Does project success rely on good governance?

More recently, one of the wisest modern uses of governance is given by Sir Adrian Cadbury, who developed the UK government’s approach to corporate governance: “It means either the action of governing or the method of governing and it is in the latter sense it is used with reference to companies.”

In short, it is taking a business-like approach. At the same time it acknowledges that to govern an activity is to visibly exercise authority over it. Perhaps then, the true reason for the governance movement in project management has been the uneasy feeling that somehow, projects are un-business like, and no one seems to want to take responsibility!

Basic project governance

What does project governance mean for a new project then? Here are a few basics:

• The OECD defines governance as the formal and informal arrangements that determine how public decisions are made and how public actions are carried out, from the perspective of maintaining a country’s constitutional values in the face of changing problems, actors and environments.
• The Association of Project Managers defines the governance of projects as those areas of governance (public or corporate) that are specifically related to project activities. Secondly, good project governance ensures relevant, sustainable alternatives are chosen and delivered efficiently.
• A project charter is a guide to the authority and financial regulation of the project board’s oversight of the project: this includes the level of financial delegations that a project manager has over the particular project.
• Project success, from the classical project management perspective, focuses on transaction costs being minimised and quantified in terms of cost and time, whereas the delivery of benefits as well as public acceptance and sustainability are all factors that now affect notions of success, which are not usually the responsibility of the project manager.

However, even with these basics clarified, the question still remains: what do I (as a project manager) need to do for my project to not join the long list of those displaying bad governance behaviours?

Project governance and success

One of the main benchmarks for delivering any size of project is using measures to define its success. These success factors are typically defined by a project owner prior to the project commencing, and is assessed only once the project is completed. The use of project management is the typical vehicle to deliver the success – so where then, is the relationship between management of the project, and its eventual output? Is this success tied to ‘good’ governance or simply good project management?

Typically, governance seems to cover the following elements:

• Systems of structuring, operating and controlling.
• Achieve long-term strategic goals to satisfy shareholders, creditors, employees, customers and suppliers.
• Compliance with the legal and regulatory requirements; includes meeting environmental and local community needs.
• Any specific considerations for specific organisations and sectors.
• Processes and evaluation criteria to deliver value.

The relationship between governance and project success is a new field, however one issue coming to the fore is the element of ‘quality’. It is asserted that it seems to be closely equated with a ‘benefits-view’, a basic question about a project’s success or otherwise, is becoming more important than the time and cost dimensions.

It may well be that a new definition of project success needs to be built into basic governance requirements of producing a project charter. This would need to be tailored to compel project boards to keep in mind that the quality of the project is sufficiently being considered, to justify confidence that these effects will be delivered.

As well, the broader effects that projects are trying to achieve—the ‘benefits-view’ as well as public acceptance and sustainability—should be factors that are worked into the basic definition of success, which is guiding the project’s ultimate missions or goals.

This is an abridged version of a whitepaper, ‘Governance is Important to Project Success’, available in PDF form.

If you would like to review this paper, please contact Chris Flaherty via email to offer feedback.