Posts Tagged ‘6QGovernance’

Deficiencies with programme management?

Posted in Governing Programmes and Projects, Strategic Programmes on September 7th, 2009 by Raymond Young – Be the first to comment

Executive Summary

Having raised the question in a earlier post of why billions of dollars invested in projects were not resulting in the realisation of strategic benefits, and then exploring portfolio management, this post explores whether programme management may play a part.

It appears programme management is indeed the vital link but may be deficient in two critical areas:

  1. Current conceptions of programme management are often immature and inconsistent.
  2. Current guidelines may not be flexible enough to support strategy.
    1. The level of certainty that exists with strategy is far less than programme managers have traditionally assumed.
    2. It is not optimal to work on the basis that top managers set strategy and programme managers implement strategy.
    3. Programme management must adapt to the context within which it operates. This flexibility of practice is important to:
      1. support some level of challenging, feedback and dialogue on strategy, and
      2. easily redefine the program as new information comes to hand.


this post is an extract from an academic paper prepared for the IT Project Management SIG meeting at the2009  International Conference for Information Systems

Making Sense of Program Management

Programme management in contrast to project or portfolio management is not a mature discipline. There are less than a dozen textbooks and almost all of them start by commenting on the dearth of available guidance. This situation may have arisen because the origins of program management were in the US aerospace and defence industries where it was kept secret for decades. It was only in the 1980s as people moved did program management take hold in the commercial sector but even then it was sometimes only the term being misapplied to the management of large or multiple projects [1]. The US understanding is probably best captured by the Project Management Institute’s recently published Standard for Program Management with its focus on new product development. However, the UK’s Office of Government Commerce’s developed Managing Successful Programmes in the late 1990s to focus on the delivery of change and has begun to dominate the way programme management is being understood internationally [2].

However, there remains however considerable confusion [3]. Some successful project managers have been promoted into programme roles only to flounder [2]. It was an important clarification to find that project management and program management had different theoretical foundations and that programmes could not be treated as scale-ups of projects [4]. It was found that project management had been applied successfully mainly in the domain of new product development. Program management was characterised more as a tool for strategy implementation in domains that included manufacturing, quality, organisational change, change in work and industry and product development [5]. It is not well understood that programme management competence relates more to general management skills and generic leadership qualities than to project management skills [6].

Deficiencies with implementing strategy

A problem has arisen because strategy is becoming more complex and is increasingly less about the technical skills to develop new products and more about the leadership skills to introduce organisational changes to react to rapidly changing environments. A strategy may sometimes require development of new products and services but to be effective the strategy will still require organisational change to develop the capacity to deliver new services [7]. We are starting to realise that the programme management practices that we have inherited are not particular supportive of strategic thinking and are inadequate for strategy implementation.

Programme management practice has yet to reflect the insights from thirty years of experience with strategic planning. Strategic planning has been found to be fundamentally different to strategic thinking [8]. The WW1 battle of Passchendaele is an example of how a strategically desirable option was found to be tactically impossible. After four months and the loss of over a quarter of a million lives, the generals eventually found they were sending their men through a sea of impassable mud. This particular failure was inexcusable, because the map is not the reality and the general should have seen for himself. However, corporate leaders do not have this option because they are not dealing with a physical environment that can be inspected but a future environment which cannot. It is necessary for a strategy to be informed by the results of a strategic plan. A chosen strategy must be tested on an ongoing basis, whether it is working as expected, or whether an alternative strategy is a better option. The level of certainty that exists with strategy is less than the practitioners of strategic planning and programme managers have traditionally assumed. It is not appropriate to work on the basis that top managers set a strategy and programme manager implement the strategy. There must be some level of questioning, feedback and dialogue.

Deficiencies with programme management

This insight is rarely if ever reflected in practice. Mainstream programme management is strongly influenced by the project management tradition and programme management practices may have been codified too rigidly. Practice tends to be programme-centric and a clear boundary between the project and business domains is maintained [9]. Guidelines suggest a level of documentation rigour that works as a disincentive to challenging and redefining the program as new information comes to hand and the guideline underemphasise the need to adapt to the context in which a programme operates [2]. Responsibility for the realisation of benefits is often assigned to business managers outside a narrowly defined programme [10]. One major text provides an example of a program to develop a new product independent of another program to market the product without emphasising the need to coordinate decisions to realise a strategic goals such as profitably entering a new market [1]. When organisations view programmes in this way, they tend to shoe-horn programmes into project-level thinking, fail to focus adequately on building and maintaining support for the strategic programme goals and lose most of the benefits sought in setting up programmes in the first place  [11][2]

Effective programme managers have been shown to frequently adapt the formal guidelines in subtle and creative ways, or ignore or contradict them completely. Arguably the common guidelines were found by them to either be not useful or not make sense. They seek more to engage stakeholders than to manage them as the methodologies might suggest. The current codification into a common set of transferable principles and processes appears to be inadequate and some even question whether it is possible [2].

