How to Establish a Project Governance Process

By Paul Borders, CMRP, Life Cycle Engineering

It had been a long two days at the corporate headquarters and Lesley had a lot of information thrown at her but the statement from her boss, the VP of Manufacturing, is what kept echoing in her head. 

“We are very disappointed in your team’s ability to execute on its commitments.”

It wouldn’t have stung so much if it was incorrect. As a Plant Manager, Lesley had the same concerns her boss had vocalized. She tried her best to follow up on projects and initiatives in the midst of the daily whirlwind of activity, but it wasn’t effective enough and time was passing quickly. Three quarters of the year was gone and her team had only spent five percent of its capital budget. Several corporate initiatives that her team had committed to implement had yet to start. Most troubling, some projects that were critical to implement because they drove financial gains had been started, but for a variety of different reasons the projects were not completed nor did they deliver financial gains.

Days turned into weeks and weeks into months and generally encouraging her team to execute wasn’t delivering the results. Hearing “We are very disappointed in your team’s ability to execute on its commitments,” meant she had to do something different. She didn’t know what to do next.

An Extremely Common Problem: Poor Project Execution

Many companies struggle with this. I’ve worked with scores of organizations over the past 14 years and I can count on one hand the number of sites that were excellent at project execution. Most of a team’s bandwidth is consumed just executing the core mission of their day-to-day work. The tendency for teams to overestimate what can get done results in commitments made to their leadership and to each other – commitments that aren’t met and result in disappointment and frustration. The strongest organizations I’ve worked with have a simple but thorough process to manage continuous improvement projects, capital projects, and corporate projects that are mandatory to implement.

The Elements of a Project Governance Process

A Project Governance Process enables an organization to oversee and manage a portfolio of improvement projects simultaneously. At its core, what this process does is very simple. A leadership team agrees that a problem or opportunity needs to be addressed and it is willing to commit some of its resources to execute the project. It then assigns a significant leader to be the Project Champion and assigns a Team Leader. Together they scope out the project and create a timeline. Then the Team Leader gives a quick update every week or so on how the project is moving forward. The power of the Project Governance Process lies in its simplicity. Let’s look at the main program elements:

Project Charter - The Project Champion and Team Leader develop a project charter that answers basic questions including:

• What is the business case or reason to do this project?
• What is the current situation?
• What will things look like when the project is done?
• How long will it be before the project is complete and what are some key milestones along the way?
• How are we going to measure if the project is successful?

Project Plans – A project plan must be put together that includes basic tasks, dates, and who is going to execute the tasks. These project plans could be as simple as a list of tasks in a MS Word document, a more complex arrangement in MS Excel using the Tactical Implementation Plan format, or in more complex projects, a MS Project file.

Chartered Project Update Meetings – Once every week or two, leadership checks in for a quick project update report. The update is a simple, one-slide update that conveys basic information.

In this example you can see the important elements:

• A box at the top to indicate a self-reported status of the project:
  • Green – If the project is on track to deliver the results, and on time
  • Yellow – If the project is encountering some significant headwinds or is experiencing temporary setbacks
  • Red – If the project is in trouble and not making progress
• A section titled “Wins over the Past Week” where the Team Leader discusses progress made since the last update meeting.
• A section titled “Challenges Encountered” where the Team Leader talks about rough spots, setbacks, or problems.
• A bottom section, which drives accountability for execution: Team Leaders must “check off” that they have executed on “Last Week’s Key Items” and identify “Key Items to Execute over the Next Week.”

Program Facilitator – In this role, an individual runs the Chartered Project Update meetings. They also help administer the program in important ways:

• Follow up with Team Leaders that aren’t following the process
• Coach newcomers to the process and help them understand expectations
• Follow up with Project Champions and Team Leaders on problem areas like weak execution by a Team Leader or perhaps inadequate preparation for a Chartered Project Update Meeting.

