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Establishing a Foundation for Organizational Success.

“….. The governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources.”

Good governance by Sir Adrian Cadbury (2002)

In the realm of project management, the distinction between management and governance is often muddled, leading to confusion among professionals. However, a clear understanding of these concepts is essential for building functional Project Management Offices (PMOs) and increasing project success rates. This paper aims to elucidate the differences between project management and governance, highlighting their unique roles and contributions to organizational effectiveness.

Project Governance entails the establishment of rules, policies, procedures, standards, relationships, systems, and processes that shape how an organization’s objectives are defined and achieved. It encompasses the framework within which decisions are made, resources are allocated, risks are monitored, and organizational performance is optimized. In essence, governance sets the stage for effective management by providing the structure and guidelines necessary for sound decision-making and accountability.

Project Management, on the other hand, is focused on the execution and delivery of specific project objectives. It entails planning, organizing, and managing resources to ensure the successful completion of projects within defined constraints such as time, budget, and scope. Project managers play a central role in coordinating project activities, mitigating risks, and ensuring alignment with project goals and stakeholder expectations.

Differentiating Management and Governance

While management and governance are complementary, they serve distinct functions within an organization. Good governance fosters the efficient utilization of resources and demands accountability for stewardship, as emphasized by Sir Adrian Cadbury. It provides the framework within which management operates, guiding decision-making processes and ensuring alignment with organizational objectives. On the other hand, project management focuses on the tactical execution of projects, translating organizational goals into actionable plans and deliverables.

Synergy Between Governance and Management

Although governance and management systems are symbiotic, they are not synonymous. Rather, they are mutually interdependent, with each system fulfilling unique functions to drive organizational success. A well-governed organization facilitates the seamless integration of governance and management systems, allowing them to work in concert for the benefit of stakeholders. By aligning governance frameworks with management practices, organizations can enhance decision-making, optimize resource allocation, and ultimately, achieve their strategic objectives.

Three Layers of Functions within the Organization

In the white paper “Governance Systems” by Dr. Lynda Bourne and Patrick Weaver, three layers of functions within any organization are identified: producers of goods and/or services, management, and governors.

Producers of Goods and/or Services – Production & Knowledge workers
Management – Oversight & Direct Production/Knowledge Workers
Governors – Oversight & Direct the Managers

In any organization, the three layers of functions—producers of goods and/or services, management, and governors—form the backbone of operational excellence and strategic alignment.

Producers are the skilled individuals directly involved in delivering products or services, utilizing their expertise to drive value creation. Management oversees and directs the activities of producers, ensuring efficiency, effectiveness, and adherence to organizational goals. At the highest level, Governors provide oversight and strategic direction, guiding management in decision-making processes to achieve long-term objectives.

This hierarchical structure sets the stage for the seamless integration of portfolio, program, and project management (PPP), which plays a pivotal role in aligning organizational strategy with project execution, optimizing resource allocation, and maximizing value delivery across the enterprise.

Doing the 'Right Projects' vs Doing the 'Projects Right'

To better align project management capability with corporate strategy, organizations must employ two approaches: doing the ‘right projects’ and doing the ‘projects right’.

Doing the ‘right projects’ – balancing portfolios to meet corporate goals and also with the confines of the capacity of the organization to absorb additional change
Doing the ‘projects right’ – ensuring they have the capability to apply the right skills and other resources to the successful delivery of the project objectives. Doing projects ‘right’ will be enhanced through implementation of standard processes to support project delivery consistently – ‘doing projects right, time after time’
Balancing portfolios to meet corporate goals and ensuring the capability to apply the right skills and resources to project delivery are key components of successful project management aligned with governance principles. Consistently implementing standard processes supports project delivery, enabling organizations to achieve their strategic objectives effectively and efficiently. It is noted that there are essentially three layers of functions within any organization:

To better facilitate the alignment of project management capability with corporate strategy, organizations must employ two approaches:

In conclusion, clarifying the distinctions between project management and governance is essential for establishing a solid foundation for organizational success. By recognizing the complementary nature of these concepts and fostering synergy between governance and management systems, organizations can build resilient PMOs, improve project outcomes, and drive sustainable growth.

Created and authored by George J. Raymond, inspired by many educational resources, books, certifications earned, and project management experiences. Website designed, planned, and created by nextgenray.com.