Conclusion

The conclusion is that programme management is far from uniform and is immature as a discipline. It is as much about coping as it is about planning and rational decision making, as much about re-shaping the organisational landscape as it is about delivering new capabilities. There is the suggestion that the tendency towards prescription based on ‘one size with minor variations’ approach may warrant re-examination [2]. These insights may explain why programme management concepts have not had more influence or lead to the realisation of more strategic benefits within the Victorian public sector or beyond. This would appear to be a crucial deficiency that justifies further work. It does not seem acceptable to allow governments or corporations to continue to invest tens of billions of dollars and not realise the strategic benefits that we expect of them. This finding seems particularly important in the context of the massive fiscal stimuli being funded by governments around the world to counter the GFC.

References

[1]       D.Z. Millosevic, R. Martinelli, and J.M. Wadell, Program Management for Improved Business Results,  Hoboken, NJ: John Wiley & Sons, 2007.

[2]       S. Pellegrinelli, D. Partington, C. Hemingway, Z. Mohdzain, and M. Shah, “The importance of context in programme management: An empirical review of programme practices,” International Journal of Project Management,  vol. 25, 2007, pp. 41 – 55.

[3]       A. Stretton, “Program Management Diversity – Opportunity or Problem?,” PM World Today,  vol. 11, Jun. 2009.

[4]       M. Lycett, A. Rassau, and J. Danson, “Programme management: a critical review,” International Journal of Project Management,  vol. 22, 2004, pp. 289 – 299.

[5]       K. Artto, M. Martinsuo, H.G. Gemünden, and J. Murtoaro, “Foundations of program management: A bibliometric view,” International Journal of Project Management,  vol. 27, 2009, pp. 1 – 18.

[6]       D. Partington, S. Pellegrinelli, and M. Young, “Attributes and levels of programme management competence: an interpretive study,” International Journal of Project Management,  vol. 23, 2005, pp. 87 – 95.

[7]       D. Williams and T. Parr, Enterprise Programme Management: Delivering Value,  Basingstoke, Hampshire: Palgrave Macmillan, 2004.

[8]       H. Mintzberg, “The fall and rise of strategic planning,” Harvard Business Review,  vol. Jan-Feb, 1994.

[9]       M. Thiry and M. Deguire, “Recent developments in project-based organisations,” International Journal of Project Management,  vol. 25, 2007, pp. 649 – 658.

[10]     CCTA, Managing Successful Programmes,  London: Central Computer and Telecommunications Agency (now called OGC), 2000.

[11]         S. Pellegrinelli, “Programme management: organising project-based change,” International Journal of Project Management,  vol. 15, 1997, pp. 141 – 149.

Post-GFC: project failure leads directly to bankruptcy

Posted in Governing Programmes and Projects, Practice Areas on August 17th, 2009 by Raymond Young – Be the first to comment

Here’s a situation that may be playing out in companies globally:

A company is on the verge of bankruptcy. It has been particularly hard hit by the global financial crisis and is losing several million dollars a month. It desperately needs to reduce costs and their accounts are not up to the intense scrutiny. A number of key initiatives are being undertaken and the auditor has added the requirement to consolidate the accounting systems. The board has no choice but to agree, but there couldn’t be a worse time to do a new IT project. The chairman has overseen a number of IT projects and “not one of them has succeeded”.

IT said that the systems can be integrated in two months so the edict from on high is that it has to be done before Christmas. The new boss is claiming not to be on top of the detail and plans to delegate responsibility for the accounting system project to a manager. The manager understands the business processes but hasn’t been involved in the decision.

It wasn’t so long ago that the press was reporting on a similar IT project that failed just before Christmas.  I helped Standards Australia produce a handbook for boards and top managers of lessons learned from a whole range of similar disasters (HB280-2006).  In the case above, not one of the guidelines is being followed. It seems no one ever learns. The price this time will be jobs, followed soon after by bankruptcy.

For many, the GFC has all but removed any margin for error. Will boards also pay the price? The precedent was set in 2006 when the CFO, CEO and chair of the audit committee resigned from Australian Pharmaceutical industries following an IT project failure.

Where are the auditors?

My friendly advice in such cases is often rejected with the put down “have you ever implemented XYZ system?” There is little understanding that the real issues actually relate to governance. People fall into the trap of thinking they are IT projects, deferring to the vendor and assuming the business benefits will flow automatically from implementing a system. Fifty years of experience proves it doesn’t.

