DOI: 10.7763/IPEDR. 2014. V55. 11

Entice Sponsors and Foster Change to Empower Quality and Innovation.

Mithun Kumar Mridha 1, Paul Florea 2

1 Davidson Consulting – Paris (Program & Project Portfolio Management Department)2 S&H Group – Paris (Program & Project Portfolio Management Department)

Abstract. Imagine you have an innovative Idea for a product that doesn’t even exist in the current market. A product that can change lives, add value and generate millions of Euros in revenues. You have the money somewhere locked in your portfolio. You wish this Idea to travel, all the way from your mind to the showroom of your industry outlet. For making this journey successful, you need active support and collaboration of Herculean sponsors and Top Change Agents. But it is extremely difficult to find such ideal sponsors who can support the initiatives from the inception phase to the closure phase.

This article is an amalgam of practical experiences and organizational research in several business domains. It will orchestrate innovative organizational approaches and strategies used by multinational companies for Sponsor retention in project portfolios. You can use these best practices to transform unengaged Sponsors into proactive Sponsors. You can switch your portfolio from Change critical to Change embracing. From finding ways to do things right, you can now find ways to do the right things. The world is always on the move and so are your portfolio priorities. Investing on Quality and Innovation is the key to sound growth in this ever changing business environment. This article will provide different scenarios in which some excellent initiatives and approaches survived, succeeded or failed. The article will conclude with pragmatic guidelines that will enable senior managers and engineers to succeed in their future Quality and Innovation project initiatives.

Keywords: Innovation, Risk, Project Portfolio Management, Program Management, PMO, Corporate Culture, Corporate Strategy, Quality, Change, Transformation, Sponsorship

1. Sponsors and their glamorous Project Portfolios

1.1. Why is it important to have a sponsor?Every company wants its projects to be successful. Getting a clear and un-doubtable sponsorship, having

people adhered and showing a clear understanding of what the goals are and how to achieve them are critical success factors.

1.2. The theory is simple …In theory, once the organization has committed to undergo a project, a sponsor is nominated by the high-

level instances like the Executive Committee or the Steering board. This person is usually having a lot of power and authority within the organization and plays a major political role, which is not to be neglected. Even if not stated officially, the main characteristics of a sponsor are:

He is expected to bring a supportive attitude and to motivate people His nomination sends a clear message that the company is fully engaged in the project The people are more sensitive that their work and performance is followed at the top of the company Overall, the sponsor is there to guarantee the success of the project

1.3. … but the real world is different

However, this nomination does not represent everything and the expectations the people may have can quickly turn into a reverse situation. What seemed to be a pledge of support may in reality be the opposite. The root causes may be various, like:

The sponsor does not see the project positively or does not value people He is not a good manager and doesn’t know to give a clear orientation, He is not a good communicator and lacks charisma

2. The Challenges in Project SponsorshipA project sponsor is the key link between the project management team and the organization's executive

management. An effective sponsor "owns" the project and has the ultimate responsibility for seeing that the intended benefits are realized to create the value forecast in the business case.

A good project sponsor will not interfere in the day-to-day running of the project - that's the role of the project manager. But, the sponsor should help the project manager facilitate the necessary organizational support needed to make strategic decisions and create a successful project. It's important to flag the lack of effective sponsorship as a key risk to the project. It may not make you popular, but you have an ethical responsibility to clearly define risks that need management attention.

Project sponsorship is linked very strongly with principles of leadership, and is improved by awareness of different leadership theories, styles, models, etc. Project sponsorship is also closely connected with delegating responsibility, benefit reviewing and related techniques. Having a basic understanding of different personality and motivational issues is also helpful for interpreting and performing the project sponsorship role effectively and successfully.

The following two cases will provide you with some real situations with lacking optimal sponsor involvement with their impacts.

