Project Benefit Realisation and Project Management E-Book

Raymond C. Young

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 255

Veröffentlichungsjahr: 2021

Beschreibung

PROJECT BENEFIT REALISATION AND PROJECT MANAGEMENT

Dispels the confusion between project management success and project success, showing how project sponsors can govern their projects to succeed in delivering the strategic benefits originally envisaged

Project management success does not automatically lead to project success. Many large projects fail to live up to expectations, with between half and two-thirds of large projects either failing to deliver or delivering few strategic benefits. Traditional project management resources focus on delivering a project on time and on budget, yet they fail to supply top managers, many of whom find themselves in the role of accidental project sponsors, with guidance on how to govern their projects to succeed.

Project Benefit Realisation and Project Management: The 6Q Governance Approach bridges the strategy to performance gap by providing boards, senior managers and project sponsors with the six critical questions necessary to diagnose the health of any project. Presenting a systematic framework developed from research cases of successful and unsuccessful projects in various types of organisations, this practical guide enables those in top management to determine if their strategy or policy is on track and to assess whether a project is likely to deliver the expected benefits. The text features real-world examples illustrating how concepts can be applied to different types of projects in engineering, construction, information technology, business transformation and many others. This must-have guide is designed to help top managers and other stakeholders:

• Clarify the link between business outcomes, benefits, and strategy to evaluate where effort should be directed
• Assess how much behavioural change is required to effectively implement strategy and realise desired benefits
• Select a project sponsor committed to influencing key stakeholders to make necessary changes and intercede to resolve issues as they arise
• Establish how success will be measured before a project begins, to gauge sponsor commitment and ensure project goals are not changed to match whatever is achieved
• Ask if the right culture is in place to ensure all relevant information is being reported
• Determine teams’ ability to adapt and change plans in response to issues arising in the project
• Monitor if the project is on track to realising the benefits and have a process in place to cancel failing projects

Project Benefit Realisation and Project Management: The 6Q Governance Approach is an indispensable volume for board members, project sponsors, project advisors and those in senior positions who find themselves in the role of accidental project sponsors.

Leseprobe

Table of Contents

Cover

Title Page

Copyright Page

List of Illustrations

Preface

Authors CV

Raymond C. Young – Career Summary

Vedran Zerjav – Career Summary

1 Introduction

The Board, Governance and Projects

Key Concepts

References

2 How to Govern Projects: Six Questions

Q1. What is the Desired Outcome?

Q2. How Much Change?

Q3. Sponsor

Q4. Success Measures

Q5. The Right Project Culture

Q6. Monitoring

References

3 Tools and Techniques

Q1. Strategy – Diagnostic Toolkit

Q2. Change – Tools and Techniques

Q4. Measurement – Tools and Techniques

Q6. Monitoring – Tools and Techniques

References

4 Further Insight

When Do You Ask Each 6Q Governance™ Question?

The Best Guidance Available

Reference

5 The Future of Project Management and Governance

Where Do We Go from Here?

The History and the Future of Project Management

Conclusion

References

Appendix A: TechMedia

Background

Project Initiation

Package Selection

Board Reluctantly Convinced

The Project – Stated and Unstated Objectives

A False Start …

Stage 1

Stage 2

Outcomes

Appendix B: SkyHigh Investments

Background

Project Initiation

Establishing Project Governance Structure

Requirements Analysis

A Useful Delay

Package Selection: Understand Workarounds and Trade‐offs

Obtain Funding

Project Implementation: Monitoring and Managing Risks

Outcomes

Appendix C: The Agency

Background

The Finance Department

Project Failures Within Finance Branch

Accrual Accounting and Other Drivers for Change

The Right Advice and the Right People

Initiating Project – Request Funding

Winning Allies

Overcoming Dissension in the Ranks

A Cautious Phased Approach – Phase 1: Proof of Concept

Phase 2 – Implementation

Creating an Environment to Succeed Against the Odds

Revising the Project Plan

The User Experience

The Outcomes

Further Reading

Index

End User License Agreement

List of Tables

Chapter 3

Table 3.1 An overview of change management theories.

