Tag Archives: Project Governance

Governmentality – the cultural underpinning of governance

Governmentality1Two major governance failures in recent times highlight the importance of organisational culture in delivering a well-governed entity.  Professor Ralf Müller has adapted the term ‘governmentality’ to describe the systems of governance and the willingness of the people within an organisation to support the governance objectives of the organisation’s governing body. When the willingness to be governed breaks down, as these two examples demonstrate, governance failures follow.

Toyota

The Lexus ‘unintended acceleration problem’ from 2009 has cost  car manufacturer Toyota a staggering $1.2 billion fine to avoid prosecution for covering up severe safety problems and continuing to make cars with parts the FBI said Toyota “knew were deadly.”  In addition to numerous civil actions and costs of reputational damage.  The saga was described as a classic case of corporate culture that favoured the seemingly easy way out instead of paying the cost and doing the right thing.  But, the actions of the people who magnified the problem by attempting to cover up the issues fundamentally contradicts the ‘Toyota Way’ that has guided Toyota since 2001. The Toyota Way has two core principles, respect for people and continuous improvement (kaizen).

Respect for people puts ‘people before profits’, and this is not an idle slogan.  Following an Australian Government decision in 2014, all motor vehicle manufacturing in Australia will cease by 2018 (this affects General Motors Holden, Ford and Toyota). In February 2014 Toyota president Akio Toyoda personally came to Australia to tell his workers of the closure and Toyota’s commitment to its staff through training and other activities has maintained staff commitment at our local Altona plant with everyone working to make the “last car the best global car!”.

The difference between the “people first equals customer first” attitude demonstrated in the approach to closing the Altona plant where people are still being released for paid training to up skill for new roles and the ‘customer last’ approach that dominated the Lexus saga is staggering.  The reaffirmation of the ‘Toyota Way’ may have been driven in part by the Lexus disaster but this does not explain why quality and customer service was allowed to fail so badly in the company that practically invented modern quality.

Volkswagen

A similar dichotomy is apparent in the Volkswagen diesel engine emissions scandal.  A company renowned for engineering excellence, from a country renowned for engineering excellence allowed engineering standards to slip to a point where the cars being sold were illegal.  The actual emissions were only part of the problem, Volkswagen engineers had developed a software program dubbed the ‘diesel dupe’ that could detect when the cars were being tested and change the engine performance to improve results. When the cars were operating under controlled laboratory conditions – which typically involve putting them on a stationary test rig – the device appears to have put the vehicle into a sort of safety mode in which the engine ran below normal power and performance thereby reducing emissions. Once on the road, the engines switched out of this test mode.

Governance issues

Neither of these issues involved ‘a few bad apples’ – the excuse used by most institutions to explain banking and financial scandals. They both required extensive management involvement and cover-ups or acquiescence. A substantial subset of both organisation’s management felt that doing the wrong thing was in the best interests of either themselves or the organisation (or both, at least in the short term). But the governing bodies of both organisations would seem to have maintained a commitment to their overall philosophy, the ‘Toyota Way’ and ‘Engineering excellence’.  So what caused the governance failure?

Governmentality

One element that seems central to both of these failures was a breakdown in the willingness of managers to comply with the overall governance philosophy of the organisation which in turn caused the governance processes to fail; this is the domain of governmentality. Governance cannot be successfully imposed on a population that does not want to be governed!

Governmentality2Governmentality is a term coined by philosopher Michel Foucault around 1980 and refers to the way in which the state (or another governing body) exercises control over, or governs, the body of its populace. The concept involves a complex series of two-way transactions involving:

  • the way governing bodies try to produce the people best suited to fulfil those governments’ policies;
  • the organised practices (mentalities, rationalities, and techniques) through which people are governed, and
  • the techniques and strategies by which a society is rendered governable.

In the same way as governments rely on most people complying with legislation most of the time, organisational governance mechanisms such as ‘project management offices’ and ‘portfolio management’ cannot function effectively without the cooperation of the people being governed. When governmentality breaks down and people no longer support the governance processes they cease to be effective.

The challenge facing every governing body, in every organisation, is in three parts

  1. Creating an authentic vision and mission for the organisation.
  2. Creating an effective governance system that supports the achievement of the vision.
  3. Creating and maintaining an ethical culture that embraces and supports governmentality.

