My colleague was nervous. He was kicking off a major initiative with an important new customer and program governance was a mess. The customer, a well-known retailer, had selected us to implement a new supply chain management solution to accelerate production and sales of private label goods. It’s a familiar challenge for us; we’ve worked for years in retail and have delivered a number of similar solutions with great results.
But we also know that effective program governance is one of the most important contributors to success. Indeed, a recent study on PLM shows that the companies deriving the greatest business value from their PLM programs are much more likely to have invested in executive alignment, detailed implementation planning, and formal program management with business value metrics and scorecards.
My colleague was new to PTC but experienced in program management for complex solutions. He went immediately to his new boss to raise his concerns. “When I looked at the customer from a program governance perspective, there were red flags all over the place. My successes in the past have always come with strict methodology and governance, so I was very concerned,” he said.
Specific worries included:
- A project director on the customer side not actually reporting to the program sponsor
- Dispersed and unclear authority for decision making in general
- Multiple stakeholders with different agenda
To add to the challenge, the customer was working with a management consulting firm at the same time with unclear division of labor between their people and ours. Finally, the implementation timeline was extremely short and the CEO was paying close attention.
Ten months later, my colleague was all smiles. The program was a great success, the customer was thrilled, and we’re all talking about follow-on work for additional business improvement.
The key to success was the skill and focus of the program leader even in the absence of formal governance structure and process. For one thing, the project director on the customer side did “one of the most brilliant cat herding exercises I have ever seen,” according to my colleague. “He had a lot of people that needed to be pleased and he managed that with an astonishing level of skill.”
For another, the dispersed authority meant that while formal decision making could be a challenge, it was also difficult for individual stakeholders to actually slow down or stop the project. The project teams on both sides were focused, driven, and results-oriented, so the lack of formal governance at the top in some ways made it easier to get the work done.
Finally, project leaders on both sides recognized that insisting on additional formal governance mechanisms would have been counterproductive given the culture and politics of the situation. They were flexible enough to allow the skill and commitment of team members to take center stage and rely on informal relationships and collaboration to get the work done on time and with the necessary results.
The lesson here is NOT that formal program governance is irrelevant. All things being equal, it is always preferable to have strong, executive-level governance in place to ensure that complex change initiatives stay on track, that partners quickly resolve the inevitable conflicts that arise during implementation, and that the programs ultimately realize the expected value. A recent McKinsey study on IT project failures is a useful reminder.
Rather, the lesson is that true leadership is even more important. The project described here was made more difficult, and required more personal heroics, with the lack of formal governance. It’s the exception to the rule. My colleague will never suggest that governance is unimportant. It’s just that he now pays even more attention to the individuals on the other side of the table responsible for leading the way forward.