Project Management Institute

Communicate or fail

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When the right information gets to the right people on time, you can make timely profit-driven decisions.

BY MICHAEL FINLEY

EXECUTIVE SUMMARY

images A reporting chain with too much slack in it can function at as little as 40 percent efficiency.

images All reporting that relies on human input is subject to human error, but at the same time, human judgment is valuable.

images Executive sponsorship at the highest possible level lends credibility to a message and helps get the right knowledge in people's hands.

images Keep people in the loop, but don't burden them with information they don't need.

images The strength of a reporting chain is a function of coherence, so accurately define your team.

images Choose the right people to form the chain.

Petro-Canada, Calgary, Alberta, Canada, gambles with its existence every day. Energy companies must roll out hundreds of $40 million to $500 million exploration and drilling projects concurrently, and each one can result in a bonanza. Offshore wells in Newfoundland, for instance, are expected to yield 79,000 barrels per day with operating costs of less than $3 per barrel—or a dry hole.

But, almost more important than the subsurface geology is the timely flow of information that can make or break these projects, says Kathy Sendall, Petro-Canada senior vice president—North American Gas. “These teams are the ultimate source of our success,” she says. “We have to give them the information they need to succeed. Or, if they fail, we have to get them through that.”

images The cost of poor information flow is shocking: Most teams are no more than 60 percent efficient, estimates Lee R. Lambert, PMP, project expert with Lambert Consulting Group, Dublin, Ohio, USA. However, a reporting chain with too much slack in it, or a single stubborn kink, can function at as little as 40 percent efficiency, he says.

Throw 40 percent efficiency at a complex series of interlayered tasks, such as prospecting for oil and natural gas, and the cost per barrel leaves no margin for profit. The oil and gas may be down there, but poor team process makes bringing them to the surface economically prohibitive. The problem may be something as simple as two teams politely waiting for the other to make the first move, or as serious as a disconnect between the project and long-term corporate strategy.

Project reporting chains simply represent the path for information flow through a team and from the team to management. There are different models, each with their own strengths and weaknesses:

Status reporting chains clue management to the progress a project is making. They inform and educate, but they may lack the measurement data, or “they may be a snapshot of a moment's progress, to be useful in making decisions,” says Helen Cooke, project manager with the Chicago, Ill., USA-based consultancy Cooke & Cooke. These chains are susceptible to narrative results and narrow interpretation, limited error review and bureaucracy, she says.

Measurement data reporting chains, which show the work of subordinate groups to supervisory groups with oversight responsibilities, take the opposite tack, loading reports with relevant numbers. But measurement data can be wrong, too. Project managers must be on the lookout for inaccurate or fluctuating data.

TEMPERING THE TEAM

Every now and then ugly turf struggles break out along the length of a reporting chain, where one person wants all the credit, or the power, for part of a project. “It's the project manager's job to step in and keep that kind of toxic competition from killing the team,” says Helen Cooke, project manager with the Chicago, Ill., USA-based consultancy Cooke & Cooke.

One practice, according to researcher Lynn Crawford, who conducts project management competence assessments through the University of Technology in Sydney, Australia, is to inform all team members about how the reporting chain works—and why it's vital—in the team charter. “It should be a living document that is kept in front of the team, with regular reviews. Regular review has been identified as one of the key factors in good team performance.”

Sometimes project teams resent that a few individuals have access to key information, and more importantly, access to the ears of higher-ups. Reporting chains must take care not to exclude dissent or alternative analyses. At the same time, team members need to understand that top managers can't function if everyone feels free to chime in. A good reporting chain relies on discipline, not censorship.

Fraser O'Hare, change management consultant for Swiss Life UK in Kent, U.K., recommends what he calls “tailoring messages” when reporting down the ladder to teams. “A project manager can't simply be interested in the delivery half of the communication equation. Of equal importance is how the message is received and interpreted. Since every recipient is unique, every message should be tailored.” The trick, he says, is to maintain message integrity whether you are sending it up the ladder to senior management or down the ladder to work crews. “The heart of the message must be the same, and the project manager must be recognized as credible.”

O'Hare also has thoughts on what to do with teams who are discouraged when a bad link in the reporting chain allows a project to drift off course. “When that happens, the navigators have to reaffirm the destination and set course from where they are. Rather than focus on where the team should have been, a project manager must remind his team where they are headed, paint a picture of the paradise they will see and put forward the plan of how they get there, starting today.”

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“All reporting that relies on human input is subject to human error,” Cooke says. When possible, such reporting information should be collected as the result of mature reporting and measuring activity.

“At the same time, human judgment is also valuable,” says Harvey Robbins, a Minnetonka, Minn., USA-based group process trainer with experience in national security projects. “Numbers never tell the whole story, which is a big reason information teams fail. Management must strike a balance between reliable numbers and reliable people.”

Critical Context

Swedish telecom equipment giant Ericsson, stung with lower earnings reports the past couple of years, is battling back with new wireless tools and software.

Ericsson CEO Carl-Henric Svanberg calls simplicity and clarity critical success factors for the company's future. That means that tightening project roles and responsibilities, based on an agreed-upon and well-anchored strategy, will become a linchpin for Ericsson. “We want short reporting chains with relevant managers carrying clear responsibility for the figures,” he announced to investors this spring. “We're currently selecting a limited number of reports and key figures that will be in the minds of a large number of managers both day and night.”

At IT consulting giant EDS, Plano, Texas, USA, thousands of software projects are under way every day, and none are more complex than the projects EDS does for General Motors. “Executive sponsorship at the highest possible level is what gives programs extreme credibility and top priority,” says Beth Kirkpatrick, who played a part in sponsoring the successful development of the OnStar remote service capability. She is now president of EDS GM Europe.