Effective governance systems can weed out the bad apples and correct errors, but they cannot oversee the actions of every manager all of the time if the majority of people do not wish to follow the governance dictates, or actively work to subvert them.

Developing the ‘right culture’ by employing the right people (and importantly offloading the wrong people) starts at the top.  The governing body needs to ‘walk the talk’, their CEO and senior executives need to model the desired behaviours and ‘doing the right thing’ needs to be encouraged throughout the organisation.

Achieving this requires authenticity and a holistic approach to the way the organisation functions; all of the elements need to work together cohesively. Achieving this is the primary responsibility and challenge for the ‘governing body’, in most organisations, the Board of Directors!

If you get the vision, mission and culture right, even major lapses such as the ‘Lexus unintended acceleration problem’ can be overcome.  Despite the damage this caused, Toyota is now the world’s largest automotive manufacturer with a market capitalisation that is nearly double that of Ford and GM combined.  This is also the reason why Objectives, ethics and culture are the top three elements in my model for the ‘Functions of Governance’.

Seeking a definition of a project.

Good definitions are short and unambiguous and are essential for almost every aspect of life. Even something as simple as ordering a snack requires a clear understanding of what’ required – this understanding is the basis of a definition. For example, doughnuts and bagels have a lot in common, they are both round and have a hole (a torus), and are made from dough but they are ‘definitely’ very different commodities! If you need a bagel for breakfast or a doughnut for you coffee everyone involved in the transaction needs to understand your requirements if your expectations are to be fulfilled.

bagel

donut

 

 

 

 

 

The simple fact is if you cannot define something precisely, you have real problems explaining what it is, what it does and the value it offers, and this lack of definition/understanding seems to be a key challenge facing the project management community (by the way, the bagel is on the left…… the other picture is a Krispy Kreme donut).

Definitions serve two interlinked purposes, they describe the subject of the definition in sufficient detail to allow the concept to be recognised and understood and they exclude similar ‘concepts’ that do not fit the definition. Definitions do not explain the subject, merely define it.

Way back in 2002 we suggested the definition of ‘a project’ was flawed. Almost any temporary work organised to achieve an objective could fit into almost all of the definitions currently in use – unfortunately not much has changed since. PMI’s definition of a ‘project’ is still a: temporary endeavour undertaken to create a unique product, service or result. This definition is imprecise, for example, a football team engaged in a match is involved in:

  • A temporary endeavour – the match lasts a defined time.
  • Undertaken to create a unique result – the papers are full of results on the weekend and each match is unique.
  • Undertaken to create a unique product or service – the value is in the entertainment provided to fans, either as a ‘product’ (using a marketing perspective) or as a service to the team’s fans.

Add in elements from other definitions of a project such as a ‘defined start and end’, ‘planned sequence of activities’, etcetera and you still fail to clearly differentiate a team engaged in a project from a football team engaged in a match; but no-one considers a game of football a project. Football captains may be team leaders, but they are not ‘project managers’.

The definition we proposed in 2002 looked at the social and stakeholder aspects of a project and arrived at an augmented description: A project is a temporary endeavour undertaken to create a unique product, service or result which the relevant stakeholders agree shall be managed as a project. This definition would clearly exclude the football team engaged in a match unless everyone of significance decided to treat the match as a project but still suffers from a number of weaknesses. To see how this definition works download the 2002 paper from, www.mosaicprojects.com.au/PDF_Papers/P007_Project_Fact.pdf

 

Updating the definition

Since 2002 there has been a significant amount of academic work undertaken that looks at how projects really function which may provide the basis for a better definition of a project.  The key area of research has been focused on describing projects as temporary organisations that need governing and managing; either as a standalone organisation involving actors from many different ‘permanent organisations’ such as the group of people assembled on a construction site, or as a temporary organisation within a larger organisation such a an internal project team (particularly cross-functional project teams). The research suggests that all projects are undertaken by temporary teams that are assembled to undertake the work and then dissipate at the end of the project.

My feeling is recognising the concept of a project as a particular type of temporary organisation provides the basis for a precise and unambiguous definition of ‘a project’. But on its own this is insufficient – whilst every project involves a temporary organisation, many temporary organisations are not involved in projects.

