Project, Programme and Portfolio Governance: P3G

By Ross Garland

This publication provides comprehensive and practical guidance. It explains

what effective governance looks like and describes, in easy-to-understand

terms, how to achieve it. With advice that is adaptable and scalable,

P3G provides the knowledge and understanding necessary to design,

implement and operate effective and efficient governance arrangements

for a project or programme, or your organization’s entire change portfolio.

• Language: English
• Publisher: TSO - Ross Garland and Associates
• Release date: Jun 7, 2022
• ISBN: 9780117093775

Book preview

Project, Programme and Portfolio Governance

Ross Garland Adrian Morey

Published by TSO (The Stationery Office Limited), part of the Williams Lea group of companies.

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First edition 2022

ISBN 9780117093768

J003900038

Contents

Foreword

About the authors

Acknowledgements

1Introduction

1.1 Purpose

1.2 Target audience

1.3 Organizational context for P3G

1.4 The benefits of effective and efficient P3G

2What is P3G?

2.1 Projects, programmes and portfolios – a brief introduction

2.2 Defining project, programme and portfolio governance

2.3 Delivery approaches and P3G

3Principles of P3G

3.1 Principle 1: Treat change differently from business as usual

3.2 Principle 2: Ensure a single point of accountability for each project or programme

3.3 Principle 3: Business outcome accountability determines project or programme accountability

3.4 Principle 4: Support the person accountable for a project or programme with a governance board

3.5 Principle 5: Separate project and programme decision-making from stakeholder engagement

3.6 Principle 6: Align investments with strategic objectives

3.7 Principle 7: Maintain the business case

3.8 Principle 8: Design portfolio governance to drive investment outcomes

3.9 Principle 9: Ensure consistent and logical decision-making rights

3.10 Principle 10: Enable evidence-based investment decision-making

4Application of the principles: Implementation

4.1 Scaling governance to fit the need

4.2 Establishing new or enhanced P3G arrangements

4.3 Effective operation of P3G arrangements

4.4 Documenting and communicating P3G arrangements

4.5 P3G implementation and agile approaches

4.6 P3G maturity

5Application of the principles: Case studies

5.1 Case study 1: Basic project – payroll implementation

5.2 Case study 2: Complex programme – public sector transformation

5.3 Case study 3: Standing programme boards – utility business

5.4 Case study 4: Portfolio governance models

Appendices

Appendix A: Key parameters and the business case

Appendix B: Role statements (examples)

Appendix C: Terms of reference for governance bodies (templates)

Appendix D: In-room practices and behaviours

Appendix E: Enterprise P3G framework (template)

Appendix F: P3G and organizational maturity

Appendix G: Standard governance forms (templates)

Acronyms and abbreviations

Glossary

Bibliography

Foreword

Project management is a hot topic and one that’s getting hotter all the time, with chief project officers becoming commonplace, a ‘torrent’ of new advice and guidance being published every year, and the Harvard Business Review referring to ‘the project economy’. Yet, there doesn’t appear to be any significant improvement in the track record of successful delivery; projects continue to come in late, overspend and underdeliver to an alarming degree, and Cobb’s paradox seems truer than ever: ‘We know why projects fail; we know how to prevent their failure – so why do they still fail?’

The really worrying thing is that, as Professor Bent Flyvbjerg has shown, the law of regression to the tail increasingly appears to be true – there will always be a project failure even greater than the worst to date.

This is where project governance comes in, by providing the strategic direction, decision-making and oversight required to ensure successful delivery and avoid the all-too-common (and ever-worsening) ‘train wrecks’. Unfortunately, whenever there is a major project or programme failure, the subsequent review inevitably highlights failings in governance. So while governance is a crucially important subject, it’s often found wanting in practice – and until now, anyone looking for comprehensive guidance on the bookshelf was going to be disappointed, as there was comparatively little available.

That’s why this new guide is so important: in clarifying what effective governance looks like; explaining it in terms that are easily understandable; and, fundamentally, in showing how it can be adapted to the specific organizational circumstances. This is crucial because knowing what to do is one thing, but being able to explain it in terms that make intuitive sense is another.

I’ve met many subject matter experts, but Ross and Adrian really stand out from the crowd. I know this because I’ve worked with them both, seen them in action, and they share a wealth of practical experience that has been captured in this publication.

I particularly welcome three things. Firstly, the principles-based approach – meaning the guidance is adaptable to different organizations and, moreover, it is scalable. ‘Ensure a single point of accountability for each project or programme’ seems such an obvious and non-contentious principle, and yet we still see reports of project governance failure where there was confusion about who was accountable for successful delivery. Similarly, from a benefits perspective, I’ve seen countless examples where projects and programmes have been developed in apparent isolation from the end user. The principle ‘Business outcome accountability determines project or programme accountability’ goes a long way to addressing the benefits issue. And that’s just two principles – there are another eight to gain value from.

Secondly, the comprehensive and integrated coverage of project, programme and portfolio governance. When I wrote Management of Portfolios (Axelos, 2011) with Craig Kilford, we emphasized the importance of governance alignment across all three dimensions. Ross and Adrian take this to another level – explaining concisely, clearly and consistently what it means and how it can be achieved in the real world.

Thirdly, I welcome the coverage Ross and Adrian have included of the ‘difficult’ and too often ignored (or skimmed over) subjects of how to adapt governance to agile delivery; and their recognition of the softer behavioural issues which breathe life into the ‘harder’, structural side of governance.

This publication is an awesome achievement from the gurus of governance – it’s comprehensive, accessible and relevant. Don’t take part in project, programme or portfolio governance without it.

