The Sapere Good Governance Guide
Sapere have consolidated years of project and program assessment, assurance and delivery experience into a help guide for leaders of major projects and programs.
The Good Governance Guide helps establish the right governance and decision making for major initiatives as a way of maximising success and avoiding common challenges that can lead to project failure. For ease of reading, the remainder of this article refers to all as “projects”.
Origins of the Good Governance Guide
Projects are inherently risky. They are designed to undertake non-business-as-usual activity and/or complete activities where there is uncertainty around achievement of an outcome.
Project practice has improved over the last 25 years with the Project Management Body of Knowledge (PMBoK), PRINCE2, AGILE, program management, portfolio management and Gateway reviews all maturing as methodologies. This is in addition to increasing quality of project estimating and control systems and practices, improving the professional nature of project management as a discipline.
Project “failure rates” continue to be recorded at up to 50% however, depending on the nature of the project and the industry. It is fair to say that generally project success is higher for infrastructure projects than organisational change or ICT projects.
Statistics and reasons for project failure are widely recorded. If you are reading this, its most likely that you have experienced the results of projects not achieving their expected outcomes.
A 2023 article in the Harvard Business Review echoes our own experience from reviewing and recovering failed and failing projects in identifying the key causes of project issues.
In summary, the article identifies the following 5 key reasons for failure in projects:
- Selection of the wrong project
- Unrealistic constraints (time, resourcing, budget, contingency)
- Lack of effective leadership
- Complexity
- “Getting the basics wrong”
Project failure and deemed project failure
A “project failure” is when a project does not meet its defined objectives within the agreed-upon budget and timeline, essentially failing to deliver the intended outcome.
A “deemed project failure” is a more subjective assessment where stakeholders decide a project has failed based on their perception of the delivered result, even if it technically met the initial criteria. This can be due to factors such as poor quality, lack of user adoption, or not achieving the desired business impact.
“Having successfully delivered and recovered projects over the years, our experience is that these five factors are not discrete challenges. “
– Sapere
This is because:
- Unclear objectives will result in the wrong project – unclear objectives are the key cause of the misalignment of what a project delivers or “gaps” in the scope of work required to achieve the targeted benefits and outcomes from a project. Gaps typically include missed dependencies within the project, unidentified changes to business/ stakeholder and community practice and required outputs from areas outside of the project needed to provide complete solutions. Projects can also “over-reach” to seek to claim benefits that are beyond the enabling capabilities that they will deliver.
- Required capability to achieve benefits are missed. Key, risks are not identified – this incomplete understanding of in-scope requirements, out-of-scope requirements, assumptions, uncertainties and dependencies leads to an incomplete understanding of risks. This is both risks for the delivery of the project and risks for the achievement of project benefits and outcomes.
- Project governance and control is not fit-for-purpose – without understanding of risk, appropriate contingencies and program controls cannot be set
- Project governance has incomplete representation and focus – the “right people” may not be identified to be included in governance for the project. The “right people” includes leaders with accountability and delegation for decisions making for the key aspects of the project, both through delivery and into realisation of outcomes of benefits as the project is delivered. “Right people” also includes those who can effectively inform leaders and decisions makers and assure the project.
Sapere has developed the Good Governance Guide which summarises our learnings on effective ways to manage these linked challenges. This guide-on-a-page is intended as a tool to be used as a checklist by project sponsors and leaders, either as projects are established or in reviewing existing initiatives.
Good Governance Guide overview
We like to focus on the positive, so the guide is written from left to right in how good project outcomes are supported by good governance practice, and how potential challenges are avoided.
From top to bottom, the guide then covers setting the right project, the right controls and the right decision-making capabilities.
Our experience, and the resulting logic in the guide, in summary:
- To succeed, project objectives need to be clear, and all the effort required to achieve those objectives needs to be understood. This includes dependent initiatives, change requirements etc. and identify all the work required to achieve intended outcomes.
- Understanding objectives and the full scope of work required to achieve objectives means that assumptions, dependencies and uncertainties can be identified. These represent the risks to the project. Risks need to be understood both in terms of delivery risk and benefit realisation risks.
