Monday, 06 May 2013 18:51

Poor governance blamed for failed major projects


Australian chief executives and other senior managers say poor project governance is to blame for failed major projects, such as big-ticket infrastructure items, according to a newly published survey.

New research by Sydney consultancy Caravel Group and the Melbourne Business School has found major project Governance Teams are dysfunctional, lack the skills and experience to govern major projects, exhibit poor corporate behaviour, are conflict-ridden and rarely have their performance measured or reviewed.

According to Caravel Group Director and CEO, Paul Myers the survey of approximately 100 public and private sector board, CEO and senior management-level project participants, across a range of industries, had yielded “some stark assessments.”

“We found that project success rates in Australia are on average 40-50 per cent. When coupled with the time and cost overruns one can only wonder what the cost is to the GDP.”

Melbourne Business School Associate Professor Graeme Cocks said the survey challenged traditional explanations of where major projects came unstuck.

“Blame for failure has traditionally been laid at the door of the Project Management team. However, it appears that most of the fault actually lies with the Project Governance team.”

Project Management teams focused on creating the deliverables in accordance with the scope of work. They manage the people, money and resources and all other facets for delivery. The project Management team reports to the Project Governance Team.

Associate Professor Cocks said that, aside from monitoring progress and supporting the Project Management Team, the Project Governance Team should focus on the strategic intent of the project and delivery of the value promised in the business case. “Project Governance therefore encompasses authority, accountability, stewardship, leadership, direction and control.”

“Too many Governance Teams are stacked with ‘stakeholders’ to secure buy-in, rather than people with proven ability to govern projects. These people are often heavily conflicted and have no accountability for their Project Governance role.”

Paul Myers said the survey showed that, when measured against nine basic elements for successful Project Governance the respondents deliver an average score of only 24%.

“The most glaring omission is lack of an approved Governance Plan – these were absent 87% of the time. Teams also performed badly in ensuring zero conflicts of interest, adequate delegated financial authority, and understanding the difference between consultants, solution and project delivery SMEs.

“Our findings demonstrate that a major rethink and reform of Project Governance practices in Australia is required.”

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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