However, if a new question becomes important to the committee, let the project manager know so he/she can be prepared at the next meeting. Quid pro quo: no surprises for the governance committee, no surprises for the project manager.

PARTICIPATION—Encourage team members and project sponsors to make part of the presentation. Everyone deserves their moment in the spotlight.

By coordinating the portfolio of projects and establishing rules by which projects will be governed, the governance committee will create clear, consistent policies that make it easier for the project players to meet expectations and for the committee to make better business decisions. PM

Joan Knutson has recently gone out on her own as an independent consultant. Her new company is called PM Guru Unlimited.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI.

PM NETWORK | OCTOBER 2004 | WWW.PMI.ORG
OCTOBER 2004 | PM NETWORK

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