Table 3.2 Examples to assess required change.

Table 3.3 Six sources of influence.

Table 3.4 Six sources of influence.

Table 3.5 6Q governance diagnostic.

Chapter 4

Table 4.1 Correlation of 6Q Governance constructs with project success.

Chapter 5

Table 5.1 The future of project management.

List of Illustrations

Chapter 1

Figure 1.1 6Q Governance (TM) as a business canvas.

Chapter 3

Figure 3.1 AcdB layout on a whiteboard.

Figure 3.2 Worked example: TechServ! It’s not an IT project, it’s a customer...

Figure 3.3 Typical output from a stakeholder analysis.

Figure 3.4 Helpful output from business process mapping.

Figure 3.5 A typical logic map.

Figure 3.6 An example of a Results Chain.

Figure 3.7 A weak AcdB logic.

Figure 3.8 Initial value chain.

Figure 3.9 Enhanced value chain.

Figure 3.10 Value chain enhanced with projects identified through influencer...

Figure 3.11 Prototype project reports.

Figure 3.12 Screenshot of step 1 of the project initiation process – busines...

Figure 3.13 Prototype project portfolio management reports at DSTG.

2

Figure B.1 Project governance structure.

Figure B.2 Project timeline.

Guide

Cover Page

Title Page

Copyright Page

List of Illustrations

Preface

Authors CV

Table of Contents

Begin Reading

Appendix A TechMedia

Appendix B SkyHigh Investments

Appendix C The Agency

Further Reading

Index

Wiley End User License Agreement

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Project Benefit Realisation and Project Management

The 6Q Governance Approach

Raymond C. Young, MBA, PhD, FAIPM, FGIA

Vedran Zerjav, PhD

This edition first published 2022© 2022 John Wiley & Sons Ltd

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The right of Raymond C. Young and Vedran Zerjav to be identified as the authors of this work has been asserted in accordance with law.

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Library of Congress Cataloging‐in‐Publication data applied for

ISBN: 9781119367888

Cover Design: WileyCover Image: © matejmo/Getty

List of Illustrations

Figure 1.1: 6Q Governance (TM) as a business canvas.

Figure 3.1: AcdB layout on a whiteboard.

Figure 3.2: Worked example: TechServ! It’s not an IT project, it’s a customer service project.

Figure 3.3: Typical output from a stakeholder analysis.

Figure 3.4: Helpful output from Business Process Mapping.

Figure 3.5: A typical logic map. Source: Arnold [19].

Figure 3.6: An example of a Results Chain. Source: Thorp, J. (2003).

Figure 3.7: A weak AcdB logic.

Figure 3.8: Initial value chain.

Figure 3.9: Enhanced value chain.

Figure 3.10: Value chain enhanced with projects identified through influencer analysis.

Figure 3.11: Prototype project reports.

Figure 3.12: Screenshot of step 1 of the project initiation process – business case. Source: DSTG.

Figure 3.13: Prototype project portfolio management reports at DSTG.

Figure B.1: Project governance structure. Source: Young, 2005.

Figure B.2: Project timeline. Source: Young, 2005.

Preface

As we are writing this handbook, the COVID‐19 crisis is unfolding, creating challenges and opportunities of unprecedented scale for the economies and societies around the world. A number of projects are having their budgets axed and objectives put on hold but at the same time, many new projects are being initiated to help us all prepare to function and live in the ‘new normal’. Project sponsors, investors, and financiers are taking a risk‐averse view as to what projects will be needed and what to support in the post‐pandemic ‘brave new world’. Indeed, we felt that this handbook is a timely response to the challenges of this situation, focusing on project benefits and the design of projects in the light of their benefits, rather than the conventional criteria of project success.

