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STEVE JOBS is to the development and success of the Macintosh computer as Michael Dell is to its counterpart, the Dell PC. Likewise, Donald Trump is synonymous with championing real estate projects in the United States. In the United Kingdom, entrepreneur Martha Lane Fox launches popular Internet travel businesses, such as Lastminute.com. No matter the industry, there are superheros in business who ensure that projects are aligned with strategy—they right the wrongs and meet the challenge of a better tomorrow.
“In every organization, every significant project needs an internal champion,” says Terence Cooke-Davies, Ph.D., executive chairman of Human Systems International, a global project management consultancy with headquarters in London, U.K. “These sponsors come from the ranks of top management because only experienced senior managers are likely to possess the right combination of knowledge of the organization and credibility. Emotional leadership also is important.”
A veteran project management consultant with nearly 40 years of profit-and-loss responsibility, Dr. Cooke-Davies’ message is simple: Executive sponsors who guide a project to fruition are critical to project success. “Executive sponsors usually are in middle- to upper-level management and even can be a CEO, board member or CFO,” he says. Sponsors may arise from the project area itself, such as a CIO to spearhead an IT project or a research and development director to sponsor a major product program.
The article is based on material in the white paper, “The Executive Sponsor—the hinge upon which organizational project management maturity turns?” presented by Terence Cooke-Davies, Ph.D., at PMI Global Congress 2005—EMEA in Edinburgh, Scotland.
- ➔ Executive sponsorship drives project performance improvement.
- ➔ Set sponsor goals. Use management objectives to link the project's business case to reasonable goals for the executive sponsor to achieve.
- ➔ Do more with fewer projects. Select and commit to only those projects that support company strategy and vision.
“The role of the executive sponsor is not just about delivering the project,” Dr. Cooke-Davies says. “It's about delivering the right projects or right products for the customers. The responsibility is on the executive sponsors to see the project through to its end and to make sure the benefits are fully delivered.” He gives the example of an IT software implementation. The project entails more than simply supporting a software implementation, but actually overseeing reorganization or layoffs to ultimately realize project benefits.
➔Dr. Cooke-Davies says research by academic researchers as well as Human Systems International clearly points to the direct relationship between successful projects and executive sponsorship and project governance. In fact, the firm conducts ongoing quantitative research in this area. Its findings show a correlation between project success and executive sponsorship of projects, citing clearly defined goals and stakeholder commitment, among other factors.
The Driver's Seat
Other research by Dr. Cooke-Davies and Paul Dinsmore, PMP, PMI Fellow, in their book Right Projects Done Right (Jossey Bass, 2005) found executive sponsors assume several distinct yet interrelated roles in guiding projects:
- Owner of the business case
- Harvester of benefits
- Governor of the project
- A “friend in high places” to the program manager or project manager
- Champion of the project.
EARLY INVOLVEMENT OF THE PROJECT SPONSOR IN DETERMINING HOW AND WHETHER THE PROJECT SHOULD BE RUN IS QUITE CRITICAL. IT'S MORE IMPORTANT TO CHOOSE THE RIGHT PROJECT THAN TO MANAGE THE PROJECT RIGHT.
Managing Director, Europe, Human Systems International
➔Via these roles, Dr. Cooke-Davies says project sponsors contribute to both project effectiveness and efficiency. “In terms of effectiveness, a sponsor is positioned to see that all strategic options are considered before the project is approved, ensure it receives proper resources and that the project team has the authority to accomplish its goals,” he says. Likewise, he notes sponsors drive project efficiencies at the project level, using the classic measures of time, cost, scope and quality as well as factors such as health, safety and environmental impact. “The sponsor's role is to assure the quality of the business case, allocate responsibility to the right people in the organization and ensure technical performance requirements are in line with the business case.”
Dr. Cooke-Davies says the executive's role can be incorporated into an enterprise's program management scheme and its best practices in project management. “Organizations are making sponsors accountable for the project benefits,” he says. “They're making the sponsor not only sign for the business case and put into place accountability procedures, but even assigning amounts of the executive's bonus tied to project benefits.”
Regarding critical projects or groups of projects, Dr. Cooke-Davies says authorities such as executive committees or boards of directors may set the sponsor's performance criteria around each effort. “This includes working with a sponsor on their performance objectives,” he says. “The sponsor then works closely with the project manager to make sure the project is set up for success.” Indeed, it's that granular level of accountability, along with intangibles such as passion and motivation, which drive results. “If your sponsor is accountable for the benefits, they'll take things like risk management much more seriously.”
An effective executive sponsor means active, hands-on management of the project, says Morgan Spillane, change management director at AXA Insurance, a property and casualty provider based in London, U.K. “The executive should chair the steering committee for the program of change for which they're actually responsible,” he says. “This means actual attendance at meetings and holding of regular one-on-ones with the project or program manager.”
