Leading projects through rock bottom--inside the mind of the executive

Introduction

“I think this is the ultimate creative challenge. We have a clean sheet of paper that comes with hitting rock bottom…There is a place for the best minds in our business in this process.”

Robbie Virtanen, CEO of Trumpet Ventures discussing post-Kartina New Orleans

The Halo Effect is the basic human tendency to make inferences based on general impressions. We are quick to blame failing projects on poor leadership, bad requirements, and ineffective project management. But project performance is inherently relative, not absolute (Rosenzwig, 2007, p. 17). Many highly effective leaders making the right decisions with the right controls still find their projects at “Rock Bottom,” the place where projects sputter and fail. As Vitrano points out in Exhibit 1, “Rock Bottom” is also a place of opportunity and creativity. The executive and the project leader are the two agents that can translate failure into opportunity.

This paper provides leaders with a framework for understanding the dynamics of projects as they land at Rock Bottom, a perspective on executive crisis management, and strategies for leading the executive and a troubled project team forward towards a successful conclusion.

What is “Rock Bottom”? – Knowing How We Got There

Rock Bottom is the place where an organization's ability to deliver the project is at its lowest and where the potential business value of the project is also at its lowest. It is where the project is “unrecoverable” without a significant rechartering of the project's foundation. Generally, projects at Rock Bottom share one or more of four attributes shown in Exhibit 1:

The four attributes of projects at Rock Bottom

Exhibit 1: The four attributes of projects at Rock Bottom.

Over two thirds of projects fail to meet expectations (Standish, 2009). The symptoms and signs of failing projects are well-documented and well-known (Exhibit 2). In How Project Leaders Can Overcome the Crisis of Silence, Grenney (2007) describes common reasons cited by executives on what drove failure in their organizations. He points out that the ability to have the right candid conversations with executives on these causes of failure was often the inflection point for the ultimate success or failure of the project (p. 46).

Causes of project failures cited by executives surveyed

Exhibit 2: Causes of project failures cited by executives surveyed

Risk Factors That Shape Project Success

High-risk projects are highly visible, have a “sweeping impact” inside and outside the organization, and pose significant threats to the project team's ability to deliver (Turner, 2007, p. 1). Our experience indicates that we can understand a project's descent to Rock Bottom by looking at three main risk drivers: political exposure, impact to core business, and the organization's ability to deliver.

Political exposure encompasses how project outcomes affect the personal stock and creditability of key stakeholders. It is the shared vision, commitment, and courage of key stakeholders to move the project forward. Projects facing political exposure challenges face an entangled web of political stakeholders with individual agendas, challenging business cases, and, often, a hostile shareholder/public perception (Turner, 2008, p. 1). As the project deteriorates, stakeholders fracture and shared commitment to the plan falls apart.

Impact to core business addresses how project outcomes will affect an organization's value chain, including but not limited to business processes, employees, and technology. It is the solution's depth and breadth of change that shape an organization's level of preparedness. Projects facing business impact challenges may not have developed an adequate change management plan (based on a facts-based impact assessment) or may not have the right level of engagement and sponsorship across the organization. As an embattled project deteriorates, the potential damage that the project could cause to the business significantly outweighs the benefits that it could produce.

Ability to deliver focuses inward on the organization's commitment and ability to deliver results. It is the ability to effectively manage scope, resources, team morale, time frame, and quality that often determines whether projects will succeed or fail. Projects facing a great deal of delivery risk generally are facing significant pressures on several fronts. As project health deteriorates, projects often cannot “get traction.” Despite efforts to mitigate scope, schedule, and resource issues, the project continues to flail. Key project team members can appear beaten down, despondent, or even cannibalistic towards progress.

Effective project leaders watch for vital signs that determine the health of these risk drivers and engage executive leadership in the critical conversations around reshaping the project landscape to advance progress. They understand how executive leadership will shape their decision making and can anticipate what they need to do to position the executives for the best possible decisions.

Understanding Project Executive Decision Making at Rock Bottom

When a project hits Rock Bottom, executives must respond. Our experience and research indicate that executive decision making during times of crisis follows predictable patterns. Exhibit 3 shows some common executive decision-making patterns (plays) exhibited at Rock Bottom.

Executive decision-making plays at times of crisis

Exhibit 3: Executive decision-making plays at times of crisis.

An executive defaults to or chooses which play to use based on the amount of personal political exposure he or she has had, the organizational impact of failure, the executive's experience in past crises, and his or her own paradigm (the way he or she processes and resolves problems).

Generally speaking, if an executive's personal exposure is high but the organizational impact of failure is contained (or at least perceived as contained), the executive is more likely to blow a project up (i.e., detonate it), step in as the project leader, or employ the “last-ditch effort” (Exhibit 4). As the perceived organizational impact of failure broadens, executives generally know that they can't directly influence the outcome. They will reduce their personal exposure by rallying their leadership team and organization around solving the failure. These leaders may see the issues more broadly, given the bigger organizational impact. They will more likely try to develop an integrated response, drawing many different elements of the organization, or “change the rules of the game.”