2.1. Corporate Case 1A leading French Environment Company funds more than 30 Million Euros on Quality initiatives in an

IT portfolio. The Sponsors want the company to keep their leadership position in external markets. Once the initiatives were qualified, the sponsors chose a healthy project team. A year later the Company

undergoes Organisational Transformation and restructuring. The project team members find themselves split into different Supplier-User entities. The Sponsors have changed their roles and moved to different branches of the organisations. The Project delays become a common scene and costs hike. Very few projects are now getting to the final validation stage.

A team of Process Consultants and Portfolio & Programme PMOs are asked to help the team to improve the portfolio maturity and efficiency. The process consultants develop sound processes to accompany the change. The PMOs develop and implement detailed project management tools and train the project teams to use them. Somehow the new Project Sponsors are very new to the organisation and don’t understand the initial goals behind the projects. They lack charisma to get support and engagement from the project teams. The project resources who are allocated in certain projects do not really work on the project. They time-track on one project and give outputs to other projects. The project managers are not motivated to use the rules of project accounting from IT Controlling department. The result was poor performance in projects, reporting and follow-up for several years. The project resources started getting fed-up of the status quo and a lot of them quit.

2.2. Corporate Case 2 A top car manufacturer entrusted a logistics company to manage its whole European supply chain

activities from A to Z through a multi-billion dollar Innovation Contract. This represented a historical chance for the company to expand its operations, penetrate into new markets and develop its service offerings.

Once the contract was signed, a small team of key people was formed. Without a clear vision and orientation, they started to deal with detailed tasks, forgetting a crucial point: “the big picture” and the key transversal points.

As one of the contract requirements was to implement business processes that are auditable, a consulting firm was hired to identify and secure the critical processes. Some impressive steps are taken in this order: the processes are identified, the business expresses their requirements, and then the IT can start developing the IT tools to support those business processes. Imagine the Achilles heel of the contract was to receive, check and pay more than 50.000 bills per day. Obviously, the IT system is crucial, yet you have to know exactly how many bills you are waiting for, what their contents are and what each bill means to your business.

The consulting firm was assigned a project of creation of an enterprise referential or repository containing business and IT layers. The following pictures best resumes the consulting firm approach.

The consulting firm provided some consistent quick wins including high level business processes and an organizational gap analysis. Even an accurate nomenclature of risks was set-up but the teams never followed it.

You have probably seen similar situations where organisations are ignorant on some strategic matters. As the “Go live” day approached, the pressure on the team exploded and their micro-task oriented approach made them overlook the value of managing their processes. The responsible who sponsored the consulting firm assignment lacked leadership and zeal, the teams then stopped working on the key processes.

The end of the story is a dramatic one: without clear business requirements, the IT team took the lead over the IT tools. They developed an expensive tool that has never been used. The reason is obvious: the tools didn’t respond to what business and client expected. As a consequence, the logistics company did not manage to start the operations in due time. To make things worse, the company postponed the “Go live” date three times and finally started with only half of initial scope, with many manual workaround solutions.

Now imagine the reverse situation, if the sponsor of the process approach proactively supported the consulting firm in securing the process clearly fitting the client requirements. If he backed the development team, to avoid the escalation of costs and the multiple postponing of the Go live date. If only he could foresee the immense pressure put on the understaffed teams due to tight deadlines.

All these fatal consequences were just because the sponsor didn’t react appropriately at the right time, in the right direction. A British politician once said, "All that is necessary for evil to triumph is for good men to do nothing".

3. When it works…Sometimes in a few organisations that managed to find rare sponsors who managed miraculous

turnarounds in Quality projects. These organisations are no different from ordinary organisation – they only used some right techniques to get the right level of Sponsor involvement throughout their project life cycle.

3.1.1. Corporate Case 3A leading Investment Bank in Europe invests more than 300 M€ in IT and Business projects across

several portfolios. Even in times of crisis, this bank kept recruiting and investing on innovation and quality initiatives. How did they manage?

