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EXECUTIVE
SPONSORS:
Do Sponsors of
Your Projects Act Like Owners?
The role
of executive sponsors has emerged as a critical factor in determining
the
success of a project. Timothy J. Cloppenborg, PMP and his colleagues
studied the effect of sponsor behavior on project outcomes and found
that six
factors
were “significantly correlated with at least one of three outcome
measures .…”(1) The clusters of
sponsor behaviors identified were:
- Establishing commitment
and communications
- Aligning and defining
the project
- Defining
performance/success
- Selecting and mentoring
the project manager
- Prioritizing
- Selecting and
establishing project teams.
Translating
Research
into
Practice
This
article is based on several months of collaboration between Jim
Kendrick and
Jerry Jones, who both have years of experience with program and
project
management in the Mid-Atlantic region. In our work as consultants to
organizational leadership, we like to boil the key success factors for
executive sponsorship down to acting like
owners. Sponsors of
major organizational investments must be fully invested in the project
and have
a personal ownership stake in its outcome, and the Cloppenborg research
findings resonated with our own experience and understanding of best
practices.
We have seen repeatedly the importance of a sense of ownership in the
outcomes
for very large Federal projects with which we are currently working.
Let’s
consider an analogy to home owners: The new owner of a custom-built
house stews
over floor plans with the architect, negotiates with contractors, wants
to know
the qualifications of subcontractors, monitors costs, and watches the
quality
of work like a hawk. After moving in, the owner generally puts ongoing
effort
into preventive maintenance, corrective repairs, aesthetics, and
protection of
the investment. It’s all logical of course, because the owner-occupier
expects
to reap the benefits.
All of
these characteristics are why executive sponsors of major projects
should act
like owners. In addition, the analogy suggests criteria of who an
organization
should designate as sponsor: an executive who will personally benefit
from—and
demand—the maximum advantages and results of a successful project.
Applying
the
Ownership Analogy to Executive Sponsorship
An
executive sponsor need not actually own—have legal title—to an
investment to
act like an owner. We have observed that there are many reasons to act
like an
owner, such as:
- The project may win
praise, recognition, and status points for the executive
- Career advancement may
be at stake if the project fails or underperforms
- Project success may
remove obstacles to business results that the executive needs to achieve
- The project may
eliminate organizational problems that have made life difficult for the
executive or his subordinates
- Customers may be
overjoyed with the improvements
- The successful project
may yield big cost savings for the organization.
This
brings up a point about the selection of executive sponsors for
projects: It
needs to be someone who personally benefits from sponsoring the
project. The
payoff may be quantitative—in terms of potential bonuses or salary
increases,
or qualitative—in terms of recognition and satisfaction, but it must be
there.
If an
organization cannot find the appropriate sponsor to act like an owner,
there’s
something wrong. Either the project is not a strategic priority for the
organization (and should not be approved), or the organization is not
aligning
its executive management structure with strategic priorities.
In some
cases, the “perfect fit” for project owner is too busy with other
responsibilities. If so, the organization may consider designating that
person
as mentor to another person who serves as executive sponsor. But be
forewarned:
The organization must provide enough incentive, rewards, authority, and
accountability so that the designee is fully invested with “skin in the
game.”
Acknowledging
the
Critical
Need for Owners
Only 7%
percent of all projects fully meet or exceed expected benefits, and two
thirds
deliver less than 75% of intended benefits, according to research
findings
reported at the 2005 PMI Global Congress.(2) For
organizations
intent on reaping a robust
return on investment from projects, it is imperative that they
acknowledge and
respond to the need for executive sponsors who act like owners.
Certainly
qualified project manager, resources, and the PMBOK framework are all
vital;
but even “good projects” cannot achieve robust benefits without
sponsors who give the project organization-wide visibility, commitment,
and linkage
to
strategic goals.
In the
real world, large projects are difficult even in the best of
organizations. There
are always risks and unknowns. Obstacles arise that may throw the
project
outcomes, costs or schedule off track. The project needs an executive
owner who
will intervene, provide leadership … and fight for solutions when
necessary.
Looking
for Best
Practices
The
construction industry is a sector where project management
professionals have
frequently benefited from effective executive sponsors who act like
owners.
