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Enterprise Project Governance: How to Manage Projects Successfully Across the Organization

SERIES ARTICLE

EPG Principles and Framework 

By Paul Dinsmore & Luiz Rocha 

Rio de Janeiro, Brazil
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This is the fourth article of this series. The previous three articles presented the evolution of corporate governance, a definition for EPG, and the view of major international project organizations regarding the governance of projects and programs. This article covers the principles and framework necessary to enable and drive projects and programs to achieve the expected outcomes for the organization.

Why did a project leader make such an ill-advised decision?  In reality project decisions cannot be attributed to a single person; in fact, projects evolve as a result of a decision chain. A pivotal reason for flawed decisions is that many project leaders think about decisions as events and not processes. Decisions are a long social process involving a series of interactions carried out by different people, unfolding over time and involving three levels of analysis: individual, team, and organizational. Many project managers focus too much on deciding the right solution for a problem rather than thinking about the right process for making key decisions. Effective project and program governance requires focusing on the right decision making process..

At the individual level,  poor decisions are made because of cognitive biases such as overconfidence, repeating old patterns, overestimating benefits and underestimating cost and time. At the team level, although teams can leverage the perspectives, experience and expertise based on the potential that diversity brings, teams tend to get immersed in a script of dealing with idiosyncrasies, conflicts and social pressures for conformity and fail to realize their potential. At the organizational level, decisions are shaped by culture, structure, and systems.

Here are the basic principles that define the effective approach to Enterprise Project Governance and  decision making on the individual, team and organizational level:

  1. 1.    Identify a single point of accountability

Identify the persons accountable for the success of the portfolio, programs and projects. The roles, responsibilities and performance criteria for the governance of project management must be clearly defined and all personnel involved in the project governance structure need to know for what they are accountable and responsible, and members of delegated authorization bodies must have sufficient representation, competence, authority and resources to enable them to make appropriate decisions. Accountability cannot be shared – more than one person, or a committee, cannot be held “accountable” for the success of a project – or delegated. Without a single point of accountability, projects lack clear authority because the validity of any decision is questionable since the authority that lies behind that decision has not been established.

  1. 2.    Ensure enterprise project governance is value focused

The focus on value creation is guaranteed by the EPG structure that considers three decision layers:

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This series includes articles by Paul Dinsmore and Luiz Rocha, authors of the book Enterprise Project Governance, published by AMACOM in the USA in 2012.  The articles are extracts and summaries of key topics from their book, providing information and guidance on one of the most important aspects of portfolio, program and project management today – governance.  For information about the book, go to http://www.amacombooks.org/book.cfm?isbn=9780814417461

About the Authors 

usa-brazilpaul-dinsmorePaul C. Dinsmore

Paul Dinsmore is President of Dinsmore Associates, and a highly respected specialist in project management and organizational change. A certified project management professional (PMP), he has received the Distinguished Contribution Award and Fellow Award from the Project Management Institute (PMI®). He regularly consults and speaks in North America, South America, Europe and Africa.  Paul is the author and / or editor of numerous articles and 18 books, including the AMA Handbook of Project Management. Mr. Dinsmore resides in Rio de Janeiro, Brazil. 

luiz-rochaflag-brazilLuiz Rocha

Luiz Rocha has 35+ years of experience in the industry and business consulting. Luiz worked with Andersen Consulting and Delloite in the USA and Europe when he had the opportunity to manage multi-cultural and geographically dispersed projects in Latin America, North America and Europe. In Brazil he worked with Dinsmore Associates and Petrobras. Luiz is an engineer by background, MSc. in industrial engineering from UFRJ – Brazil, PMP-PMI and IPMA certifications. He is also a published author with two previous books, Business Metamorphosis, in Brazil, and Mount Athos, a Journey of Self-Discovery, in the USA. Luiz can be contacted at [email protected].