Wednesday, 17 September 2008

"Project chicken" and the lessons from Bear Stearns, Merrill Lynch, Lehman Brothers and ?

I make no apology for 'borrowing' TBH's blog from yesterday. I couldn't agree with what he wrote more and it perfectly, to my mind, sums up the climate of self delusion that the world is living in right now.

With the crisis in Freddie Mac and Fanny Mae, and the demise of Bear Stearns, Merrill Lynch and now Lehman Brothers, everyone is asking who is going to be next, AIG perhaps?.

And the recriminations have started: it was the SEC’s fault, Alan Greenspan’s fault, the Bush Administration’s fault; the writing has been on the wall for years; and so on.

Meanwhile half a million jobs are expected are to go in the UK before Christmas.

These kinds of problems don’t occur because nobody knew things were going badly wrong in time to do something about it. Research on Informational Failures and Organizational Disasters (according to Chun Wei Choo in the MIT Sloan Management Review Spring 2005) consistently suggests that catastrophes can be foreseen but groups often have partial information and no one has a view of the situation as a whole, so signals are either not seen or, if seen, are not perceived as warnings.

Being open to the possibility of finding new viewpoints changes the outcome drastically. Because if you haven’t learnt to listen, don’t make it safe to talk and do “shoot the messenger”, then people will certainly cover up problems and disown mistakes. You will have started to hatch a catastrophe.

One morning you will wake up to find that the end date of your pet project is no longer slipping a day at a time but is suddenly going to be months, maybe years, late. Instead of extra costs in the hundreds and thousands, you will learn of overruns in the hundreds of thousands, maybe millions. Instead of minor bugs to fix, you will discover that the breakthrough technology you pinned your hopes on has been leapfrogged and is now hopelessly obsolete. This won’t be because nobody knew things were going badly wrong, but because they didn’t feel safe to warn you.

Thus if you don’t listen, you won’t learn. If you don’t learn, you won’t change. If you don’t change, you won’t adapt. If you don’t adapt, you won’t grow. If you don’t grow, you won’t thrive and survive. If you don’t listen, learn, adapt, grow, thrive and survive, then you will forget, stagnate, dwindle, fall ill and move inexorably towards extinction.

Listening carefully changes that outcome.

Other research suggests that five conversations are essential to the success of high-stakes cross-functional initiatives. In How Project Leaders Can Overcome the Crisis of Silence (2007), the authors (Grenny, Maxfield and Shimberg) argue that leaders can substantially improve their organizations’ ability to execute by raising these issues:

  1. Are we planning around facts? Project leaders under pressure from their stakeholders tend to set deadlines and budgets with insufficient regard for what will actually be required to achieve them. Are project managers willing and able to call the bluff?

  2. Is the project sponsor providing support? Project sponsors have the position, perspective and clout to provide the championship and political cover necessary to ensure the project succeeds. Project sponsors may, for whatever reason, go “absent without leave”. Is the project team forceful enough in keeping them engaged?

  3. Are we faithful to the process? Senior leaders and powerful stakeholders often short-circuit the formal planning and decision-making processes. Do project managers make it clear enough that informal conversations with those stakeholders who don’t want to be burdened with practical considerations cannot initiate extra work?

  4. Are we honestly assessing our progress and risks? Project participants often fail to report delays in the hope that some other group with problems will speak out first. Are project leaders able to openly discuss this kind of “project chicken” with those who appear to be playing the game?

  5. Are team members pulling their weight? Often project leaders must negotiate with functional managers to staff their projects, and feel they have little or no say in selecting or replacing nonperformers. Is the project hobbled with people who don’t show up to meetings, fail to meet schedules or lack the competence to meet ambitious goals?
Grenny et al. recognize that speaking up or challenging others about these issues won’t happen by accident. They emphasize the importance of frequent surveys to assess the quality of dialogue, of making it easy and safe to have such conversations, and of project managers who teach others through their personal example when and how to confront project leaders and sponsors.

“Our conversation should be infinite; we should be open to the possibility of discovering new viewpoints from our interactions with each other” argues writer and philosopher James Carse.

In a finite conversation, each person has their standpoint and is not going to change. It is a “zero-sum” game: if I win, you lose (“either you are with us, or you are with the terrorists”).

In an infinite conversation, both of us may influence the other, gain a fresh perspective from considering all points of view, find new and more useful ways to see the world. Everybody wins.

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