The sponsors came up with the idea of marrying Agile Project Management with Traditional Project Portfolio Management to implement Agile Portfolios. These portfolios have a lot of projects in the funnel that get qualified by Sponsors after a detailed benefit analysis. The project size are restricted to less than 5 months and 500 k€. Small projects are grouped to make programs. Umbrella projects are used in programs for coordination & program management tasks. Projects are not allowed to be in execution throughout the year unlike competing organisations. They need to be short and benefit oriented. This results in focus on a

Align organization

Align business processes

few initiatives, the sponsors keep the money in the portfolio envelop to decide step by step on their investment. Like in Airline companies, the Sponsors overbook 10% of their budget on innovative projects during the year. Projects performing poorly or late are forced to release their budgets every month through unused contingency releases. Thus unused contingency and immature budgets are forced to be released by Sponsors. This overbooked budget is efficiently used during the year to encourage more creative initiatives. The program managers become conscious of their actions and their focused effort helps the portfolio to deliver high maturity products continuously.

3.1.2. Corporate Case 4Imagine working in the heart of an expertise centre at one of the leading European transportation

companies. A program manager responsible for companywide Quality initiatives is overwhelmed by operational tasks and does not know what is happening within his portfolio of more than 50 projects. He feels embarrassed for not providing his boss an insight on the portfolio. The days passed and more projects poured in. The program manager could not separate the redundant and unimportant projects from the vital ones. He was overwhelmed as Clients began to complain about the outcome and benefits of some major projects.

One day, a program consultant was presented to him. The mission was to offer a precise overview of what’s happening in all those projects in terms of risks, budget variations, client impact and benefits.

The consultant’s first step was to attentively observe the current situation. He observed that each Project Management Officer (PMO) manages his projects in his own manner and some of them lacked the basic project management follow-up tools.

Armed with patience and diplomacy, the consultant developed a tailored project management methodology, followed by a client-oriented dashboard and a project toolbox. Now the program manager spent a lot of time analysing the results of these dashboards. He surprisingly cancelled 28% of his projects, de-scoped another 19% of this key projects. The Result: The organisation was focussed on the right projects and delivered all milestones in the next 12 months. The Clients sent a high rating & feedback on the project outputs.

All this was possible because one person strongly believed in the outcome of the consultant’s mission – the Sponsor. This departmental Head actively supported and encouraged his troops in the right direction of the alignment of their respective practices.

The challenge was met by patience (3 months) and key ingredients (good communication, pragmatic and ease to follow methodology), without forgetting the most important thing – people who really felt concerned and taken care of. But the critical success factor of the whole approach was the flawless department responsible sponsorship.

The lesson learnt is so well described by Confucius: "Tell me and I'll forget; Show me and I shall remember. Involve me and I'll be concerned.”

3.1.3. Disruptive innovation : The Salomon case study The story started 5 years ago, when Salmon’s footwear department faced its worst results. It seemed

almost impossible to face powerful competition more firmly entrenched and with huge budgets. Financially speaking it was David versus Goliath. One can ask: in this disadvantageous yet challenging context, how did Salomon succeed in becoming the leading business in its market? The answer is: by creating a disruptive innovation, Salomon multiplied its sales figures by 2.5 in only 5 years to exceed 220 million euros, 90% of which are made through export!

The Sponsors at Salmon used the strategy of creating and preserving a competitive advantage in the face of much stronger competition.

The first step they made was to identify a new market. For a number of years Salomon had been equipping athletes of a little-known sport, “adventure racing”. Salomon’s teams were looking to improve these athletes’ performance and so designed shoes that were more stable, solid and protective, as well as lighter and faster.

They pursued with identifying a starting niche. The trail runners aspire to run in the wild, far from asphalt. However, since there was no specialized footwear for this, mountain runners were using running shoes. Therein lied an unfulfilled latent need since running shoes are not well adapted to mountain running.

