A significant gap in the current standardisation of project, program and portfolio management relates to the senior management functions necessary to effectively manage the projects and programs initiated by the organisation.

Project Management, as defined by PMI, ISO21500 and a range of other standards commences when the project is funded, and concludes on the delivery of the outputs the project was established to deliver.

Program Management focuses on the coordinated management of a number of projects to achieve benefits that would not be available if the projects were managed in isolation. Different types of program have been defined by GAPPS ranging from optimising annual budgets to maintain a capability (eg, the maintenance of a railway system) through to creating a major change in the way an organisation operates.

Processes for identifying the best projects and programs for an organisation to invest in through portfolio management and tracking benefits realisation are also well defined within the context of strategic management, but are generally not as well implemented by organisations.

Finally the overall governance of organisations and its key sub-set, project governance is recognised as essential for the long term wellbeing of the organisation.

Within this overall framework, the element not well defined, that is essential to achieving the optimum benefits from the ‘doing of projects and programs’, is the organisation’s ability to manage the management of its projects and programs.

At the overall organisational level, the management of project management includes developing and supporting the capabilities needed to provide executive oversight and leadership so that the organisation is able to undertake projects and programs effectively. This includes the organisations ability to develop and enhance its overall project management capabilities, develop project and program managers and project team members, implement appropriate methodologies, provide effective sponsorship, and achieve the benefits and value the projects and programs were set up to facilitate.

At the individual department level, the ability to manage multiple projects in an effective way is equally critical. Typically the role of a Project Director, multi-project management differs from program management in a number of key aspects:

• There is limited correlation between the objectives of the various projects, eg a number of design and fabrication projects may each have a different external customer.
• The function is relatively stable and permanent (programs close once their objectives are achieved).
• The primary focus of this management function is resource optimisation, minimising conflicts and process clashes, and developing the project/program delivery capability of the department/facility.

A number of recognised roles such as the Project/Program Sponsor, project governance and PMOs contribute to the organisations ability to manage the management of projects and programs and develop effective multi-project management capabilities, what is missing is an overall framework that supports the ongoing development of these functions to facilitate the effective governance of projects, programs and portfolios.

Peter Morris and Joana Geraldi have recently published a paper focused on ‘Managing the Institutional Context for Projects’ (Project Management Journal, Vol.42, No.6 p20-32), this paper defines three levels of project management:

Level 1 – Technical ‘project management’; the processes defined in standards such as the PMBOK® Guide and ISO21500.

Level 2 – Strategic ‘management of projects’; the overall management of the project from concept to benefits realisation, starting with identifying and validating concepts, through portfolio selection to delivery and the creation of the intended value.

Level 3 – Institutional context; developing an institutional context for projects and programs to enable them to succeed and enhance their effectiveness. The focus is on creating an environment that encourages improved levels of success in all of the organisation’s projects and programs.

The theoretical framework described in Morris’ paper covers the same concepts (but from a different viewpoint) to the technical framework of organisational entities and roles defined in our White Paper, a PPP Taxonomy (and the linked White Papers focused on specific elements of the structure), see: http://www.mosaicprojects.com.au/WhitePapers/WP1074_PPP_Taxonomy.pdf

What developing the PPP Taxonomy identified within our White Papers, and Morris highlights in his paper, is the critical need for organisations to develop an intrinsic capability to manage the overall management of projects and programs. Over the next few weeks I hope to complete two additional White Papers to start filling this gap:
- The Management of Project Management – the institutional context.
- Multi-project Management – the departmental context.

In the meantime, a PPP Taxonomy defines the overall project governance and control framework these two critically important elements fit within.

On reflection, many of the project and program failures identified in our earlier posts as generic ‘governance failures’ are likely to be shown to be directly caused by the absence of systems designed to ‘manage project management’, this is still a governance failure but now the root cause of some of these failures may be able to be specifically defined.

This is an emerging area of thinking, you are invited to download the White Papers and post any thoughts, comments or disagreements, as well as make use of the ideas to help improve your organisations. There’s a long way to go, at present there’s not even a clearly defined term for this aspect of project governance/management……

In October 2011 we were persuaded to switch our Australian Yellow Pages advertising from print to on-line media, based on a shift in sensis’ overall direction. The package and price offered was good.

The process of sensis staff creating the advertisement took several weeks rather than several days despite me supplying a complete set of text for the advertisement (but I was assured there would be no bills from senses until the work was done). Delays in completing the work and publishing the advertisement cut out all sales opportunities pre Christmas 2011.

Before the advertisement was live, we had received a bill for the work that at the time had not been done contrary to earlier promises. A written objection was lodged in early December. To date no action has been taken on this written complaint by senses apparently ‘the complaint is in the queue….’ But this has not stopped their credit department following up on monies that were billed for work not done – a potential breach of the Trade Practices Act.

Dozens of phone calls later, in mid January 2012 the situation remains:

1. No one from senses has contacted me (apart from the credit people)
2. The advertisement as created by senses is incorrect and inaccurate and has not been corrected despite numerous telephone calls
3. I’m now being billed monthly for an advertisement that is wrong and does not reach our specific market – we are refusing to pay this bill as well
4. No information has been provided on how to manage the advertisement and its on-line content
5. Telstra/sensis management continue to hide behind call centre staff who have generally been more then helpful as individuals but are helpless when faced with internal bureaucracy and indifference

To add insult to injury, the on-line form for contacting sensis in writing has been defective since December 2011 and every telephone call takes over 30 minutes ‘on-hold’ before contact is made with the call centre staff, who listen to the complaint, log the call and escalate the problem again so that nothing happens.

My strong recommendation to any small/medium business operator is to do almost anything with your on-line marketing budget other than wasting your time with the incompetent systems created by sensis. You may be lucky to get things 100% right first time otherwise forget any notion of customer services – based on my experience, as far as sensis is concerned anything they do is good enough and you should be grateful, even if as a small project management training company, you get listed as a miner.

