PMUni Workshop 2/13 Corporate Governance of the Process & Project-oriented Company Roland Gareis...

PMUni Workshop 2/13

Corporate Governance of the Process & Project-oriented Company

Roland GareisVeszprem, University of PannoniaOctober 5th, 2013

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Objectives

> Objectives: Informing about …> the model of the process & project-oriented company> the corporate governance concept> ideas about corporate governance for the management of

temporary organizations> the relationship between corporate governance and an integrated

management approach> Non-objectives: Informing about …

> process, project, change management

3

Context

> Research Project: Corporate Governance of the process & project-oriented company > PhD thesis by Renata Mosoci, WU Vienna

> Supervisors: Roland Gareis and Ralf Müller> Research question: How can corporate governance improve the

management quality of the project-oriented company?> Book edited by Laurence Lecoeuvre, to be published by Gower

> Book chapter: The performance of projects and project management: Sustainable delivery in project-intensive company

> Case study work by RGCresearch> Presentation contributing to the happy projects‘14: One

Management

4

Overview

> The process & project-oriented company> Corporate governance concept> Corporate governance for the management of temporary

organizations> Corporate governance and an integrated management approach> Conclusion

5

RGC Process Map & Projects

Selling an in-houseservice

Selling a seminar, coaching

Clients

Sellinga product

Performinga seminar, coaching

Performingan event

Performinga consulting

contract

Performinga researchassignment

Procuringa service,material

Developinga service,product

Developingthe

organisation

Managing the

personnel

Managingthe

infrastructure

Managingfinances,

controlling

Managingstakeholderrelationships

Marketing/PR

Strategicmanagement

Operationalmanagement

Process management

Project and program

management

Porjectportfolio

managementChange

managementKnowledge

managementManagementof sustainabledevelopment

PrimaryProcesses

SecondaryProcesses

TertiaryProcesses

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Process & Project-oriented Company: Organization Chart

Management Board

BusinessUnit A

BusinessUnit B

BusinessUnit C

Department

ExpertPool 1

PcM/PMOffice

ProcessManagers

ProjectManagers

Projects,Programs

Projects,Programs

Projects,Programs

Department

ExpertPool 2

Department

ExpertPool 3

Department

ExpertPool 4

Department

Department

ProjectPortfolioGroup

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Clusters of Projects

a set of sequential projects

all projects of a project- oriented

company

a set of coupled projects

a set of closely coupled projects &

work packagesover a period

of timeat a point

in timeat a point

in timeover a period

of time

chain of projects project portfolio network of projects program

Relationships between projects

Clusters of projects

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coMATUREProject management

Program management

Assurance of the managementquality of a project or program

Initiation of a project or program

Project portfolip coordinationand networking between projects

Organisational design

Personnel management

Process management

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Process & Project-oriented

Company

Strategy: Management by Projects

Structures: Permanent and

Temporary

Culture:New Management Paradigm

Organizational Fit Model

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Process & Project-oriented Company: Definition

> A company which …> defines processes holistically and applies process management

formally> uses projects & programs as temporary organizations for the

performance of relatively unique processes of medium and large scope

> applies “Management by Projects” as an organization strategy> considers processes, projects & programs, the project portfolio

and networks of projects as management objects> has Management Offices and a Project Portfolio Group as

integrative organization structures> provides corporate governance for process, project & program,

and project portfolio management> has employees with competences in process, project & program,

and project portfolio management> applies a “new” management paradigm

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Overview



12

Corporate Governance: Definition (OECD, 2004)

> CG involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders.

> CG provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined.

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Corporate Governance: Objective, Tasks, Results

> CG objective is to achieve …> transparent structures and repeatable processes

> CG tasks are to define …> the objectives of the organization> the means of obtaining those objectives> the means of monitoring the performance of processes> the relationships between management and stakeholders

> CG results are …> high level rules and regulations> which are relating to all identity dimensions of an organization,

and not just to the financials

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Identity Dimensions of an Organization

> Structures of the organization > Objectives, strategies> Services, products> Technologies> Organizational structures> Organization culture > Personnel > Infrastructure > Budget, financing

> Contexts of the organization> Higher social system > Stakeholders > History and expectations about the future

Structures

Stakeholder

Stakeholder

Contexts

Stakeholder relation

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Corporate Governance: General Examples

> Objectives, strategies, values> Processes, methods, and rules about how objectives, strategies,

and values are to be planned, communicated and controlled> Definition of overall objectives, strategies, and values

> Services, products> Rules about which services to be provided for which markets> Processes, methods, and rules about the delivery of the services

and products to different markets> Organizational structures

> Processes, methods, and rules about how role descriptions, organization charts are developed

> Important role descriptions and organization charts> Rules about how processes to be documented> Important process documentations

> ….

