Tag Archives: Project Controls

PGCS 2015 is declared an outstanding success

The outstanding success of the 2015 Project Governance and Controls Symposium (PGCS), held in Canberra last week, builds on 25 years of similar events and has been the subject of a news story posted on the APM website (UK) about Steve Wake’s travels to Australia and his presentation at the PGCS:  https://www.apm.org.uk/news/apm-chairman-highlights-contribution-project-controls-global-scale

L to R: Kym Henderson (PGCS), Yvonne Butler (AIPM), Steve Wake (APM) and Pat Weaver (Mosaic)

L to R: Kym Henderson (PGCS), Yvonne Butler (AIPM), Steve Wake (APM) and Pat Weaver (Mosaic)

The PGCS is designed to make the connection between organisational governance and project controls.  Project controls cannot operate effectively without the protection of senior management. Frank and fearless reporting of status and issues cannot be assumed if the middle levels of management have the capability to restrict negative information.  Conversely, executive management decisions depend on accurate and realistic assessments of risk, schedule and cost.  Creating a culture where this type of information is not only available but accepted and used properly is the key governance issue within the project, program and portfolio domain.

To facilitate this objective, the PGCS invites prominent international and Australian speakers to its annual conference, and then works to build connections and make the knowledge available through both personal contacts and the resources section of the www.pgcs.org.au website which now has all of this years presentations uploaded.

You may have missed the Symposium, but you, and everyone on the project controls and governance communities are invited to make use of this resource, join in the conversation, and start planning for the 2016 Symposium, scheduled for the 11th and 12th May 2016.

Project Governance and Controls Symposium (PGCS) Canberra

Four years ago I was looking for a name to describe the governance and controls ‘conference’ we were intending to spin out of the PMOZ conference.  There appeared to be a real opening for a ‘focused event’ looking at the mutual interdependence and almost symbiotic relationship between governance and project controls, and Canberra seemed to be the ideal location.

The synthesis between good governance and effective controls is obvious, if not well understood or implemented:

  • Project controls cannot operate effectively without the protection of senior management. Frank and fearless reporting of status and issues cannot be assumed if the middle levels of management have the capability to restrict negative information.
  • Conversely, executive management decisions depend on accurate and realistic assessments of risk, schedule and cost. Creating a culture where this type of information is not only available but accepted and used properly is the key governance issue within the project, program and portfolio domain.

Finding a name was a different challenge….

The first bit was easy if the KISS principle is applied.  ‘Project governance and controls’ – we knew the program was intended to cover a lot more than just ‘projects’; at a minimum, programs, portfolios, benefits realisation and change management were in the mix but can all fit under the general umbrella of ‘projects’.

More challenging was deciding on what type of event we wanted and therefore what name to use……   Symposium is a slightly old fashioned word but it has a long history and a quite specific meaning that fitted perfectly with the type of event we were planning.

The modern definitions are a good starting point:

  • A formal conference or meeting at which several specialists deliver short addresses on a topic or on related topics or a collection of essays or papers on a particular subject by a number of contributors. Fits perfectly, we have a clearly defined topic, internationally recognised experts, and after May, will have most of the presentations from the last four symposia indexed and freely available on our website.
  • A social gathering at which there is a free interchange of ideas or a convivial discussion. One of the key elements in the PGCS design is facilitating the exchange of ideas both within Australia and with the wider international community.

The origins of the term are slightly less focused on knowledge transfer and learning.   Symposium originally referred to a drinking party or convivial discussion, especially as held in ancient Greece after a banquet (and notable as the title of a work by Plato).

Symposium

Certainly in the late 16th century a ‘symposium’ denoting a drinking party: via Latin

  • from Greek sumposion, from sumpotēs ‘fellow drinker’,
  • from sun- ‘together’ + potēs  ‘drinker’.

The annual PGCS reception at the ADFA Officers Mess fits here although we do expect professional behaviour. The reception flows on from the conclusion of day one’s formal presentations – the hot topic for discussion this year should be the ‘One Defence’ presentation by Ms. Roxanne Kelley, accompanied by Air Vice Marshal Neil Hart.

