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Progressing Between Project Risk Governance Maturity Levels

The adoption of maturity models supports regular and systematic assessment of the organisation's capabilities. While theoretical frameworks provide the underlying conceptual understanding, the application of the model has to take place in the organisation's own context. The expectations of PRG performance are organisation-specific and the level of maturity to be achieved is determined according to its circumstances. The context in which a PRG maturity model is applied should take into account corporate and project strategy, resource constraints, criteria for project success, the ambitions and motivations of management, and so on. Furthermore, the assessment of PRG maturity should be based as much as possible on quantitative data rather than on feelings and opinions (Rad and Levin 2006).

Table 9.3 provides recommendations on strategies or activities that could be applied to move to the next level of PRG maturity. They are not exhaustive but intended to indicate the options that are available to an organisation. As such, they reflect the orientation to PRG of this book.

Table 9.3 Transition between project risk governance maturity levels

Transition

Key PRG Strategies and Activities

Level 1 (ad hoc) to Level 2 (initial) 'from negative to positive project risk management'

The board takes an interest in risk management. Focus on negative project risk with emerging focus on positive project risk.

Recognition of importance of an ERM approach.

Level 2 (initial) to Level 3 (defined) 'development of formal PRG structures and relationships'

Project risk management included in project/ business strategy.

Implementation of risk strategies for value- protecting.

Implementation of risk strategies for value- creating.

PRG processes, structures and relationships defined.

Level 3 (defined) to Level 4 (managed) 'enabling a predictable PRG approach'

Project risks are managed strategically.

PMO is change agent for implementing PRG. Project manager aligns project risk management with strategic goals.

Risk appetite and tolerance levels are clearly defined.

Level 4 (managed) to Level 5 (optimised) 'continuous improvement and embedded approach to PRG'

Move to an innovative and flexible PBO. Business/project/project risk strategy alignment is complete.

Performance management criteria are applied. PRG maturity model assesses PRG sophistication.

There are number of factors that may impede the transition between stages.

• A lack of ready-to-use documentation. Models may exist in concept form and lack useful assessment guidelines for their application in practice. Models stimulate discussions within the organisation but not in sufficient depth because of the absence of documentation.

• The misapprehension that the higher the organisation is on the scale, the better. A case should be made for the level deemed appropriate for the organisation, based on the overall return on the investment of getting to the level. Vandersluis (2004) provided the example of the cost of implementing a culture change required to do Enterprise Project Management exceeding its potential benefits.

• The misapplication of the maturity model. There could be an error in the way the assessment was conducted because of inadequate supporting documentation. 'Determining the correct level of maturity in an organization is something less than a science and more than art' (Crawford 2006: 55). A potential disconnect could exist between conceptual design and actual organisational setting.

• The misuse of the maturity model to support the claim that there has been progress. As Crawford (2006) observed, organisations typically start with a baseline assessment which provides the basis to judge progress on a periodic basis.

To support movement along the stages of development, a number of prerequisites have to be satisfied (Crawford 2006; Pasian et al. 2012). First of all, project clients must be involved. The goals of the project must reflect customer interests, and hence the customer should be involved in defining them. They are stated at the beginning of the project and revisited throughout project implementation. This means that adaptable cultures must be fostered among staff to develop a willingness to accommodate new circumstances, methods or customer demands. There should be a recognition that there are aspects in organisational life that are inexact. However, an 'undefined' project raises questions and creates uncertainty. To generate the required trust, attitude and motivation, project goals should be dear and effectively communicated. To overcome any resistance to change, staff members should have an understanding of what the future holds for them. These prerequisites apply to both project and PRG maturity assessment.

Checklist: Progressing to the Next Level in the Project Risk Governance Maturity Model

• Are the differences between levels of PRG maturity clearly understood?

• Are strategies and activities developed to move to a higher level of PRG maturity?

• Is it understood that PRG maturity assessment can be misused?

• Is wide agreement obtained before attempting to move to the next level of PRG maturity?

• Is the move to another level of PRG maturity cost-effective?

Conclusion

This chapter introduced the nature of project management maturity models, before developing a model for PRG. The role of the model is to identify issues most critical to achieving PRG objectives according to dimensions and levels of maturity. Five levels were determined, ranging from an ad hoc to an optimised stage. Dimensions reflect the orientation to PRG by the author of this book. The model assists management to establish weaknesses in the current stage of reaching PRG maturity and serves as a roadmap for further improvement. The merit of the maturity model is to set direction, determine the actions required and encourage a culture change towards continuous improvement. Assessments are carried out periodically and provide a benchmark against which future progress or lack of it can be determined.

 
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