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Corporate Governance: Characteristics

> Implicit vs explicit, values vs company rules> Complain and explain vs complain and penalize> Relating to the principles of sustainable development, e.g.

transparency, accountability, responsibility, fairness (Aras & Crowther, 2010)

> Regular reviews to maintain effectiveness and benefit> Managing is not governing

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Overview



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Hypotheses: Objects of Consideration for Corporate Governance> CG in the process & project-oriented company relates to the company

overall. This includes the governance of the management of temporary organizations and of the project portfolio.

> Specific objects of consideration of CG of the process & project-oriented company are > its specific objectives, strategies, and values > its specific processes, namely project initiation, project

management, program management, and project portfolio coordination

> its specific organizations, namely projects, programs, the PcMO, the PMO and the Project Portfolio Group

> its specific roles, namely process managers, project/program sponsors, project/program managers, and project/program teams

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Hypotheses: Objectives of CG of the Process & Project-oriented Company> CG improves the management quality of the process & project-

oriented company, including the management quality of its projects and programs.

> Sustainable development principles are implemented by CG.

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Hypotheses: Implementing, further Developing, and Controlling CG> The PMO and the PcMO contribute to implementing, further

developing, and controlling the CG of the process & project-oriented company.

> Stakeholders are involved in implementing, further developing, and controlling CG in the process & project-oriented company.

> Regular audits/health checks ensure the compliance of the process & project-oriented company with its CG.

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Guideline: Project & Program Management (Example) 1. Introduction2. Definitions

2.1 Definition: Small project, project, program2.2 Definition: Project discontinuities - crisis, chance2.3 Definition: Project and program management2.4. Project and program types

3. Project management process3.1 Project management: Objectives, structure3.2 Project starting: Objectives, structure3.3 Project coordinating: Objectives, structure3.4 Project controlling: Objectives, structure3.5 Project transforming, re-positioning: Objectives,

structure3.6 Project closing: Objectives, structure

4. Project organization4.1 Project organization chart4.2 Project roles and project communication structures4.3 Project values4.4 Project management methods and templates

5. Program management process5.1 …..

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Project Organization Chart: Standard (Example)

Projectcontibutor

Projectcontributor

Projectcontributor

Projectcontributor

Projectcontributor

Projectsponsor

Subteam 2Subteam 1 Project Team

Project Organisation

Project teammember

Projectmanager

Project teammember

Project Management Methods (Example) Methods for Project StartingProject scope planning> Project objectives plan Must > Project objects of consideration plan Must > Work breakdown structure Must > Work package specifications (for essential work

packages)Can

Project scheduling> Project milestone plan Must > Project bar chart Must > Project CPM schedule CanProject resource planning and project budgeting> Project resource plan Can> Project budget Must > Project finance plan CanProject context relationships > Project stakeholder analysis Must > Investment cost-benefit analysis Must > Analysis: Relationships to other programs and projects Can> Analysis: Pre- and post-project phase Must Designing the project organization> Project assignment Must > Project organisation chart Must > Project role descriptions Must > Project communication structures Must Methods for Project Controlling> …

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Guideline: Project Portfolio Management (Example) 1. Introduction2. Definitions:

2.1 Definition: Project portfolio, network of projects

2.2 Definition: Investment2.3 Definition: Project portfolio

management3. Project initiation process

3.1 Objectives, structure of the process3.2 Project initiation roles3.3 Project initiation methods and

templates4. Project portfolio coordination process


templates5. Networking of projects process


templates

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Start Projectdefining

Project portfolioanalyzing

Economic, ecologic & social impacts

Short, mid & long-term impacts

Local, regional,& global impacts

Stakeholder & riskorientation

Projectproposalpreparing

Projectdeciding

Projectassigning

End

End

no

yes

Project Initiation Process

Role Description: Project Portfolio Group (Example)

Objectives > Optimizing the project portfolio results and the project portfolio risk

Organizational position > Reports to the board of directors

Tasks in the project initiation

> Coordinating the project objectives with the strategies of the project-oriented company

> Deciding about the organization for implementing the investment (project or program)

> Nominating the project sponsorTasks in the project portfolio coordination

> Analyzing the project portfolio structure and optimizing it> Deciding about project priorities> Analyzing and managing relationships between projects> Coordinating scarce internal and external resources> Promoting the networking between projects> …..