Our ambition is to help organisational project clients and their project executives navigate these uncertain times. The book is deliberately brief and written for Corporate Boards and their ‘accidental project sponsors’. Managers do not suddenly acquire the knowledge to govern a big project when they are promoted to senior management. It is far more common to be delegated the role and to become a project sponsor by ‘accident’. Once delegated, the common experience is to find most of the advice one is given is not helpful, and success or failure becomes dependent on your instincts as a project sponsor. In the post‐pandemic world, projects are more critical to the survival of organisations and we cannot fall back on such a hit‐and‐miss approach. This handbook addresses this issue by distilling the experience of senior managers and presenting guidance in the form of six key questions illustrated by case studies.

The guidance is informed by decades of research and has been tested against a database of hundreds of projects to confirm its effectiveness. It is also supported by a companion website (www.6qgovernance.com) where readers can read the latest insights and post questions to the authors and their peers to get timely advice on how to govern their projects for the new normal.

Authors CV

Raymond C. Young – Career Summary

Raymond Young is an international authority in project governance. His research has been published by Standards Australia as HB280‐2006, a handbook explaining how boards and top managers influence business projects to succeed. His career objective is to help clients realise strategic business benefits from their projects rather than to simply come in on‐time on‐budget.

Raymond is a Fellow of the Australian Institute of Project Management (FAIPM) and a Fellow of the Governance Institute of Australia (FGIA). He is a founding member of the committee that developed the Australian and international governance standards AS8016 and ISO38500. Raymond’s career alternates between industry and academia. He has recently taken up a Senior Associate Professor role at Xi’an Jiaotong‐Liverpool University in Suzhou, China after a lengthy period as an academic at both the University of New South Wales and the University of Canberra. He has a decade of management consulting experience culminating in a CIO role within Fujitsu Australia.

Until recently, Raymond has been advising Australian Federal Government agencies on how to improve their project, programme, and portfolio management practices. His other expertise includes performance measurement, business process reengineering, activity‐based management, and logistics. His significant clients have included Colgate‐Palmolive, BHP, Commonwealth Bank of Australia, Telstra, Department of Health, Electricity Trust of South Australia, and Prospect Electricity.

Qualifications and Accreditations

Fellow of the Governance Institute of Australia (FGIA)

Fellow of the Australian Institute of Project Management (FAIPM)

Graduate of the Australian Institute of Company Directors (GAICD)

Doctor of Philosophy (PhD), Macquarie Graduate School of Management, Macquarie University, 2006

Master of Business Administration (MBA), University of Sydney, 1988–1992

Graduate Diploma in Education (DipEd), Sydney College of Advanced Education, 1986

Bachelor of Building Science (BBSc), Victoria University of Wellington, New Zealand, 1982–1984

Work History

2019–current

Senior Associate Professor

Xi’an Jiaotong‐Liverpool University

2016–2019

Senior Lecturer

University of NSW, Canberra

2010–2016

Assistant Professor

University of Canberra

2008–2010

Practice Lead, Project Governance

e8 Consulting

2002–2008

Lecturer

Macquarie University

1994–1998

CIO

Fujitsu Australia & FBA Computer Technology Services

1991–1994

Management Consultant

Deloitte Touche Tohmatsu

Vedran Zerjav – Career Summary

Vedran Zerjav is an Associate Professor of Infrastructure Project Management in the Bartlett, UCL. He is a scholar of projects with an interest in a range of organisational issues in project‐based organisational forms. His main areas of interest include strategic, operational, and value considerations in projects and his empirical focus is on urban infrastructure and its delivery. He is a qualitative researcher with an interest in hybrid and novel methodologies for project studies. Vedran’s engagement with the world of project management practice is extensive and spans research and advisory roles working with major infrastructure clients and professional bodies such as the Association for Project Management and Project Management Institute.

