Governance System Outputs

November 24, 2012

In a number of blog posts and White Papers we have argued that:

  1. Governance and Management are separate systems and have separate functions
  2. Governance is the exclusive responsibility of the ‘governing board’ of the organisation
  3. The three functions within any organisation are:
    • the governance functions that establish the objectives for the organisation;
    • the management functions that direct and organise the work needed to achieve the objectives; and
    • the productive functions performed by workers to create the knowledge or products required to fulfil the objectives.
  4. PPP Governance is an integral part of organisational governance (not something separate)

These systems and functions are discussed in depth in WP1084 – Governance Systems & Management Systems and two linked White Papers on Corporate Governance and PPP Governance.

In my last post I looked at the communication challenges faced by the governing board, this post looks at the unique outputs created by the governance system.

As a starting point for the discussion, if governance and management are different systems, they should have different functions creating different outputs. We believe this is the case.

The functions of management were defined by Henri Fayol (1841 – 1925) in his general theory of business administration as:

  • Forecasting.
  • Planning.
  • Organising.
  • Commanding.
  • Coordinating.
  • Controlling.

Inherent in these functions are decision making and the primary output from management can be defined as information and instructions that have to be communicated to others. The communication is firstly to the workers so they understand what has to be produced, where and when; secondly to the governing body to provide assurance that the right decisions have been made and the right things are being produced in the right ways applying the organisation’s policy framework correctly.

The governance system operates at a higher level and is responsible for governing the organisation to create sustainable success for the organisation’s owners. This is of necessity, a multi-faceted process that requires the careful balancing of different, frequently contradictory, objectives from different stakeholder groups.

The governance function has two key aspects; the first is deciding what the organisation should be and how it should function. These governance decisions are communicated to management for implementation and the primary outputs from this part of the governance system are:

  • The strategic objectives of the organisation framed within its mission, values and ethical framework.
  • The policy framework the organisation is expected to operate within.
  • The appointment of key managers to manage the organisation.

These aspects are best developed using a principle-based approach that recognises and encourages entrepreneurial responses from all levels of management.

The second aspect of the governance system is oversight and assurance. The governing body should pro-actively seek assurance from its management that the strategic objectives and policies are being correctly achieved or implemented. The assurance and oversight functions include:

  • Agreeing the organisations current strategic plan (in conjunction with executive management). The strategic plan describes how the strategic objectives will be achieved.
  • Suggesting or approving changes to the strategic plan to respond to changing circumstances.
  • Requiring effective assurance from management that the organisations policy framework is being adhered to.
  • Requiring effective assurance from management that the organisations resources are being used as efficiently as practical in pursuit of its strategic objectives.
  • Communicating the relevant elements of the assurances received from management to appropriate external stakeholders.
    • Assurance to the organisation’s owners the strategy and policies are being adhered to by management and the organisation as a whole.
    • Assurance to a wider stakeholder community (including regulatory authorities) the organisation is operating properly.

As my previous post suggested, the governance communication challenges are significant! However, by clearly defining the different roles of governance and management the functioning of an organisation will be enhanced, and the communication challenges will be reduced.

Communication in governance

November 20, 2012

The effective governance of an organisation relies on effective communication between the organisation’s ‘governors’ and ‘managers’. If the communication fails, governance fails!

Governance is the exclusive role and responsibility of the governing body, in a commercial corporation this is the board of directors, and is their equivalents in other types of organisation. The role of governance is a subtle balancing of competing interests to optimise the long-term value of the organisation (see more on corporate governance). The outcomes from governance decisions are policies and strategies designed to guide the development of the organisation and balance the interests of its various stakeholder groups.

Management’s role is to implement the strategy within the policy framework defined by the ‘governors’ and to assure the governing body their policies are effective and are being implemented properly to achieve the organisation’s strategic objectives (or highlight issues).

The governance communication loop starts with the governing body communicating its strategy and policy decisions to management and is closed once the governing body receives assurance that this has occurred and is satisfied with the feedback. This process is not a one-off loop; continual adjustments are needed to the strategy, the policy, and their implementation to deal with changes in the environment, learned experience and the actual effects of the work undertaken.

The communication challenge is dealing with shades of opinion and expectation in areas where there are very few empirical measures. Let’s look at one practical policy area to demonstrate the challenge: optimising risk.

The role of the governing body is to develop a policy that defines the optimum risk profile for the projects and programs the organisation intends to undertake. Accepting too little risk leads to stagnation, too much risk may lead to failure. What is needed is a policy that accepts some long term, high risk projects in the expectation of higher rewards, and some low risk lower return projects that keep current operations functioning. The risk policy would also need to consider different classes of risk including safety, reputational and financial risks as a minimum.

Good practice suggests the best approach to governance is principles based rather than rules based so the policy should define the principles that management will apply in the management of risk.
Communication challenge #1 – this policy needs to be meaningful and then communicated to management in a way that can be implemented!

