Project Governance In An Agile World – Part 1
Exploring Project Governance: Can Traditional Models Adapt to Agile Delivery?
As organizations increasingly shift toward agile delivery, one persistent challenge is the urge to retain elements of traditional “Waterfall” governance. Even service-oriented organizations often cling to familiar governance models when adopting agile methodologies, which can create friction and confusion.
To delve deeper into this tension, I’m launching a blog series that explores Project Governance by Ralf Müller (2009). Over the next seven weeks, we’ll examine each chapter, evaluating whether its governance concepts can support agility, or what changes are needed to make them work in an agile context.
Chapter One: Introduction—What Is Governance, and Why Does It Matter?
Müller opens by emphasizing the growing importance of governance, especially in light of compliance regulations such as SOX and Higgs. With numerous governing bodies and standards to meet, organizations face significant reputational and financial risks if they fail to meet these expectations.
A compelling angle in this chapter is the discussion of contemporary governance through a Neo-Liberal lens (inspired by Foucault’s philosophy). This approach resonates with agile and self-managed teams, focusing on the behaviours that shape frameworks—very much in line with Simon Sinek’s “Golden Circle” and the behavioural-first approach we’ve discussed in past webinars. From the outset, Muller suggests that governance can be compatible with agile thinking if approached thoughtfully.
Governance Theories: Shareholder, Stakeholder, and Beyond
Shareholder Theory
This model prioritizes delivering the best return on investment (ROI) for shareholders. The relationship is transactional: organizations serve the interests of their shareholders. In agile terms, this can be compared to the Product Owner’s relationship with the customer, where they deliver value in exchange for investment.
This model prioritizes delivering the best return on investment (ROI) for shareholders. The relationship is transactional: organizations serve the interests of their shareholders. In agile terms, this can be compared to the Product Owner’s relationship with the customer, where they deliver value in exchange for investment.
Stakeholder Theory
While Shareholder Theory is about the organization and its investors, Stakeholder Theory is more internally focused. It emphasizes coordination, transparency, and communication to drive productivity, core values of agile development. This theory aligns well with agile’s emphasis on cross-functional teams and open knowledge sharing.
While Shareholder Theory is about the organization and its investors, Stakeholder Theory is more internally focused. It emphasizes coordination, transparency, and communication to drive productivity, core values of agile development. This theory aligns well with agile’s emphasis on cross-functional teams and open knowledge sharing.
Muller also touches on Transaction Cost Economics (build vs. buy) and Agency Theory (the principal-agent relationship, akin to the Servant Leader’s role in agile teams), rounding out the theoretical landscape.
Project Governance as a Subset of Corporate Governance
Here, Muller digs into how project governance fits within broader corporate governance. Boards of governors set goals, define means, monitor progress, and take corrective action. In traditional models, this is a “command and control” process. Agile, by contrast, advocates for distributed decision-making and adaptive planning.
Four Governance Paradigms
Muller introduces four paradigms, mapped across two axes: Shareholder vs. Stakeholder Orientation and Outcome vs. Behaviour Control Focus.
- Flexible Economist Paradigm
(Shareholder Orientation, Outcome Control)
Focuses on ROI through tactical methods and tools—very results-driven. - Versatile Artist Paradigm
(Stakeholder Orientation, Behaviour Control)
Blends quantitative and qualitative approaches, tailoring processes for strategic outcomes. - Conformist Paradigm
(Shareholder Orientation, Behaviour Control)
Follows established methods and tools rigidly to maximize ROI, with little room for adaptation. - Agile Pragmatist Paradigm
(Stakeholder Orientation, Behaviour Control)
Seeks to balance diverse stakeholder needs, prioritizing the timely delivery of value based on user needs. Muller’s definition gestures toward agility, but still carries undertones of command-and-control and a focus on delivery over learning, adapting, and improving.
Key Takeaways: Theory vs. Practice
While Muller starts by suggesting agile mindsets can be woven into governance, the chapter ends with a familiar trap: focusing on “doing agile” (following frameworks) rather than “being agile” (embracing adaptive, value-driven behaviours). This distinction is critical; research and case studies, including those from Berriault & Associates, consistently show that sustainable agile success is rooted in behavioural change, not just process adoption.
Let’s Keep the Conversation Going!
Curious how governance models can truly support agility in your organization? Want to discuss how to move from “doing agile” to “being agile”?
Book a free Breakthrough Call to explore how your governance approach can unlock real value and adaptability.
Book a free Breakthrough Call to explore how your governance approach can unlock real value and adaptability.
"I help create ecosystems that become legacies.”
- Jeremy Berriault
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