Understanding Governance

April 29, 2014

My last post looked at developing a grounded definition for the governance of PPP based on established definitions for corporate governance (see: Defining Governance – What the Words Mean) .  This post looks at how the definition can be put into practice to govern an organisation doing projects and programs.

An organisation is governed by its ‘governing body’ which, depending on the nature of the organisation, may be an individual, a small group, a committee or a formally constituted board of directors.  Whilst this statement may seem obvious, it is vitally important! The governing bodies job is to represent the interests of the organisation’s owners and to appoint, direct and oversight the organisation’s management (see more on organisational governance).

Within the organisation, the workers are appointed, directed and overseen by management, management is appointed, directed and overseen by the executive and the executive is appointed, directed and overseen by the governing body. However, whilst the governing body has responsibilities and obligations to both the organisation’s owners and other external stakeholders, within the organisation, the governing body is self-governing and very often self-appointing (in practical effect if not always in theory). And unlike management which is hierarchal, within most Boards the legal assumption, and general practice, is that all of the members are equal .

Governance Structure

 

The key responsibilities of the governing body are:

  • Framing the values and ethics of the organisation
  • Appointing the CEO and other key executives
  • Developing and maintaining the organisation’s strategy in collaboration with the executive
  • Ensuring an appropriate management system is developed by the executive (see more on governance and management systems)
  • Surveillance of the performance of the organisation
  • Stewardship of the organisations resources and assets
  • Taking appropriate actions to support the needs of stakeholders and sustainability (CSR).

The ‘governing body’ cannot achieve these responsibilities alone, management support is essential. However whilst the governing body can and should delegate aspects of the organisation’s governance processes to management and should hold management accountable for their performance, the ‘governing body’ is ultimately responsible for the actions of the organisation it is governing, including the actions and failures of management.

 

A Governance Framework

The Australian Institute of Company Directors (AICD) has developed a comprehensive Corporate Governance Framework to help directors understand their responsibilities and develop the skills they need to serve effectively on a ‘governing body’.  The framework sums up the practices (skills, attributes and expertise) that comprise good director practice as demonstrated by responsible directors.

It is designed as a wheel that has four quadrants depicting the four key areas of focus and engagement applying to every individual director: individual, board, organisational and stakeholder. Each quadrant is divided into a number of slices representing director practices essential to the quadrant’s focus (the different sizes of the slices do not represent the relative importance of the topic).

AICD GovFramework

Together with the AICD’s Guide for Directors and Boards: delivering good corporate governance, which articulates a set of values and principles that underpin the behaviours and practices of sound directorship, the framework provides a solid basis for developing the skills needed to ‘govern’ an organisation.

 

Governing Projects, Programs and Portfolios (PPP)

Whilst the inclusion of stakeholders as one of the four focuses is something I strongly applaud, the governance of PPP is focused in the ‘green quadrant’ and really only connects directly into a couple of the sub-sectors, primarily, implementing the organisations strategy (3.3.1). Therefore, a different frame is needed to understand the governance of PPP in the overall context of governing an organisation.  This reframing consolidates many of the personal responsibilities highlighted in the AICD framework whilst retaining the core tenet that governance is a holistic process and a significant failure within the PPP domain can have ramifications across the entire organisation. The ‘petal diagram’ below is our attempt to reframe the concepts of governance is it is affected by, and affects the PPP domain.

 

The Governance ‘Petal Diagram’

The ‘petals’ seeks to aggregate the various functions of governing the organisation into the five main themes, whilst other aspects of governance such as the performance of the ‘governing body’ and of individual directors have been largely omitted for clarity. The importance of these ‘other’ functions from the AICD perspective of developing the competence of directors is crucially important; the ‘petal diagram’ assumes competent directors and an effectively functioning board and focuses on the board’s role in governing the organization.

The domain of PPP is focused on implementing the changes needed to fulfil the organisation’s strategy and therefore, the processes of PPP are grouped in the ‘Governing Change petal’.  The other ‘petals’ are aspects of governance and management that affect, or are affected by the change processes.

Governance Petal Diagram

This petal diagram is a synthesis of several sources focused on various aspects of governance that are associated with projects, programs and portfolios. The primary source is the AICD ‘Company Directors Corporate Governance Framework™’. discussed above.

Secondary sources are a series of Standards that focus on the governance of projects and ICT, including:

  • Directing change: A guide to governance of project management (APM, 2011) (download from here);
  • AS 8015-2005 corporate governance of information and communication technology (AS8015, 2005); and
  • AS/NZS 8016: 2010 corporate governance of projects involving information technology investments (AS8016, 2010).