- Understanding of objectives, scope and risk allows the governance and control for the project to be appropriately sized and ensure that constraints for the project are realistic.
- In establishing governance forums and structures, this means that the right people can be identified, and effectively engaged, in the roles of decision makers, advisors and assurance providers to the project.
Good Governance Guide – a little more detail
Establish the right project
Projects are seen as a success if they deliver quality outputs on time and within budget and they achieve the intended benefits and outcomes that the project was set to address.
The right project means ensuring that outcomes are clear and measurable in business terms – these may be different to the benefits and measures used for economic justification of a project investment.
Identifying contribution of all work that is required to achieve outcomes and benefits is required. Sapere uses results chains for this which clearly map the outputs that the project is expected to produce to the benefits that need to be achieved.
This process is intended to also identify changes that may be required in business operation, stakeholder groups or the community to achieve required benefits. This process may identify additional scope required, dependencies to other projects and risks, assumptions and uncertainties in how the project will achieve targeted objectives that would otherwise be missed.
Knowing the full project scope required to achieve benefits, the critical path, assumptions and dependencies provides the full understanding of what is important in the project (and why) and is a requirement to effectively be able to identify risk.
Result Chains
Investment logic maps (ILMs) define benefits and outcomes to shape a required project through a business case process.
Results chains work the other way. They are intended to test the logic and identify dependencies and assumptions for how the work in the project plan is intended to achieve identified benefits.
This notices assumptions and dependencies that, in our experience, ILM typically misses.
Understand risk and set realistic project constraints and controls
Projects with unrealistic constraints suffer from inadequate funding, resourcing or timeframes to complete delivery of the work required to achieve project outcomes.
This occurs through not fully understanding required scope to complete the project, assumptions, constraints, dependencies from other work outside of the project and time required for organisational and community change (where projects are dependent on these changes).
It also occurs when risk is not fully understood. Risks need to consider both delivery and benefits and need to focus on threats. They need to be actively managed, with the right risks highlighted and dealt with at the right governance levels through the life of the project.
Understanding risk allows appropriate contingencies to be set. This may be in terms of time or budget identified to respond to specific risks eventuating. This is an enabler of active risk management, including considering risk proximity and retirement to release contingency from the project.
The degree of project investment, importance of benefits and outcomes, level of project risk and requirements for approvals and delegation all affect the setting of fit for purpose governance and control for the project.
Causes of failure – not understanding threats
Projects where challenges are experienced will commonly have risks not listed or registers that contain generic risks, such as “the project will overrun” or “the project will exceed budget”.
These generic risks are consequences. Effective risk management needs to understand and ensure effective controls for the specific threats that result in these consequences.
Examples of specific threats are, “bridge X is assumed to be a re-usable component of the highway upgrade but will require engineering assessment”, “if specialist resources are not secured by a given date, development timelines cannot be met” or “there is low confidence in cost assumptions for community engagement”
Engage the right decisions makers, governance and control
Good governance means having leaders with the right decision-making power based on the requirements of the project. This includes providing clear roles in governance for sponsorship of outcomes, delivery of project outputs and transition to “business as usual”. Considerations to make include:
- Who is accountable for the outcomes from the project?
- Who is accountable for business changes required to achieve benefits?
- Who is accountable for delivery?
- What level of delegation is required to direct on potential project risks, including financial delegation within corporate policies.
It also means identifying the right people to advise decision makers and to assure project outputs and outcomes are being achieved.
All attendees at steering committees, or similar project governance forums, should know why they are there and what role they need to play in governance.
Keeping steering committees engaged through good secretarial support
Leaders involved in project governance will typically have significant demands on their time. High quality governance secretarial support assists in ensuring that these leaders remain engaged.
This means that required outcomes from meetings are specific and clear. It means that papers and briefings include the right information to enable decisions to be made and are provided in time for review. It means that decision records, reports and controls are carefully maintained.
These factors all demonstrate a value for key leader’s time and confidence that the project is well controlled.
References
Te Wu & Ram B. Misra. (2023). Why Big Projects Fail—And How to Give Yours a Better Chance of Success. Harvard Business Review.
