The level and nature of project governance changes from organization to organization.
However, through our research into the drivers and destroyers of project value we have identified a correlation between the level and nature of project governance provided by executive teams and the business results achieved.
The characteristics and consequences of the five levels of project governance. Which level of governance does your organization currently employ?
Level 1 No governance involvement
Projects are left to their own devices to deliver.
Project results are often out of alignment with business needs and imperatives (due to no business direction to prevent the project progressively straying from the original intent). Business costs tend to go up rather than down but these are ‘hidden’ in workarounds and standalone systems and spreadsheets.
Sustained positive benefits are rare.
Level 2 Minimal governance involvement
Although some governance structures exist they are essentially a ‘rubber stamp’ for the project. Business commitment to the project and visible accountability for the project’s results is low.
Business fit of solutions and, therefore, staff acceptance is low. Extra project costs are incurred to implement ‘enhancements’ needed to make the original solution work.
Benefits achieved are usually less than 20% of what is actually available.
Level 3 Decision making governance
The governance structures are approving projects and nominating business sponsors to be accountable for the projects. Business involvement is provided on request.
Solutions tend to meet current rather than future needs. The governance team tends to make risk-avoidance decisions that directly reduce the project’s potential value (but this is not measured).
The business cares but does not see itself as accountable for the (lack of) outcomes.
Benefits achieved are usually less than 30% of what is actually available.
Most organizations are at this level of governance today.
Level 4 Involved governance
The governance structures and participants see the projects as ‘their’ responsibility.
Business staff and managers are made available to projects to ensure the results fit the business’ ongoing/ needs.
However, benefits are lost due to overriding ‘business pressures’, other distractions and some business management still ‘sitting on the fence’ in case the project does not succeed.
Benefits achieved are usually around 50% of what is actually available.
Level 5 Governance Leadership
The governance structures and participants are actively leading the project. They see it as a ‘business transformation’ project and measure its success by the results achieved in the business.
Achievement of the business outcomes and benefits is actively managed and measured, generating a momentum for change amongst the staff.
Benefits achieved are between 50% and 100% of what is available.
To start to understand Project Governance explore its role further.
