Effective Project Governance: The Responsibilities of Senior Management

Strategic projects that aim to create organisational change often have more stakeholders and are more complex, lengthy, and costly than just a few years ago. And although they are more crucial than ever, their governance, a major responsibility of senior management in overseeing their project managers’ decisions, appears to be lacking. Too often, top management fails to see the probable impact that environmental changes may have on their marketing, operations, R&D, financial, and organisational projects. The actions that need to be taken during the narrow “window of opportunity” to ensure the delivery of the benefits expected from the project cannot be simply relegated to the project specialists because their vision and authority are limited. Environmental changes may come from many sources, both external like changing the tastes of customers, new competitors, technological changes in products and services, new regulations by government authorities, and internal like changes in either the senior managers themselves or their priorities. Also, even senior managers may exhibit behavioural quirks that can affect taking action on projects, such as optimism bias, underestimating risks, overconfidence, anchoring bias, and complacency. A common danger is that these psychological biases commonly arise when the project initially appears that it will be successful in terms of its cost, schedule, and scope, rather than its benefits delivery. In this chapter, we describe these problems and suggest areas for senior managers to monitor, including themselves, when governing their projects to ensure realisation of their intended benefits.