Perhaps we in the profession need to do more. It is disturbing that I often hear that auditors are not suggesting clients follow the 2006 guidelines in HB280 nor the related Standard on the corporate governance of projects (AS8016 forthcoming).

In the building industry, clients are not expected to know whether concrete has been poured correctly or the steel is of the right thickness. We have building inspectors to certify minimum standards have been met. It is completely dysfunctional to defer to vendors just because it is an IT project! Why aren’t our auditors providing ‘project inspectors’. It is not part of the formal auditor training, but it is common practice for audit firms to subcontract specialists when they don’t have the expertise. I’m arranging to provide these services for a mid-tier firm as I write, so clearly it can be done. Why is this not a common service?

Where were the directors?

Perhaps the most disturbing thing of all is that boards know projects have a high failure rate [i]. Why do they and senior management expect a different result when they continue to follow the same process? Governing projects is not rocket science. There are only six basic issues that have to be addressed:

  1. Make sure you know what success looks like (IT is generally only an enabler, it is rarely the real objective).
  2. Make sure you know what has to change for the benefits to be realised.
  3. Make sure you appoint a sponsor who is personally motivated to make the changes happen, and make them accountable for the benefits.
  4. Make sure you have a way to measure if the benefits have been realised (Do not use on-time on-budget. This is desirable but not the ultimate objective).
  5. Make sure you listen. Establish the right culture so that bad news is not filtered out.
  6. Make sure you monitor and intercede as necessary (Something always goes wrong and there are times decisions can only be made at the board and top management level. Political considerations cannot override the need to have the right person accountable. When the consequences include bankruptcy, we all lose).

This advice is usually enough for most people, but there are times more detailed help might be required. We have developed 6Q Governance™ to be the project inspector’s toolkit and when appropriate, we can work with you to transfer our skills.


[i] R.C. Young and E. Jordan, “Lifting the Game: Board views on e-commerce risk,” in IFIP TG8.6 the adoption and diffusion of IT in an environment of critical change, (Sydney: Pearson Publishing Service, 2002), pp. 102-113

Deficiencies with programme/portfolio management?

Posted in Governing Programmes and Projects, Practice Areas on August 12th, 2009 by Raymond Young – 2 Comments

Executive Summary

Victoria is considered to be one of the international leaders in New Public Management and their approach to project investments was expected to be at the forefront of practice. Our research has shown however, that their key investment frameworks (based on tools developed by the UK’s Office of Government Commerce) do not adequately support their strategic goals.

Our evidence suggests there are major deficiencies with best-practice. We are taking the lead to address this by developing approaches to help boards and top managers to govern projects effectively. However the significant deficiencies with program and portfolio management have yet to be addressed. A call is made for others to contribute.


No adequate tools to govern programmes/portfolios to realise strategic goals

Projects in the public sector

We were recently commissioned by the Victorian Auditor-General’s Office to undertake a study to explore ‘The role of projects within the Victorian Public Sector’. We subsequently extended our study to include New South Wales and found that projects are increasingly important across the whole public sector. Projects now consume around 20-30% of budget[i] and are the main enabler of government policies such as improving health/education and reducing crime/traffic congestion.

The significance of the studies is that they have highlighted a very major flaw in the way projects are typically managed. Victoria is considered to be one of the international leaders in New Public Management and their approach to making project investments was also expected to be at the forefront of practice. It was therefore a revelation to discover their key investment frameworks (based on tools developed by the UK’s Office of Government Commerce) did not adequately support their strategic goals!

The deficiencies can most clearly be seen by considering the impact of the huge project investments over past decade in education and health (estimated to be between $10-20b). The Victorian Department of Education and Early Childhood Development is considered one of the best in Australia, and their effort is undeniable, but their results have not contributed to the government’s 10-year goals. Literacy has generally not improved and numeracy has actually decreased [ii]. Waiting times for health services appear to have been largely static despite almost a billion dollars a year being poured into health related projects. What is going wrong?

Projects in general

Please understand I am not taking the boot to public sector. As a citizen of NSW I am envious of the quality of life the Kennett, Bracks and now Brumby government have delivered for Victorians. A quick comparison with the post-melt-down corporate sector reveals the Victorians govern better than almost anyone in both the public and private sector. Yet their track record with project investments echoes the dysfunctional pattern found all over the world (where half to two-thirds of project investments fail to deliver any benefits at all [iii]). If the ‘best’ cannot get it right, there must be something wrong. Something is missing.

What we have found is that the Victorian investment frameworks are “directed mainly at asset investments”. Their strength is that they select investments based on the benefits to be delivered rather than the cost or the time. Their weakness is that selection is at the project investment level rather than at the program level.