Factors Shaping Executive Plays

Exhibit 4 – Factors Shaping Executive Plays

An executive's experience plays an uncertain factor in decision making. Familiar project issues tend to push the leader's personal exposure lower, because the leader may believe that the problems can be solved since he or she has seen them before. Unknown issues facing the project may make the leader, who does not have experience solving them, more likely to blow it up, because this leader perceives a higher level of exposure and will want to contain the damage.

An executive's paradigm is little tougher to tease out, but an intuitive project leader may have enough experience with the executive to anticipate it. An executive who likes to “single-thread issues” may be prone to oversimplifying and is therefore more likely to see choices in binary terms, such as “either kill it or give it to me to fix.” Likewise, an executive with a track record of recognizing interdependencies and revisioning business problems is more likely to view the problem as solvable, but only with a broader team approach. These executives tend toward an integrated response or to change the rules of the game play.

The Playbook Implications for Project Managers

Each potential executive play implies a role for the project manager ranging from detonator to architect. In the case of the “blow it up” play, the project manager falls neatly into the detonator role, closing down the project and likely cleaning up afterwards. While the executive may “walk away” with little political damage, the project manager is diligently working to prevent the blow-up from harming the morale and careers of key project team members (Bucero, 2007). Moreover, the project manager may need to reevaluate the original charter, develop the organization's lessons learned, and, most importantly, to assess the alignment of the organization's mission, strategies, goals, and projects and how a particular project represents the organization's culture (Michel, 2007, p. 2).

Decision Frameworks to Optimize Executive Decision Making at Rock Bottom

There is, admittedly, no cookbook for making effective decisions at Rock Bottom. Given the influences that personal exposure, organizational impact, experience, and paradigms have on executive decision making, Exhibit 5 shows several crucial questions that executives must answer as they grapple with how to move forward.

Crucial questions to consider at the executive decision-making table

Exhibit 5: Crucial questions to consider at the executive decision-making table.

Understanding Organizational Impact

Projects under significant pressure tend to prioritize brainstorming solutions over understanding root cause and the full organizational impact of success or failure. But even when facing significant time pressures, effective leaders will create the space for the project team to better understand these two aspects. These leaders:

  1. Anchor the team in first understanding the customer impact before understanding the organizational impact
  2. Create a safe haven to discuss what is known and unknown that will shape the project's future
  3. View the project's balance sheet not simply as performance against plan and budget, but also with regard to what tangible and intangible assets have been created, as well as what liabilities have been generated for the organization.
Reducing Executive Exposure – Shared Vision, Commitment and Governance

Stakeholder alignment is a crucial asset in optimizing executive decision making. Stakeholder alignment starts with facing reality as to who is at the governance table, what their level of commitment to the project is, and who is not at the governance table. Based on the organizational impact, the effective executive must be willing to change the governance structure to bring in key stakeholders who either don't share the same vision or aren't committed to the journey. With a reshaped governance table, the effective executive sponsor can then drive a shared understanding of how we got here and what this means to the key stakeholders. These leaders build a coalition that can stand behind the decision to move forward, even if moving forward means “blowing up the project.”

Channelling Experience into Looking Forward Instead of Backward

In executive decision making, experience can be both a “blessing and a curse.” It can boost executive confidence that a project can work through its problems if the issues are ones they have solved in the past. But it can also limit the range of possible options to go forward. Effective executives can spot what influence experience may be playing in looking at the problems. In addition, these leaders can channel the experience in the room to look forward rather than backward—to identify the full range of options ahead and what those options would look like for the organization.

Broadening the Paradigms at Play

Our paradigms can impose several limitations on our ability to see problems and opportunities. In a world of rapid change, being aware of them is more important than ever. In many projects facing crisis, executive leadership “closes the door” and tries to work through the problems with their management team. Effective executive leadership internalizes how their problem-solvers work the problem and what biases their methods may cause. They design changes to that team to introduce new ways of thinking, including bringing outside “devil's advocates” to the decision table to provide fresh perspective. These outside observers quickly grasp the project's overall balance sheet and how decisions may play out over both the short- and long run of the project. Creating a clear role in the process for them often opens up the communication lines between the problem solvers and the executive sponsor, and clarifies what the executive sponsor wants to do.

Project Leader Strategies

The “Project at Rock Bottom” drama has its typical set of scenes, roles, and conclusions. But what if you were to inject different roles into the play—could you change the final act? Our research and experience suggest that using the right role for the right play can change the outcomes—dramatically.

There are additional roles that can be applied to the typical Rock Bottom plays—the accountant, the architect, the visionary, the ambassador, and the negotiator. These roles are not traditionally called for as the project goes through Rock Bottom, nor do they come naturally to an executive or to many project managers. Consciously getting into character and engaging the right role for the right play will help the organization use the failing project as an opportunity to better the organization.