After the reception, here is plenty of time for visitors to Canberra (not to mention locals) to move ‘down town’ and enjoy one of the many excellent restaurants in Civic or further afield. Whilst not a formal part of the conference, I can recall a number of memorable evenings for the first three years and I’m looking forward to what eventuates this year…… (but reporting on attempts, if any, to emulate the ‘Ancient Greek’ version of ‘symposium’ is proscribed by Chatham House Rules).

Certainly the three events to date have lived up to the modern concept of a ‘symposium’ and have demonstrated that both ‘governance’ and ‘controls’ can be usefully discussed in a convivial atmosphere.

It’s not too late to sign up for the next PGCS, hosted by Platinum Sponsors, UNSW Canberra; the symposium will be held at the Australian Defence Force Academy (ADFA) on the 6th and 7th May, more information see: http://www.pgcs.org.au/

One Defence – A Governance and Controls Perspective

The report of the First Principles Review Team into the workings of the Australian Defence Department and the Defence Materiel Organisation (DMO) will be a hot topic of discussion at the upcoming Project Governance and Controls Symposium (PGCS) in Canberra next month.

The report found that a holistic, fully integrated One Defence system is essential if Defence is to deliver on its mission in the most effective and efficient way.  The major consequence of the reports recommendation to ‘Establish a single end-to-end capability development function within the Department to maximise the efficient, effective and professional delivery of military capability’; is the decision to disband DMO and integrate procurement back into the main functions of the Department. All but one of the reports 70 recommendations have been accepted by Government [Download the report].

Three aspects of the report closely align with the objectives of the PGCS.

First, at the macro level, the report recommends ‘Ensure committed people with the right skills are in appropriate jobs to create the One Defence workforce’ one of the key objectives of PGCS is to bring knew knowledge and research to the governance and controls community.

Second, the need for effective controls systems was simply seen as a ‘given’.

finally, at a more specific level, many of the report findings suggest there is a singular lack of effective governance and controls within the DMO procurement processes. Effective governance and controls is not measured by the quantity of processes, procedures and committees, but by the effectiveness of the project and programs being governed and controlled in meeting their objectives.

The reported need for acquisition teams to comply with over 10,000 Defence Materiel Organisation specific policies and procedures which include 35 policy and procedure artefacts totalling around 12,500 pages on procurement processes and controls is appallingly bad governance.  The consequence of this paper mountain is that the average government submission is 70 pages long, takes 16 weeks to move through the Cabinet preparation process and an average of 46 months to progress from first pass initiation through to second pass approval.  The result is slow delivery, high cost and inefficient procurement.

Add to this around 200 active committees in the organisation and lack of clear responsibility and reporting lines completes the picture of an organisation that has spent decades adding more processes, procedures, committees and check points to ‘all future projects’ every time an issue occurred in one project – one size does not ‘fit all’ and adding process never prevents the occurrence of other issues.

The proposed business model will go a long way to eliminating many of these unnecessary checks and reviews.

OneDefence

The essence of good governance is to have the right balance of checks and reviews supported by reliable information from an effective controls system, customised to meet the needs of different sizes and types of project and program. This statement has a number of key components:

  • Reliable information also requires a clear understanding or the inevitable risk and variability inherent in every forward estimate – there is no such thing as a certain estimate.
  • The governance system and the organisation’s ‘governors’ need to actively support this controls infrastructure and protect it from the inevitable attacks.

The objective of the PGCS is to develop the linkage between governance and controls.  Many of these capabilities have been developed within the UK government including its ‘Major Projects Authority’ and the successful approach used to develop Cross Rail, the London Olympics and two new mega projects, Thames Tideway and the HS2 railway from London to the ‘North’.  We can learn a lot from the UK experience.

One of the PGCS keynote speakers is Steve Wake, Chairman of the Board of the Association for Project Management (APM) in the United Kingdom. His presentation is focused on the status of project management and project governance and controls from an international and British perspective.

If you want to join us and be part of the discussion now is a good time to book your place at the PGCS, full details are on the website at: http://www.pgcs.org.au/

I will be posting more on the lessons from the One Defence later.

