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Project governance builds trust and confidence in project management. While there are many ways to approach governance, most organizations rely upon a Project Management Office to perform this function.

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Quick reference

Project Governance

Project governance is the organizational institutionalization of a project management methodology and the compliance with that methodology.

When to use

Large organizations with many projects find a need for governance to improve communication and project performance.  Effective organizational project governance requires a Project Management Office (PMO) to maintain the methodology and ensure compliance.

Instructions

Project governance ensures that all project teams and stakeholders are following the project management methodology.  This standardization simplifies some aspects of project management (planning and reporting) although it can become bureaucratic and burdensome if the methodology is not flexible and responsive to the unique needs of each project.

The governance approach will normally consist of four elements:

  • Alignment of project resources in accordance with approved project plans. This element ensures the organization understands its commitment to the project team and the team understands the boundaries of resource application.
  • Project risk identification and reduction.  This element ensures the project team is proactively seeking to identify and reduce risk.  It includes the involvement of project stakeholders in risk reduction/mitigation approaches.
  • Project performance with respect to project goals.  This element includes ensuring that SMART goals are established and that the project deliverables are designed to demonstrate the achievement of the goals.  It also includes the activities by stakeholders and the PMO to track the progress towards achieving those goals.
  • Communication between project team members and stakeholders.  This element ensures regular communication between the project team and the senior stakeholders who defined the project goals and funded the project.

Effective governance provides project management structure for both project managers and the rest of the organization, in particular senior management.  This allows all parties to manage expectations and clarify roles and responsibilities. An important benefit is the elimination of the “Lone Wolf” project manager who operates outside the methodology and often creates havoc in the organization because no one knows what to expect from this person and their team.

A small organization with only a few projects maintains governance as part of project planning, control, and stakeholder communication.  Each project can be unique and still be adequately supervised by senior management.  However, in large organizations, a PMO is normally used for project governance.  There is no standard for what a PMO is or does, but they typically can be characterized as one of three types.  Your organization needs to decide which type is best suited to your organizational culture and business needs.

Subject Matter Expert (SME) PMO

The SME PMO is normally a one-person organization.  The SME maintains the procedures and templates that comprise the methodology.  The SME will also act as a coach for a project team or stakeholders if they require it.

Oversight PMO

This PMO is normally a small team of individuals who are project management SMEs.  They maintain the procedures and templates of the project management methodology.  In addition, they often chair or run the management reviews, stage gate meetings, and technical reviews.  They do quality audits on the projects to ensure that the project teams are using the methodology correctly.  They often create and maintain dashboards or summary reports for how all projects are progressing.

Leadership PMO

This PMO is really a project department.  In addition to doing everything that the other two types of PMOs do, in this case, the Project Leaders and often the Core Team members are assigned to this organization.  The PMO manages the project resources in addition to managing the project management methodology.

Definitions

Project Governance: “The alignment of the project objectives with the strategy of the larger organization by the project sponsor and project team. A project’s governance is defined by and is required to fit within the larger context of the program or organization sponsoring it, but is separate from organizational governance.” PMBOK® Guide

Project Management Office (PMO): “An organizational structure that standardizes the project-related governance processes and facilitates the sharing of resources, methodologies, tools, and techniques.” PMBOK® Guide