Maybe in 2 to 3 years time the glacial bureaucracy within sensis may have worked out how to implement on-line systems that are responsive to their customer’s needs, until then the cost of the time you will wast trying to deal with their processes will be 5 to 10 times the cost of any bill for the actual advertising.

The Planning Engineers Organisation (PEO) has re-launched under the sponsorship of Athena Project Services Ltd.

The PEO is focused on recognising and promoting expertise in planning, scheduling and project controls whilst also encouraging and facilitating the development of new entrants, whether old or young! As such, the PEO offers a membership scheme that provides enhanced levels of access and facilities with the PEO in return for advancement in the knowledge base, levels and length of experience and general standing within our industries.

The PEO is looking to promote expertise in planning, scheduling and project controls, and encourage participation from all levels of ability, including those that are associated with our discipline by way of providing support services, software and employment opportunities. Consequently, membership is open to all planners, schedulers and project controllers, or those associated with project time management, from across the world at the following grades:

• Fellows: Restricted for those individuals with greater than 15 years experience in planning/scheduling or those, who in the opinion of the Organisation, have made a major significant contribution to the field of project time management. This grade of membership carries the designation FPEO.
• Members: This grade is for full time planners/schedulers and project controllers who have at least 5 years project time management experience, and entitles the designation MPEO to be used.
• Associate Members: For those planners/schedulers and project controllers with less than 5 years experience in project time management, or for those whose work or business is associated with products and/or services that are related to project time management. This entitles the designation APEO to be used.
• Student Members: For those studying planning/scheduling and project controllers who would benefit from access to the Organisation’s information and website.

For more information and to join see: http://planningengineers.org

Charts are a great way to visualise complex information. The following chart may explain some aspects of my life…

However, care needs to be taken in the assembly of data in a chart The following data is Northern Hemisphere centric.

Correlation is not the same as causation!
The source is http://ilovecharts.tumblr.com/ – a blog focusing on project management charts of all types.

The WordPress.com stats helper monkeys have prepared a 2011 annual report for this blog. We would like to express out thanks to all of the viewers and commentators and look forward to continuing the debate in 2012.  Happy New Year everyone!!

Here’s an excerpt:

The concert hall at the Syndey Opera House holds 2,700 people. This blog was viewed about 22,000 times in 2011. If it were a concert at Sydney Opera House, it would take about 8 sold-out performances for that many people to see it.

Click here to see the complete report.

Melbourne’s Swanston Street is undergoing a major upgrade to create a primarily tram and pedestrian precinct. This includes new tram stops, but the new Swanston St. stops are dangerous.

The new tram stop outside of Melbourne Central is probably one of the most dangerous pieces of public architecture produced in the last several years. The design ignores basic building standards established for over 100 years and incorporates a small ‘trip’ line of around 4cm in height in the middle of what is otherwise a flat walking area.

The almost invisible ‘trip line’ before the yellow paint line was added.

Steps and kerbs should be a minimum of 10cm in height (preferably 15cm or 6 inches) so walkers can clearly see the change in level. The shallow trip line incorporated into this design is too low to notice but big enough to catch anyone walking normally. I have no idea how many people will need to fall and then sue the Council for negligent design before this dangerous ‘feature’ is corrected but you can guarantee there will be many accidents and near misses on a daily basis.

Another view of the tripping hazard.

What is tragic is the apparent inability of the designers of this tram stop to learn from similar stops created in other locations in the network or from published design principles. This type of ‘tripping hazard’ was a major consideration in the Bourke St. Mall design a couple of years ago and an elegant solution was developed.

Even without this experience, there is plenty of information available that clearly shows it is dangerous to put a small ‘trip line’ at right angles to the direction of travel of most pedestrians. Good design suggests the ‘trip’ is either eliminated by a small change in level or protected by a hand rail.

This ‘feature’ has apparently been deliberately included in the design to keep the pedestrian footpath and bike lane differentiated by having pedestrians ‘step down’ into another zone. A great idea but the same separation effect could easily have been achieved by using a couple of well placed bollards or even a painted line or change in surface texture – the focus on one aspect of safety without looking at easily learned lessons on another has created a hazard that will cause serious injury to many people if it is not quickly corrected.

Unfortunately a few cents of design effort to review and ‘learn’ appropriate lessons will require $thousands to fix now the stops have been built. The danger has obviously been recognised with a pretty yellow line now painted along the length of the trip line (which it totally useless if you cannot see the ground for people). My guess is nothing further will happen until the council’s insurers force the issue after receiving a barrage of insurance claims. Getting designers, bureaucrats and politicians to admit they have screwed up the design is next to impossible. But until this happens ‘enjoy your trip’ will have a completely different meaning in Swanston St.

Photographs copied from http://treadly.net/2011/12/01/swanston-st-the-upgrade/

One of the themes running through several of my recent posts is the importance of effective Governance. Both organisational governance and its sub-set project governance.

Good governance is a synonym for ‘good business’, structuring the organisation to deliver high levels of achievement on an ethical and sustainable basis. This requires the optimum strategy and the right approach to risk taking supported by sufficient processes to be reasonably confident the organisations limited resources are being used to achieve the best short, medium and long term outcomes.

Project governance focuses on the portfolios of programs and projects used by the organisation to deliver many of the strategic objectives. This process focuses first on doing the right projects and programs constrained by the organisations capacity to undertake the work – Portfolio Management; secondly, creating the environment to do the selected projects and programs right- developing and maintaining an effective capability; and lastly systems to validate the usefulness and efficiency of the ongoing work which feeds back into the selection and capability aspects of governance.

Within this framework, portfolio management is the key. Strategic Portfolio Management focuses on developing the best mix of programs and projects to deliver the organisations future within its capacity to deliver. This means taking the right risk and having sufficiently robust system in place to identify as early as possible the ‘wrong projects’, so they can be either be reframed or closed down and the resources re-deployed to other work.