Having understood the policy intent, management then have to create the management systems to implement the policy by developing processes, procedures and guidelines that are capable of effectively delivering the policy objectives and communicate these systems to all levels of the management structure.
Communication challenge #2 – communicating the existence of the systems and way it is to be interpreted and implemented to other levels of management!

Ultimately individual managers (or committees) have to make decisions about specific projects and programs to implement the policy. Some of the decision points include:

  • Deciding which project and programs to select for investment at the portfolio level.
  • Deciding what risks can be accepted, and which risks require either contingencies to be created or the project changed to mitigate the risk at the project oversight level (sponsor or PCB)
  • Deciding what emerging risks need escalation to more senior management, and how quickly, at the project management level.

Communication challenge #3, – communicating the decisions correctly so they are properly implemented.

Each of the specific management decisions made within the policy framework will have an effect. Assurance systems need to be in place to observe the outcomes of these decisions, with two primary objectives, firstly by observing the outcomes identify ways to improve the current practices and enhance the implementation of the current policy. Secondly to feed back to the governing body information on how the current policy is being implemented and suggestions for improvement.
Communication challenge #4 – understanding exactly what is occurring as a result of the management decisions (at all levels – this is a multi-faceted challenge).
Communication challenge #5 – providing effective feedback and recommendations to both senior management and the governing body.

None of these communications are simple. Decisions need to be made about what’s significant and what’s business as usual in an environment where very few of the matters under consideration have simple yes/no, right/wrong answers. An assessment of ‘significant’ depends on the perspective on the observer, not an empirical value. $500 may be significant to one manager $50,000 significant to another.

Given risk is only one facet of governance and similar communication loops are needed for all of the different facets of the governance framework, the magnitude of the communication challenge can begin to be understood. It therefor follows that it is a governance responsibility to ensure these critical communication channels are working effectively, which in turn requires a communication focused strategic intent, appropriate policies and for management to allocate adequate resources to achieve the intent.

PM World Journal up and running

November 16, 2012

PM World Journal is a free monthly e-Journal that is progressively filling the void left by the closure of PM World Today in March. You can read the journal and download articles of interest at

The November edition of the PM World Journal was published late last week, and included my article ‘Communicating Upwards for Effect’, introduced by Prof Darren Dalcher.

Other points of interest in the November edition include:

PM World Journal fills an important gap between the heavy-weight, peer-reviewed academic journals and the short shelf-life news sites and magazines. If you have something of value to contribute, the call for Papers for December and January editions is open at –


November 13, 2012

The recently released Sixth edition of the APM-BoK consists of four major sections: context, people, delivery and interfaces. Typical ‘hard’ project management processes such as scope, schedule, cost, resource, risk, integration and quality comes in the section focused on delivery. This is after the section concerned with people and interpersonal skills and the first area featured in the APM-BOK under the people area is communication. The APM-BoK recognises that communication is fundamental to the project management environment, and makes a very powerful statement: “None of the tools and techniques described in this body of knowledge will work without effective communication”.

To an extent the PMBOK is playing ‘catch-up’ with other key standards including the Association of Project Management (UK) Body of Knowledge (APM-BoK) 6th Edition and ISO 21500. The good news is all three standards now see identifying the important stakeholders in and around a project or program and then communicating effectively with each stakeholder as the fundamental driver of success.

The recently released Sixth edition of the APM-BoK consists of four major sections: context, people, delivery and interfaces. Typical ‘hard’ project management processes such as scope, schedule, cost, resource, risk, integration and quality comes in the section focused on delivery. This is after the section concerned with people and interpersonal skills and the first area featured in the APM-BOK under the people area is communication. The APM-BoK recognises that communication is fundamental to the project management environment, and makes a very powerful statement: “None of the tools and techniques described in this body of knowledge will work without effective communication”.

The PMBOK® Guide 5th Edition has followed PMI’s standard practice of retaining existing chapters and adding new sections at the back so the positional prominence in the APM-BoK is not possible. However understanding the changes between the 4th and 5th Editions and comparing these to ISO 21500 does show the extent of the increased focus in the PMBOK on communication and the stakeholders you communicate with.


This is a new section in the PMBOK® Guide 5th Edition (Chapter 13). It is based on two processes moved from the communication section of the 4th edition and has been expanded.

Identify stakeholders is a beefed up version of the same process in the 4th Edition, focused on understanding who the project’s stakeholders are.

Plan Stakeholder Management is a new process that describes how the stakeholder community will be are analysed, the current and desired levels of engagement defined and the interrelationships between stakeholders identified. It highlights the fact that levels of engagement may change over time.

Manage stakeholders remains basically the same as in the 4th Edition and is similarly defined in ISO 21500.