Within the ‘petal diagram’ some of the specific references are:

Values — Yellow section

Vision

•   GoPM: Assure the continued development of the organization
•   AICD Value: Leadership

Values & ethics

•   AICD ‘Ethics’ are a key sub-set of values

Corporate social responsibility

•   AICD 4.4 Society and Community

Governing of the Board

•   AICD Segments 1 and 2

 

Principle functions of governance — ‘the petals’

Governing relationships

•   AICD Quadrant 4

Governing change

•   AICD 3.3.1 Strategy
•   GoPM (full document)
•   AS8016 (full document)

Governing the organizations’ people

•   AICD 3.2.1 Executive Team
•   AICD 3.1.3 Culture
•   AICD 3.1.2 Policies and Assurance

Financial governance

•   AICD 3.1.3 Corporate outcomes—financial

Governing viability and sustainability

•   AS8016 1.4.3 (e)
•   Cadbury and others

From within this overall governance framework, the more specific aspects of governing PPP can be established (see more on governing PPP).

 

The two key takeaways from this post should be:

  1. Governance is a holistic process, and the ‘governing body’ has exclusive accountability and responsibility for the effectiveness of the organisation’s governance.
  2. Governance and management are quite different functions.

For more posts on governance see: http://mosaicprojects.wordpress.com/category/governance/

 

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Defining Governance – What the Words Mean

April 21, 2014

Origins

Governance is the act of governing. Originally the province of ‘rulers’ over the last century or so, as power and authority has devolved to various types of organisation, and the influence of organisations within society has grown, the concept of governance has become increasingly important to the people entrusted with leading these organisations and to the stakeholders who own or intact with the organisation, corporation or department.

At the most basic level:

  • To govern is to rule with authority…; to direct and control the actions and affairs of others… and
  • Governance is the controlling, directing or regulating influence.

Therefore organisational governance can be defined as the system by which organisations are directed and controlled. It involves a set of relationships between an organisation’s management, its board, its shareholders and other stakeholders and provides the structure through which the objectives of the organisation are set, and the means of attaining those objectives and monitoring performance.

Project, program and portfolio (PPP) governance
PPP Governance is a sub-set of and integral to organisational governance. Using the two most common definitions of ‘corporate governance’ (corporations being one form of organisation) it is possible to drill down to a meaningful definition of PPP governance as follows:

Definition

The original definitions

1. Sir Adrian Cadbury (1992):
Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place. The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship.

2. OECD (2004 p.11):
Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interests of the company and its shareholders and should facilitate effective monitoring.

Converting the definitions to PPP governance:

3. Cadbury adapted to PPP governance:
PPP governance is the system by which an organisation directs and controls those aspects of its work that will be accomplished through the performance of projects or programs. Boards of directors (or their equivalent) are responsible for the governance of their organisation and for satisfying themselves that an appropriate PPP governance structure is in place. This includes understanding the organization’s strategic aims, providing the leadership to put them into effect, supervising the management of PPP and overseeing the stewardship of the resources used in PPP.

4. OECD adapted to PPP governance:
PPP governance involves a set of relationships between an organization’s board (or its equivalent), its executive management, its PPP management and other stakeholders. PPP governance also provides the structure through which the objectives of the organisation are refined, and the means of attaining those objectives and monitoring performance. Good PPP governance should provide proper incentives for management to pursue objectives that are in the interests of the organisation and its owners and should facilitate effective monitoring.

Distilling the essence of the definitions:

5. Combined elements of the adapted definitions:

  1. PPP governance is the system by which an organisation directs and controls those aspects of its work that will be accomplished through the performance of projects or programs. It involves a set of relationships between the organization’s board (or its equivalent), its executive management, its PPP management and other stakeholders.
  2. The board of directors (or their equivalent) are responsible for the governance of the organisation and for satisfying themselves that an appropriate PPP governance structure is in place.
  3. PPP governance provides the structure through which the strategic objectives of the organisation are refined and the means of attaining those objectives are implemented.
  4. PPP governance also includes understanding the organization’s strategic aims, providing the leadership to put them into effect, supervising the management of PPP, overseeing the stewardship of the resources used in PPP and monitoring performance.
  5. Good PPP governance should provide proper incentives for management to pursue objectives that are in the interests of the organisation and its owners and should facilitate effective monitoring.

6. Key components of the definitions:

  1. Creating the PPP management system including Portfolios / program / project management systems.
  2. Surveillance (PMOs etc., + accountability).
  3. Organisational support (HR, Finance, etc).
  4. Alignment with strategy to create value (primarily portfolio responsibility).
  5. Stewardship = the assignment and acceptance of responsibility for overseeing and protecting something considered worth caring for and preserving by shepherding and safeguarding the valuables of others (ie, the resources assigned by the organisation for use in PPP).
  6. Stakeholders and sustainability.

