Chapter 14 SENIOR MANAGEMENT The responsibility of senior management within a company is to guard, further and strengthen the business of that company. Each senior manager oversees some area of the overall business, generally managing a subset of the corporate staff. This concept is true no matter what the type of company, and it applies even in an association or government organization. Because of the breadth of this responsibility, senior management is generally not intimately involved with any particular project. Instead the responsibility is to support a number of projects, to prioritize a broad set of project under his control, and to help with prioritization of a broader set of projects underway within the company as a whole. The executive is generally measured on contributing positively to a subset of the business. He will take any required action to ensure that the corporation is strong overall, and that in particular, his responsibility areas are successful. The nature of this job necessitates that no one senior manager is familiar with many projects. Most senior managers are not familiar with the fine details of even one project; it is not their job to be so. They need to focus their energies on the higher-level picture. They rely on their staff to keep them informed of those aspects of the ongoing work that they should be aware of. A good executive is able to understand the situation based on the reports he is given, and will assist with appropriate support when presented with problems. Senior management is involved in all projects, by necessity, because, if nothing else, senior management is responsible for the allocation of the funding. In project management terms, this puts senior management in the role of project sponsor. This chapter starts with a discussion of the project sponsor – who can be a sponsor, and what this role entails. Senior management must also consider the amount of risk the company is taking 232 Senior Management when any project is undertaken. Here we discuss risk management and how it applies to projects. Let’s start with the concept of sponsor. There are various views on what constitutes a project sponsor. All of the views include some sort of project ownership. In some cases people describe what might be called a project champion. In other cases, where a project is being done for a specific customer, the people mention the customer. Still others mention senior management within the company. From the PMBOK ® Guide we get the official definition of a project sponsor: “The individual or group within or external to the performing organization that provides the financial resources, in cash or in kind, for the project” PMBOK ® Guide, section 2.2 The two points to consider from this definition are that the sponsor is within the performing organization, and that the sponsor provides the financing for the project. These two points let out the customer as the project sponsor, and also disqualify some project champions. When we consider the roles for the sponsor we will see why an internal sponsor is needed. As for choosing the person with the financial stake rather than a project champion who may not have a financial stake, the premise is that if someone has the major financial stake, this person will have a strong interest in the project, and thus will be interested in and willing to fulfill the sponsorship roles. While this is generally true, there are sometimes cases in which the project champion might be more useful to the team than the defined sponsor. Let’s look at the roles of a sponsor. The roles of the sponsor include: guardian of the “business vision” resource allocator, negotiator clarify critical issues communication link support the PM and the team The sponsor usually issues the Project Charter and evaluates project performance and deliverables. He should be senior enough to resolve conflicts. 233 Senior Management As the guardian of the business vision, the sponsor must ensure that the project objectives are consistent with the corporate objectives. He will ensure that the company management understands the value the project brings to the company within the business vision. He will also ensure that the project team clearly understands the corporate strategic goals, and how the project fits with them The financier of the project is essentially the resource allocator. The sponsor will usually approve the allocation of funds, and also select the project manager, but usually he will delegate the allocation of personnel resources to the project manager. If there are project issues to be solved, the sponsor can help the team to understand the corporate implications of the potential directions, to ensure that they make decisions that are most beneficial to the corporation. The project sponsor should be senior to the project manager, and should hold a position senior enough to enable him to protect and support the project. This includes bi-directional communication regarding any issues related to the project. When the executives discuss potential budget cuts, the sponsor speaks for the project, to protect the funding. When projects are discussed, the sponsor touts the project benefits to the corporation. When project prioritization is discussed, the sponsor fights to maintain a high level of priority for the project. When corporate issues threaten the project, the sponsor provides information to the Project Manager to enable the team to prepare their response. Communication is a key function provided by the sponsor. The PM needs to keep in mind that executives are not able to be aware of the details of all projects underway. In fact, one of the duties of the PM is keeping the sponsor well informed about the status of the project, the success, and the problems that the team is facing. The sponsor supports the PM, the team and the project. When additional resources or specific skills are required, and the PM’s requests do not yield satisfactory results, the team depends upon the sponsor to help with the negotiations. Considering these responsibilities of the sponsor, it is clear that there is a need for an internal sponsor. This does not diminish the role of the client. If the project is being done for a client, this client is a very key stakeholder whose requests must be carefully considered. But there is also a need for someone within the company who has access to the right information, who can speak for the project and who can assist with resource or conflict issues. 