Stephen Jenner

Stephen Jenner is a best-practice author, business practitioner and academic; his work centres mainly on the fields of portfolio management and benefits management. He authored Managing Benefits (Jenner, 2014), co-authored Management of Portfolios (Axelos, 2011), and has worked for the Major Projects Authority. He is a Fellow of the Chartered Institute of Management Accountants, with an MBA and Master of Studies degree from Cambridge University. When not walking the Camino in Spain and Portugal, or riding his motorbikes in the UK and Australia, he designs and teaches courses for the Graduate School of Business at Queensland University of Technology.

About the authors

Ross Garland

Ross has been working in the area of project, programme and portfolio governance (P3G) for nearly 20 years and has designed, implemented or reviewed the governance on billions of dollars of investments. Ross has addressed governance arrangements in numerous sectors, including health care, aviation, public transport and roads, education, infrastructure, utilities and ICT. His work has taken him to Australia, the UK, the Middle East and the US. He has delivered white papers on P3G for the UK Cabinet Office and regularly presents to conferences. He is a fellow of the Australian Institute of Managers and Leaders.

Ross is the managing director of Ross Garland and Associates and is president of P3GQA, the qualification authority for certification in P3G. He lives in England.

Adrian Morey

An award-winning adviser, Adrian works with organizations to enable them to achieve optimum value from their change initiatives. Working across infrastructure, technology and business transformation, Adrian partners with public- and private-sector organizations to design, build and operationalize enterprise-wide project, programme and portfolio governance standards and implement tailored governance arrangements for individual initiatives or entire portfolios. Based in Australia, but operating domestically and internationally, Adrian has enabled breakthrough outcomes for client organizations across an array of market sectors in Australia, the UK, Hong Kong, Singapore, Papua New Guinea, the Philippines, Japan, Bangladesh, Bahrain and Spain. Adrian also advises on corporate and joint venture governance arrangements, which provides him with both rounded and integrated perspectives on the application of best practice across a broad spectrum of governance domains. Adrian is regularly sought after to act as an independent adviser on various P3G bodies, and is also a non-executive director.

Acknowledgements

Reviewers

The authors and publishers are grateful to the following people for reviewing this guide and their valuable insights:

Special thanks

Special thanks to Martin Samphire, whose comments and advice have proved invaluable in shaping this guide.

Contributors

As well as being reviewers, the following people provided contributions and additional insights to this guide:

Milvio Di Bartolomeo, Kit Friend, Holger Heuss, Deborah Hopkins-Hurt, Dr Khalid Ahmad Khan, Ata ul Musawir, Martin Samphire, Rod Sowden.

CHAPTER 1

Introduction

1Introduction

A portfolio of projects and programmes delivers change¹ for an organization and so brings the organization closer to achieving its strategic objectives. To do this requires the suite of projects and programmes selected to comprise the portfolio to be the right ones – those best placed to help achieve the organization’s strategic objectives.

Projects and programmes (collectively called initiatives from here on) must then be successfully delivered. However, success and failure in this respect are not necessarily binary outcomes. Any initiative involves numerous decisions. Every decision directs the initiative down a particular path. Theoretically, within the network of all possible decision paths, only one will deliver optimum outcomes. All other paths will result in somewhat sub-optimum outcomes – for example, fewer benefits than expected, higher costs or missed schedule dates. So, even though a project or programme may be viewed by some as successful – it has delivered an output, say – it has actually failed in its primary purpose: to deliver its outcomes and benefits (outcome performance) within the defined scope, time and cost parameters (delivery performance).

Project, programme and portfolio management (P3M) has a large part to play in ensuring the right initiatives are delivered successfully. However, management alone cannot ensure this, as management must operate within a governance framework. It is the governance framework that determines how decision-making operates and who makes what decisions. If a governance framework is designed to optimize the effectiveness and efficiency of the decisions to be made, those decisions are more likely to support optimum outcomes. The focus of this guide is P3G. It does not address P3M except as an aid to understanding P3G.

1.1 Purpose

The purpose of this guide is to provide the knowledge and understanding necessary to design, implement and operate effective and efficient governance arrangements for a project or programme, or for an organization’s entire change portfolio.

This guide is focused on assisting practitioners and so takes a practical approach. In Chapter 2, it provides a simple definition of P3G based on the activity that lies at the heart of governance: decision-making, underpinned by clear and transparent accountability. In Chapter 3, it presents a set of principles for P3G and the logic that underpins each principle.

Chapter 4 provides implementation guidance, while Chapter 5 provides some case studies that demonstrate the application of the principles. The appendices provide some sample templates for the artefacts that support the P3G arrangements.

1.2 Target audience

The target audience for this guide is:

•Members of main boards and their sub-committees, company secretaries, and others who are responsible for governance across an organization

•Executive management team members, because they are invariably called upon to participate in P3G-related governance groups and undertake key P3G roles

•Portfolio management executives and officers, because P3G directly affects, and is part of, their roles

•Executives accountable for project and programme outcomes, including project sponsors and senior responsible owners (SROs) (and project sponsor delegates and SRO delegates ), because they need to understand their roles and accountabilities and what effective governance looks like to ensure that their projects and programmes are properly governed

•Project, programme and portfolio management offices (PMOs) and their staff. They play a decision support role and so need to be aware of what constitutes effective and efficient P3G; they need to be able to identify deficiencies and/or opportunities and know how to address them. They may also be called upon to design or provide assurance of governance arrangements

•Project, programme and portfolio managers who rely on effective governance to be successful in their roles

•Assurance professionals and capability assessors, so that they can identify both effective and deficient governance arrangements and practices, thereby providing confidence to stakeholders

•Those wishing to train others in P3G.

1.3 Organizational context for P3G

P3G operates within an organizational or corporate governance framework, and those who work in a P3G environment must abide by organizational governance principles, policies and business rules.

The ISO 37000:2021 standard, ‘Governance of organizations – guidance’,² defines the