7. To derive a working PPP definition:

PPP Governance is the creation and implementation of the framework and principles by which the organization’s PPP activities are directed, supported, monitored and controlled.

Where:

  1. Framework = P + P + P management structures (see more on PDC).
  2. Principles = stewardship, sustainability, stakeholders, etc.
  3. Direction = alignment with strategic objectives, etc.
  4. Support = organisational systems, HR, finance, etc.
  5. Monitoring = surveillance, PMOs, etc (see more on surveillance).
  6. Control = tie back to organisational objectives.

Based on these definitions, in my next post the role of PPP Governance as a core component o organisational governance will be discussed.

For other posts on governance see: http://mosaicprojects.wordpress.com/category/governance/

For more Governance Papers see: http://www.mosaicprojects.com.au/PM-Knowledge_Index.html#OrgGov


Practical Project Politics

April 13, 2014

PMI expects project managers to be politically smart and recognises that the appropriate and skilful use of politics and power help the project manger be successful (PMBOK® Guide Appendix X3.7). But what is organisational politics?

no-politicsProject Managers tend to be ‘doers’ that like the action of delivering tangible results, things that have value. Most successful PMs are skilled at managing project sponsors or steering committees and their cross functional teams, and the best are good at navigating complex organizational structures. But, project managers are usually not office politicians and are usually not very good at playing corporate politics.

They see ‘playing politics’ as an undignified form of behaviour where logic, discipline, transparency and loyalty are replaced by deceit, secrecy and subterfuge. And whilst this may be true of some ‘political operators’ everyone in corporate management is involved in organisation’s politics and the biggest mistake a project manager can make is to assume that organizational politics don’t exist.

Project Managers need to understand corporate politics so they can see the warning signs of danger, and can position themselves to survive in politically charged environments. Politics is normal and dealing with it is just another part of an overall stakeholder management strategy.

Organisational politics is neither good nor bad in itself, it simply how power gets worked out on a practical, day-to-day basis. It is about power, influence, and access, and about working with the system to get what you need; which is not necessarily a bad thing.

A good definition of politics is: ‘the use of one’s individual or assigned powers within an organisation for the purpose of obtaining advantages beyond one’s legitimate authority. Those advantages may include access to tangible assets, or intangible benefits such as status or pseudo-authority that influences the behaviour or others’.

‘Good politics’ is about working with the system to achieve positive results and helping to meet or exceed your project’s objectives. It’s about maintaining relationships and getting results at the same time. This can be achieved by finding win-win solutions and working to achieve mature compromises.

‘Bad politics’ is when someone works the system to make themselves look good at the expense of others. Bad politicians are focused on winning at all costs and abusing power systems to impose their will on others. This usually result in win-lose situations that can be highly de-motivating, destructive and dangerous to all involved.

Some traits of political players you need to be wary of include:

  • Self Promoting: they take credit even when they have not earned it
  • Manage up: they buddy only with power brokers
  • Spread gossip and talk badly about others who are not present
  • Distance themselves from failure
  • Throw bombs into situations and then retreat into the shadows
  • Extract information and opinions, without sharing their own.

Some of the ways to counter these traits and position yourself for success include:

  • Consistently meeting and/or exceeding the expectations of your stakeholders. Delivering results brings you organisational credibility that is not easily negated by the words and actions of others. This is best achieved by proactive stakeholder management!
  • Learn the political landscape of your organization. Be aware of how politics are unfolding around you. Determine the political players in your organization. Observe their actions and tactics. Anticipate what they will do next. Identify the power blocks and alliances that exist. The more you know, the better you can determine the course of action that is best for you.
  • Actively manage your reputation. It’s ok to talk about your successes and to self-promote in a positive way. And, also promote your team and/or the people around you who helped with the success.
  • Do not let negative talk fester. If someone engages in negative talk about you, your team or your accomplishments confront them with facts – address it quickly.
  • Don’t take sides unnecessarily. Try not to become part of one of the existing power blocks, this often limits your options going forward. Instead keep your options open.
  • Create your own alliance with people who are aligned with your values and engage in ‘good’ politics. Recruit people into your circle of influence by offering them support, encouragement, information, input, feedback, resources and access to others in your network. Earn their trust and respect through positive deeds and actions. Building your network will take time but it is worth the effort
  • Don’t denigrate others. It’s easy to be trapped into a discussion where negative sentiments are being expressed about someone, even if you do not agree. Say, “I’m not comfortable talking about ‘Person X’ when they are not in the room. If you have an issue with them I suggest you talk about it with them directly.”
  • ‘Keep your friends close, your enemies closer’. Sun Tzu, the author of the Art of War, understood that you have to be able to think like your enemies if you want to defeat them. So don’t shut out those who practice “bad” politics – rather, engage them, try to understand their perspectives, and learn their patterns. The more you know about them, the better you can manage your relationship with them.
  • Remember, it’s not personal. Stay detached, don’t let your emotions dictate your actions, find support in your network, stay positive and, focus on delivering positive results.
  • Think and look for Win-Win solutions. Win-lose outcomes will create enemies.
  • Be true to your core values and principles. If a person or action does not fit within your core values you need to reconsider your path going forward.
  • Be trusting but expect betrayal. Pragmatic trust is the key to successful engagement, if you are not prepared to trust people, they will not trust you (see more on The Value of Trust).