It is impossible to develop an innovative future for an organisation without taking risks and not every risk will pay off. Remember Apple developed the ‘Apple Lisa’ as its first GUI computer which flopped in the market, before going on to develop the Apple Macintosh which re-framed the way we interact with machines.

Apple Lisa circa. 1983

Obviously no organisation wants to have too many failures but good governance requires ‘good risk taking’. Apple had no guarantees the i-Pod and its i-Tunes shop would succeed when it started on the journey of innovation that has lead to the i-Phone, i-Pad and Apple becoming one of the largest companies in the world based on capitalisation. As Richard Branson says – ‘you don’t bet the company on a new innovation’ but if you don’t innovate consistently, obsolescence will be the inevitable result.

The balance of project governance focuses around creating the environment that generates the capability to deliver projects and programs effectively, effective sponsorship, effective staff development, effective and flexible processes and procedures, simple but accurate reporting and good early warning systems to identify issues, problems and projects no longer creating value (a pharmaceutical industry saying is that if a project is going to fail it is best to fail early and cheap!).

Good questions outrank easy answers! Every hour and dollar spent on governance processes is not being spent on developing the organisation. The challenge of good governance is to have just enough reporting processes embedded in an effective culture of openness and accountability to provide an appropriate level of assurance the organisation’s resources are being used effectively; whilst at the same time allowing innovation and development. Restrictive and burdensome governance processes are simply bad governance – they restrict the organisation’s ability to achieve excellence.

To help organisations understand these key governance processes we have updated our two White Papers on the subject:
Corporate Governance: http://www.mosaicprojects.com.au/WhitePapers/WP1033_Governance.pdf
Project Governance: http://www.mosaicprojects.com.au/WhitePapers/WP1073_Project_Governance.pdf

For more discussion around the subject of governance see the previous posts on this blog.

If you don’t like change you had better get used to irrelevance! By 2006, of the approximately 60 highly successful companies listed in ‘In Search of Excellence’ (1982, Tom Peters & Robert H. Waterman, Jr.) and ‘Built to Last’ (1994, Jim Collins & Jerry Porras), only 33% remained as high performers (source: Beyond Performance, Scott Keller & Colin Price). Of the rest, 20% had ceased to exist and 47% were struggling.

The message from ‘Beyond Performance’ is that focusing on current performance such as return on capital is never enough. The primary driver for long term success is focusing on the health of the organisation, supported by performance. Sustained excellence needs an organisation that has a vision of a medium and long term future as well as performing effectively in the current environment. This requires investment in change to meet those futures with no guarantees the investment will pay off, in the short-term, or at all.

A ‘healthy’ organisation has a clear sense of direction, inspirational leadership and an open and supportive culture of shared beliefs. Within the organisation, the people are motivated and empowered to take responsibility and accept accountability for their work, within a coordinated and controlled environment that deals effectively with risks, issues and opportunities. The organisation is effectively governed and designed by its leaders to execute strategy effectively; it is outwardly focused on a wide range of stakeholders and most importantly, creative and innovative.

But innovation is not enough; the key enabler of sustained excellence is the ability to implement change! This requires good project capabilities to transform innovative ideas into the elements needed to enable the change such as new processes, products or procedures, supported by the ability to implement the change effectively within the organisation to realise the benefits. There is no magic formula for this; different styles of leadership can be equally effective. However, what is certain is that organisations that don’t create the ability to continually change and grow quickly fade into irrelevance as the world around them moves on.

This applies equally to private sector companies and government departments and agencies – there are very few government processes that can’t be privatised, commercialised or simply abandoned if the public service executive don’t rise to the challenge. Australia Post makes a profit for the Government; the Royal Mail in the UK carries far more mail over far shorter distances with a far greater population density and charges far more for its stamps but despite all of these advantages is only marginally profitable through the sale of property assets – guess which organisation’s future is in serious doubt!

All types of organisation need to embrace the ability to change or the cultural inertia I’ve been discussing in a series of posts over the last few weeks will have its inevitable consequences sooner or later.

Corporate governance is defined as aligning as nearly as possible the interests of individuals, the organisation and society. Good governance is good business!

Project governance is a sub-set of corporate governance, focused on systems that ensure the right projects and programs are selected by the organisation, and the selected ‘few’ are accomplished as efficiently as possible. Projects that no longer contribute value to an organisation should be terminated in a way that conserves the maximum value and the resources reallocated through the portfolio management process to more valuable endeavours.

The framework for effective project governance is laid out above, and is an executive management responsibility. Sponsors and the Portfolio Selection/Management processes provide the key link between the executive and the working project and programs (for more see our Governance White Paper).

The focus of this post is to look at the pre-selection activities that inform the portfolio selection processes. One of the key conclusions to be drawn from the Ombudsman’s Report discussed in my earlier post Cobb’s Paradox is alive and well  was that many of the projects that contributed to the $1 billion in failures were set up to fail – the projects had absolutely no chance of delivering within the announced parameters: the inputs to the portfolio selection process were grossly flawed (or were non-existent).

This appears to be a wide spread issue. Most project management standards such as ISO21500 and the PMBOK® Guide start with an approved project and a business case or similar that defines what has to be accomplished; this is the end of the portfolio selection process outlined above and is assumed to set realistic and achievable objectives.

What is missing, are the steps leading up to this point; the life of a ‘project’ starts with an idea, need, opportunity, requirement or threat (the ‘concept’). The organisation assesses and studies the ‘concept’ hypothesises options and solutions and frames a proposal that becomes the foundation of a future project. These key investigative elements of a project generally sit under the portfolio umbrella developing information to allow a proper decision to be made. In mining this can represent exploration, feasibility studies, ‘bankability’ studies and concept designs which between them can cost $millions, leading to project funding. Importantly, this ‘Front End Loading’ (FEL) is seen as the key to a successful mine in most major mining corporations.