Project Governance and Controls Symposium (PGCS) 2015

The Project Governance and Controls Symposium (PGCS) 2015 will be held on 6-7 May 2015 at the Australian Defence Force Academy (ADFA) thanks to the continued platinum sponsorship provided by the University of New South Wales Canberra.

The PGCS is the only annual project governance, controls and management event held in Australia. It has a unique focus on the project governance and control needs of the Australian Federal Government from the perspectives of Government agencies, Industry and Academia. The Symposium is focused towards public sector projects and seeks to engage with Defence/DMO and other large departments because they have they have the largest, longest running and most nationally significant projects in Australia.

The PGC Symposium also differs significantly to those run by other organisations.  While it does not ignore the soft skills (they are a critical part of governance),  the focus is on the quantitative project control techniques that are essential to providing a clear and objective status of where a project is truly at – particularly for major capital acquisition projects – and how this information supported effective governance.

The PGCS is supported by the Australian Institute for Project Management (AIPM), and a range of other project management bodies.

For more information visit the conference website at: http://www.pgcs.org.au/

Bookings are now open and it is not too late to offer a paper – contact me if you are interested in speaking.

Two new papers on the web

BeaverWe presented papers at the Engineers Australia MCPC14 conference late last year. They are now available on our website.

Understanding Design – The challenge of informed consent looks at the problem of communicating complex project information to stakeholders in a way they can understand.

Scheduling Complexity discusses the challenges of managing time in complex projects and the need for qualified schedulers.

For more of our papers and articles see: http://www.mosaicprojects.com.au/PM-Knowledge_Index.html

Project failure revisited

Project-FailOver the holiday period there has been a couple of interesting discussion on project success and failure. The consensus of the many commentators was that the simplistic measures of time, cost and scope are inadequate but there was little consensus on the solution.  This post poses some of the questions that need a considered answer:

Firstly, the APM website posed the question which of the following projects was successful?

Two organisations decided to undertake identical projects with a normalised value of  $1million.
–  Organisation A assessed their project and set the project budget at $800,000
–  Organisation B assessed their project and set the project budget at $1,200,000
Organisation A’s team did their best to ‘meet the challenge’ and achieved an outcome of $900,000 – a cost overrun of $100,000 nominally a project failure.
Organisation B’s team did ‘a good job’ and achieved an outcome of $1,100,000 – a profit of $100,000 nominally a project success.

But which project is really successful??  The one that cost $900,000 or the one that cost $1,100,000 to produce the same output.  This example is simplistic, the numbers are given and the problem is demonstrated, but nowhere will you ever have two identical projects run against different baselines.  How can you assess the ‘project risk’ caused by soft or hard targets??

Similar issues arise when allocating the blame for ‘failure’ to different parts of the ‘performing organisation’.  Many so-called project management and project leadership failures are likely to be either unavoidable consequences or symptoms of far more significant underlying issues (for more on this see: Project or Management Failures?).  Focusing on the superficial (and blaming the project manager) prevents a more thorough ‘root cause analysis’  of the real issues and problems in organizations.  I will take 2 examples and borrowing from Toyota’s ‘Five Whys’ ask ‘why’ a few times:

  1. Failure of PM leadership. The project manager failed to lead, relate or communicate, with stakeholders. But the project manager did not appoint him/her self , some of the unanswered questions are:
    1. Why did the organisation appoint a PM lacking the requisite skills?
    2. Why did the organisation fail to support/train the PM?
    3. Why were the failings not picked up and resolved during routine project surveillance?
  2. Failing to use recognised techniques such as risk management. Some of the unanswered questions are:
    1. Why does the organisation allow sub-standard practices to exist?
    2. Does the organisation have proper templates, processes and support in place to support the practice?
    3. Does the organisation provide adequate time, training and resources to implement the practice?
    4. Why were the failings not picked up and resolved during routine project surveillance?

The answer to these questions may go back to organisational culture, the overall organisational ability to effectively manage and support its projects (the strategic management of projects)  and/or ultimately the governance of the organisation.

