Project Management Institute

The Top Management Project Steering Committee

Project Management in Action

THE EXECUTIVE'S NOTEBOOK

Joan Knutson, Feature Editor

As we begin this new series, The Executive's Notebook, we look at the impact that top management can have on the projects in their organization. This impact is far more than the ethereal “big brother” watching over projects, expecting them to be completed on time, within budget, and of a high quality. Top management can and must contribute to the success of the project discipline within their organization. To do this, many companies are creating a new organizational unit to support the project management discipline. This organizational unit is called the Top Management Project Steering Committee (PSC) or sometimes the Resource Management Committee.

Its genesis comes from the acceptance that effective and timely execution of corporate strategy is dependent on successful execution of multiple projects. Multiple projects require coordination from the top management. This coordination requires communication, which is one major function of the PSC.

The PSC is composed of line and staff managers from across the organization. The line managers are those who use project management the most; for example, the managers of engineering, manufacturing, marketing and sales, data processing, and so forth. The staff committee members are those who support the project management discipline; for example, the managers of strategic (or long-range) planning, human resources, and the project office. The overall charter of this committee is to set direction, provide support and remove obstacles for project teams.

Steering committees are not new organizational entities. Strategic planning or long-range planning steering committees have been setting direction for the organization as a whole. Different disciplines within the organization, such as data processing, have employed steering committees as the focal point for priority setting and dispute resolution. To implement lean, flexible organizational concepts requires establishing PSCs to do what management is expected to do: set direction, provide support and remove obstacles.

This and subsequent articles will describe a variety of roles and responsibilities that the PSC can play in the project management environment. The implication is not that every steering committee assume all these roles; but that each steering committee consider which of these roles is appropriate and productive for their unique charter in their organization.

Priority Setting

In almost every case, a steering committee is expected to establish priorities. The PSC is no exception. It is asked to evaluate the relative order of importance of all the projects being done by one corporation or agency. The established priority of each project sends a message to the organization as to where the time, effort and resources should be expended. The differing priorities clarify decisions that relate to how resources will be allocated to various projects.

In many organizations, more than one project is assigned number 1 priority. They are all number 1, or at least there seems to be a number la, lb and 1c; all of which are considered the most important. That is ludicrous. No one knows what to work on; so the priority- setting process is a farce.

Thus, the PSC must evaluate the relative merits of the multiple approved projects, delineating the top priority from the second, third and twenty-third priority project. There are various ways to accomplish this task. Some organizations rank-order the projects in the order in which they think the projects will support the strategic goals of the corporation or agency. This often is done arbitrarily, allowing politics to play a more-than-reasonable role in the process.

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Joan Knutson is president and founder of Project Management Mentors, a San Francisco-based project management consulting and training firm. She is a graduate of Ohio State University, and has worked with a wide range of disciplines and industries spanning the areas of high-technology, insurance, banking, pharmaceuticals, and utilities, to name a few.

In many organizations, more than one project is assigned number 1 priority…. That is ludicrous.

One company had each of its managers rank the 100+ projects in the queue. Then each of the project's rankings was averaged and the averaged ranking became the official priority. This was done without discussion as to the importance of the project to the organization as a whole nor to the fictional area sponsoring it. Also, this priority-setting process had not gained consensus among the managers. By the way, the priority order stayed in place for less than a week, after which a high-powered manager wanted resources for one of his pet projects and even though that project had not ranked anywhere near number 1, his position and influence got the resources that he needed. The priorities obviously meant nothing.

A more formalized priority-setting process is strongly recommended, one in which criteria are established and then weighted. For example, one of the criteria upon which a project's priority can be based is its Alignment to the Strategic Goals of the Corporation. As each project is evaluated, the PSC decides whether that project does or does not meet the criteria. If the project meets the criteria, it scores a 1; if it does not, it scores a 0. At the end of the evaluation of all the criteria, the project with the highest cumulative score is ranked as priority number 1, and so forth down the line.

The PSC may want to consider a variation of the above priority-setting methodology; one that is more refined and more delineating. Rather than scoring each criterion on a binary Yes/No basis, each criterion is given several weighting factors or scores associated with different levels of meeting the criterion. For example, “Alignment to the Strategic Goals of the Corporation” might suggest these weighings:

  • 4. The project is in direct alignment to the corporation's strategic goals.
  • 3. The project has a limited alignment to the corporation's strategic goals.
  • 2. The project has no alignment to the corporation's strategic goals but is directly related to another project that does.
  • 1. The project has no alignment to the corporation's strategic goals.

As in the first scenario, all the weighting factors or scores for all the criteria upon which one project is being evaluated are added up and the highest-scoring projects become the top priority projects.

This technique is a more logical process than just rank-ordering the projects in an emotional manner. It ensures discussion, a rational rather than subjective determination of priorities, and a reasonable degree of consensus.

We also suggest that, when a priority system is implemented, the message being communicated is that certain projects are more important than others and that the lower priority projects will not be given the same consideration for resources as will the higher priority projects. If that is true, then consider a time contingency for the lower priority projects. This means, for example, that the top ten projects are expected to meet their deadlines, because these projects presumably will have the leverage to get the needed resources. Priority projects ranked as 11-20 will have a 5 percent time contingency. In other words, these projects will not have the same access to resources; therefore, it will be acceptable to extend the total elapsed time by 5 percent, if necessary. Following that same logic, priority projects 21-30 are allocated a possible 10 percent time contingency; projects 31-40, 15 percent; and 41-50, 20 percent. The contingency can only be used with proof to the PSC that the needed resources are not available and the time contingency was necessary.

SUMMARY

Any organization embarking on a modern project management approach to managing their change efforts will need a Top Management Project Steering Committee. It can be productive immediately by starting the process of managing priorities of the projects. This will require some time to: (a) identify all projects, (b) identify the strategic criteria, (c) let each member of the PSC score each project, and (d) summarize the scores. It is likely that these steps will lead to serious discussions that will keep the PSC members busy until the next installment in this series arrives in the February PMNETwork. It will discuss some Planning Issues of concern to the PSC. ❑

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.

PMNETwork • January 1994

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