Similar problems exist in major infrastructure projects, defining a solution to prison overcrowding can involve building a new major prison, building several smaller prisons, extending current prisons, changing the way criminal justice system works to reduce the need for prison places, or a combination of the foregoing options (substitute University/hospital/school, into the previous sentence to see just one dimension of the challenge). However, unlike mining, most government and many corporate organisations see effective ‘front end loading’ as unnecessary.

Other organisations use the process to formulate definitive solutions to problems they have no real understanding of (typical in ICT) and then pretend the defined solution has no associated risk (because it is defined) despite the fact the full dimensions of the problem the project is supposed to solve are still unknown, and are frequently changing over time.

The challenge, requiring informed judgement and effective governance is recognising which development processes suits what type of ‘concept’:

• Sometimes, the ‘investigation’ requires a significant amount of work (eg, a bankability or feasibility study); this work may be treated as a project in its own right, and is time, cost and resource constrained with a defined deliverable (the report).
• If the work is expected to flow forward and will only be stopped in exceptional circumstances, project phases work best, with some form of ‘gateway’ or transition review.
• In other circumstances, studies are undertaken as part of the portfolio by corporate or PMO professionals with no dedicated budgets, assessing multiple proposals as an ongoing process, but once a concept gets the go ahead a project is created and a budget and resources allocated.
• Other concepts (particularly problems) cannot be defined and an ‘agile’ approach is needed where elements of a partial solution are developed and put into use developing new learning that will then allow the next module to be developed in a progressive sequence. However, whilst this may be the most suitable and cost effective way of developing an effective solution, budgeting in a traditional ‘iron triangle’ concept of fixed cost, time and scope is impossible.

The challenge is recognising which type of project is being proposed (based on Project Typology), and then deciding which type of process will develop the best input to the portfolio selection process and what level of uncertainty (risk) is associated with the proposal once developed. Certainty is not important, what matters is appreciating the extent of the risks and the likely benefits, so an informed investment decision can be made. Most ‘game changing’ initiatives involve high risk, high reward projects that create a totally new future!

OGC Gateway™

The OGC ‘Gateway Reviews’ is a flexible process that addresses this part of major projects from the client’s perspective:
Gateway 1 = Business Justification, options identified and appraised, affordability, achievability and value for money established.
Gateway 2 = Procurement strategy, will the proposed strategy achieve the project objectives?
Gateway 3 = Investment decision, based on realistic project cost information (eg, tenders or bids) can the business case be confirmed from both the cost and the benefit perspective?
Gateway 4 = Readiness for service. The completion of the project work and a reassessment/confirmation of the expected benefits as the deliverable is put into ‘service’.
Gateway 5 = Benefits evaluation. Did we get what was expected now the project’s outputs are being used?

Summary

Most of the risks and rewards associated with a project or program are determined long before the project manager is appointed; if these decisions are wrong (or non-existent) project and program management cannot resolve the problem.

The role of effective project management is to deliver a realistic and achievable outcome efficiently; if the parameters for the project are unrealistic in the first place, the best project management can do is stop the situation deteriorating further! As far as I know, none of the various BoKs and methodologies, including the PMBOK® Guide has a ‘miracle’ process that will magically transform an impossible set of objectives into achievable set of objectives. Wishful thinking is not an effective substitute for effective project governance!

My last couple of posts on the subject of change and executive leadership generated a range of comments many suggesting if we did ‘better project management’ the problems would be resolved. Unfortunately for this to be true, the organisation still needs executive buy-in and leadership to support the process, in fact demand better project management.

An article in the December edition of ‘project’, the journal of the UK Association of Project Management (APM) by Martin Samphire, a committee member on both the APM Governance SIG and the APM Portfolio Management SIG highlights more project failures. This time the FiReControl project which was described by the House of Commons Public Accounts Committee as ‘one of the worst cases of project failure the committee has seen’, followed by a catalogue of fundamental failures; and the NHS Connecting for Health program which is beset by weak program management.

The UK industry and Government know how to deliver large complex programs, the work of the Olympic Development Authority is a world class example; it’s just that many other managements simply choose to ignore good practice, or more accurately refuse to change to allow good practice to be introduced.

The challenge of getting senior management to actively support change that brings better systems into use to the benefit of the organisation they work for is not new. Henry Gantt had similar problems introducing his systems that demonstrably increased production by over 100% and massively increased profits. Here are a few of his comments:

• The changing of a system of management is a very serious matter and cannot be done by a superintendent in his spare time (Work Wages & Profits, p168).
• In every workroom there is a fashion, a habit of work, and every new worker follows that fashion, for it isn’t respectable not to (Work Wages & Profits, p186).
• The most casual investigation into the reasons why so many of the munition manufacturers have not made good, reveals the fact that their failure is due to lack of managerial ability rather than to any other cause (Organizing for Work, p64).
• Our most serious trouble is incompetency in high places. As long as that remains uncorrected, no amount of efficiency in the workmen will avail very much (Organizing for Work, p64).
• Our industries are suffering from lack of competent managers,—which is another way of saying that many of those who control our industries hold their positions, not through their ability to accomplish results, but for some other reason (Organizing for Work, p64).

By the way, Henry was also less than impressed with the bankers of his time as well: “No …laws…. have so far been framed that restrain the ‘high financier’ who, without giving anything in return, taxes the community for his own benefit to an extent that makes all other forms of acquiring without giving an adequate return seem insignificant.”

The framework needed by senior executives is well established the APM has just published the 2nd edition of Directing Change – a guide to the governance of project management (60,000 copies of the 1st edition have been distributed since publication in 2004). This guide is written by senior managers for senior managers. It provides clear overall guidance to an organisation’s governing body (board or equivalent) and executives on their responsibilities and more specific guidance on choosing the right projects (portfolio direction), project sponsorship, project management capability and disclosure and reporting. Copies can be downloaded from the APM website or: www.mosaicprojects.com.au/Resources_Papers.html#Governance

Martin Samphire’s view is that applying good governance in their management is 80% of the answer to successful projects. I feel he is understating the importance of the role and responsibility of the senior executives, particularly when it comes to the process of changing an organisations culture to accept good governance and effective project management!

