A survey of Australian chief executives and other senior managers lays the blame for failed major projects – such as big-ticket infrastructure items – on poor project governance.
New research by Caravel Group and Melbourne Business School has found major project governance teams are dysfunctional, lack the skills and experience to govern major projects, exhibit poor corporate behaviour, are conflict-ridden and rarely have their performance measured or reviewed. Project success rates in Australia were found to be on average 40 to 50 percent, and while blame for failure has traditionally been laid at the door of the project management team, it was found that most of the fault actually lies with the project governance team.
Project management teams focus on creating the deliverables in accordance with the scope of work. They manage the people, money and resources and all other facets for delivery and report to the project governance team. Aside from monitoring progress and supporting the project management team, the project governance team should focus on the strategic intent of the project and delivery of the value promised in the business case. Project governance, therefore, encompasses authority, accountability, stewardship, leadership, direction and control.
“Too many governance teams are stacked with ‘stakeholders’ to secure buy-in rather than people with proven ability to govern projects,” Graeme Cocks, Melbourne Business School associate professor, states. “These people are often heavily conflicted and have no accountability for their project governance role.”
When measured against nine basic elements for successful project governance the respondents deliver an average score of only 24 percent. “The most glaring omission is lack of an approved governance plan – these were absent 87 percent of the time,” Paul Myers, Caravel Group director and CEO, states.
Teams also performed badly in ensuring zero conflicts of interest, adequate delegated financial authority, and understanding the difference between consultants, solution and project delivery SMEs. “Our findings demonstrate that a major rethink and reform of project governance practices in Australia is required,” Myers concludes.