A New Cast of Characters—New Roles to Improve Executive Decision Making

As the accountant, we pull together the project's balance sheet. In this role, we fight through competing agendas, vague business cases, and organizational silos to really take stock of a project's assets and liabilities. There is difficult work to be done here to assess the entire organizational landscape. Success in this role comes from clearly communicating the stark reality of the project with as little background color as possible. Ultimately, understanding the project's assets and liabilities will give the project team clear information to use to strategize next steps.

When playing the architect, we build the decision-making framework that leads to a 360-degree decision for what happens next. The architect defines the decision gates and criteria that will get executives out of the binary decision of “shut down or move ahead.” Focusing on the blueprint for a decision, rather than the go/no-go decision itself, can often be the way to get a languishing project unstuck.

As the visionary, we play a large role in motivating decision-making participants to “peek behind door #2, #3, and #4.” It is a picture that an organization's executives and project leadership team must see to weigh the opportunity costs of a shake-up or a shut-down. Our challenge is to draw a compelling and realistic picture of alternative futures based on all the decision frameworks, and a little of our own intuition. We help the project team, particularly the invested stakeholders, visualize the different options for where the project could be. This role directly aims at counterbalancing the impacts of leaders' emotional fatigue and snap decision making.

When we play the role of ambassador, we bring good will and mutual understanding to the situation. The ambassador can create a shared view of how the project to where it is and what the cultural possibilities are for next steps. The ambassador can bridge fault lines between teams and realign team agendas and stakeholders to a renewed set of project goals. This role is not neutral, but those in the role of ambassador do seek to understand rather than to enforce the project's current structures.

The role of negotiator is put in place both to serve as a focal point for neutrality and also to drive toward a shared solution. This role requires trust in the project leader from all parts of the organization. The negotiator must understand the problem from all of the decision frameworks so that they can understand the boundaries to negotiate within. This role is useful where the go-forward plan involves many different organizations, and where there is opportunity to create new solutions. Like any negotiation, this role (anchored in the organization's non-negotiables) creates a new deal that project stakeholders can support and project team members can deliver.

Putting the Roles into Play in the Executive Decision-Making Process

What are the right roles to cast into each Rock Bottom play? Exhibit 6 below suggests the primary roles to use in each play, and what the character will typically do within the play.

Using New Roles to Optimize Executive Decision Making

Exhibit 6—Using New Roles to Optimize Executive Decision Making

Of course, the reality of how a project plays out is never according to script. Project leaders find themselves engaging multiple roles to move the project to its best conclusion. But, the project leader can advance executive decision making by recognizing how the executive is playing out their role and choosing a role or strategy that augments rather than conflicts with that executive's role.

Concluding Remarks—What is the Value to the Organization?

A project in crisis is painful for the organization, for the project team, and for the executive. The perceived need, and therefore tendency, is to make it go away. But when an organization chooses to simply assuage the pain, it misses an opportunity for growth. Project leaders can improve executive decision making—illuminating the impact of executive decisions on their organizations' future. If project leaders can play the right roles, they can help executives create solidarity with their peers and stakeholders, create believable messaging for their organizations about the state of the project, and can give executives leverage and options for reframing the initiative. Mindful application of the roles and decision frameworks will allow the organization to extract benefit from their failure.

“The signature of the truly great versus the merely successful is not the absence of difficulty, but the ability to come back from setbacks, even cataclysmic catastrophes, stronger than before.”

Jim Collins – How the Mighty Fall and Why
Some Companies Never Give In (2009)                     

References

Bucero, A. (2007). Failing to Succeed. PM network. 21(11). Retrieved August 20, 2009, from http://www.pmi.org/Marketplace/Pages/ProductDetail.aspx?GMProduct=00101045000&iss=1.

Carroll P., & Mui, C. (2009, March). Seven ways to fail big. Harvard Business Review. 2–11. Collins, J. (2009). How the mighty fall and why some companies never give in. New York: HarpersCollins Publishers.

Collins, J (2009). (How the mighty fall And why some companies never give in New York, NY: Harper Collins.

Grenny, J. (2007). How project leaders can overcome the crisis of silence. MIT Sloan Management Review. 48(4), 46–53.

Michel, S. (2007). The upside of falling flat. Retrieved August 19, 2009, from http://hbr.harvardbusiness.org/2007/04/the-upside-of-falling-flat/ar/1.

Rosenzwig, P. (2007). The halo effect and other business delusions. California Management Review. 49(24), 6–20. Standish Group. CHAOS 2009 Report. Retrieved August 18, 2009, from http://www1.standishgroup.com/newsroom.

Turner, B. (2007). Leadership Strategies for Tackling the High Risk/High Profile Project. 2007 PMI Global Congress Proceedings – Atlanta, Georgia, USA.

Turner, B. (2008). Mastering Political Capital in high Risk/High Profile Projects. 2008 Global Congress Proceedings – Denver, Colorado, USA.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2009, Point B, Inc.
Originally published as a part of 2009 PMI Global Congress Proceedings – Orlando, FL

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