The Program Facilitator influences the strength of the whole process. If your facilitator is very fastidious about program elements, that attention to detail will benefit your whole program. If your facilitator is less conscientious, your program will be less successful.

Critical Leadership Behaviors – It is vital that important business leaders and Project Champions at the site be very consistent with their behaviors exhibited at the Chartered Project Update meetings. It’s important that they:

• Be on time for the meetings
• Be engaged in the discussion…no phones or laptops
• Verbally reward Team Leaders whose project execution is solid
• Verbally provide negative feedback to Team Leaders who aren’t executing
• Provide help and resources to overcoming inevitable barriers that projects encounter

How to Implement a Project Governance Process

I recommend implementing this structure in two phases. The

Phase 1: Stand up the program. Establish charters and update meetings, and create expectations for a spirit of candor and accountability in the overall program.

1. Inventory current projects
2. Decide which ones should be included in the Chartered Project process. Projects that should be included are those which:
   1. Require a team to be formed for execution
   2. Are complex, involving multiple functional areas and impact the way people work
   3. Have a business case with demonstrated value
      Note: It’s not recommended to include department-level projects or projects that are just simple enough to “go do.”
3. Educate your team on the overall process overall. Start with a couple of key projects and teach them by doing.
4. Have your Program Facilitator follow up and coach because people will not be good at it in the beginning.

Phase 2: Increase the level of program integrity and intensity. The items in Phase 2 increase the level of rigor and professionalism in your process.

1. Start driving for more robust business cases that include ownership and alignment with your financial personnel.
2. This process often reveals the poor project planning skills that many of your team members possess. You may need to provide some project planning training or online courses for your staff because it’s the rare person that is just naturally good it.
3. Implement metric reporting. This can be done by secondary reporting charts where key project metrics are identified that should get better as a result of the project being done.

Common Mistakes to Avoid

There are some common mistakes that teams make when using this process:

Cancelling Update Meetings – It’s critical for the leadership team to conduct these meetings consistently on the agreed-upon cadence.

Tolerating Verbal Updates – Sliding to a verbal update undermines so much of the program’s integrity. The project update slide should take less than five minutes to prepare. Insist that your team leaders prepare for the meeting.

Modifying Update Slides – Team leaders will often want to make changes to the format of the standard update slide to suit their own preferences. Maintain the standard slide format and when you see modifications, call them out and reinforce your preference for the standard update slide layout.

Benefits from Establishing a Project Governance Process   

The beauty and effectiveness of this process are found in its simplicity. Once you’ve set up this structure and are executing well, I promise that you will see the following benefits.

Your team members that are good at execution will be highly visible – Not only will they be visible to the leadership at the site, but they will also be visible to members of your team who are NOT good at executing. This often creates “performance envy” and it drives people to “up their game.”

Your team members that can’t execute become visible – While this is a painful benefit to obtain, you will absolutely see where important members of your team cannot execute projects. They may be critical to you for the execution of your day-to-day processes, but they cannot execute on things that make the business better. It is important for you to have Team Leaders that can start and complete projects. Knowing which ones can and can’t will serve your site better.

You will see areas where you need to develop your people – Because so many basic business skills get caught up in the net of executing this system, you will see areas where your team needs help. It could be in time management, ethics, project-planning skills, or even public speaking or computer skills. This process puts many things on display where it previously had been hidden.

Now, let’s hear how Lesley fared once she implemented a Project Governance Process:

Lesley beamed with pride as she finished up her presentation. Her boss, the VP of Manufacturing, said “I can’t tell you how excited we are about the turnaround we’ve seen in the results over the last two years at your site. It’s clear that your leadership has taught your team how to execute on its projects and commitments. You are setting the bar high for the other plants! And we’re counting on you to teach our other Plant Managers how you and your team have become experts at execution.”

Paul Borders, CMRP, a Senior Principal Consultant for Life Cycle Engineering (LCE) and a Prosci-certified change management professional, has more than 20 years’ experience as a strategic manufacturing manager. You can reach Paul at pborders@LCE.com.