234 Senior Management The sponsor usually writes the charter, or at least approves the charter. One of the main reasons that this is the case is that the project has to be implemented in such a way that it aligns to the overall corporate strategy. Therefore the sponsor’s input is invaluable in defining the project. This should apply to all projects, even though they occur in different forms and very different industries. It is expected that the individual who provides the funding will have significant interest in the project, and generally this is the case. Thus most projects have the required support available. However, from time to time the person providing the funding is not appropriate as the sponsor, or the sponsor takes either too much interest, or too little interest in the project. In any of these cases, the PM has a problem that must be addressed. Consider the first case. How could the project-funding provider not be appropriate as a sponsor? In one case, this happened because of the business relationships amongst companies. The project occurred in one of three sister companies. The books of the three companies were completely separate, but there were close working relationships amongst the three. The PM was in one company, but the senior manager who had the most interest, and the most at stake, in the project, was in one of the other two companies. However, since the books of the companies were separate, it was not possible for the manager to provide the project budget. Instead, the funding was provided by senior management within the company in which the PM worked. Technically, the owner of this budget was the project sponsor. But this manager did not have a strong interest in the project, knowing that the project champion was in the sister company. So, in this case, the technical sponsor did not provide the project support. The project champion fulfilled this function. In the case of a sponsor who does not have the expected interest in the project, if the PM can find a project champion, this might solve the problem. If this is not possible, the PM will need to work with the sponsor to attempt to generate the required support. In this case, the PM should allocate some additional project management time to allow for the extra effort. Why might the sponsor exhibit too much interest? Maybe the sponsor was a PM, and still enjoys being involved. Maybe the sponsor has such a strong stake in the success of the project that he believes he cannot afford to leave it in the hands of others. Or perhaps the sponsor does not trust the skill of the PM, so he steps into the picture to ensure his project is successful. In 235 Senior Management any of these cases, the PM will have to spend time with the sponsor to build the required trust, and to work towards more appropriate relationships. Once the relationship has been satisfactorily established, the sponsor can provide all the required support for the project. The sponsor will provide the communication to and from management bodies about the project, and to and from the PM about corporate developments. The sponsor can be called upon to assist with problems in obtaining the needed skills. It is the sponsor who will be approached if there is a need for management reserve funding. And perhaps the sponsor will need to enter into customer discussions when agreements are difficult to obtain. Senior management will also be involved corporately in the prioritization of projects. It is very useful to the project team to have a spokesman in the prioritization discussions to protect the project, and also to have someone to share priority information with them. An project which is liable to be targeted in executive discussion benefits from having a sponsor senior enough to be included in the discussions. When accepting a project, the PM should judge whether or not the designated sponsor is at the appropriate management level to protect and support the project. Senior management should also be involved in the definition of the success measures for the project. Management will generally provide some criteria that they expect to be met. These criteria should be accepted by the team unless there is some reason that they cannot be met – in which case it is the responsibility of the PM to let management know about the problems early. In addition, the team should suggest any success measures that they feel would appropriately measure success. Management should then assess these, and either approve them, or provide reasons why they should not be used. In fact, before any project is even accepted, most companies work through some sort of project selection process. The most objective way to handle this is to have a project selection model that is based on numerical values. Then the team making the project proposal will analyze the benefits, and the costs, along with some of the risks the project will encounter. This process will yield some of the success measures before the project even begins. These models consider many factors, amongst them the potential revenue, the potential loss or build of reputation, the return on investment, the potential for success, the availability of needed resources, including money, skills, etc, the potential market demand, the potential competition, 236 Senior Management the fit with corporate strategic goals, the potential risks and ability to deal with them. One of the key responsibilities that the sponsor should be involved with is the project risk assessment. This does not necessarily mean that the he works directly with the team in the risk assessment, although this could certainly be useful to all concerned. But as the risk assessment proceeds the sponsor should be made aware of all the potential risks, and should ensure that the team includes enough contingency time, money and plans to ensure project success. Senior management will actively monitor all projects on an ongoing basis, and may request project details from time to time when they are needed for evaluation. . problems. Senior management is involved in all projects, by necessity, because, if nothing else, senior management is responsible for the allocation of the funding. In project management terms,. the appropriate management level to protect and support the project. Senior management should also be involved in the definition of the success measures for the project. Management will generally. within the performing organization, and that the sponsor provides the financing for the project. These two points let out the customer as the project sponsor, and also disqualify some project champions.