Control Stakeholder Management is a new process that ensures new stakeholders are identified, current stakeholders are reassessed and stakeholders no longer involved in the project are removed from the communication plan. The process requires the on-going monitoring of changes in stakeholder relationships the effectiveness of the engagement strategy, and when required, the adaption of the stakeholder management strategy to deal with the changed circumstances.

As with ISO 21500, the early parts of the PMBOK discussing the management or projects in organisations also has a strong emphasis on stakeholders (Chapters 1, 2 and 3).


This section of the PMBOK® Guide 5th Edition has been consolidated and expanded and is very similar to ISO 21500 in its effect.

Plan Communications remains basically unchanged, the key input is the stakeholder analysis.

Manage Communications is a new process that amalgamate the 4th Edition processes of Distribute Information and Report Performance, and in doing so removes a lot of unnecessary confusion. This new process goes beyond the distribution of relevant information and seeks to ensure that the information being communicated to project stakeholders has been received and understood, and also provides opportunities for stakeholders to make further information requests. ISO 21500 has an interesting additional function (not in the PMBOK) which is the management of the distribution of information from stakeholders to the project in order to provide inputs to other processes such as risk management.

Control Communications is a new process that identifies and resolves communications issues, and ensures communication needs are satisfied. The outputs are accurate and timely information (resolved communications issues) and change requests, primarily to the communication plan.


Communication is the means by which information or instructions are exchanged! Communication is the underpinning skill needed to gather the information needed to make project decisions and to disseminate the results from all of the traditional ‘hard skills’ including cost, time, scope, quality and risk management. Good communication makes these processes effective, whereas poor communication leads to misunderstood requirements, unclear goals, the alienation of stakeholders, ineffective plans and many other factors leading to failure

The common theme across all three standards is that communicating the right information to the right stakeholders in the right way (and remembering communication is a two-way process) is fundamental to success. The basic requirement is to deal effectively and fairly with people, their needs, expectations, wants, preferences and ultimately their values – projects are done by people for people and the only way to influence people is through effective communication.

Project communication skills include expectation management, building trust, gaining user acceptance, stakeholder and relationship management, influencing, negotiation, conflict resolution, delegation, and escalation.

What’s really pleasing to me is how similar these ‘standard’ requirements are to the ideas embedded in my Stakeholder Circle® methodology, books, blogs, White Papers and tools. I have no idea how much influence my writings have had on the various standards development teams but it is pleasing to see a very common set of ‘best practices’ emerging around the world. Now all we need is the management will to implement the processes to improve project and program outcomes.

The Art of Mentoring

November 6, 2012

Mentoring is a vital tool that helps project and program managers advance their careers; whilst we also gain much from the process. But before signing up, understanding how the relationship works will help you decide if the journey is one you wish to undertake, and help you achieve your objectives.

We believe the following factors are crucial to achieving a positive mentoring outcome:

  1. Both the mentor and mentee should do thoroughly prepare for the process, take time to understand the other person and pay proactive attention to building early chemistry and engagement with each other in the first two to three meetings.
  2. The mentee needs to take ultimate responsibility for setting robust objectives and goals that will materially assist his or her career. You may not know the details of how to get you’re your desired outcome but you must have an objective that is specific and measurable so you know when it has been achieved.
  3. The mentor takes the ultimate responsibility for establishing an environment of strong trust, candour and confidentiality, but also one characterised by his or her active listening to the real needs of the mentee. The mentoring assignment needs to be characterised by common values.
  4. Both parties need to set a program of meetings every month, or at least once every six to eight weeks, and be willing to re-set meeting dates to avoid cancellations.
  5. The mentoring process should involve loops of preparation and negotiation to facilitate the confident application and trial by the mentee of strategies and desired practices formulated in the mentoring sessions, followed by reviews and reflective learning.
  6. These loops should be evaluated and enhanced or re-tried as appropriate at subsequent sessions. Any perceived failure to trial, or avoidance, needs to be pursued vigorously by the mentor – the objective is to set stretch assignments to the mentee and help him/her succeed. A mentoring relationship without a bit of ‘tough love’ in the advanced stages is unusual, and unlikely to produce material benefit in the mentee.
  7. The hallmark of a positive and productive mentoring assignment is a well established level of dialogue characterised by patient probing and powerful questioning by the mentor and non-defensive consideration, responses and reflection by the mentee.
  8. The ultimate test of a mentoring relationship is whether it reaches the goal set by the mentee and he or she not only achieves the outcome, but is also confident in their ability to handle it into the future.
  9. When all of the key elements of the ‘goal’ have been reached, the mentoring has done its job and both parties should move forward independently.

As with every relationship it takes two people to make it work and you also need the time and energy to commit to its success. We undertake a limited number of mentoring assignments each year, where we feel the chemistry is right and we can make a real difference, a brief outline is on our website at: Executive PM Coaching & Mentoring  – then if you feel this is an option you would like to follow up, the next step is seeing if the ‘chemistry’ works and setting some mutually agreed objectives.