Qualifications

Doctor of Technical Sciences (Dr.techn.), Vienna University of Technology, 2012

Diploma in Civil Engineering (Dipl.ing./M.Eng.), University of Zagreb, 2006

Work History

2014–Present

University College London, Bartlett School of Construction and Project Management

2012–2014

University of Twente (The Netherlands), Department of Construction Management and Engineering

2006–2012

University of Zagreb (Croatia), Faculty of Civil Engineering, Department of Construction Management and Economics

1Introduction

The Board, Governance and Projects

A corporate board’s role is to ‘ensure management is focused on above‐average returns while taking account of risk’ [1, 2]. At a minimum, in our post‐COVID world, the board needs to ensure the survival of an organisation. For most organisations, business‐as‐usual is not an option because the environment has changed so much. Projects have always been important but now they are even more so because projects are the vehicle to take us from where we are now to where we need to be to survive and thrive. Project failure is not an option and projects are more of a boardroom issue than they ever were.

However, at the board and senior management level, we have tended to think of projects as someone else’s problem. Boards willingly take oversight of a company’s strategy but they seldom follow through on the insight that strategy [3] is implemented through projects. When we pause, reflect, and examine the success rates of strategy and projects, all the evidence suggests there is a very large strategy to performance gap [4]. Fewer than 10% of strategies are fully implemented [5], most large projects fail to live up to expectations [6] and between half to two‐thirds of projects either fail outright or deliver no discernible benefits [7]. There is a major deficiency in practice. Projects are troublesome with high capital costs, long time frames, and difficulties in delivery. Apart from the funding decision, most of us would prefer not to have to deal with projects at all. However, the world has changed and now, unless projects succeed, there may be no business at all. Boards and their advisors need to discuss projects in terms of the strategic benefits to be realised and go beyond the traditional focus on time and cost.

Project results appear to be no better in the public sector where hundreds of billions of dollars are invested annually in projects that contribute little to policy goals [8, 9]. If this pattern were to continue into the post‐COVID‐world: huge sums of money will be wasted, more people will die, and the economy may take decades longer than necessary to recover. At the senior management level, we need to go beyond issues of probity and simply doing it right. We need to learn to focus on the more important issue of realising strategic benefits in the right projects.

This book has been written to address the needs of the board and senior management. It deals with projects, but it is not a project management book. Instead, it focuses on implementing strategy, policy, and creating value through projects.

This book has been written because boards and top managers need better guidance. There is a paradox in project management: Project management is a mature discipline but following the standard guidelines does not automatically lead to success [10, 11]. There is widespread confusion [12] between project management success (on‐time on‐budget) and project success (realisation of business benefits) and most project management books incorrectly imply that one will lead to another. The guidelines that exist do not explicitly acknowledge that it is more important to realise strategic benefits than to simply come in on‐time and on‐budget. This notion is particularly important in the world of the new normal where it will be even less important to focus on time and budget criteria of projects and focus on achieving strategic goals of organisations. A classic example occurred during the 2008 Global Financial Crisis when the Australian government spent billions of dollars on school buildings to keep the economy moving. Schools got a new hall whether they needed one or not and the public dialogue was all about time and cost. The expenditure helped the economy, but no one thought to question whether equally important strategic educational goals such as literacy and numeracy had improved because of the projects. We risk repeating the same mistake as we commission projects to overcome the downturn in the economy caused by COVID‐19.

Projects rarely succeed in realising their expected benefits without the top management support [13, 14] and this is even more the case in the post‐pandemic world. Project management books provide little to no guidance for the senior management and, as a result, top managers are often not sure how to govern their projects to succeed. This insight informed the development of an international standard ISO38500 [15] and is based on HB280 [16]: an Australian Handbook for boards and their senior managers on how to govern ICT projects to succeed. HB280 is a research report distilling the experience of senior managers to identify what they did right and what they did wrong in governing their projects to succeed (or fail). In the words of one senior manager, ‘These big projects are a little like marriage, you don’t do them often enough to get practiced at it [and it is valuable to debrief to identify what you did to cause them to succeed]’.