Another fundamental problem with the basic PMBOK definition is the concept of an ‘endeavour’.  The definition of endeavour used as a noun is: an attempt to achieve a goal; as a verb it is: try hard to do or achieve something.  But, ‘making an effort to do something’ is completely intangible; projects involve people! Hitting a nail with a hammer is an endeavour to drive it into a piece of wood but this information is not a lot of use on its own; you need to know who is endeavouring to drive the nail and for what purpose?

Nail-Quote-Abraham-Maslow

Another issue is the focus on outputs – a product service or result; the output is not the project, the project is the work needed to create the output. Once the output is finished, the project ceases to exist!  A building project is the work involved in creating the building, once the building is finished it is a building, not a project. But confronted with the need to create a new building different people will create different projects to achieve similar results:

  • One organisation may choose to create two projects, one to design the building, another to construct it;
  • A different organisation may choose to create a single ‘design and construct’ project;
  • Another organisation may simply treat the work as ‘business as usual’.

The scope of the work involved in any particular project is determined by its stakeholders – projects are a construct created by people for their mutual convenience, not by some immutable fact of nature.

 

A concise definition of a project

Unpacking the elements involved in a project we find:

  • A temporary organisation is always involved, but not all temporary organisations are project teams.
  •  Projects cause a change by creating something new or different – this objective defines the work to be accomplished and usually includes constraints such as the time and money available for the work. These requirements and scope of work included in a project have to be defined and agreed by the relevant stakeholders at some point – there are no pre-set parameters.
  • The stakeholders have to agree that the work to accomplish the scope will be managed as ‘a project’ for the project to exist; the alternative is ‘business as usual’ or some other form of activity.

Modifying our 2002 definition to incorporate these factors suggests a definition along these lines:

A project is a temporary organisation established to deliver a defined set of requirements and scope of work, which the relevant stakeholders agree shall be managed as a project.

The definition originally proposed has been updated based on discussions with colleagues to:

Project:  A temporary organisation established to accomplish an objective, under the leadership of a person (or people) nominated to fulfil the role of project manager.

Project manager: A person (or people) appointed to lead and direct the work of  a project organisation on behalf of its stakeholders, to achieve its objective. The job title and the degree of authority and autonomy granted to the project manager are determined by the governance arrangements established by the project’s stakeholders.

Project management: The application of knowledge, skills tools and techniques to lead and direct the work of a project organisation.

This definition overcomes many of the fundamental problems with the existing options:

  • It recognises projects are done by people for people, they are not amorphous expenditures of ‘energy’.
  • It allows for the fact that projects do not exist in nature, they are ‘artificial constructs’ created by people for their mutual convenience, and different people confronting similar objectives can create very different arrangements to accomplish the work.
  • It recognises that projects are only projects if the people doing the work and the people overseeing the work decide to treat the work as a project.  The ‘always present’ factors are:
    • People decide to call the work a project (but just calling it a project is not enough)
    • The work is directed to achieving an objective that involves a change in something (new, altered, improved, demolished, etc)
    • The people doing the work are part of a temporary organisation (team / contract / ad hoc / etc) created to facilitate achieving the objective.
    • The work is led by a person fulfilling the role of a project manager and the work is managed as a project (PMBOK / ISO 21500 / Agile / etc).

What do you think a good project definition may be that is concise and unambiguous?

The challenge is to craft a technically correct definition, and then apply the Socratic method of thinking outlined in our 2002 paper at:  www.mosaicprojects.com.au/PDF_Papers/P007_Project_Fact.pdf.

I look forward to your thoughts!

Project Governance and Controls Symposium 2016.

miracle2We are only a few weeks out from PGCS 2016 and this year’s  Symposium is shaping up to be the best yet.  The Symposium will be held in its usual ADFA, Canberra venue on Wed. 11th and Thur. 12th May 2016.

Governing for performance was the key theme of the AICD’s Australian Governance Summit held in Sydney last month. But organisations cannot perform sustainably if they cannot govern and control their projects effectively.  Unfortunately as the Shergold Report has highlighted (consistent with the findings of many other surveys), most organisations struggle to achieve the full potential value from their projects and programs – literally $billions are wasted annually by poorly governed and controlled projects.