Capital investments in physical assets—buildings, bridges, airports,
and major
renovations or improvements—seem to cause many organizations to expect
an
attitude of ownership. And perhaps its
because project shortcomings are so visible: Either the lanes added to
the
highway are ready to use, or they aren’t. When wind velocity blows
windows out
of the 75th floor office suite, the problem is no secret.
We think
it is possible to bring the hard-nosed visibility of construction to
many of
the softer sides of project management like software systems, business
process
improvement, and customer service initiatives. To do so, the owner must
demand,
upfront, clear expectations, requirements, standards, and metrics
linked to the
organization’s strategic performance goals.
The
project owner must be involved from the beginning of the Initiation
process
group, because the definition of the problem, the solution, the general
scope,
and expectations for benefits will tend to be set in concrete early in
the
project lifecycle. Breaking apart the project’s Initiation phase
“concrete”
later in the lifecycle will usually cause expansion of costs, schedule
delays,
and risk of project failure or disappointment.
Many
projects are executed through contractors, and a critical dimension for
owners
is acquisition oversight. Generally the quality of the
specifications—before a
contract is ever awarded—will contribute significantly to project
success or
failure, and it invariably is a key factor driving cost of work
performed and
schedule.
Major
projects should involve the organization’s entire executive team—at
least for
periodic status reviews and decision making. An executive board
responsible for
projects (sometimes designated as the Investment Review Board, or IRB)
should
meet with the sponsor to review project plans and execution. The IRB
and/or the
executive sponsor should have its own (small) budget for trusted
advisors who
can provide independent assessments about project plans, acquisitions,
standards, and performance.
The
purpose of executive oversight is not to second-guess a qualified
project
manager or to micromanage the project. Rather it is to provide strong
organizational leadership and accountability so that the organization
achieves
the results sought by the project. This is a huge asset to the project
manager,
whose odds of success are greatly improved by access to organizational
power
and resources, management buy-in, connectedness of the project to
strategic
business needs, and clout with stakeholders in carrying out needed
project
communication and change management activities.
It also
helps to give the owner the management tools needed to oversee
performance and to
report progress to the organization’s entire executive team—so that
even “soft”
projects gain hard metrics and visible outcomes. Widely recognized best
practices include Earned Value Management, quality measurement, outcome
metrics
that track benefits, and stakeholder satisfaction surveys. The PMBOK®
outlines many of these best practices in the process group for
Monitoring and
Controlling. The sponsor—as well as the project manager and team—needs
access
to these tools, though condensed to a high-level executive view.
Acting
Like an Owner
So how
does an executive sponsor act like an owner? It depends to some degree
on the
organizational environment and the nature of the project, but here are
some
general guidelines.
Take
Charge at the Beginning. An owner should be
involved at the outset to define how a project
aligns with the strategic goals and objectives of the organization.
Additionally, an owner is involved in project planning and the
acquisition. Sponsors
should feel free to ask tough questions. After all, they will be doing
the project
team a favor by raising issues that could later become stumbling
blocks:
tenuous assumptions, potential risks, necessary project steps,
important
standards and expectations, and overlooked corporate policies,
regulatory
constraints, or business issues. It is far cheaper to work out the
problems at
the beginning of the project.
Be a
Leader.
The owner
should work out issues with implementation and dealing with
stakeholders,
including end users. A high-placed executive can deal with
organizational
culture and politics in a manner that few project managers alone can
handle.
This can greatly increase the likelihood of project cooperation and
acceptance
of the changes brought about by the project.
Keep
Organizational Priorities Clear. An
owner
should
be involved in prioritizing and phasing implementation of long-term
projects.
For example, milestones that are most crucial to the organization may
need to
be implemented first, even though some of the stakeholders may have
other (or
even conflicting) priorities.
Hang
Tough in Negotiations.
Executive sponsors are responsible for an organization’s purchase of
outcomes
that are achieved through large investments in a project. The sponsor
is
responsible for making certain that the “purchase” buys what the
organization needs,
fits the timeframe of business needs, delivers the quality expected,
and is
completed at a reasonable cost. Tough
negotiations may involve many other dimensions as well. It may include
addressing
labor relations when a union is involved, or dealing with a
recalcitrant vice
president or division director who has become an obstacle to project
success.
Manage
the Purse Strings.