3.1.4. Creating and preserving a competitive advantage Now let’s have a look at how Salomon kept a step ahead of the competition by using the Web 2.0 – and

especially its community management features. Anticipating fundamental market changes: It is perfectly reasonable to think that the trail running

market will become much bigger than the city jogging market. Using communities of enthusiasts: Salomon was faced with giants such as Adidas and Asics that were

taking an interest in this new market. They began to sponsor races and were signing ridiculously big contracts with athletes.

Making a strategic choice: Community Management.o Salomon teamed up with community managerso Community managers do not have primarily financial motivations. They are all passionate

about running in nature and are referred to by the community. o Community management is cheaper and more efficient. When a highly regarded athlete

recommends Salomon shoes, it creates a snowball effect. Being close to your customers is a major asset in making your competitive advantage sustainable.

o Be accessible and attentive to passionate consumers: Community Managers are accessible and attentive to nature running enthusiast and react immediately and exchange views widely.

o Geographical proximity: Stay local – act on a regional or even national level, but not a global one. Salomon organizes races on a local, regional, or national scale, with the involvement local specialized stores.

3.1.5. Four rules to follow to succeed in community management Be transparent: refrain from stonewalling. When there is a problem, admit it. Make it tangible, not abstract: this is not a dream Share a common passion: common to employees, amateurs (consumers), community managers… Keep it local: it is a fallacy to think that communities are global. Communities can only be local.

3.1.6. Disruptive innovations: 2 fundamentals that you must bear in mind The Salomon case study brings to light 2 fundamental characteristics of disruptive innovation: The risk factor is tiny: You are launching a product in an area where customers did not have a

solution to their problems in the first place. The risk is therefore minimal because:o Incremental innovations are much more expensive and high-risk than disruptive innovationso Investments are small in disruptive innovations, it’s all about changing business models.

It’s all about passion: Salomon’s corporate Sponsors are champions in cultivating passion! Salomon’s employees are all passionate about mountain sports.

4. The SolutionLet’s focus on Sponsorship in Quality initiatives from two perspectives in the presented cases: Why it did not work? How could it work?There is no miracle that will make you get an ideal sponsor actively engaged in the project.But there are some basic rules that, if carefully considered, might change the way you or your team

initiatives are looked at.

4.1. Benefit AnalysisThe first element to consider is what the company or the Sponsor might get in return by proceeding with

the project. You should look at this from several points of view:

Quick wins Vs. long term gains Individual, team or corporate gains Competitiveness and innovation gainsYou should remain factual and make your project messages benefit-oriented.

4.2. Project Sunk Cost Fallacy Many project sponsors fall for sunk cost fallacy where they keep investing in project initiatives only

because they have already invested so much in the past years. It’s like waiting for a metro when it is late. You have already waited for 20 minutes, even if it would be wiser to go walking you’ll have more tendency to stay longer and wait for the metro since you already invested 20 minutes. Sponsors need to nourish the habit of stopping projects at any moment if they don’t appeal to the corporate strategy even if a lot has been spent on the project.

4.3. Creative Avoidance in ProjectsMany project sponsors are experts in an advanced type of procrastination. They are victims of Creative

Avoidance that make them unconsciously fill up the day with trivial work, a lot of operational work to keep themselves Busy: Busy to be only Busy. It’s a vicious cycle that makes them avoid interesting and innovative project initiatives. Sponsors need to take a step back, analyse what they are doing and avoid procrastination in analysing new initiatives. Some hidden gems could be discovered and that might change the whole project scenario.

4.4. Portfolio Priority DilutionSponsors often consciously allow their attention to shift to less important projects distracting them

investing on value added quality initiatives. The idea is not to do take the list of all initiatives and start allocating resources to finish them all. Priority Dilution happens in Executive Sponsor Meetings where the the validation goes to project managers who are loudest and latest. Sponsors need to focus on their long and short term goals and see which projects are authentic and fit to these goals.

4.5. Change managementAnother element to be carefully considered is how to manage change.Many Quality-related projects fail not because of the technical knowhow of project managers but

because of missing change leadership skills.You have to be fully prepared with answers to questions like: How you will communicate, to whom and when How you will deal with change resistance How you will onboard people who are likely to embrace the change.