PGCS was created to focus on the gap between intention and delivery – and to help build Australia capability in the governance and management of projects by providing a forum for the exchange of ideas between international experts, leading Australian practitioners, the people responsible for governing projects within their organisations, and the people responsible for making the governance and controls systems work.

The 2016 program is on target to fulfil this ambitious objective 100%:

  • We have speakers from the UK National Audit Office and the Australian National Audit Office, both of who lead the push for improved performance in government projects.
  • Controls and surveillance of projects is well covered with both international and Australian experts. Lisa Wolf’s pre-symposium Masterclass ‘A Practical Guide to Project and Contract Surveillance’ is a sell out, fortunately Lisa is also one of our Keynote Speakers.
  • The needs and expectations of organisational governors is covered by among others, Ms. Jane Halton the Secretary of the Australian Department of Finance who will be outlining her perspectives on improving the performance of major projects.
  • AIPM, PMI, IPMA and ICCPM are all supporting the Symposium and providing high quality speakers.
  • We have our inaugural Academic Stream – this aspect of the Symposium will become increasingly important as we direct any surplus funds towards Australian based research into the governance and control of projects and programs.
  • And there’s more – click through to our program page to download the full event program.

Thanks to the ongoing support of our Platinum Sponsor, The University of New South Wales (UNSW), Canberra, the cost of the symposium, including 2 full days and our reception at the ADFA Offices Mess is only $990 (early bird available prior to the 25th April).

To make the learning opportunity provided by the Symposium available to more junior staff, we also have a unique 2-for-1 offer in place with a number of ‘supporting organisations’; each senior manager who registers can nominate a more junior staff member to attend the Symposium at no additional cost (We are always happy to extend this arrangement to new organisations).

PGCS is designed to be a very different type of event compared to the traditional, and well loved, annual conferences run by the major associations – we are very focused on accessing and creating knowledge focused on ‘governance and controls’ – as part of this process all of the available papers from previous years are also made available to attendees and others via our on-line library.

The open question is can you afford to miss this world class event?  For more information visit our website at: http://www.pgcs.org.au/

Note: Patrick Weaver is a member of the PGCS Organising Committee.

Practical Ethics

EthicsA string of disasters over the last couple of years suggest many business and government leaders simply do not understand ‘practical ethics’.  Through naivety, undue optimism, or laziness, they have set up situations based on blind trust in the ethical standards of others resulting in deaths, injury and the loss of $billions.

Just a few examples:

  • The ‘Home insulation program’ of 2008/9 resulted in 4 deaths, numerous house fires and many well established businesses being destroyed. The naive assumption by the Government seemed to be that with $millions of government funding easily accessed, businesses would still act ethically, train staff and comply with occupational health and welfare standards. The failure by businesses to meet this expectation has resulted in numerous prosecutions after the damage was done.
  • The outsourcing of technical and further education training (TAFE) to the private sector. Private providers under the VET Fee-Help scheme are paid for students signed up to courses, not for students qualified from courses – the naive assumption by the Government seemed to be that with $millions of government funding easily accessed, businesses would still act ethically and only sign up students that could benefit from the courses and would deliver good training outcomes. $hundreds of millions of public funds have been wasted – most of which can never be recovered.
  • Downer EDI’s Board of Directors appear to have blindly trusted their management to run the disastrous $3 billion Waratah train project. Normal governance feedback seemed to have been ignored to the point where the Directors were unable to get information on the project when needed, blowing a $20 million loss into a $200 million loss.

In each of these cases the government and business leaders seemed to have either assumed everyone would act ethically or relied on Adam Smith’s ‘Invisible hand’ (a flawed theory much loved by the rabid right, particularly in the USA). Unfortunately ethics is not that simple!  Writing a code of ethics[i] is a relatively simple process; encouraging people to live up to the code is far more difficult. There are several factors needed:

  • First, the organisations leaders need to lead by example. The ethical standards of the organisation and its supply chain are unlikely to exceed the standards set by the leadership (see: Ethical Leadership).
  • Second, the expected standards need to be clearly and unambiguously articulated. Saying you require one standard of behaviour and then paying people to perform differently will inevitably lead to the organisation getting what it has paid for (see: The normalisation of deviant behaviours).
  • Third, the governance and management systems need ‘real-time’ feedback to both encourage the desired standards of behaviour and to detect any ‘slips’ very early in the process so corrective actions can be implemented before there is a major issue (see: Self Correcting Processes).