Hints & tips

  • Good governance assists the project team to identify and resolve issues when they are small and not wait until they become disasters.  Bad governance instills fear in projects because it is focused on punishment.
  • PMOs have become very popular recently.  However, some have missed that their role is to improve project performance, not just regulate it. 
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  • 00:04 .Hello, I'm Ray Sheen.
  • 00:05 I'd like to talk with you now about project governance.
  • 00:09 The Project Management Body of Knowledge, the PMBOK guide,
  • 00:12 defines project governance as the framework, functions, and processes that
  • 00:16 guide project management activities in order to create a unique product,
  • 00:20 service, or result to meet organizational, strategic and operational goals.
  • 00:24 Wow, that's quite a mouthful.
  • 00:26 So what does it really mean?
  • 00:27 There are four elements associated with project governance.
  • 00:31 The first element is one of making sure the resources are aligned
  • 00:35 against the approved projects.
  • 00:37 There are no stealth projects going on.
  • 00:39 People and equipment are being used on the projects to which they are assigned.
  • 00:43 The second is risk identification and risk reduction.
  • 00:47 The organization considers both project and organizational risk and
  • 00:52 implements plans to address it.
  • 00:54 The third is that projects are evaluated against their approved performance
  • 00:58 goals typically found in the charter.
  • 01:00 This means that the project performance is tracked and that there is a change
  • 01:04 management process in place whenever the goals or charter would be updated.
  • 01:09 Finally, there is a regular meaningful communication between the project team and
  • 01:14 stakeholders.
  • 01:15 Any mode of communication is okay as long as it works.
  • 01:19 Project governance then is a way the organization ensures that projects will
  • 01:23 be managed and that they will incorporate approved best practices,
  • 01:27 increasing their probability of meeting the project goals and objectives.
  • 01:31 A good governance approach impacts the way projects are managed.
  • 01:35 It provides guidance for project managers and holds them accountable to the process,
  • 01:40 charter, and any required project management methodology elements.
  • 01:44 It also provides guidance to team members.
  • 01:47 This includes both what they should be doing but
  • 01:50 also what they should not be doing as a project team member.
  • 01:53 I don't mean the details of the project plan but rather,
  • 01:56 how they organize their work and communicate within the team.
  • 01:59 Governance also applies to stakeholders and managers.
  • 02:03 They can't arbitrarily change the project or resources,
  • 02:06 they must follow the framework and the process.
  • 02:08 In addition, governance creates expectations that the team will be
  • 02:12 following the organization's best practices and procedures.
  • 02:16 It builds confidence for
  • 02:17 the organization that the project team is doing the right things.
  • 02:21 This helps the organization guard against the Lone Wolf project manager who defies
  • 02:25 the organization's policies, procedures and practices.
  • 02:29 Good governance quickly exposes this problem.
  • 02:32 Another value from governance is that it provides a framework for
  • 02:35 assessing projects and showing that they are being managed well.
  • 02:39 I worked with an organization at one time that did not have a governance function.
  • 02:43 Project managers were evaluated on how well they fixed problems.
  • 02:48 Unfortunately, the good project managers avoided problems and
  • 02:51 corrected them when they were still small.
  • 02:53 So it wasn't obvious that they were good at fixing problems because the problem
  • 02:57 never made it to the attention of the senior management.
  • 03:00 It was only the project managers who lost control of their projects and
  • 03:04 then regained control who were recognized for their ability.
  • 03:07 Eventually, all the good project managers left the organization since
  • 03:12 managing a project well was not recognized or rewarded.
  • 03:15 One final comment about effective project governance.
  • 03:19 It will be consistent with the organization's culture.
  • 03:22 The oversight and methodology will reinforce the organization's values and
  • 03:27 norms, not create barriers and frustration for the team members and stakeholders.
  • 03:32 Governance is commonly implemented in an organization through a project management
  • 03:37 office.
  • 03:37 The Project Management Body of Knowledge, the PMBOK guide,
  • 03:41 defines a project management office as an organizational structure
  • 03:44 that standardizes the project-related governance processes and
  • 03:48 facilitates the sharing of resources, methodologies, tools, and techniques.
  • 03:52 Since the PMO is normally responsible for governance,
  • 03:55 let's consider the three typical approaches used when creating a PMO.
  • 04:00 The description of PMOs is based upon how they operate,
  • 04:03 not necessarily the specific name or title of the organization.
  • 04:07 There are many books and gurus who can tell you how to set up a PMO.
  • 04:10 These are the categories that I have seen effectively implemented.
  • 04:15 One type is the SME or subject matter expert PMO.
  • 04:18 This type is a single individual.
  • 04:21 Many times this function is an additional duty for
  • 04:23 an individual who already has another role or responsibility within the organization.
  • 04:28 From a governance perspective, their job is to make sure that the procedures,
  • 04:32 templates, tools, and techniques are kept current and up to date.
  • 04:35 When either teams or stakeholders have problems or
  • 04:38 questions about project management or the methodology,
  • 04:42 they turn to this person for some advice and coaching.
  • 04:45 Another type of PMO is the oversight PMO.
  • 04:48 This is normally a small dedicated team.
  • 04:51 From a governance perspective,
  • 04:53 this PMO performs the same functions that an SME PMO performs, but in addition,
  • 04:57 they track project progress based upon input from the project leaders.
  • 05:02 They often create a dashboard for
  • 05:03 communicating that progress to the stakeholders.
  • 05:06 In many cases, they lead or participate in project reviews or
  • 05:10 stage gate reviews or technical reviews.
  • 05:13 They're often performing an oversight role, but
  • 05:16 not an actual implementation role.
  • 05:18 The project leaders and program team members are not part of the PMO.
  • 05:23 The third type of PMO is the leadership PMO.
  • 05:26 This PMO performs all the functions of the SME and oversight PMOs, but
  • 05:30 it now has direct responsibility for
  • 05:32 the projects in addition to project governance of the methodology.
  • 05:36 This PMO includes all the project managers and
  • 05:39 many times will also include individuals from the functional departments who have
  • 05:44 been assigned full time to support projects.
  • 05:47 This PMO is responsible for planning and managing the projects.
  • 05:50 This is often a standalone department on the org chart reporting to
  • 05:54 senior management, rather than just an individual or a small team.
  • 05:58 Whatever type of PMO you're using, whether it's an SME, oversight, or
  • 06:03 leadership PMO, you still need to provide project governance to ensure
  • 06:08 that the methodology is being applied correctly and
  • 06:11 is maintaining a level that is consistent with your business goals and objectives.

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