HB280 presented five cases and distilled the lessons learned into six key questions that boards and their delegates should be asking when governing projects. These six questions were trademarked as 6Q Governance™ to make them more memorable. The 6Q Governance Framework has been tested with an international dataset to prove it works with all types of projects [17]. We see an adaptation of this framework as particularly well suited for the current transition into the new normal where projects need to be constantly revisited and interrogated by their clients and sponsors rather than have their requirements frozen in time and driven to completion with the least disruption. This handbook will show boards and their senior managers how to apply the 6Q Governance Framework by asking just six key questions at different stages in a project lifecycle. This is the first handbook to present projects in the context of the needs of the top manager and is written for board members, their ‘accidental’ project sponsors, the business project manager, and their project advisors.

A Diagnostic Toolbox for Project Executives

Our aim in this handbook is to set forward the basic diagnostic toolbox that will help executives understand the strategic health of their project portfolio and to know whether they are on track to realise the benefits that they were originally set out to achieve. We are offering the equivalent of a doctor’s stethoscope and a diagnostic map: six places to check to determine the health of your project. As in any medical check‐up, the general condition will depend on how several forces interact with each other in a systemic way. If a doctor requests a blood test for example, what we will get is a few measurements with values within certain ranges that are deemed as normal for any given parameter. If the blood counts are all within the expected ranges, no action is to be taken. If, however, a certain value is found to be outside the ‘normal’ range, then action needs to be taken to explore the nature of the ‘disease’.

Our method establishes dialogue and questioning as the main mode of engagement to achieve alignment between projects, strategy, and policy and, thus, undertake a project health check. The diagnostics will allow us to probe into different aspects of the project in order to guide reflection on the different options for the project business case and if and how it is going to fulfil its objectives. These questions are the backbone of our thinking in this book and they are the equivalent of the diagnostic map shown in Figure 1.1. Armed with the knowledge of where to look and listen, you are the stethoscope to bring your projects into strategic conversations.

We next introduce a toolbox grouped by six questions that you can use to make sense of any given number of projects in their organisation and then govern at the right time. These six questions were derived by rigorously looking at both successful and unsuccessful projects and asking what could have been done to improve the business outcome. The 6Q Governance business canvas is given below and each of its areas will be elaborated in more detail in Chapter 2 of this book.

Figure 1.1 6Q Governance (TM) as a business canvas.

The rest of the handbook is organised in the following way:

Key concepts

Chapter 2

: The 6Q Governance questions

Chapter 3

: Tools and techniques

Chapter 4

: Further insights

Appendices: Detailed case studies – for practice

Key Concepts

Project Management Success vs. Project Success

Before we launch into the six Questions, there is an important concept to establish: what is success in the context of the new normal? A lot has been written about project success in terms of time and cost, so much so that for most people, this is their only understanding of success. It is a blind spot for most practitioners. As long as the project delivery team can argue that they delivered what was agreed in the project brief and as long as they can do it within the constraints of time and budget, they will be seen as successful. Of course, there are many nuances to this argument by adding additional dimensions such as innovation, stakeholder management, leadership, entrepreneurship, and others but, ultimately, they all boil down to whether the project was on‐time and on‐budget.

This is the idea of project success that we are criticising in this book. We are not saying that projects should be seen as if they are unbounded by earthly constraints such as time and budget. But we are saying that a more strategic view of project success is necessary to come up with a meaningful execution strategy. For example, the question of whether stopping a failing project early should be considered a failure or success is never asked in the traditional execution sense. It would invariably be considered a failed project. In the same vein, a project that delivered nothing but a white elephant – an asset that is expensive to maintain but of very little or no use at all – would be considered a success as long as its deliverable remotely resembles what was promised in the brief when it was put together even if the world may have changed since then – and it will have changed.

So, how can we then change the emphasis to project success rather than project management success? This is the main riddle we will try to address with this handbook. Having been involved with projects and their management in various shapes and forms collectively for several decades, the main problem we’ve seen is one of failing to achieve alignment between policy, strategy, operations (outcome thinking), and project delivery (output thinking).