Unfortunately governments in particular are reasonably good at enforcing standards years after the breach took place and seem to assume that the ‘deterrent effect’ will suffice to maintain ethical standards – this assumption patently does no work!  I doubt the £2.25m fine imposed on UK consultancy Sweett Group[ii] for bribing a prominent United Arab Emirates (UAE) businessman in return for work will have much effect on other unethical business people contemplating paying a bribe – for a start, no one expects to get caught. The ‘pink batt’ prosecutions occurred years after the scheme was closed, prosecutions under the VET Fee-Help scheme are still to eventuate (and rip-offs are still continuing). The simple fact is the fear of a potential prosecution in a few years time compared to the opportunity to make $millions now has very little effect on unethical people.

Conversely, over policing ‘ethics’ and watching every move can be as destructive as ‘blind trust’. If people feel they are not trusted, there is no incentive for them to act ethically.  Micro management is a major de-motivator and will inevitably lead to suboptimal performance with people doing ‘just enough’ and seeing how much they can get away with[iii]. This approach stifles innovation and creativity.

Practical ethics requires pragmatic trust. You need to trust the people you are working with, governing or managing, but have agreed processes that provide feedback and monitoring, that demonstrates your trust is being honoured.

  • In my ‘Six functions of governance’ management control functions are expected to provide feedback to the governing body that allows it to hold its management accountable and ensure conformance by the organisation being governed. Had these functions been implemented effectively EDI-Downer would be in a much better position today.
  • Demand feedback – even if you do not want to hear bad news! The recent announcement by CSIRO that its climate division will be virtually eliminated may be a pragmatic response to government initiatives and cost cutting but serves no one in the long term. Governments and business rely on climate science to make billion-dollar decisions. Without it, they will be relying on guesswork. Shooting the messenger simply means everyone is ‘flying blind’.
  • Build feedback into management systems. In the various government debacles mentioned above (and others) simple changes in process could have reward desirable outcomes rather than rewarding unethical behaviour. The purpose of any TAFE course is to educate a person and demonstrate learning by success in an exam.  Why not pay most of the money on completion of the course? Then make sure audit processes are in place to validate the exam performance is genuine – these exist and are easily applied.

Pragmatic trust is a graduated process – as people demonstrate their trustworthiness and ethical standards less oversight is needed (but less does not mean no oversight); the challenge is to design systems that reward desirable behaviours and outcomes creating a win-win, people who demonstrate high ethical standards are rewarded.

This approach is the antithesis of the current government approach which seems to rely on blind trust, assumes everyone is ethical, and as a consequence directly benefits unethical behaviours (at least in the short term). Not only have the $millions paid out in VET Fees to unethical providers resulted in minimal return to the government; they have actively encouraged unethical standards and have damaged businesses and organisations that do offer quality courses. A lose-lose outcome in which the only winners are the unethical businesses that have ripped off the system – the Pink Batts Royal Commission found a similar effect on the insulation businesses.

Slippery-slopeEthics are by definition based on the standards of behaviour considered acceptable by a group[iv].  When a significant proportion of the groups members start to let standards slip, they will tend to drag the rest of the group with them down the slippery slope – it is very hard to stand out against the normally accepted behaviours of your group. And as with any slippery mountain slope, it is far easier to slide towards the bottom than to keep your footing and climb towards the top.

The role of ethical leaders is first to set the ethical standards, then live up to the standards themselves, and finally require their followers to conform to the standards using pragmatic trust and encouragement rather than after the event punishment.


 

[i] The PMI Code of Ethics and Professional Conduct is a good example: http://www.mosaicprojects.com.au/PDF/PMICodeofEthics.pdf

[ii] See: http://www.globalconstructionreview.com/news/sweett-group-must-pay-32m-bri7bery-a7bu-dh7abi/

[iii] For more on motivation see: http://www.mosaicprojects.com.au/WhitePapers/WP1048_Motivation.pdf

[iv] For more on ethics and leadership see: http://www.mosaicprojects.com.au/WhitePapers/WP1001_Ethics.pdf

Australian Defence White Paper requires a major increase in project delivery capability.

