6 Tests When Reviewing Board Project Reports

reviewing

Earlier this year I posted 10 Questions the Board Should Ask Projects that received plenty of attention. The focal point was the approval of major initiatives by the Board. Since then I have been questioned regularly about ongoing Board reporting of those initiatives.

The structure of the report will vary based on the type and size of initiative relative to the size of organisation, risk and experience with this type of initiative and level of trust the Board has with management.

Unfortunately it is not uncommon for Board reporting of major initiatives to be overly optimistic until the position can no longer be defended. The bigger the initiative the harder it is to discern fact from hope in reporting and the greater the consequential cost to the organisation. I have seen instances where two years into a three year initiative the plan was extended by another two years.

This puts the Board in a very awkward position of being informed too late to take preventative action. In the end it is about good judgement both by management and the board using the best information available to them.

Irrespective of the form of reporting I find the following six tests to be very helpful to improve the judgement of both the board and management when reviewing initiative implementation reports.

The Trust Test

Is there Smart-Trust between the Board and management such that management is confident to raise difficult issues early? Does the Smart-Trust extend down into the project team? The critical word here is SMART. Smart trust is the intersect between a high propensity to trust and a strong basis of trust. This means the Board must do appropriate due diligence using the 4 Cores of Credibility (Integrity, Intent, Capability and Results) to establish that trust is warranted. It is not acceptable to trust because “we have a good management team” if the initiative is outside the normal course of business. Management may pass the test regularly on BAU matters but do they pass it on this type of initiative? The common failing here is that the Board assumes that Management can do it and have put in place what is necessary to achieve the initiative.

The A-B Test

What are the alternative interpretations of what I am hearing or seeing in this report? This question opens the door to probe and validate that the scenario presented is the true scenario or is an alternative scenario more likely. You may expose some weakness to be resolved which is a gift to management if Smart Trust is present otherwise it may be seen as interfering.

The Triangulation Test

Is the information presented consistent with other sources of information (including but not limited to my personal experience)? Again an opportunity to probe more deeply. A word of caution here. It is possible that the report is framed in a language to pass the triangulation test and not trigger a reaction from the Board. It is therefore necessary for the Board to have multiple sources of information for large strategic initiatives. Superior executives understand this need and cultivate multiple channels for the Board. These executives understand that the Board is there to serve the greater good of the business and how to facilitate that outcome.

The Assumption Test

What assumptions need to be true for this observation to be logical? Are those assumptions still valid? At what point would the assumptions fall away? What actions need to be taken now to confirm or otherwise the assumptions? These questions are important to overcome the tendency to focus on task rather than objective of the initiative. This is especially problematic at the project level. Many project managers see their role as delivering to a defined scope and not the planned business outcome rendering the business assumptions as irrelevant in their mind.

The Complete Picture Test

Is what is reported the complete picture on this initiative? For example big change initiatives that have a large technology component often report on technology progress and not the preparations to effectively adopt those changes. the consequence is that important activities are not addressed in a timely manner jeopardising the project delivery.

The Murphy’s Law Test

What could go wrong from here? This is similar to the concept of a premortem. The objective is to identify necessary actions to prevent that negative outcome and keep the project on track. Understanding these potential outcomes gives greater context and meaning to the reported information.

The tests should be applied at each level from program manager, sponsor and the C-suite to probe and “work harden” the initiative performance and its reporting. As the last line of defence the board must also apply such tests to satisfy its governance role without inappropriately interfering with the role of management.

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