As well, a sponsor must foster good working relationships with the project management office (PMO), which ideally should report to the CEO'S office. The best way to empower the PMO is to ensure its reporting line is outside the program it monitors, Mr. Spillane says. This ensures an effective, independent and objective governance reporting framework—particularly where sponsorship is weak or large-scale change management is relatively new in the organization.
THE EXECUTIVE SHOULD CHAIR THE STEERING COMMITTEE FOR THE PROGRAM OF CHANGE FOR WHICH THEY'RE ACTUALLY RESPONSIBLE. THIS MEANS ACTUAL ATTENDANCE AT MEETINGS.
Morgan Spillane, Change Management Director, AXA Insurance, London, U.K.
Mr. Spillane joined the AXA unit three years ago to beef up its program management. To date, his efforts include hiring seasoned project managers and reworking the company's governance framework. The framework now delineates clear lines of reporting and roles among AXA'S executives, its executive steering committee as chaired by the CEO and its change board as chaired by Mr. Spillane. Keeping the PMO neutral fosters good executive sponsor relationships, he says. “Ideally from a governance perspective, the PMO should act as trusted friend to all sponsors, and at the same time provide an early warning system on risks and issues to the CEO,” he says.
BEFORE THE DAY-TO-DAY DUTIES OF SPONSORING A PROJECT ARE UNDERWAY, executive sponsors MUST ENSURE THE RIGHT PROJECTS ARE SELECTED IN THE FIRST PLACE.
Tony Teague, managing director of Europe for Human Systems International, says project sponsors aren't born but made. “Sponsor skills are a specialty and need developing and coaching. They don't come naturally to any manager,” he says, noting it's about learning behaviors, not processes.
Mr. Teague recommends executive sponsors undertake group sessions with outside experts and individual coaching sessions to introduce them to the required skills and behaviors. Especially at the board level, he says, executives prefer one-on-one coaching as opposed to classroom-style training.
Above all, sponsors must act as the project's champion in showing a passion for the project, getting others actively involved and removing barriers to success. “Sponsors must live and breathe the project they're sponsoring as its ambassador,” Mr. Teague says. “They can't question the value of the project they're sponsoring. [They should] regularly kick the tires, and ask if the business case stacks up.” Last, executive sponsors must ensure everyone involved in the project is clear on their responsibilities and empower them to get the job done.
THEY'RE MAKING THE SPONSOR NOT ONLY SIGN FOR THE BUSINESS CASE AND PUT INTO PLACE ACCOUNTABILITY PROCEDURES, BUT EVEN ASSIGNING AMOUNTS OF THE EXECUTIVE'S BONUS TIED TO PROJECT BENEFITS.
Ph.D., Executive Chairman, Human Systems International London, U.K.
Before joining Human Systems, Mr. Teague held director positions at Abbey National PLC. Under his latest role as group transformation director, Mr. Teague experienced the control of the then CEO firsthand in guiding projects under a revised company strategy. Sometimes it meant ensuring newcomers to the company were aware of the corporate culture around program and project management and how seriously it was taken at Abbey. In one instance, Mr. Teague faced resistance in dealing with a head of a bank that Abbey had acquired and was integrating into its network. The CEO artfully paved the way with the executive for Mr. Teague to get his job done.
Mr. Teague says the vision of the Abbey CEO infused empowering attitudes into the bank's board of directors to shepherd the overhaul of its retail operations. Dubbed the Retail Transformation Program, the four-year program, which ended in 2002, pared down the retail bank's crowded roster of projects. Mostly in the areas of process changes and product development, projects were cut from 292 to a mere 72. The remaining projects represented projects essential in supporting the unit's revised strategy as led by the CEO.
“The CEO really led by example,” Mr. Teague says. “He communicated his vision to the board and showed his own intent toward projects. His influence served to change the behavior of the board.” As a result of the CEO'S guidance as well as training and coaching efforts, each of Abbey's several full-time board members successfully adopted suitable styles to champion individual projects.
Mr. Teague says once the bulk of the 292 projects were canceled, the remaining projects were given more attention under sponsor-led guidance. “The immediate consequence of this focus on doing the right projects resulted in an increase in the number of projects delivered in the following 12 months of 500 percent.”
➔Before the day-to-day duties of sponsoring a project are underway, executive sponsors must ensure the right projects are selected in the first place. “Early involvement of the project sponsor in determining how and whether the project should be run is quite critical. It's more important to choose the right project than to manage the project right,” Mr. Teague says.
At Abbey, program management and its attendant vigilance around selecting projects was king. “If the leader believes that program and project management is the way to get things done, to deliver strategy, then project management can thrive,” Mr. Teague says. “You'll then find those firms that invest in it, do it well.”
Like other corporate initiatives that have met with success over the decades (total quality management is an example), top-level management support drives results. “The point where the rubber hits the road is with an executive sponsor. You need an effective executive sponsor to have happy stakeholders and to receive value from money put into the project,” Dr. Cooke-Davies says. PM
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Marcia Jedd is a Minneapolis, Minn., USA-based supply chain and business writer.
PM NETWORK | NOVEMBER 2005 | WWW.PMI.ORG