Improving the governance of projects, programs and portfolios
A short while ago I posted some criticism on the new ‘Practice Guide for the Governance of Portfolios, Programs, and Projects’. The core of my criticism was the confusion of management and governance and PMI’s focus on improving management functions. This article looks at some of the things a governing body can do to improve the governance of projects, programs and portfolios within the organisation it is responsible for governing.
As a starting point, most people on most governing bodies are not experts in the overall process of managing projects, and it would be unreasonable to expect people to acquire this skill late in their careers. The solution is to create a ‘board subcommittee’ or similar entity tasked with overseeing the whole organisational change process that includes projects, programs and portfolios.
The reason for this broad remit is the only point in undertaking a project is to create value for the organisation; this means selecting the right ideas to make into projects, doing the project ‘right’ and then making use of the project’s outputs to generate value.
A failure at any point in the chain diminishes return on investment. As with other established board subcommittees, the ‘organisational change subcommittee’ should draw on external expertise (either from within the organisation or from outside) to enhance its understanding and oversight capabilities.
The next key element is creating the function of ‘chief projects officer’ (CPO) or similar. This role is starting to appear in some organisations. The CPO and the CPO office have a number of key roles:
- The CPO is a member of the ‘board subcommittee’ to ensure effective two-way communication and understanding.
- The CPO is responsible for the accuracy and timeliness of the information being used by both management and the governing body in making project related decisions. Therefore the organisation’s PMOs, audit and surveillance capabilities and so on, report to the CPO, not other line mangers. The PMOs support line and project management but obtain their authority from the CPO.
- The organisation’s portfolio management functions are managed by the CPO, although final investment decisions will typically be made by an executive committee.
- The CPO is responsible for developing the overall capability of the organisation to manage and support its projects and programs as well as its ability to do projects and programs right.
Finally, the governing body needs to establish a culture of openness and transparency that allows sensible risk taking, the transmission of frank and fearless advice and supports proactive problem solving. An excellent summary of the cultural aspects needed for the effective governance of projects, programs and portfolios is contained in the recently released Shergold Report.
In summary, the role of the governing body in facilitating the effective governance and management of projects programs and portfolios is to create the culture, policies and high-level management structures needed to allow effective management to evolve.