I think it's pretty safe to say that most of us believe that sponsors are critical to project success. Let me clarify that. Most of the time a project sponsor is critical to project success. There are some projects that probably don't need a sponsor (like ongoing infrastructure projects) and would probably find difficulty attracting a sponsor anyway.
That being said, there are projects that are doomed to fail without a sponsor. But remember, simply having a sponsor isn't enough. Let me share a couple of sponsor issues that contribute to project ineffectiveness:
The sponsor's role is not clearly defined: Don't assume that the project sponsor knows his or her role in the project. Most business people don't really understand the project management process. Make sure sponsors know exactly what's expected of them. It's never a good idea to make them guess about their role. They will appreciate the explanation and you will appreciate the results.
Your sponsor falls out of the loop: If your sponsor doesn't have the political clout within your organization to help you push issues forward, he or she won't add any value to the project. It's important to pay attention to how connected your sponsor is to the decision-makers in your organization. Remember, ineffective executives sometimes get the ax too. Don't let your project languish on the chopping block along with them.
Sponsor relationships should add value to your project. If they don't you may need to evaluate whether it's the way you interact with your sponsor, or whether the sponsor is able to adequately fill the roll.
What do you do to manage sponsor relationships? Have you ever had to work with a sponsor who is "out of the loop?"