DEF-WPThe Australian Defence White Paper 2016, released today, will require a major increase in project delivery capability across defence.   For the first time, an integrated approach to capital investment planning is being used which will provide the framework for a more coherent and efficient approach to managing the development of future Defence capability. However, whilst a single investment program will reduce the risk of incomplete or fragmented approaches to investment, there will be a corresponding need to seriously ramp up capabilities in program[1] and portfolio management.

Coupled with a more complex (but potentially beneficial) management environment, there is also a major increase in the volume of projects and programs with an expenditure of approximately $195 billion (in today’s terms) planned for the next decade. Some of the projects and programs in the pipeline include:

  • Increasing the submarine force from 6 to 12 regionally superior submarines with a high degree of interoperability with the United States.
  • Three Hobart Class Air Warfare Destroyers (under construction).
  • A new class of nine future frigates.
  • New replenishment vessels.
  • More capable offshore patrol vessels,
  • New manned and unmanned aircraft for border protection.
  • A new large-hulled multi-purpose patrol vessel, the Australian Defence Vessel Ocean Protector.
  • The F-35A Lightning II program.
  • Twelve E/A-18G Growler electronic warfare aircraft.
  • More air-to-air refuellers will be acquired to support future combat, surveillance and transport aircraft.
  • New personal equipment for soldiers.
  • A new generation of armoured combat reconnaissance and infantry fighting vehicles, as well as new combat engineering equipment.
  • A new long-range rocket system to further enhance fire power,
  • Armed medium-altitude unmanned aircraft to enhance surveillance and protection for the land force.
  • Extending the life of and acquiring new weapons and equipment for the amphibious ships.
  • New light helicopters will be acquired to support Special Forces operations.
  • Upgrades to ADF bases and logistics systems, including fuel and explosive ordnance facilities.
  • Upgrade training and testing facilities, health services and information and communications technology.
  • Air lift capability will be increased to comprise 8 heavy lift C-17A Globemasters with additional heavy lift aircraft to be considered in the longer term, 12 upgraded C-130J Hercules, 10 C-27J Spartans and 10 CH-47F Chinook helicopters. Sea lift capability will be strengthened by extending the

Add the White Paper’s commitment to Australian industry involvement in most of these projects and the volume of work that will require effective project governance, management and controls becomes apparent. To download the white papers see: http://www.defence.gov.au/WhitePaper/

Fortunately Australia already has an effective forum focused on improving the capability of government and industry to govern and control its projects and programs.  The Project Governance and Controls Symposium, hosted by the University of Mew South Wales Canberra (ADFA), is focused on developing this capability and providing a forum for exchanging learning and ideas.  The 2016 Symposium is scheduled for May 10th to 12th, see: http://www.pgcs.org.au/

The Australia government has laid out the plans, its up to the project management profession to realise the intent, effectively and efficiently[2].   Watch this space…….


 

[1] Where the term ‘program’ is used to mean a series of projects (of very different types) managed together to achieve benefits that would not be available if they were managed separately. See: www.mosaicprojects.com.au/WhitePapers/WP1022_Program_Typology.pdf

[2] Improving the project delivery capability of Australian government departments is the focus of the separate Shergold report, see: https://mosaicprojects.wordpress.com/2016/02/20/the-shergold-report-calls-for-better-governance-and-better-project-controls/

The Shergold Report calls for better governance and better project controls!

Shergold2The recently released report by Professor Peter Shergold, ‘Learning from Failure: Why large government policy initiatives have gone so badly wrong in the past and how the chances of success in the future can be improved’ (the Shergold Report), sets out a framework designed to improve the delivery of major Australian Government programs.  But the framework is not limited to government; the concepts can be usefully applied by any organisation seeking to initiate a major program of works.

The report focuses on making practical recommendations to enhance the capacity of the Australian Government to:

  1. Design and implement large public programmes and projects;
  2. Develop robust and effective governance and accountability arrangements for such programmes and projects;
  3. Understand the broader environment in which programmes and policies are designed and implemented;
  4. Identify, understand and manage risks; and
  5. Provide accurate, timely, clear and robust advice to ministers and within the APS.

Substitute ‘organisation’ for ‘Australian Government’ and ‘senior stakeholders and governors’ for ‘ministers and within the APS’ and the value of the document to the wider community becomes apparent.