Certainly some projects will fail for project related reasons; projects and programs are innately risky and this means project related failures are to be expected – minimising this cause of failure will be valuable. But, simply measuring performance against cost and time targets is influenced by the way the initial target was set in the first place.

project-failure-2The problem is compounded by the lack of ‘root cause’ assessments. I expect a proper study of the root causes of many so-called ‘project failures’ will show many projects are effectively set up to fail by the organisation.  Allowing executive management to continue with these types of practices is ultimately a governance failure. Addressing the ‘root causes’ of failure hidden in executive management practise, culture and governance are likely to generate significantly greater benefits than simply trying to ‘fix project management’; but you cannot see the failures without proper data.

One initiative aimed at working towards a standardised assessment of project failures is a series of articles being published by Proff. Alan Stretton in PM World Journal, see: http://pmworldjournal.net/article/series-project-success-failure-deficiencies-published-causes-project-failures/  (registration is free).

Given the general management mantra of ‘you cannot manage what you cannot measure’, developing a measure of project failure that is valuable and consistent would be a good start in developing the data needed to allow management improvement across the board.

As Alan concluded the referenced article:

The above deficiencies in current data all point to an urgent and obvious need to develop comprehensive data on causes of project failures – preferably validated by appropriate and agreed criteria as to what constitutes success / failure, and covering the widest possible range of project types and project management application areas.

A suggestion (or challenge) here is for global project management organisations (IPMA, PMI, apfpm, etc) to jointly create a framework to develop and share project success / failure data, covering the widest possible range of project management types and application areas. This would include

  • Developing and agreeing common criteria for project success / failure;
  • Collecting and sharing validated data on success/ failure rates;
  • Researching and sharing validated data on success drivers / failure causes.

If you agree support Alan and start lobbying your PM association of choice. Defining the problem is easy, solving it elegantly is not!

Ethics, Culture, Rules and Governance

RulesFar too many governing bodies spend far too much time focused on rules, conformance and assurance.  While these factors are important they should be an outcome of good governance not the primary focus of the governors.

When an organisation sets high ethical standards and invests in building an executive management culture that supports those standards the need for ‘rules’ is minimised and the organisation as a whole focuses on doing ‘good business’ (see: Corporate Governance).

The order of the functions outlined in The Functions of Governance, places: ‘Determining the objectives of the organisation’, ‘Determining the ethics of the organisation’, and ‘Creating the culture of the organisation’ ahead of both assurance and conformance.  The rational being creating a culture of ‘doing the right thing’ that extends from the very top of the organisation to the very bottom, means most people most of the time will be doing the ‘right thing’ making assurance and conformance a relatively simple adjunct, there to catch the few errors and malpractices that will inevitably occur.

A very strong endorsement of this approach to governance has recently come from one of the world’s most successful business people, Warren Buffet.  His recent memo to the top management of his holding company, Berkshire Hathaway’s subsidiaries (his ‘All Stars’) emphasised that their top priority must be to ‘zealously guard Berkshire’s reputation’ (read act ethically). He also reminded his leadership team that ‘we can afford to lose money–even a lot of money. But we can’t afford to lose reputation–even a shred of reputation’.

His advice to managers also included this good advice ‘There’s plenty of money to be made in the centre of the court. If it’s questionable whether some action is close to the line, just assume its outside and forget it’. This is a simple ethical guideline that avoids the need for pages of precise ‘rules’ designed to map the edge of legality drafted by lawyers and argued over endlessly.  See more on Ethics.

Rule#1Reading the memo, its clear Buffet has built a massive organisation based on an ethical culture, employs executives that reinforce the culture, and still makes a very good profit. It’s a long term investment but infinitely preferable to the sort of issues that confronted Salomon Bros., 20 years ago (see: Warren Buffett’s Wild Ride at Salomon), the banks associated with the GFC, and the on-going damage continuing to be suffered by the Australian banks as more ethical failures come to light. I’m sure they all had hundreds of ‘rules’ some of which may even have been sensible.

A copy of Warren Buffet’s memo can be downloaded from:  http://www.mosaicprojects.com.au/pdf/Ethics_Culture_Rules-Buffet_Memo.pdf