Project Management Warning Flag 2 – Breaking-up a Project to Avoid Approval Thresholds

Most organizations increase expenditure authority with each successively higher organizational level. Such budgetary constraints necessitate higher levels of approval for increasingly resource intensive projects; adding to the work required of lower level managers who need to ‘sell’ senior executives on their larger initiatives. Subsequently, circumvention of these often difficult to get authorizations may be sought.[wcm_restrict plans=”41140, 25542, 25653″]

One such circumvention method is to break-up a large project into several smaller, less resource-intensive initiatives. These less expensive projects can then be authorized by lower level managers, thus avoiding the time consuming ‘sales pitch’ needed for larger projects.

While adhering to the letter of company policy, this practice most certainly violates its spirit. While not all inclusive, the four lists below, Process-Based Warning Flags, Process Execution Warning Flags – Behaviors, Potential, Observable Results, and Potential Causes, are designed to help leaders to recognize whether this usurping of authority is going on within their organization. Only after a problem is recognized and its causes identified can the needed action be taken to move the organization toward improved performance.

Process-Based Warning Flags

• Lack of a centralized Project Management Office (PMO) or mechanism to assess all projects in aggregate
• Lack of granularity in the monitoring of the total budget spend by managers
• Lack or inadequacy of change governance policies

Process Execution Warning Flags – Behaviors

• Laissez-faire oversight by senior managers
• Lack of organizational challenge by peers who are likely involved in the aggregated project
• Demand for results by senior managers combined with constant action approval indecision
• Lack of change governance reinforcement

Potential, Observable Results

• Strategic organizational goals not achieved
• Large numbers of small projects done that are led by one department/work group
• Excessive number of staff dedicated to project management, coordination, communication, and reporting overhead
• Projects are completed and their outcomes are rejected by senior managers who were not involved in their approval or scope/outcome definition
• Project outcomes conflict with those of properly approved projects

Potential Causes

• Perception that senior management approval is an obstacle to getting things done
• Belief by lower level managers that they know what is best for the organization often because they have firsthand knowledge and experience from the ‘front lines’
• Pressure from executives and senior managers to get things done without a commensurate amount of support, often the result of a lack or an attempt to avoid accountability by these individuals

Final Thought…

Circumventing expenditure authorization limits can have dramaticly adverse impacts on the organization. This practice takes a degree of visibility and control of the organization’s direction away from senior leaders. Because the collection of small projects has a high aggregate cost, funding can be diverted from strategic initiatives; placing organizational goals achievement at risk. This is not to imply that senior managers should micro-manage every budget dollar but to simply assert that lower level managers must act ethically and in good faith within their given authority and not usurp that of senior leaders.[/wcm_restrict][wcm_nonmember plans=”41140, 25542, 25653″]

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