In 1995, Martin Cobb worked for the Secretariat of the Treasury Board of Canada. He attended The Standish Group’s CHAOS University, where the year’s 10 most complex information technology (IT) projects are analysed. The high level of failure led Cobb to state his now famous paradox: “We know why projects fail; we know how to prevent their failure—so why do they still fail?”

In 2011, another report into the management of IT projects asks the same question! This time the report was prepared by the Victorian Government Ombudsman, in consultation with the Victorian Auditor-General, it documents another series of failures largely created by executive management decisions. The report entitled Own Motion Investigation into ICT – Enabled Projects, examines 10 major Victorian Government ICT projects that experienced difficulties such as budget and timeframe blowouts or failure to meet requirements.

Portfolio Management
Problems identified by the Ombudsman in the area of Portfolio management and governance include a lack of effective leadership, accountability and governance. He was particularly concerned about poor project governance, the lack of accountability of project stakeholders and a lack of leadership — a reluctance to take tough decisions.

These failures contributed to poor decision making, and an inability or reluctance to make difficult, but necessary decisions. Leaders lead and determine governance practices; the resources needed to implement these facets of effective Portfolio management are readily available including:

• PMI’s The Standard for Portfolio Management – 2nd Edition, available in Australia from http://www.mosaicprojects.com.au/Book_Sales.html#PMI, elsewhere from http://marketplace.pmi.org
   
• The Association for Project Management’s Directing Change, a guide to the governance of project management: Download the booklet

Project Definition
It is impossible to deliver a project successfully if the decision to proceed is based on inaccurate assessments in the business case. The Ombudsman commented on the inadequacy of business cases, the failure to fully define requirements for new systems, a general reluctance to change business processes to better fit with off the shelf products (to reduce cost and risk) and a ‘tick the box’ approach to risk management (ie, avoiding any real assessment of risks and opportunities).

Linked to this lack of definition major project funding decisions were announced publicly before the business case was fully developed (representing either wishful thinking or a wild guess?), and high risk decisions being made to only partially fund some projects.

The solution to these issues is a robust and independent PMO that has the skills and knowledge needed to validate business cased before they go forward to management for decisions. Many years ago, KPMG released a series of reports that highlighted the fact that organisations that failed to invest in effective PMOs were simply burning money! The Ombudsman’s report shows that ‘burning public money’ is still a popular pass time.

For more on PMOs and to download the KPMG reports see: http://www.mosaicprojects.com.au/Resources_Papers.html#Proj_Off

Risk Management
Many of the factors identified above and in my view the primary cause of most bad decisions is the abject failure of senior management to insist on a rigorous risk management process. Risk management is not about ‘ticking boxes’, it is about having the ethical courage to objectively explore the risks and then take appropriate actions to either mitigate the risk or provide adequate contingencies within the project budget. This failure was manifest by an inconsistent approach to contingency funding. There are many examples of high risk decisions being made without any contingency provisions:

• The Myki ticketing system was let to an organisation that had never delivered a ticketing system before. No contingencies were made for this high risk decision and the project is years late, $millions over budget and will only deliver a small part of the original scope.
   
• Agencies preferred to be on the leading edge rather than leveraging what had been done by others elsewhere. This may be justified but not without proper risk assessment, mitigation and contingency.

Government agencies are not alone in failing to effectively manage risk in ICT procurements. The same problem has been identified in major infrastructure projects, in a series of reports by Blake Dawson; see: Scope for improvement

There are always difficulties in transferring project risks to vendors, and dealing with large vendors who may be more experienced in contract negotiation than their agency counterparts. Whilst modern forms of contract provide opportunities to adopt innovative procurement processes that could significantly reduce project risks for vendors and customers these were not used.

As our paper, The Meaning of Risk in an Uncertain World  and the Blake Dawson reports clearly demonstrate, not only is it impossible to transfer all of the project risk to a vendor, it is totally counterproductive to try! Organisations that try to transfer ‘all of the risk’ end up with a much poorer outcome than those organisations that actively manager the risks in conjunction with their vendors.

Large ICT projects are inherently complex and necessarily involve some significant risks. But these can be mitigated to some degree by taking heed of the Ombudsman’s observations, lessons learnt in other projects and the implementation of robust and independent systems.

The PMI Practice Standard for Risk Management provides  good starting point.

Recommendations
The Ombudsman’s recommendations on how to address these issues can be applied to ICT and other projects undertaken by other state, local and Commonwealth government agencies, and in the private sector: Download the report.

In my opinion, the primary cause of these failings, referenced but not highlighted by the Ombudsman, is cultural. Executives and senior managers overtly preferring the status quo and the current power structures they have succeeded within over leading the implementation of change that will deliver improved outcomes for their organisations but make people more accountable and redistribute organisational power. This was the focus of my last posting; Culture eats strategy for breakfast 2!

As Martin Cobb observed in 1995, “We know why projects fail, we know how to prevent their failure — so why do they still fail?” Unfortunately this is still a valid question more that 15 years later and, without leadership from the very top, I expect the effect of this report will be little different to the dozens of similar reports generated over the years and we will still be asking the same question in 2020.

The answer is culture and leadership – to change the culture within senior management ranks, the owners of organisations need to take actions similar to the Australian Federal Government and mandate effective processes and then measure performance in their implementation and use. The implementation of the Gershon Report that is being forced through the federal government departments is a Cabinet level initiative. It is still too soon to judge wether the initiative will be successful, effective culture change takes years to embed in major organisations, but at least the push has started at the right level. My feeling is that if the pressure is maintained for another 3 or 4 years (the original report was released in 2008) there may be some real benefits. To avoid similar reports to this one in the future, the leaders of other organisations need to take similar robust, strategic action tailored to the needs of their organisation.