Currently, projects are not measured on how they are aligned with the ever‐evolving strategy and operational requirements of their respective organisations, but on how they aligned with their own plans suggested at the outset. Therefore, the front‐end planning ends up being a proxy for measuring project success, regardless of whether the project plans made sense in the first place. Then, as the project unfolds, project plans are often put forward with an entirely different mindset and agenda than what is described in the business case. Indeed, the underlying rationale of the project brief is to provide an early outline and a justification for the project with the main ambition of going very little beyond having the sponsor pushing the go button to get the project sanctioned. In this handbook, we will argue that this is the problem to be solved. At the heart of the problem are the often‐rushed planning and design decisions that take place at the inception of the project. This is what needs fixing, the fact that project execution does not conform to them is simply a corollary.

We should embrace serendipity, but not forget what projects are for – getting things done. But ‘things’ can often be a lot different to that what we think at the project outset and ‘done’ can mean different things in different situations. We are writing this handbook to understand the success of projects as its alignment with not be on time, on cost, outputs, but rather with the operational and strategic purpose that the organisation has set out.

This change in emphasis is exactly what makes it nightmarishly difficult to deliver the project as an ‘accidental project sponsor’ as any one of us can potentially find ourselves in such an accidental role. We have started by putting this marker on the ground: projects need to focus on realising (evolving) strategic goals. Project management success (on‐time on‐budget) is a secondary objective, and the so‐called experts must not be allowed to dominate the conversation by their misguided efforts. This book will try to shed some light and build a roadmap for what is clearly a daunting journey full of trials and difficulties. But before we start, let us take one more deep breath and discuss strategy and its importance for the success of projects.

Strategy and Policy Execution

After discussing what projects are for strategy and business operations, it is time to reflect on the other side of the coin – what strategy and business operations are for the projects we deliver. The short answer is – everything. Let us start by discussing the importance of strategy.

We would like you to pause and rank the importance of the following governance issues:

Risk and compliance – Avoid litigation, reputational risk

Strategy and planning

Board composition, diversity, and performance

Government regulation

Executive compensation – alignment with shareholder expectations of performance

New technology and its impact on the business

Strategy is probably far more important than you think. At a minimum strategy ensures the long‐term survival of an organisation and good strategy will lead to above‐average performance. The following statistics show that these are not motherhood statements:

For small businesses, ineffective strategy contributes to the problem of 50% surviving no longer than 5 years and 64% not surviving for more than 10 years

[18]

.

Poor strategy in large businesses results in underperformance. Booz Allen Hamilton found in a five‐year study of under‐performing US organisations

[19]

that 60% of the value destroyed was due to strategic errors, 27% due to operational errors, and 13% due to compliance problems.

In the public sector, strategy is a confused concept

[20]

and we often talk about policy instead. A study of the State of Victoria in Australia, normally considered an exemplar, found $100B had been invested into projects over a 10‐year period without any evidence any high‐level policy goals had improved

[9]

. A follow‐up study in the State of NSW also in Australia suggested that, more generally, only one in five policy goals are positively impacted

[8]

.

In discussing the role of a board, Henry Bosch (former chair of the Australian National Companies and Securities Commission, now ASIC) states:

The board’s first responsibility is to ensure that the organisation has clearly established goals; objectives and strategies for achieving them; that they are appropriate in the circumstances; and that they are understood by management (1995:93).

Before reading on, we suggest you go back to the earlier question and reconsider the relative importance of the governance issues. On reflection, do you find the strategy is more important than you first thought? Management consultants Booz Allen support a performance rather than a risk emphasis for governance and made the following observation around the time of the Enron, WorldCom, and Tyco scandals:

More strategic value has been destroyed in the past five years as a result of strategic mismanagement and poor execution … than was lost in all of the recent compliance scandals combined [19].

So, strategy is important. However, it is not necessarily the glamorous function that only highly paid consultants can deliver. Ever since seminal works by strategy scholars such as Henry Mintzberg, strategy has been seen as a lot less as clever planning and a lot more as juggling a number of competing priorities and conflicting goals in face of execution and operational challenges. Indeed, strategy and strategic management turn out to be a mundane and organic effort that unfolds in day‐to‐day activity.