1. PMUni Workshop 2/13 Corporate Governance of the Process & Project-oriented Company Roland Gareis Veszprem, University of Pannonia October 5 th, 2013

2. 2 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. 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. 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. 5 RGC Process Map & Projects Selling an in-house service Selling a seminar, coaching Clients Selling a product Performing a seminar, coaching Performing an event Performing a consulting contract Performing a research assignment Procuring a service, material Developing a service, product Developing the organisation Managing the personnel Managing the infrastructure Managing finances, controlling Managing stakeholder relationships Marketing/ PR Strategic management Operational management Process management Project and program management Porject portfolio management Change management Knowledge management Management of sustainable development Primary Processes Secondary Processes Tertiary Processes

6. 6 Process & Project-oriented Company: Organization Chart Management Board Business Unit A Business Unit B Business Unit C Department Expert Pool 1 PcM/PM Office Process Managers Project Managers Projects, Programs Department Expert Pool 2 Department Expert Pool 3 Department Expert Pool 4 Department Project Portfolio Group

7. 7 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 packages over a period of time at a point in time at a point in time over a period of time chain of projectsproject portfolionetwork of projectsprogram Relationships between projects Clusters of projects

8. 8 coMATURE Project management Program management Assurance of the management quality of a project or program Initiation of a project or program Project portfolip coordination and networking between projects Organisational design Personnel management Process management

9. 9 Process & Project-oriented Company Strategy: Management by Projects Structures: Permanent and Temporary Culture: New Management Paradigm Organizational Fit Model

10. 10 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

11. 11 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

12. 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.

13. 13 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

14. 14 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 Contexts Stakeholder relation

15. 15 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  ….

16. 16 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

17. 17 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

18. 18 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

19. 19 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.

20. 20 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.

21. 21 Guideline: Project & Program Management (Example) 1. Introduction 2. Definitions 2.1 Definition: Small project, project, program 2.2 Definition: Project discontinuities - crisis, chance 2.3 Definition: Project and program management 2.4. Project and program types 3. Project management process 3.1 Project management: Objectives, structure 3.2 Project starting: Objectives, structure 3.3 Project coordinating: Objectives, structure 3.4 Project controlling: Objectives, structure 3.5 Project transforming, re-positioning: Objectives, structure 3.6 Project closing: Objectives, structure 4. Project organization 4.1 Project organization chart 4.2 Project roles and project communication structures 4.3 Project values 4.4 Project management methods and templates 5. Program management process 5.1 …..

22. 22 Project Organization Chart: Standard (Example) Project contibutor Project contributor Project contributor Project contributor Project contributor Project sponsor Subteam 2 Subteam 1 Project Team Project Organisation Project team member Project manager Project team member

23. Project Management Methods (Example) Methods for Project Starting Project 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 Can Project resource planning and project budgeting > Project resource plan Can > Project budget Must > Project finance plan Can Project 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 >…>…

24. 24 Guideline: Project Portfolio Management (Example) 1. Introduction 2. Definitions: 2.1 Definition: Project portfolio, network of projects 2.2 Definition: Investment 2.3 Definition: Project portfolio management 3. Project initiation process 3.1 Objectives, structure of the process 3.2 Project initiation roles 3.3 Project initiation methods and templates 4. Project portfolio coordination process 4.1 Objectives, structure of the process 4.2 Project initiation roles 4.3 Project initiation methods and templates 5. Networking of projects process 5.1 Objectives, structure of the process 5.2 Project initiation roles 5.3 Project initiation methods and templates

25. 25 Start Project defining Project portfolio analyzing Economic, ecologic & social impacts Short, mid & long-term impacts Local, regional,& global impacts Stakeholder & risk orientation Project proposal preparing Project deciding Project assigning End no yes Project Initiation Process

26. 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 sponsor Tasks 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  …..

27. 27 Stakeholder relations 15.01.201315.04.201315.08.2013 Customers Partners Authorities Suppliers Results of Projects/Programs 15.01.201315.04.201315.08.2013 Progress Schedule Resources Costs Revenues Project Portfolio Organisation 15.01.201315.04.201315.08.2013 Multi-role assignments Application pm procedures PM auditing PM personell development Investment Strategies 15.01.201315.04.201315.08.2013 Innovation strategies Financial strategies Customer relations strategies Process strategies Project Portfolio Structure 15.01.201315.04.201315.08.2013 Number of projects per type Project portfolio budget Project portfolio resources Project portfolio risk 15.01.1315.04.1315.08.13 Overall Status very poorpooraveragegoodvery good Project Portfolio Score Card (Example)

28. 28 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

29. 29 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. 30 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

31. 31 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.

32. 32 Business Analysis Body of Knowledge Guide 21. – 23.05.2012

33. 33 Change, Processes, Projects, and Business Analysis Business Requirements Documents Technical Design Specifications Project Plan: Concep- tion Project Plan: Implemen- tation Vision Statement Project Plan: Study Project Plan: Stabili- zation Feasibility Study Change ConceptionStabilizationImplementation

34. 34 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.

35. 35 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

36. 36 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

37. 37 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.

38. 38 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“

39. 39

40. Happy Projects! Roland Gareis, www.rolandgareis.com