Project professionals can help by effectively communicating to your top-level executives the real benefits of effective project governance. For many ICT and other technical/engineering professionals this represents is a whole new set of skills to learn, my book Advising Upwards may help!

I’ve been at the Projectchat 2011 conference in Sydney for the last couple of days. Projectchat is the ‘home’ of the Deltek community with a strong focus on scheduling and Earned Value.

The event this year has been organised by a new name, Connexion Systems Pty Ltd. New name, same team – Connexion has evolved from WST Pacific through Deltek Australia to its present form and remains the primary sales and support agency for Open Plan, Cobra, and associated tools in Australia.

My personal high point was the standing room only audience for the first airing of my thoughts and ideas on refocusing scheduling tools to focus on optimising the critical work and the critical workers rather than arbitrary activities, durations and ‘float’. The presentation can be downloaded from: http://www.mosaicprojects.com.au/Resources_Papers_152.html

Other thoughts and feelings include how little organisations have learned over the last 25 years, highlighted by Greg Betros’ paper, the same bad practices remain far too common. Countered by an expanding recognition that scheduling and project controls matter and the expanding interest in training and certification (for more on this topic see: http://www.mosaicprojects.com.au/Resources_Papers_149.html).

Another highlight was the overview of PMI’s updated Practice Standard for Earned Value Management presented by one of the core team members Lloyd Carter. The 2nd Edition has significant improvements over the original and aligns with AS 4127. I’ve bought a copy and will post on this shortly.

As always with Projectchat, there was a great party last night… now all I need to do is get through the rest of the sessions.

In my first post on this topic I suggested that:

• Even where a smart business has aligned the project with a sensible/necessary strategic intent, and then properly leads and resources the effort, failure is still likely if the power of culture is ignored.
   
• And culture can be loosely defined as ‘the way we do business here’ and incorporates attitudes, expectations and the way both internal and external relationships work. The people in the organisation are there because they can operate in the culture as it currently is and embody the culture; they are predisposed to resist change.

This post looks at the entrenched nature of culture and its affect on change.

Surveys by the Australian Institute of Management and others consistently show that around 30% of people in an organisation are looking to leave; which means 70% are content. This majority are comfortable within the current status quo and know how to ‘work the system’ to their advantage. The 30% who aren’t happy may be open to change but are also already disaffected and therefore probably disinterested.

Introducing a new ‘best practice’ will inevitably change the status quo and change the relative power balances within the organisation. A couple of examples:

• The organisation decides to introduce an effective scheduling system (possibly supported through a PMO). The people involved in doing the schedule gain ‘power’ they develop the schedule and report progress against the plan. The project teams lose power, they need to conform to the plan (losing the flexibility to do what they feel like on a day-to-day basis) and failures to achieve the schedule are highlighted to management much sooner than if the schedule was not being used. We can prove having an effective schedule improves the probability of project success (see: Proof of the blindingly obvious), but what’s good for the organisation as a whole is not necessarily going to be seen as good by the individuals affected by the ‘improvement’.
   
• The organisation decides to introduce a Portfolio Management process to select the best projects to undertake to achieve its strategy, within its capacity to properly support the work. This is a great strategic initiative that maximises the value to the organisation but will mean rejecting more the 60% of the potential projects it could do if it had unlimited resources. This means 60% of the pet projects supported by various members of the executive will be canned! Which means these people will lose power and status firstly to the team making the portfolio decisions and secondly to the executives whose projects were selected. Another group disadvantaged by the selection process (or more accurately the rejections) are the teams who develop the idea and build the business case for the non-selected projects.

In both cases what’s good for the organisation is potentially bad for a large group of individuals who are currently happy and effective working within the current culture and structures of the business – if they weren’t happy they would not be there!

In Culture eats strategy for breakfast! #1, I raised the concept of creating ‘space’ in the existing culture for the change initiative to move into and fill. This ‘space’ is created by crafting a general acceptance within the culture that the current status quo is not working well for the majority and some sacrifice of existing power and ‘comfort’ is generally warranted for the good of each individual as well as the organisation. This objective can be achieved in a number of ways:

• by identifying a ‘clear and present danger’ that is threatening the group and the organisation as a whole – the need to change to survive;
• alternatively a competitive challenge to beat an opposing organisation may work or;
• best but most difficult to achieve a engendering general striving for excellence simply to be part of something great.

Engendering the move towards accepting or desiring the change requires powerful leadership embodying credibility and a clear message that identifies the reason for the change and generates buy-in to the concept of changing and improving before the specifics are even discussed. This leadership has to come from the top! (see more on leadership)

The more established the ‘culture’ is the harder creating the desire for change becomes. Small and medium sized businesses can link the well being of the business to the benefits of the individuals far easier than large businesses. Commercial organisations can link their success to the well being of individuals far easier than stable government organisations with permanent employment as part of the public servant’s culture. The more resistant the culture, the more important effective leadership linked to powerful communication becomes in creating the space for change.

Once the ‘space’ has been created and the desire to improve is generally present, a careful two-way dialogue is needed to define the best options for change and build engagement, to recognise those who will inevitably lose power or be inconvenienced by the change and to help these ‘losers’ re-gain their losses (or perceive a better future despite the losses). Altruism is wonderful but it is unwise to rely on it as the primary mechanism for change.

There will always be resisters to change, the challenge is to shift the majority to a point where they want the improvements (or at least recognise the changes are essential). In addition to leadership, this also requires effective stakeholder management (see more on stakeholder management ). Once this shift is achieved, traditional change management processes cut in to deal with the implementation of the change, supported by project management processes to create the necessary deliverables to implement the change.

However, if the organisation fails to create the ‘space’ in its existing culture for the new processes to work within, the existing culture will definitely eat the intended strategy for breakfast!

