Holding project sponsors to account
Many of the common causes of programme and project failures are related to the effectiveness of the sponsor. In many situations the project manager is blamed for perceived failure of a project even though they carried out their role well to deliver what was requested / defined to the stated objectives. Success has to be measured by the impact of the project on the organisation, the benefits or outcome – and that responsibility sits with the sponsor. Throughout this blogI will refer to the executive sponsor, or SRO in the public sector, as the sponsor.
The APM Governance SIG Sponsor Survey of 2020 found that 45 per cent of board directors were poor at holding sponsors to account. Furthermore over 75 per cent of sponsors felt they were incorrectly held to account by the board. We have a fundamental issue of poor governance here that needs addressing and was the focus of the recent online debate hosted by us, the APM Governance SIG.
Projects often don’t meet their objectives and the reasons for failure are evident early in the project. Why wasn’t the sponsor helped so they could understand and face their responsibilities to avoid failure? And where was the organisational board? Too many times, neither the board nor sponsor understand their respective responsibilities and good governance principles go by the wayside.
Some of the issues that get in the way of effectively holding sponsors to account include:
- The business case was developed primarily to gain funding – and then hidden or forgotten
- Confusion over who the sponsor is. The expectations for the role are not made clear nor personal performance criteria set and agreed
- Vision and success criteria being unclear, so different people assume what these are. Often time, cost and quality are the default criteria, which are output focused
- Board reports being too focused on delivery progress rather than outcomes or predicted benefits; the sponsor just forwards the project manager (delivery) progress summaries
- Individual performance incentives not aligned with project success criteria
- The organisation not supporting good project governance or practice
- Too little time devoted to key project (strategic) performance at board meetings
- Sponsors not staying in role for the duration of a project thereby avoiding accountability for the project outcome and / or formal processes for a proper handover of responsibility not carried out.
Tim Carroll, formerly of Standard Chartered bank and one of the panellists at our recent webinar on improving sponsor capability stated, "With the amount of change that businesses face in today's volatile world, maintaining alignment between each project or programme and the needs of the business is more critical than ever. Holding sponsors to account helps the board in their governance role, and provides a better environment within which the project manager can deliver"
So, what are the key areas where boards should hold sponsors to account throughout a project life cycle? In large organisations the board might delegate holding sponsors to account to a sub-committee of the board, (e.g. an investment committee). However, the board should still set the overall business strategy and portfolio strategy, the basis for how success criteria is defined and the assurance regime ensuring they are defined, realistic and acted upon. That crucial link back to the main board needs to exist.
Carroll further stated that “including the project's goals and outcomes within the personal, annual objectives of the sponsor has had a significant impact upon project performance; that direct accountability drives better challenge of the business case, improved reporting to the board and more attention being paid to post-project outcomes".
Holding sponsors to account should be a primary focus, and below are various ways to help boards achieve this:
- Ensure the business case is sound and reflects a strong alignment with strategic objectives throughout each phase of the project – and has a clear vision for success. The board should ensure a culture of ‘business cases matter and will be constantly referred to, and the sponsor challenged as to the forecast outcome’.
- Choosing and formally appointing the sponsor and ensuring they have the necessary competencies, respect of senior colleagues, authority over the relevant parts of the organisation and the essential leadership skills to bring about change.
- Define the success criteria in outcome terms. These might be updated under change control throughout each phase of the project in line with the latest prediction and shared with the board, so they are fully aware of the trend
- Document the sponsor responsibilities to the board and the organisation as clear unambiguous objectives so there is no room for misunderstanding of expectations.
- Document how the sponsor’s performance will be assessed at each stage of the project. This might include outcome / benefits forecasts, deviation from business case, independent competence assessment, level of collaboration with others, transparency and openness of updates to the board. Also consider a personal performance review format, it’s frequency and components – will input be sought from the project team, stakeholders and others? How much of the sponsor’s performance (delivering outcomes and benefits) will be tied to personal financial incentives?
- Confirm the type of regular reporting of project performance i.e. a balance of historical delivery progress vs benefits prediction vs risk, etc. The board should take strong interest in how the sponsor reflects the project in the organisation's portfolio and how the sponsor maintains strategic alignment of the project with the business' needs as the business and the broader business context change over time. Also confidence in the outcome or benefits being delivered and the predicted impact on the business performance must be considered
- Devote significant time to project performance reviews (predicted outcomes) of key projects at board meetings
- Clarity about the process for effectively handing over a project in the event that the sponsor needs to move on from their current role.
Project success should be measured by the impact of the project on the organisation, the benefits or outcomes which is the responsibility of the executive sponsor or SRO. Improving project outcomes could be made by organisation boards holding sponsors to account better for project success.
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