The Shergold Report does not make specific recommendations to the government; rather it reaches a series of immutable conclusions based on the narrative in each section and is intended to spark public comment and discussion from a wide spectrum of people both within and outside of the Australian Public Service.

The Shergold Report contains 28 proposals for improvement; the key conclusions are reproduced below are reformatted as recommended good practices for any organisation planning to undertake a major program of works:

Ensuring Robust Advice: Good governance is founded on good policy, and good policy depends on good advice. To this end, executives and managers should be held accountable for the quality of advice they provide. Significant advice should be provided in writing and records maintained.

Decision Making: The importance of decision-making, and the circumstances under which it occurs, underscore the need to have well-functioning support systems in place.

Creating a Positive Risk Culture: Moving the organisation from reactive, defensive risk management; to proactive, performance-focused risk engagement. The major challenge is to embed the new approaches within a strong risk culture. This requires: understanding appetites for risk on individual programs and across the portfolio, appointing a Chief Risk Officer, at a senior executive level, proposals should be supported by an endorsed Risk Management Plan, and preparing a bi-annual whole-of-organisation Risk Assessment for the governing body, analysing the system-wide impact of operational, financial, strategic, legislative and procurement risks faced by the organisation.

Enhancing Program Management: Program and project management are too often seen as control activities; they are actually creative processes!  They require discipline and professional expertise to maintaining single point accountability while being open and flexible to the opportunities of networked governance structures. To achieve this requires:

  • Defined standards of proficiency for project and program managers, with active support through career development opportunities, continued education and participation in professional communities of practice such as the upcoming Project Governance and Controls Symposium.
  • For each project or programs[1], a clear understanding of who accepts end-to-end responsibility for managing implementation (typically the Sponsor[2]), wields delegated authority and where accountability resides.

Opening up to diversity: A diversity of perspectives in the workplace and the boardroom improves performance. Diversity increases critical analysis of information, results in better decision-making and challenges ‘groupthink’. Program advisory groups should be established that include representation drawn from outside the organisation in order to capture a broader diversity of perspectives and knowledge.

Embracing adaptive governance: Organisations that thrive are flexible. They seize opportunities, learn rapidly and recognise that partners will be needed to deliver long-term goals. When they enter uncharted territory they respond fast, start small, test new approaches, watch market responses, learn from doing, scale-up their activity or, if necessary, try again.

Most importantly, they are honest about failure. They recognise that mistakes happen, interrogate why they occurred and set in place remedial measures to ensure that they perform better next time. Failure and its lessons are an inevitable part of entrepreneurial life but are also central to maintaining organisational competitiveness. This means (where possible) new proposals should include a trial or demonstration stage, allowing new approaches to be developed fast and evaluated early. Large projects should incorporate staged decision-making[3].

Conclusions

Good governance is focused on creating good outcomes, not developing a straightjacket of impenetrable and restrictive procedures – the person or organisation that has never made a mistake has never made anything! The art of effectively using project and programs to create a new and desirable future is effective governance, backed by prudent risk management and effective, adaptive delivery and change management processes. The Shergold Report concludes that:

  1. Policy is only as good as the manner in which it is implemented
  2. Policy advice can only be frank and fearless if it is supported by written argument.
  3. Deliberations, oral and in writing, need to be protected.
  4. Deliberative documents need to be preserved, whether written on paper or delivered by digital means.
  5. It is up to ministers (the governing body), not officials (management), to make policy decisions.
  6. The effective management of risk is just as important in the public sector as in the private – perhaps more so.
  7. As the public service fully commits itself to measuring results by outcomes, program management needs to be accorded far greater professional status.
  8. Good governance increasingly depends on collaboration across sectors.
  9. The APS needs to be further opened up. Diversity and external inputs to the organisation.
  10. An adaptive government (organisation) can respond rapidly to changing circumstances without taking unnecessary (and unforeseen) risks.

The one area missing from the Shergold Report is recognition of the importance and difficulty of implementing organisational change (and the disciplines of change management and benefits realisation). The concepts are implicit in many aspects of the report but would have benefitted from direct discussion.

These limitations aside, the Shergold Report is a very deep and well considered document, well worth the effort of reading by both private and public sector mangers and governors. It highlights failures and the learning that can be taken from the experiences to improve future outcomes. To quote Confucius “By three methods we may learn wisdom: First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest”. Learning from other’s experience may not be the ‘noblest’ option but is far preferable to repeating avoidable mistakes.