Most business changes involve a strategic intent, implemented by a project or program that defines the new processes and procedures needed to achieve the change and then develops and implements the processes.

Smart organisations realise this is not enough and include training to make the organisations staff familiar with the new processes and the really smart organisations link achieving the intended benefits to a key executives KPIs. And the changes still fail!

Two areas of notable failure are IT projects where the focus is on the technology rather than the business and PMO start-ups where the focus in on processes and reporting rather than improved project outcomes.

However, even where a smart business has aligned the project with a sensible/necessary strategic intent, and then properly leads and resources the effort, failure is still likely if the power of culture is ignored. Culture can be loosely defined as ‘the way we do business here’ and incorporates attitudes, expectations and the way both internal and external relationships work. The people in the organisation are there because they can operate in the culture as it currently is and embody the culture; they are predisposed to resist change.

There is an old joke that asks ‘how many consultants do you need to change a light bulb?’ The answer is ‘one, provided the light bulb wants to change!’ This adage applies to changing culture in any organisation – it wont change unless the people in the organisation want it to change, and overall most people in the organisation are quite happy with the culture as it exists (if they were not, they would move on to another job).

The challenge with implementing changes falls into two areas:

• The first is doing the ‘right project right’ by implementing effective Portfolio, Program and Project management. Whilst it is true that $billions of projects fail due to poor management practices, these failures are a deliberate choice of executive management. We know how to do projects, programs and portfolio management properly, not implementing effective systems is a cultural decision that prefers the status quo and failure over change.
   
• The second challenge is cultural; the need to move the organisations culture to allow the change to be implemented effectively. This is a much more difficult process that needs leadership and drive. You need to create the willingness to allow the change to happen, before the change can be implemented effectively, before the benefits of the change can be realised. This requires the people in the organisation to buy into the concept of the proposed change long before the benefits can be tangibly appreciated.

Meeting the challenge of ‘culture’ requires effective leadership; the people in the organisation need to be prepared to follow their leader into the new, unproven future. These traditional aspects of leadership are outlined in our White Paper: Leadership.

Another important facet of leadership is ‘Tribal Leadership’, everyone belongs to one or more tribes of associates (defined as people they know well enough to greet socially) and effective leadership at this social group level can also be a powerful influence for change, firstly to build engagement within the group (see diagram below), then to generate support to allow the change to happen.

Whilst project managers can only ever have a small role to pay in the overall leadership of the organisation (this is the province of CEOs and executive managers), they can be effective tribal leaders.

Most tribes are quite small, less then 120 people. In their book, Tribal Leadership, Logan, King and Fischer-Wright describe an organisation as a tribe of tribes and if the project manager’s tribe expands to include key members of the wider organisational community affected by the planned change, their influence can be significant.

Creating the ‘space’ within a culture to allow change, both from the executive leadership perspective and tribal leadership perspective are elements of effective stakeholder management. What most organisations forget is this part of the change effort has to precede the role out of the new processes and procedures.

Creating the space to allow for the possibility of success is not the end of the change effort. For the change to be fully successful you still need to role out strategically effective processes and procedures, provide effective training and transition support, and then maintain visible support for the change over an extended period until the ‘new’ processes and procedures are fully absorbed in to the culture of the organisation and simply become part of the way the organisation does business.

Unfortunately very few organisations start soon enough or continue long enough with the overall change effort to be successful. But without this sustained effort, culture eats strategy for breakfast.

See also Culture eats strategy for breakfast 2!

After two years of development, the basic framework of the Planning Planet ‘International Guild of Project Controls’ (GPC) is in place to develop a career framework and accreditation system for project controls professionals. The mission of the GPC is to develop a centre of excellence for developing the skills, expertise and capability of professionals in the field of project controls.

The Planning Planet, GPC announcement on the 11/11/11 confirms the Guild’s aims, objectives, governance processes, controls and initial management team are all in place.

The professional development teams are working to establish a framework of ‘standards of practice’ to support project controls professionals in their careers. The current status of this vital work is:

These standards have been mapped to a proposed career framework, and levels of membership, that recognises the different streams of expertise within the overall project controls framework.

With Phase 1 now officially launched, project controls professionals world-wide are invited to become part of the process to define our profession. The first four steps of the process are available now, for you to sign up and support this important development.

Additionally, the schedule leading to the launch of Phase 2 in March 2012 is set out below – if you want to influence this process, now is the time to be involved!!

The launch of Phase 2 will mark the start of formal accreditation to the GPC the intended framework for accreditation has to be finalised but is expected to include the following:

Personally I would like to congratulate James, Theo and the GPC committees on a massive effort and wish them every success as they move forward. If you want to be part of this process or simply find out more, download the GPC Launch presentation and sign up to help at: http://www.planningplanet.com/guild

We all know good scheduling leads to better project outcomes – certainly for me it’s been a article of faith for most of the last 40 years and ‘obvious’ from observation. But ask me, and any other scheduler I know to prove this fact and we would be hard pressed to come up with anything substantive.

Over the years there have been many surveys that link the lack of effective planning to poor project outcomes. One of the more definitive was undertaken by the CIOB in 2008 (download the report ‘Managing the Risk of Delayed Completion in the 21st Century’). But showing projects tend to fail if they don’t use effective planning and scheduling is not the same as showing that good planning and scheduling enhances the probability of success.

This has now changed! A paper published by Dr Dan Patterson, the CEO of Acumen, demonstrates a clear link between good schedules (defined as technically competent schedules) and good project outcomes.

Figure 1, taken from Dan’s paper Does Better Scheduling Drive Execution Success? Published in November’s PM World Today shows a strong correlation between the technical competence used to develop the schedule and the number of activities that finished on time. The data is based on a sample of 35 large projects ranging from US$15 million to US$30 billion (download the paper).

Link the CIOB findings with Dan’s data and the message is blindingly obvious – if you are running a large project without a competent scheduler supporting the management team with effective scheduling, you are virtually guaranteeing failure!