Organisational politics can be an ugly game in organisations that are not well lead and governed, often played by those whose only objective is complete, selfish victory (for one effect of this see: Poor Governance creates complexity). To avoid project failure, we have to recognise those who engage in bad politics, protect ourselves and our teams from them, and steer clear of situations where we might violate our core values.

To succeed as project managers, we need to link good politics with good stakeholder analysis and  management and proactively use one’s individual or assigned powers within the organisation to obtain the support and resources needed to achieve your project’s objectives and ‘meet or exceed’ your stakeholder’s expectations. In reality, this is the only way you can succeed.


Using negative feedback

April 5, 2014

In January, my blog The art of giving feedback looked at the topic of providing actionable feedback on performance to your team members. The post suggested all feedback should be actionable and most should be positive. However, it is inevitable that some feedback has to be critical in nature and ways to deliver this to achieve the maximum effect were discussed.

What was not discussed in January, the focus of this post, is how we can make use of negative feedback directed to us! Every manager and team leader has a supervisory role that requires them to offer feedback to their ‘team’ (or direct reports), whilst also being part of their manager’s team making them the recipient of feedback from their ‘bosses’ as well as from peers and in more open organisations subordinates. In short we all give feedback and we all receive feedback!

Receiving positive and constructive feedback is a pleasant experience that lifts our spirits and increases motivation and commitment; it’s easy and enjoyable. Making positive use of negative feedback is more challenging, particularly if the feedback is not well constructed, but is also the key to real improvements in your performance. You need to listen then act (see more on Active Listening).

The starting point is to accept that the negative feedback with openness and gratitude, even if you do not agree with it. You must keep in mind this type of feedback is intended to relay information that may be useful to you as long as you hear what is being said. What you then choose to do with the information is your decision, to be made later; but before you can decide on a course of action, you have to have listened to, and understood, the full message. After you have listened to the feedback say, ‘thank you’ and ‘I appreciate you taking the time to bring this to my attention’.

But be careful, unfair and overly negative feedback is used as a tool by bad managers and workplace bullies to demean and control others and requires a more robust approach discussed in Dealing with difficult people. You should not put up with this kind of attack, if you do, it will persist. However, even whilst ‘pushing back’ against this type of attack, there may still be opportunities to learn and grow – it’s sweet revenge on the bully to be able to use their ‘put-downs’ to help you advance your career.

So regardless of the intentions of the person providing the criticisms, the ways to turn negative feedback into a positive learning opportunity include:

1. Own it. Accept the feedback and make any necessary changes. Do this by turning the feedback into a list of actionable items and write down a SMARTER solution (see more on SMARTER) for each piece of negative feedback. Then work your plan.

2. Assume good intentions. Don’t automatically jump to the conclusion that the person providing negative feedback is ‘out to get you’, and remember that they are (or should be) criticising your work, not you as a person. Once you’re able to do this, it is much easier to make positive changes.

3. Clarify expectations and goals. Use the negative feedback as a chance to clarify your manager’s expectations and as an aid to understanding your role.

4. Build rapport. Use the negative feedback loop as an opportunity to bond with your manager. Their job is to help you develop, whilst yours is to bring results. Schedule regular meetings to discuss your progress and goals; get to know your manager and understand what he or she values most in an employee. This is your chance to show that you’re open to change and capable of growth, and is a great opportunity to show that you are mature, cooperative, and able to make necessary changes.

5. Get a mentor. Use this as an opportunity to find a mentor or strengthen your relationships with co-workers. If you’re in a situation where you need help or support—this is a great time to build those relationships.

6. Use reflective learning. This as a good time for some serious self-reflection. Use the opportunity to think about all the ways in which you can improve your behaviour and attitude.

7. Appreciate the attention. Remember that all constructive feedback (even negative feedback) is a sign of interest and a sign that people want to help you do better.

None of these ideas are particularly difficult to implement once you make the initial transition from seeing negative feedback as an ‘attack on you’ and reframe the criticism as an opportunity to learn and improve your performance. Achieving this needs ‘persilience’ but is well worth the effort (even with bad managers) – the alternative is to become negative and defensive which can only lead to dissatisfaction and eventually leaving or losing your job.