4.6. Cross Cultural managementA key success factor in international projects is cultural intelligence.Within the today globalized market, more and more projects are at an international scale. National cultures, beliefs and way of doing things have become more important than ever for project

success. Sponsors have to know their own cultural mindset, analyse their project teams’ cultural mindset and bridge gaps in communication and leadership.

5. ConclusionFinding pro-active Sponsors is not a One-Shot process. It is an ongoing evolutive process. Creative

actions are needed not only from the top management but also from the project teams to find the perfect match between the right sponsor and the fitting project. Once the portfolio gets many empowered Sponsors with focused projects, the portfolio maturity and project success is immediate. Stephen Covey sums it best ‘Management is efficiency in climbing the ladder of Success; Leadership determines whether the ladder is leaning against the right wall’.

6. References[1] Michelle Bowles Jackson, Success and the sponsors in PMI Executive Guide, pp.36-39, 2012

[2] Benoît Sarazin’s Blog - Disruptive Innovation to create a market where you are the standard to follow, http://marchesenrupture.typepad.com/english/2011/11/disruptive-innovation-the-salomon-case-study-14.html, 2011

[3] Susanne Madsen’s blog - Improve your effectiveness as a Project Sponsor, http://www.susannemadsen.co.uk, 2011

[4] Debbie Tesch, Timothy J. Kloppenborg, Chris Manolis, Stakeholder Relationships and Project Success: An Examination of Sponsor Executing Behaviors, POMS 22nd Annual Conference Reno, Nevada, U.S.A, 2011

[5] Ralf Müller, Project Governance, PM Concepts AB, PMI, 2010

[6] Ralf Müller, Project Governance, Chapter 3, Governance of Project Management, pp.29-44, Gower Publishing, Ltd., Sweden, 2009

[7] Johanna Rothman, Manage Your Project Portfolio, Increase Your Capacity and Finish More Projects, The Pragmatic Bookshelf, USA, 2009

[8] Pattharawan Karivate, Muhammad Rizwan, Role of Project Portfolio Control Techniques in Achieving Efficiency in Project Based Firms, Master Thesis, Umeå School of Business and Economics, 2009

[9] Prosci, Building great executive sponsorship, www.change-management.com, 2005

[10] Lynn H. Crawford, Terence J. Cooke-Davies, Project Governance: The Pivotal Role of the Executive Sponsor, PMI Global Congress Proceedings – Toronto, Canada, 2005

[11] Harvey A. Levine, Project Portfolio Management, A Practical Guide to Selecting Projects, Managing Portfolios and Maximizing Benefits, by John Wiley & Sons, Inc., U.S.A, 2005

[12] Robert Buttrick, Effective project sponsorship – turning the vision into the reality of success, Project Manager Today, from FT Executive Briefing, The Role of the Executive Project Sponsor, Pearson Education, 2003

[13] William W. Casey, What role does a project's sponsor need to play in the technology implementation process? in David Laube (ed.) and Ray Zammuto (ed.), Business Driven Information Technology: Answers to 100 Critical Questions for Every Manager, The College of Business at the University of Colorado, Denver, U.S.A, 2003

[14] Gerald I. Kendall, Steven C. Rollins, Advanced Project Portfolio Management and the PMO: Multiplying ROI at Warp Speed, International Institute for Learning, Inc. and J. Ross Publishing, Inc., USA, 2003

[15] Robert Buttrick, The Role of the Executive Project Sponsor, Pearson Education Limited, Great Britain, 2003

[16] White Paper, Sponsoring Change, A Guide to the Governance Aspects of Project Sponsorship, The Association for Project Management, http://www.apm.org.uk/page.asp?categoryID=4&subCategoryID=27&pageID=0, UK

[17] InterGlobe Consulting, What is Project Leadership?, http://www.interglobeconsulting.com

[18]PMI White paper, Executive Engagement: The Role of the Sponsor