An owner takes responsibility for funds, including negotiations for
more money
when there is a good reason to do so. This may require going to the
corporate
executive team with the project manager who will explain the technical
details,
but the sponsor is better positioned in terms of executive stature to
do the
asking, politicking, and negotiating.
Be
Real.
Occasionally
a sponsor may need to admit that a project should be terminated before
it is
completed. This can occur in many different business situations, but it
is particularly
true of R&D projects, such as in the pharmaceutical industry, when
it becomes
evident that further work is highly unlikely to yield desired
breakthroughs. In
such situations, it is important to shield good project personnel from
unfair
penalization or blame. Within an organization, project teams need the
assurance
that competent performance, hard work, and effort to stretch for
difficult
outcomes is supported—even if the project must ultimately be terminated.
Use
Communication Skills. Most
executives
have risen to senior
positions partly because of their oral and written communication
skills. Stakeholders
are more likely to pay attention when executive sponsors speak or
initiate
written communication. Their gifts of talk and friendly persuasion are
a great
asset when moving major projects forward.
Taking
Inventory
OK, we
have written highlights based on our experience and a review of the
literature.
Now, it is your turn: Take inventory of practices within your
organization,
checking off each executive behavior that usually prevails among
executive
sponsors in your organization:
- Defines why the project
is needed
- Sets the standards and
expectations about outcomes for the project
- Works with experts to
define requirements in contractor terminology
- Identifies available
budget and resource constraints
- Approves the right kind
of project to achieve the desired end result
- Participates in
selecting a qualified Project Manager
- Approves key personnel
for the project team
- Reviews and approves
major contract awards
- Participates in project
kick-off or launch meetings with stakeholders
- Reviews the
qualifications of the project team
- Approves the schedule
for completion
- Gets expert help if
needed for inspections and quality control
- Checks project invoices
like it’s his/her own money
- Briefs the
organization’s executive team about project progress
- Approves changes to
budget or scope
- Reviews and approves
modifications of major contracts
- Finds additional money
if needed
- Demands the benefits
and quality that were promised
- Signs off on the
project when satisfactorily completed
- Monitors the
realization of benefits after the project is completed
How many
of the behavior attributes did you check off for your organization?
Take the
number of “yes” check-offs and multiply by 5. That’s your informal
score out of a possible 100% for
evaluating the degree to which executive sponsors act like owners.
In the
future, we hope to conduct research to refine our criteria and norm the
results
based on a broad sample of organizations. However, in the meantime,
your
“ownership score” can serve as your own benchmark. Each year, you can
re-evaluate your rating and track progress.
Summing
Up
Peter
Fretty pointed out the critical role that sponsors play in his article Empowering Executive Decisions,
published in PM Network.(3) He cites the
perspective of San
Antonio-based Sid Kemp, PMP, President of Quality Technology &
Instruction:
Executives must realize
that true executive sponsorship goes
far beyond providing supportive lip service and providing resources
whenever
requested—it requires a level of involvement that does not tend to come
naturally. “Executives are the only folks with the broad perspective to
ensure
that internal process changes connect to bottom-line improvements, and
the only
people with the power to ensure that short-term demands don’t derail
long-term
improvement efforts,” Mr. Kemp says.
Executive
sponsors play a crucial role in making projects successful, and they
can make good
projects even more successful. Fully realizing benefits of a project is
much
more likely when an executive sponsor acts like an owner.
Literature
Cited
(1)
Timothy J. Kloppenborg, PMP, Xavier University; Deborah Tesch, Xavier
University; Chris Manolis, Xavier University; Mark Heitkamp, PMP,
American
Modern Insurance Group; An Empirical Investigation of the Sponsor’s
Role in
Project Initiation, Project Management Journal, August 2006, pp 16 – 25.
(2)
Terence J. Cooke-Davies PhD BA
FAPM FCMI
FRSA, The Executive Sponsor – The Hinge upon which Organisational
Project
Management Maturity Turns? Edinburgh, Scotland; PMI Global Congress
Proceedings, 2005.
(3)
Peter Fretty, Empowering Executive
Decisions,
PM Network, 2005, pp. 23-26.
Learning
More about
Executive Sponsorship.
The
Project Management Institute is an excellent source for online articles
about
executive sponsorship at http://www.pmi.org.
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