Time and expertise limitations can cause steering committees (SCs) in charge of major and complex strategic projects to make errors in judgement and decision-making. The result: such common but serious problems as being late and over-budget. Proactive steps and awareness can help SCs avoid the traps.
A company in the facility engineering industry took on a large and complex project that presented both technical challenges and was subject to legal regulations that affected customer requirements. Unfortunately, the steering committee (SC) in charge of the project never really understood the key trade-offs and risks in the project. Unaware of the technical or legal challenges, they accepted a project plan that was, in truth, unachievable. After the third schedule delay, the SC realized that the project was a ‘bottomless pit’, in the words of an executive connected to the project.
This example emerges from a research study on effective project governance by a team of researchers from Cambridge Judge, HEC and the Stockholm School of Economics. Strategically important projects are the most complex of projects and have the highest stakes, and yet the members of steering committees in charge of such projects are often hampered by two significant disadvantages: 1) they rarely have the time required to effectively manage the project; and 2) they don’t have the knowledge or expertise required to ask the right questions.
Based on in-depth interviews with 17 senior executives and chief executives covering 29 strategic projects, including successes and failures, the study identified five major themes of supervision challenges — or “traps,” to use the study’s term:
Given the time and expertise constraints cited earlier, is it possible for SCs to overcome the challenges in these five areas? The researchers are optimistic. Using lessons drawn from their interviews — each respondent had been asked to reflect on two difficult strategic projects, one in which the SC oversight had been successful, and one in which the problems had not been resolved — they generated specific recommendations for each of the five themes.
These recommendations are listed here:
Steering Committee Composition
Motivation and Control
Managing Surprises and Changes
An effective Steering Committee is vital for the successful, on-time, on-budget implementation of a strategic project. The recommendations from this study make clear that SCs can overcome any constraints of time and lack of expertise by taking proactive steps — from simple but important ones, such as limiting the number of SC members, to more sophisticated steps, such as putting in place process incentives. Achieving a balance is key: do not micromanage but do not abdicate. Perhaps the most essential element is awareness; if you don’t recognize the traps before you, you will not avoid them.
Supervising Projects You Don’t (Fully) Understand: Lessons for Effective Project Governance by Steering Committees. Christoph Loch, Magnus Mähring & Svenja Sommer. California Management Review (February 2017).
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