How important is an effective Executive Sponsor to a project’s success?

The Project Management Institute (PMI) recently addressed this question in its Pulse of the Profession In-depth Report, and its findings were striking. Executive sponsors can be key to the success or failure of a company initiative.

Sponsors can make or break a project

Senior executives are quick to offer buy-in and support for a project, but tend to disappear when it comes time to implement. This gap in leadership is costly, with nearly 15 percent of every dollar spent on strategic initiatives wasted due to poor performance. 

 An executive sponsor can provide that critical link between executive leadership and project management that brings projects successfully to completion at their expected performance.

 Over 90% of respondents in an IBM survey cited executive sponsorship as the deal breaker in the successful implementation of change. PMI Pulse’s research also found that actively engaged executive sponsors were “by far the top driver of projects meeting their original goals and business intent.”

 But simply assigning an executive sponsor to a project isn’t enough. It has to be the right person for the job, with enough bandwidth to do it right and operating in an environment where his or her skills and influence can be maximized.

 When executive sponsorship fails (or is non-existent), the results can be devastating. PMI reports that “for every US$1 billion spent on projects, US$109 million is wasted due to poor project performance.” The research also shows that one in three failed projects can be directly linked to poorly-engaged executive sponsorship.

 So how can executive sponsorship be a top driver of goal achievement, yet also be directly attributable to one third of all project failures? As with project management, the devil is in the details.

Why does sponsorship fail?

PMI highlighted the top three reasons why executive sponsorship can fail to meet its objective and skyrocket a project to success: overextension, lack of communication, and lack of professional development.

Overextension

Executive sponsors reported sponsoring an average of three projects or programs at a time, each requiring about 13 hours per week of work, on top of their regular full-time jobs. Just as watering down a glass of whisky makes it less potent, saddling an executive sponsor with so many duties waters down their ability to engage with any one of them. They simply don’t have the time.

  Inviting one or two other executive sponsors onto a project as a way to address overextension may be a natural temptation, but PMI’s research found that multiple sponsors were not necessarily an indicator of greater success; however, the strategy can be effective for very significant, complex or expensive projects.

 Lack of Communication

PMI also found that US$75 million of every US$1 billion spent on projects is wasted as a result of poor communication. The executive sponsor is expected to influence stakeholders, provide leadership, and make tough decisions. All of that must be communicated down to the project manager. Reciprocally, the project manager must keep the executive sponsor in the loop with project updates that are not too detailed, but give specifics on issues such as milestone status, known risks, operational or economic impacts, and useful insight.

 How can executive sponsors and project managers communicate better in order to leverage the effectiveness of executive sponsorship?

For project managers, the Boston Consulting Group (BCG) recommends rigorously defining the project in terms of 1) critical milestones with operational or economic impact 2) forward-looking lead indicators and 3) metrics on critical risks and interdependencies. Project managers also need to pinpoint how and when to most effectively engage their sponsors.

With this type of useful information at their disposal, sponsors would then be free to focus on their role in the project, which includes removing roadblocks, resolving issues, aligning with strategy, championing the project, engaging and aligning stakeholders, and course-correction.

Where executive sponsor have the least impact are in project design, project team effort and coming up with creative solutions.

Lack of Professional Development

PMI reported a disconnect, even referring to it as a “chasm,” between the perception of the project managers and the perception of the sponsors with regards to sponsor effectiveness. In the categories of motivating, active listening, effective communication, and managing change, executive sponsors consistency rated themselves as 45 to 48 percent more effective than their project managers rated them in the same categories.

While most executive sponsors have at least a basic understanding of project and program management, that alone isn’t enough, the study showed. Additional skills, training and experience are needed for success, and the type of training matters, too.

PMI found that “on-the-job learning, self-study, and ‘coming up through the ranks’ from project or program management showed no impact on improved project outcomes.” What did work were external training, internal training (including training provided by the project management office), and mentorship from other executive sponsors.

The characteristics of an excellent executive sponsor include leadership capabilities, the ability to influence and align stakeholders, knowledge, communication skills, good decision-making skills and the ability to command respect and to serve as a catalyst.

Conclusion

By avoiding overextension, tailoring communication, and focusing on professional development, organizations can maximize the effectiveness of their executive sponsors as a means to driving project success.

Company culture can have an impact on whether or not these three critical aspects of executive sponsor success are achieved. A culture that views the sponsor as a valuable resource is less likely to overburden him. Companies with a high degree of interdependence and founded on transparency and trust increases communication.

Reference

To see the complete Pulse of the Profession report, follow this link.