  • Asset investments alone (such as IT, schools, hospital or roads) seldom directly lead to the realisation of strategic goals such as reduced crime, increased literacy, or reduced waiting times.
  • Programs of projects are almost always required (e.g. build school + change bus routes + recruit quality staff + develop and implement quality curriculum + manage parent/community perceptions = increased literacy). It is pointless to fund an individual project unless all the other critical inter-related projects are also funded.
  • Effective governance is also required. Organising and funding whole programs is important, but can easily go off track after approval. Strategy is emergent and needs to respond to the changing environment. Governing is the high-level ‘steering’ of the program through the emergent issues that cannot be planned for (e.g. bushfires, swine flu, global financial crises, etc.)

Deficiencies in best-practice?

Our studies suggest there are major flaws in the way projects are managed. Value is reported to be lost in three major areas [iv]:

  • The traditional emphasis on project management has the potential to increase value by 15% (by avoiding rework and over engineering).
  • The approach taken by the Victorian government is better and may represent current ‘best-practice’ because it has the potential to increase value by 33% (by investing to reduce underutilised infrastructure).
  • The most potential value to be realised is in avoiding duplication of project effort through governance of programmes and portfolios (52%)

This understanding is show schematically below:

Relationship between governance and PPPM

New program / portfolio tools needed?

The solution appears to be more effective governance using programme and portfolio tools as appropriate [v]. e8 Consulting has been focussed on developing governance guides such as 6Q Governance™ to supplement the governance Standards AS8016 and HB280. However, further study has revealed that the disciplines of portfolio and program management to be very immature.

  • The leading programme methodology Managing Successful Projects (MSP) is overly mechanistic and not closely followed by practitioners because it is relatively ill suited to implement strategy [vi].
  • The dominant portfolio approach in practice seems to be based on the selection of projects and more suited to new product development than the implementation of strategy [vii].

These and other early findings [viii] suggest we may have to develop the tools ourselves. We hope it isn’t so and post this blog in the hope that others can comment on our findings and collaborate to find a faster way forward.


[i] We estimate project expenditures to be around $6-8b pa in VIC and $8-12b pa in NSW

[ii] VAGO, Literacy and Numeracy Achievement (Victorian Auditor-General’s Office,  2009)

[iii] R. Young, “What is the ROI for IT Project Governance? Establishing a benchmark.,” in 2006 IT Governance International Conference, (Auckland, New Zealand, 2006)

[iv] Doug Watters, “IBM Strategy and Change, survey of Fortune 1000 CIOs.” August 17, 2004

[v] Sergio Pellegrinelli and Cliff Bowman, “Implementing strategy through projects,” Long Range Planning,  27 (1994), 125 – 132

[vi] Sergio Pellegrinelli, David Partington, Chris Hemingway, Zaher Mohdzain, and Mahmood Shah, “The importance of context in programme management: An empirical review of programme practices,” International Journal of Project Management,  25 (2007), 41 – 55

[vii] Michel Thiry and Manon Deguire, “Recent developments in project-based organisations,” International Journal of Project Management,  25 (2007), 649 – 658

[viii] Alan Stretton, “Program Management Diversity – Opportunity or Problem?,” PM World Today,  11 (2009)

The emerging demand for business project audits

Posted in Governing Programmes and Projects on July 27th, 2009 by Raymond Young – Be the first to comment

Boards appear to be genuinely interested in improving their performance [i]. They are also looking for guidance on IT issues but (a) their experience with IT advisers had been disappointing [ii] and (b) ‘best-practice’ had been found to be of little practical utility with no consistent impact on success [iii].

However new governance Standards (ISO38500, AS8016, HB280) are emerging that address board-level concerns and are focused on the realisation of above average returns. Within Australia, because of the large investments in IT, effective governance of projects could lead to 1-3% increases in GDP. It will be a major breakthrough if boards start to follow these guidelines and require business process audits as part of the regular governance process.

The leading indicators of change might be:

  • appointment of board members with IT experience,
  • business project auditing being offered by major consultancies,
  • widespread adoption of the new governance Standards,
  • the term ‘business projects’ entering into the common business language
  • significant negative press over new project failures.

These suggestions were originally presented at an ISACA professional development session in Sydney on 14  March 2007. The slides can be seen by clicking on the link below.


[i] R. Leblanc and J. Gillies, Inside the Boardroom: the coming revolution in corporate governance (Toronto: John Wiley and Sons,  2005)

[ii] R.C. Young and E. Jordan, “Lifting the Game: Board views on e-commerce risk,” in IFIP TG8.6 the adoption and diffusion of IT in an environment of critical change, (Sydney: Pearson Publishing Service, 2002), pp. 102-113

[iii] Raymond Young and Ernest Jordan, “Top management support: Mantra or necessity?,” International Journal of Project Management,  26 (2008), 713 – 725