Solving Bureaucracy: Strategies for Effective Governance
In the end of 2024, I am sure you all get to a conclusion, how much achievements and delays you had by now in your projects comparing to the initial plans.
Let’s hope, you as a leader, this year encountered a situation where one of your teams’ exceeded expectations and delivered exceptional value, prompting you to ask, “How did you achieve that?” Subsequently, you requested that they train the other teams to replicate this success. The successful team then carefully documented each step they took, transforming it into a formal process to be integrated into the organisation governance to apply in 2025.
Now, consider two potential scenarios: The new process could streamline operations, reducing time and costs, enabling other teams to deliver as planned effectively. Alternatively, the anticipated results may not materialize, revealing gaps in the process, or perhaps highlighting that while the process and system are sound, the teams’ mindsets is not there. For instance, the process may inadvertently overburden some teams, imposing pressure to meet tight deadlines. Some teams may struggle with this pressure and prefer longer, more manageable timelines even with more cost to the project. It is a fact, not everyone can handle deadline pressure. We conclude here, that cutting costs and time might not always be the optimal goal. There is a need for balance planning.
Unfortunately, in most private sector and public sector, justifying and approving the luxury of extra time and budget beyond agreed contingencies is challenging. These contingencies usually, far from being “additional,” they are critical components of the planned time and budget. Therefore, this additional budget and time approval are often become a necessary decision, one that management must accept in many situations to avoid a complete loss of the investment spent on the project so far.
It is typical, projects begin with the enthusiasm of delivering on time and on budget. However, they often move from this optimistic scenario to releasing contingencies, and finally, to accepting the need for additional funding for struggling projects. Assuming you have a competent team, and the additional budget request occurs only once, let’s hope the project’s business case still remains positive with the additional cost too.
The above struggle may stem from external factors beyond the team’s control or internal factors. In mature organizations with established PMO systems, these factors are often limited to two primary factors. The first is rigid processes that fail to deliver the planned value. The second is a team that does not fully commit to the organization’s vision, mission, and culture, which ideally motivates them when they wake up on the morning to actively deliver their part until the project’s successful completion.
Addressing process issues is relatively straightforward if you have good understanding leaders. The human factor, however, is more complex, and only fortunate leaders manage to assemble the culturally committed team in most cases.
When a process fails to deliver value, it should be viewed as an enemy to governance rather than its backbone. Such ineffective processes can emerge during PMO implementation, especially when designs are copied from other organizations’ PMOs or created by a team that did not thoroughly study the organization before proposing processes. Similarly, during project delivery, the inability to promptly fix a process can result in significant costs.
I once discussed this issue with a governance expert, noting that the audit process to address such issues can take six to twelve months. I calculated the cost for a six-month period, which amounted to over $2.5 million in direct operational costs, not considering the additional impact of process failure in the other new projects, which in some cases could lead to project failure. This failure could affect crucial projects within the overall development portfolio. For example, after completing a significant infrastructure project like a wastewater treatment plant or a power plant supporting a mega development project, you might find it failing to deliver the agreed goals, thus unable to support the overall development and delayed the development opening and costing more financially and sometimes politically.
It was shocking to hear the governance expert’s response that the current process must be followed, with any suggested manual modifications (if necessary) occurring annually in one release. This is where leadership must challenge the situation and advocate for the suggested changes to be approved by project owners as soon as possible.
In PMOs, it is a fact, that once the PMO governance processes and systems are implemented, admitting the need for change within the first two years is difficult. We have to use the systems and processes for more than two years, even when we know they are not delivering value, and even when we know, project durations range from two to four years from initiation to commissioning. Believe it or not, this is a reality in all established PMOs.
As a leader, you have two options: either get the right people for your PMO implementation from the beginning or get the right people for its delivery, including the team responsible for process improvement.
It is crucial to understand that governance in project management is not just about assurance and following processes in the short project life cycle; it’s about ensuring delivering value in every single process.
Get the people who will deliver value and adjust the process as needed. Typically, your delivery team is busy delivering, so you need the right engineering mindset and experts in engineering and construction management who are also expert on both projects processes and governance to deliver value. I emphasize “engineering team” to avoid involving business graduates or other non engineering graduates who, in many cases, contribute to the problems mentioned above from the beginning.
Wishing you all, successful delivery and achieving all deadlines and approved budget for 2025.