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These teams are the ultimate source of our success. We have to give them the information they need to succeed. Or, if they fail, we have to get them through that.

Kathy Sendall,
Senior Vice President—North American Gas, Petro-Canada, Calgary, Alberta, Canada

The outcome can be compelling. Kirkpatrick says the executive champion leads the charge; every team member is chartered in terms that are unmistakable; every individual on the team understands why the work is important; every component of the project is meticulously measured. In such a critical context, few mistakes are made.

Who Knows?

images Ensuring that team members know what to do without overloading them with information is the reporting chain's reason for being, says Ron Waller, former project manager with Johnson Controls in Milwaukee, Wis., USA. Waller has worked on projects such as the design-build Water Tower Place construction and the Continental Bank retrofit, both in Chicago, Ill., USA. “I see it as my job to insulate my team as a whole from the static surrounding a project,” he says. “You want to keep people in the loop, but you don't want to burden them with information they have no use for. I believe you always give people a straight answer, but sometimes you only tell them if they ask.”

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Choosing the right people to form the chain can be management's top contribution to a project.

“I have my project teams establish a communications plan,” says Tim Kloppenborg, professor of management at Xavier University in Cincinnati, Cincinnati, Ohio, USA. This plan can be simple on a small project or quite involved on a larger one. For each deliverable and at each point in the project progress, Kloppenborg has the core project team (generally the project manager and technical leads) declare:

  • Who needs to know
  • What do they need to know
  • When do they need to know
  • What format is most convenient to the receiver
  • How do we know they both received and understood the information?

images When possible, Kloppenborg gets the sponsor to endorse the communications plan.

People can be comfortable with their part of a project without having to know everything, and that's why reporting chains need to be on point, to police information flow. “On the Continental project, construction began before the top floors were even designed. No one had a mental picture of what the final product would be. But they knew enough to do their jobs that day and to complete the project on time. Informing people when information is scarce isn't easy, but if people know they can trust you, they'll be able to follow,” Waller says.

images Choosing the right people to form the chain can be management's top contribution to a project. A project point-person sometimes has to speak up or walk out of a meeting, Waller says. “Otherwise, you get bulldozed. You don't send into the lion's den the mild-mannered engineer who's never said a harsh word in his life and if you say a harsh word to him he folds up. But that's exactly the type of guy who can work a negotiated technical project.” So forge a chain with links strengthened according to the nature of the task.

Susan MacKenzie, senior director of Bitumen, Petro-Canada's Oil Sands business unit in Calgary, Alberta, Canada, agrees on finding the right balance of information, but her idea of balance is to load project team members up until they say when. “My experience suggests that there are really only rare occasions where ‘too much’ information can get you into trouble. I prefer to err on the side of over-informing, rather than under-informing.”

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We want short reporting chains with relevant managers carrying clear responsibility for the figures.

Carl-Henric Svanberg,
CEO, Ericsson, Stockholm, Sweden

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Executive sponsorship at the highest possible level is what gives programs extreme credibility and top priority.

Beth Kirkpatrick,
President of EDS GM Europe, Plano, Texas, USA

Coherent Communications

The success of a reporting chain derives largely from the way the team is defined, says Francis Hartman, a chair in project management at the University of Calgary. To this end, he has fashioned two golden rules that every project manager should consider:

The more inclusively a chain considers the needs of key stakeholders, the more successful it will be. Those reporting links who withhold information from the next link—everyone who works to implement the project—come to regret it.

The most successful projects boast reporting chains that are tightly linked to the organizational strategy laid down by top management. When a project cuts against that strategy—when the connection up the ladder is indistinct—the project is jeopardized.

The strength of a reporting chain is a function of coherence, Kloppenborg says. He puts the responsibility for team coherence squarely on the shoulders of the project manager.

One approach to creating functional reporting chains is called boundary management, which defines what a manager needs to pass on to team members. Projects can define these boundaries broadly or narrowly, loading people up or informing them on a need-to-know basis, according to the management philosophy. The advantage of a tool like boundary management is that it saves people along the reporting chain from having to guess what's important and what's not. These boundaries are set out in the charter.

“Ideally,” says Joan Cox, vice president of Global Program Management at EDS, “project teams work in one place, and communication flows naturally and without artificial boundaries. When that's not possible, a disciplined reporting chain must step to the fore.” Cox's managers are equipped with rigorous processes to hold teams to their objectives and to maintain clarity on resources and scheduling. “Teams run on this kind of clarity,” she says. “It lets people divvy up work into manageable chunks and get it done.” EDS's change control process goes into action whenever a project swerves in a new direction, so teams are able to digest the changes and move with them.

A side benefit of astute chain management is that project people feel better about the work underway. “Poor morale happens when you don't feel close to the customer, when you don't know what the plan is,” Cox says. “Well-informed project teams are light years ahead of everyone else. We're right there, with the customer. We know what to do. There's nothing as fulfilling as a project that comes to successful completion. People talk about it for years.” PM

Michael Finley lives and writes in St. Paul, Minn., USA. He is co-author of The New Why Teams Don't Work (Berret-Koehler, 2000).

To participate in an online discussion on reporting chains with your colleagues, visit communities.pmi.org and go to the PMI Member Community.

This article is copyrighted material and has been reproduced with the permission of Project Management Institute Inc. Unauthorized reproduction of this material is strictly prohibited

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.

PM NETWORK | NOVEMBER 2003 | WWW.PMI.ORG

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