We will be commenting further on this report in future posts and I’m sure it will feature prominently in discussions at the upcoming Project Governance and Controls Symposium that is being held in Canberra in May.

Shergold1

The full report can be downloaded from: http://www.apsc.gov.au/publications-and-media/current-publications/learning-from-failure

From a completely different source, the Australian Infrastructure Plan Priorities and reforms for our nation’s future (Feb. 2016), recommendations under Chapter 9 – Governance calls for very similar processes to the Shergold Report.  These reports, and many previous, have consistently promulgated the same message.  We know what needs to be done, understanding why its not being done is the real challenge.


 

[1] To understand the difference between a project and a program see: http://www.mosaicprojects.com.au/WhitePapers/WP1002_Programs.pdf

[2] For more on the role of the Sponsor see: http://www.mosaicprojects.com.au/WhitePapers/WP1031_Project_Sponsorship.pdf

[3] For more on ‘gateway reviews see: http://www.mosaicprojects.com.au/WhitePapers/WP1092_Gateways-Scorecards.pdf

Project Management is a Profession

A recent judgement of the English Court of Appeal in the matter of The Project Management Institute, R (On the Application Of) v The Minister for the Cabinet Office & Ors [2016] EWCA Civ 21 has produced some interesting findings.

Royal-Courts-of-Justice15The appeal by PMI from a judgement in the UK High Court related to a decision by the UK Government to recommend to the Privy Council, the Queen grant a Royal Charter to the Association for Project Management (APM).  The PMI appeal has been unanimously rejected on all grounds.

In the UK, the granting of a Royal Charter is restricted to eminent professional bodies or charities which have a solid record of achievement and are financially sound. In the case of professional bodies they should represent a field of activity which is unique and not covered by other professional bodies.

The APM is the largest project management institute in the UK (over 20,000 members), PMI has around 7000 members in the UK.  The Privy Council had found that the APM substantially met the key criteria for a professional association: the institution concerned should comprise members of a unique profession, and should have as members most of the eligible field for membership, without significant overlap with other bodies. PMI disputed this finding and the processes used to reach this decision (importantly PMI were not arguing project management is not a profession, rather the APM did not meet the five administrative criteria to be awarded the Royal Charter).

The Court of Appeal has unanimously upheld the trial Judge’s key finding that: I am satisfied that the [government] committee’s decision was a proper application of the published policy taken as a whole. The committee was entitled to recommend the grant of a Charter to APM on the basis that each of the five main criteria was met either to a substantial degree or in full and that there was a compelling public interest in favour of such a grant.

The statement from APM on the publication of the award says:

The Court of Appeal has today [22nd January 2016] handed down its judgement with respect to an appeal brought by the Project Management Institute (PMI) against the Government’s recommendation to the Privy Council to grant the award of a Royal Charter to the Association for Project Management (APM).

The Appeal Court Judges have confirmed the earlier decision of the High Court to reject PMI’s appeal. The full judgement is available on the Court of Appeal website.

APM remains committed to achieving Chartered status for the benefit of both the profession as a whole and the wider community.

It has reconfirmed its view that it remains for the Privy Council to decide, in the light of its published guidance and the individual circumstances of the organisation, whether a Charter ought to be granted.

APM continues to look forward to the Privy Council determining the application in due course.

However, even before the granting of the Royal Charter, we now have confirmation by the UK Court of Appeal that project management, as represented by the APM in the UK, is a profession and as such, the APM is able to be granted a Royal Charter.

Unfortunately on the 28th January 2016, PMI sought leave to appeal to the unanimous decisions of a UK government committee (consisting of several senior ministers), the UK High Court and  three eminent Jurists sitting as the Court of Appeal to the UK  Supreme Court (formally the House of Lords). A decision on PMI’s request is awaited.

If as is expected, PMI’s appeal is rejected, over time this decision will have a significant effect on the way project managers behave.  Apart from trashing PMI’s reputation with the UK Government,  a lack of ethics and professionalism on the part of a ‘professional’ is actionable, and being formally recognised as a profession should influence our engagement with the profession’s stakeholders.  Watch this space………