One of the most valuable contributions a leader can bring to their organization is an ability to interpret what is happening; understanding when something is a risk and when it’s an opportunity; too small to be of concern or someone’s else’s misinterpretation. As this extract from Project Resilience shows, this takes a mix of confidence, self-awareness and some very specific questioning skills.
Over-optimistic forecasts of likely project performance, based on underestimating the complexity of projects and the reality of likely risks, coupled with an over-optimistic assessment of the project team’s ability to deal with risk and uncertainty, are major problems for project decision-making. As we have seen, estimates have a tendency to become commitments that, in turn, become anchors for later decisions. Given this, projects can become brittle and fragile – the slightest risk might derail them if the original commitments were dangerously optimistic. With very narrow measures of success for the immediate outputs (time, cost, quality), risk occurrences may lead swiftly to failure – that is almost an inevitability. Worse still, people are cognitively hardwired to be optimistic, either for political reasons (getting the project funded or awarded in the first place) or (more often, perhaps) psychologically. We delude ourselves and we are all complicit with each other in that delusion.
The problem faced by project leaders is that they have to find ways of countering this tendency – of stepping back, looking at the project plan with more realistic, dispassionate eyes and injecting some reality (perhaps even pessimism) into the planning process. Project managers are often unable to do this as they are too involved in the ‘process’ and are as subject to the same cognitive biases as everyone else involved in the work. Instead, the project manager must take a leadership role, focusing on people rather than structure and process, taking a longer-term rather than shorter-term view, challenging the status quo and being innovative rather than administrative. Beyond the practical things that can be done to help balance out optimism bias and organisational amnesia, the project manager as a leader has a key role in shaping the forecasts and avoiding over-simplification of the risk and uncertainty involved in delivering the project.
Asking Inconvenient Questions
If the project leader is able to emotionally and structurally detach him- or herself from the project – a difficult enough task – he or she can (as required) slip into the role of devil’s advocate that all projects require to combat our tendency to oversimplify. They will be able to challenge the ‘inside view’ and access an ‘outside view’ that may be more realistic. They will be able to prompt memory, encouraging the experts to recall past projects and consider what may go wrong, why it may go wrong and how they could deal with any risk and uncertainty. The focus of questioning is to probe limitations in everybody’s preparation and readiness and not to question anyone’s competence. As inconvenient as these questions may be, they are essential in challenging oversimplification and in encouraging new ways of thinking.
Focussing on Opportunities
A bias towards the negative side – adversity – in a project may focus people predominantly on managing it, so that they largely ignore the potential upside in the form of opportunities. A project leader can try and draw attention to how the team could deliver project outputs and outcomes faster, better and/or cheaper. This is only valid in projects in which deliverables are not set in stone but have incentives for stakeholders to explore and exploit opportunities. It is always valuable to ask the ‘Why don’t we?’ questions.
Distinguishing between Noise and ‘Real’ Risk and Uncertainty
In adopting a dialectic decision-making role, the project leader can encourage a focus on the important risks, where management attention needs to be focused. The issue is to distinguish between what ‘matters’ and what does not. Based on an active reporting culture, you may be bombarded with stakeholders’ concerns and flooded with ‘what might go wrong’ in the project. It is the job of a project leader to filter out those important messages that it is vital to respond to. In order not to discourage any report of impending failure, consider all messages as important, though. With the help of the messenger, raise some important questions such as:
- Has this happened before? Is it an indication of systemic risk and uncertainty?
- Might it influence a part/function of the project that is critical?
- How close have you been to this risk/uncertainty? Do we require more information?
- How quickly could this cascade into a bigger threat?
These kinds of questions can enable effective decisions to be made about risk. You can filter out the less important risks and concentrate on those that will impact on value. Be sensitive, though, to the idea that the messenger, as well as the wider team, may be conditioned by optimism bias.
Extract from Project Resilience: the Art of Noticing, Interpreting, Preparing, Containing and Recovering by Elmar Kutsch, Mark Hall and Neil Turner, 2015, Gower, Farnham.
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