The Executive Sponsor in the Project Economy
In the next five years, the world will see more projects than ever. The reconstruction of the economy after the devastating global pandemic crisis, will be unprecedented in human history. According to McKinsey , Governments announced $10 trillion in reconstruction funds just in the first two months of the crisis, which is three times more than the response to the 2008–09 financial crisis. These are millions of projects, which will need millions of project manager and executive sponsor(s); the confirmation of The Project Economy, a term I conceived in 2018.
Lots of companies are anticipating having to reorient themselves toward project management. According to a 2021 McKinsey survey on workforce skills after the Covid-19 crisis, companies now consider project management to be one of the top competencies they need to develop.
All of this represents an unprecedented transformation that will have profound organizational and cultural consequences. The problem is, many leaders still don’t appreciate the value of project management. Their sense is that projects are a waste of time. Typical is the attitude of one executive, who recently told me, “If you want to make sure that something is not done, make it a project.”
That may reflect the present reality in many organizations, but to dismiss the importance and potential of projects as a result is huge mistake. When executives ignore project management, products launch late, strategic initiatives don’t deliver, and company transformations fail. Project success is key to business survival—and the key to project success is getting executives to support them.
The governance of the project and the allocation of accountability and responsibility is a key area to secure in the early stages of project planning. Just as an organization or business has a chief executive who is in charge and accountable for its operations, the same is true for a project where the executive sponsor is accountable for the overall success or failure of the project. Establishing a clear governance structure at the beginning of the initiative is essential, as is selecting a sponsor with the qualifying skill set required to for them to lead the project to success.
The measure of success for which the sponsor is accountable is the benefits that will accrue once the project has delivered, is being operated or exploited by the users (clients, employees, and citizens). This is significant because it means that the sponsor not only needs to make sure that the project delivers but that the benefits associated with the project are still desirable and achievable. This explains why they have to be an advocate. This involves sense-checking throughout the project that it is still needed or, in the event that things have changed, redirecting or recommending the project’s cancellation if continued advocacy is no longer appropriate. Note that today there is pressure to deliver benefits before the project is fully delivered, requiring more agile ways to look at how the project will be structured.
Many projects still start without any clear decision who is ultimately accountable for their successful delivery. As projects tend to run across geographies, business units, functions, departments, and organizational boundaries they are often prone to ‘shared accountability and collective sponsorship.’ As a result, many executives feel responsible, yet no one is really accountable for driving the project to completion.
Once, when I was speaking to the CEO of a large global telecoms company, he bluntly admitted that, “Currently, I am the executive sponsor of 18 projects. The three projects to which I dedicate time to follow through – by supporting the project leader and team, and chairing the steering committee – go much better than the 15 that I sponsor but to which I really don’t dedicate any time.”
Organizations need to understand that the executive sponsor is one of the most vital and influential roles in any project, especially in those projects that are strategic and transversal (across departments, organizations or supply chains). The more complex the project, the more critical the executive sponsor role and the more time it demands.
The Benefit of an Effective Executive Sponsor
Three of the organizational challenges faced by projects that executives need to be aware of and that strong sponsor will address are:
- Resources are often not fully dedicated to the project and have other responsibilities: For example, a Java development expert whose main job is to keep the website up and running is asked to join a digitization project. Her current responsibilities are not modified, therefore her contribution to the strategic project will be on top of her day-to-day job. Not being fully dedicated will have an impact on the speed of the project.
- Resources have different reporting lines outside the project: For example, a legal expert is part of a GDPR (General Data Protection Regulation) project, which is led by the vice president of the business. The legal expert is not participating in the weekly project team meetings. The vice president has tried to convince the legal expert to join, but as she doesn’t report to him she doesn’t feel obliged to follow his instructions.
- Departments’ objectives are different and regularly more important than the project’s objectives: For example, a finance controller is required to participate in the development of the business case of a large company-wide project. However, his direct boss, the CFO, is under pressure to finalize the annual accounts, a key objective for the finance department. Despite having some tight deadlines, the project is at the mercy of the CFO’s willingness to cooperate.
Shortly after Fortis Bank collapsed in 2008 with the financial crisis, BNP Paribas made an offer to the Belgian Government to acquire the distressed bank. In May 2009 the acquisition was approved by the shareholders. Baudouin Prot, CEO of BNP Paribas said: “The project of tying up with Fortis Bank will be strongly value creative for all stake holders…”. And to lead the integration project he appointed BNP Paribas CFO, Jean-Laurent Bonnafé, who was sent to Brussels on a clear mission: Fortis had to be integrated within the next three years. He established a daily Steering Committee, which included all the business and function heads, where they reviewed closely the status of the integration. The pressure on the entire organization was tremendous. The entire 15.000 workforce didn’t have a doubt on what was the priority and where they had to spend their time: integration activities.
Jean-Laurent Bonnafé played an extremely active role in the project; he was what I call an engaged, committed and decisive sponsor. Needless to say that the integration project was a success, completed one year in advance.
Antonio Nieto-Rodriguez (antonionietorodriguez.com) is a leading expert in project management and strategy implementation, recognized by Thinkers50 with the prestigious award “Ideas into Practice.” He is the author of the HBR Project Management Handbook (2021, Harvard Business Press), Lead Successful Projects (2019, Penguin) The Project Revolution (2019, LID) and The Focused Organization (2012 Gower), and has been teaching project management for more than a decade to senior executives at Duke CE, Skolkovo, Solvay Business School, and Vlerick. Antonio has held executive positions at PricewaterhouseCoopers, BNP Paribas, and GlaxoSmithKline. Former Chairman of the Project Management Institute, he is the co-founder of the Strategy Implementation Institute and the global movement Brightline. He is a member of Marshall Goldsmith’s 100 Coaches.