Hopefully the work currently being undertaken by Planning Planet, CIOB and others to develop a framework (or frameworks) to train and qualify competent schedulers will mean in the next year or two there will be enough good schedulers to meet the demand from business and industry. For more on this see: Should you certify your schedulers?  and watch this space…. There are a number of announcements due in the next couple of weeks.

Starting with the 2012 PMOZ conference that will be run in Melbourne from August 14th to 16th, the profits from the conference will be invested in developing the project management profession in Australia through the PM Global Foundation.

Mosaic has been a long term support of PMOZ as an independent, cross-industry conference that allows delegates to tap into the best new thinking from all sources. We are confident this new initiative will further enhance both the independence and the value of the conference and look forward to continuing our support.

For additional information, down load the PM Global press release.

The London Olympic Delivery Authority’s Learning Legacy is designed to facilitate the dissemination of the lessons learned from the London 2012 construction project for the benefit of future projects and programmes, academia and government with the intention of raising the bar within the construction sector.

The ODA are on the verge of delivering a massive program of works on-time and on-budget, the learning from this major undertaking can benefit everyone.  To browse and download the 250 documents see: http://learninglegacy.london2012.com/

There are four types of reports:

• Micro reports: Short examples of lessons learned, best practice and innovations from the construction programme.
• Case studies: Peer reviewed papers on lessons learned, best practice and innovations from across the Programme.
• Research summaries: Summary reports of research projects undertaken by academia and industry on the London 2012 construction.  These organisations will also publish full research papers as they are finalised throughout 2012.   Over 600 interviews were undertaken by researchers on the ODA and its supply chain as part of the learning legacy research.
• Champion products: Examples of tools and templates used successfully on the programme.

The reports have been classified into 10 themes:
• Programme and project management;
• Design and engineering innovation
• Equality, inclusion, employment and skills;
• Health and safety;
• Masterplanning and town planning;
• Procurement and supply chain management;
• Sustainability;
• Systems and technology;
• Transport;
• Archaeology.

This is a highly recommended rich source of information.

Far too many people think that asking for help is a sign of failure or weakness. In fact the opposite is true. If you don’t know something and waste your time trying to find out, or worse still make an expensive mistake, no-one benefits least of all you! Effective leaders, managers and team members know what they don’t know and proactively seek help to build their knowledge and capability.

Most people seem happy to offer help when someone asks for it, but are shy or embarrassed to ask for help themselves. Rather than asking, they try to work out the answer, even when it’s clear that it is not possible; or hide and not tell anyone they’re wrestling with something; or just hope it goes away. By asking for information or help, rather than wasting time and energy trying to solve the problem, you move forward and the energy that was being wasted wondering and struggling can be used for positive purposes.

This will make you a better leader and will also show those under you that it’s OK to ask for help. Demonstrating to your team that you ask for help when needed encourages them to do the same and frees up communication, energy and the flow of information in a positive way. It seems obvious, but it won’t happen without a push in the right direction.

Things you can do:

1. First, stop talking to yourself and decide that you are going to talk to someone else.
2. Decide who that will be.
3. Craft the conversation. Write down not only what you are going to ask them, but how you hope they will respond. The art of asking effective questions is outlined in our White Paper: Active Listening & Effective Questions
4. Schedule a meeting and promise you will ask them for help.
5. Tell someone of your intentions; someone who will hold you to account for having the meeting and asking for help.

Then be pleasantly surprised; most people are honoured to be asked to assist friends and colleagues – by asking for help you are showing them you respect their knowledge and abilities.

Unrealistic expectations are highly unlikely to be fulfilled. But, when a project fails to achieve the impossible it is branded a failure!

The Economist Intelligence Unit’s recent report ‘Proactive Response – How financial services firms deal with troubled projects’  highlights unrealistic goals as the most common cause of project failure in financial service firms, other causes of failure include poor alignment between project and organisational goals, the failure of the organisation to provide adequate resources and the project sponsor failing to get involved in the project sufficiently early, if at all.

15% of firms surveyed had no processes for dealing with troubled projects and 47% wait until the project has officially missed time and budget targets before taking any action despite 61% of the executives surveyed believing early action on troubled projects enables organisations to better use limited resources.

This survey reinforces many others over many years that clearly highlight executive governance failures as the primary cause of project failures. And this seems particularly true of large IT projects where a recent survey of 1500 large IT projects by the University of Oxford found one in six projects went over budget by an average of 200% or time by almost 70%. The Oxford conclusion was that many managers in charge of the projects did not have enough understanding of how to implement the technology, presumably leading to unrealistic expectations……

These findings support two conclusions; firstly, the program and portfolio management maturity levels in organisations are seriously deficient. A series of Portfolio, Program and Project Management Maturity Model (P3M3) audits of Australian government agencies with IT budgets of more than $20 million, showed scores averaging around 2 out of 5 with many lower and a trend towards portfolio management being the least effective area. These findings are similar to outcomes from OPM3 assessment I have undertaken in other types of organisation.

The second conclusion is that knowledge, insights and valuable information derived from project expertise is not being effectively communicated ‘up the ladder’ in a way that executives can understand and appreciate.

Projects are successful when the organisation realises the benefits it expected from undertaking the project. For more on the value chain see ‘Value is in the eye of the stakeholder’. To close this loop effectively, skilled project personnel including PMO staff, need to be able to communicate effectively with their organisations executives. The art of ‘advising upwards’ effectively requires skill and understanding (this is the focus of my latest book ‘Advising Upwards’), but it is also important for the whole project industry, at the association, organisation and individual levels to recognise that knowing what represents ‘good’ PPP management is only the beginning, the end game is most organisations, most of the time doing good PPP management; and this won’t happen unless the senior executive and ‘middle management’ levels of organisations understand both the processes and the benefits.

The surveys canvassed at the start of this blog suggest we still have a long way to go!