How do you introduce Project Governance into your organization?

There are two basic options for introducing Project Governance –  "by formal program " or "by trial and experiment".

What commonly happens is …

By formal program

Is what happens by default, when the organization makes a commitment to ‘get control of projects’. The starting point is usually when an Investment Management Committee (or some name or another) is created to decide which projects do and don’t get approved and funded.

Membership of this Committee is usually the executive team (or the next layer down) plus others such as the CIO.

The business case then becomes the evaluation and approval mechanism, whether suitable or not, and the Committee meets and starts making decisions — in this way ‘governance’ is born.

Only as issues arise does this Committee begin to understand their full role is much greater than just project evaluation and decision-making.

By trial and experiment

Is usually achieved through individual projects. Due to the size, risk or complexity of a project, or a business desire to ‘control it’, a Project Sponsor and Project Steering Committee is established.

The Sponsor meets with the Project Manager regularly. The Project Steering Committee meets with the Project Sponsor and Project Manager each month to discuss the issues — and progress towards governance is thought to be made.

However, project success is still haphazard. Projects still go over time. Most participants don’t know why they’re there. Little progress is actually made.

What should happen when an organization introduces project Governance …

By formal program

If an Investment Management Committee is to be formed, it first of all needs to understand its five roles, viz:

  1. To establish the governance ‘infrastructure’ for projects
  2. To establish the bases for project/investment proposals so that the committee is comparing like with like
  3. To evaluate submitted proposals across five dimensions to identify the most appropriate investments
  4. To monitor the ‘success’ of projects in delivering the returns on the funds and resources invested
  5. To progressively build the organization’s capability to deliver successful projects.

It may then choose to initially only focus on one or two roles and take on the others later.But this is then a conscious choice (rather than an outcome achieved through ignorance).

All of the supporting tools then need to be put in place — including the accountabilities, standards and policies.

The key to success is to have project consistency for comparability. You must be able to compare project proposals on a like basis, otherwise there is no valid basis for evaluation. So, the business case, prioritisation and risk management processes all need to both exist and generate comparable (and worthwhile) results.

Setting up an Investment Management Committee requires, therefore, the implementation of a range of new or upgraded business processes for it to be effective from day-1.

By trial and experiment

Project Sponsors and Project Steering Committee members need help.

They may not realise it, but they do. Project Governance is not like operational management. Governing projects, using operational management techniques is disastrous (hence the 95% project failure to deliver the expected business outcomes and benefits).

While a few organizations do ‘formal project governance training’, most adopt a progressive training approach at specific points in the project with supporting materials such as Charters, clear accountabilities and reference Handbooks.

The key to success is to make the training short, sharp and effective — with ongoing reference materials and support.

You can try to implement Project Governance by just establishing job titles and appointing people to the roles — but this approach only works to a limited extent. Effective Project Governance needs governance-competent executives who, in turn, need governance training, guidance and support.

Last resort

Some organizations set up governance structures within IT and hope to spread it to the rest of the organization by osmosis or example. This tends to colour project governance as an “IT” structure which diminishes its organizational effectiveness. But at times this may be better than nothing.

All of the tools, training and support required to establish and sustain effective project governance at all levels (from the project to the Board) are available on the TOP Project Governance Center of Expertise. 


Topics: Capability Development, Business Case, Capital Investment, Value Equation, Project Governance

Further Reading



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Revision History

First published: Simms, J. (Feb 2008) as "How Do You Introduce Project Governance Into Your Organization?"

Updated: Chapman, A. (March 2020), Revisions and Corrections