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Stakeholder relations 15.01.2013 15.04.2013 15.08.2013Customers Partners Authorities Suppliers

Results of Projects/Programs 15.01.2013 15.04.2013 15.08.2013Progress Schedule Resources Costs Revenues

Project Portfolio Organisation 15.01.2013 15.04.2013 15.08.2013Multi-role assignments Application pm procedures PM auditing PM personell development

Investment Strategies 15.01.2013 15.04.2013 15.08.2013Innovation strategies Financial strategies Customer relations strategies Process strategies

Project Portfolio Structure 15.01.2013 15.04.2013 15.08.2013Number of projects per type Project portfolio budget Project portfolio resources Project portfolio risk

15.01.13 15.04.13 15.08.13Overall Status

very poor poor average good very good

Project Portfolio Score Card (Example)

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CG Roles in the Process & Project-oriented Company

> Board of Directors> The Board of Directors decides about the GC structures regarding

process, project & program, and project portfolio management> Process Management Office (PcMO)

> Develops process management guidelines (including templates)> Supports the documentation of single processes

> Project Management Office (PMO)> Auditors

> Not a CG Role: Project Sponsor> A Project Sponsor has a content-related interest in the project> The Project Sponsor performs a management role in the project

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CG Role of the PMO

> Providing guidelines (including templates) for …> project and program management> project and program consulting and auditing> project portfolio management

> Providing standard project plans> Providing software for

> project and program management> project portfolio management

> Communicating the CG structures by …> providing brochures, newsletters, maintaining a PMO homepage,

etc.> organizing events, e.g. project vernissages

> Controlling the compliance of the CG structures by regular audits/reviews

> Not: Controlling projects

30

Overview



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Competing Management Approaches

> Process, project, and change management as well as business analysis are considered as distinct management approaches, which require specific roles, methods and terminologies.

> On the one hand a differentiation between these approaches provides orientation, on the other hand in their practical application these approaches often need to be combined.

> In companies sometimes parallel guidelines and competing organizations being responsible for these guidelines, such as a Quality Management Department, a PM Office and PcM Office, a Change Management Department, etc., exist.

> The integration of process, project, and change management as well as business analysis, in order to contribute to the management quality of the company, is a CG function.

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Business Analysis Body of Knowledge Guide

21. – 23.05.2012

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Change, Processes, Projects, and Business Analysis

BusinessRequirementsDocuments

Technical Design

Specifications

Project Plan:

Concep-tion

Project Plan:

Implemen-tation

VisionStatement

Project Plan:Study

ProjectPlan:

Stabili-zation

Feasibility Study

Change

Conception StabilizationImplementation

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ONE Management

> Common methods and a common terminology for process, project,

and change management as well as business analysis contribute to the management quality of the process & project-oriented company.

> An integrated Management Office assures appropriate CG structures for the process & project-oriented company. It contributes to sustainable process, project and change management. It contributes indirectly to sustainable processes, projects, changes and business solutions.

> Common values considering the principles of sustainable development can be applied to all management approaches.

> Change owners, change managers, and change agents require process, project and change management as well as business analysis competences.

> Process, project and change manager as well as business analysts require common values as a basis for their efficient cooperation.

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Overview



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Resume: Corporate Governance

> CG is not management> CG provides structures for management> The CG responsibility is different from the management

responsibility> CG is values-based

> Principles of sustainable development are a basis for CG> CG is holistic

> CG integrates different management approaches> CG provides …

> holistic governing structures, i.e. for the company overall, including single organizations of a company

> permanent, mid to long-term and not temporary, short-term governing structures

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Resume: CG of the Process & Project-oriented Company> CG of the process & project-oriented company has specific objects of

consideration. > Specific GC objectives in the process & project-oriented company are

to define how process, project and project portfolio management is to be performed.> …and not to do process, project or project portfolio management

> The governing structures for process, project and project portfolio management as well as business analysis have to be integrated.

> An integrated Management Office can provide CG services for the process & project-oriented company.

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There is no Project Governance!

> To define how projects and programs are to be managed generally is a CG function. > this is defined at a generic level and not for a single project

> Single projects (and programs) are to be managed and not governed. > this applies also to projects (and programs) with multiple owners

> The lack of understanding and performing the project sponsor role appropriately cannot be compensated by „project governance“

Happy Projects!Roland Gareis, www.rolandgareis.com

PMUni Workshop 2/13 Corporate Governance of the Process & Project-oriented Company Roland Gareis...

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