New research shows big ticket infrastructure projects are failing because of 'dysfunctional', unaccountable governance teams
By Anna Game-Lopata | May 7, 2013
New research shows big ticket infrastructure projects are failing because of ‘dysfunctional’, unaccountable governance teams.
The survey of Australian chief executives and other senior managers finds major project governance teams are dysfunctional and lack the skills and experience to govern major projects.
Undertaken by Sydney consultancy Caravel Group and Melbourne Business School, the research reveals governance teams also exhibit poor corporate behaviour, are conflict-ridden and rarely have their performance measured or reviewed.
The survey of approximately 100 senior project participants across a range of industries, finds just half Australia’s projects are successful.
When measured against nine basic elements for successful project governance the respondents deliver their teams an average score of only 24 percent.
“The most glaring omission is lack of an approved governance plan – these were absent 87 percent of cases,” says Caravel Group Director and CEO Paul Myers.
“Teams also performed badly in ensuring zero conflicts of interest, adequate delegated financial authority, and understanding the difference between consultants, solution and project delivery SMEs.”
Myers says the findings demonstrate a major rethink and reform of project governance practices in Australia is required.
“When coupled with the time and cost overruns one can only wonder what the cost is to the GDP,”
he says.
To give an inkling, Myers points to a Senate Committee hearing in February this year, at which Infrastructure Australia revealed $6 billion a year is wasted through tendering processes and a further $6 billion through litigation.
Melbourne Business School Associate Professor Graeme Cocks adds the survey challenges traditional explanations of where major projects come unstuck.
“Blame for failure has traditionally been laid at the door of the project management team,” Associate Professor Cocks says.
“However, it appears that most of the fault actually lies with the project governance team.”
While project management teams focus on creating the deliverables in accordance with the scope of work, managing people, money and resources, the project governance team should focus on the strategic intent of the project and delivery of the value promised in the business case.
“Project governance therefore encompasses authority, accountability, stewardship, leadership, direction and control,”
Cocks says.
Cocks says the research shows too many governance teams are stacked with ‘stakeholders’ to secure buy-in, rather than people with proven ability to govern projects.
“These people are often heavily conflicted and have no accountability for their Project Governance role,” he says.
About the authors
The Caravel Group delivers Complex Infrastructure projects in partnership with its high profile government and private Sector, blue chip clients.
Paul Myers is a seasoned Project/Program/Change Director with more than 30 years of experience across the transport, utilities, telecommunications and IT industries at operational, project and program level within Australasia.
He has been pivotal to the success of many high-profile, landmark Complex Infrastructure programs.
Associate Professor Graeme Cocks has had a wide-ranging career in executive management.
His particular areas of expertise include strategic planning and operations management, process analysis, project management, performance measurement, technology transfer, business integration and change management.