How to Compensate For Overoptimistic Project Leaders

Leaders can avoid unhappy project status surprises if they understand how — and why — people avoid sharing bad news.

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All too often, executives are caught by surprise when projects — particularly complex IT projects — run into trouble. Project participants can be overconfident, always put a positive spin on anything they report or even have a cultural propensity to be silent in the face of bad news.

But “complex IT projects do not fail overnight; they fail one day at a time, and generally only after numerous warning signs.”

That’s according to Mark Keil, H. Jeff Smith, Charalambos L. Iacovou and Ronald L. Thompson, authors of “The Pitfalls of Project Status Reporting,” in the Spring 2014 issue of MIT Sloan Management Review.

The authors write that after reviewing 14 studies that one or more of them was involved in over the past 15 years — studies that look at the ways in which individuals report (and misreport) the status of information technology or software projects — they identified specific ways for leaders to avoid being caught by surprise when a project launch ends up in trouble.

The first step is for leaders to understand five truths — the authors term them “inconvenient truths” — about human nature, project process and workflow. Leaders who recognize these truths in advance, they argue, can better prepare for how to get more realistic and accurate information.

The five truths leaders need to recognize:

1. Executives can’t rely on project staff and other employees to accurately report project status information and to speak up when they see problems.

2. A variety of reasons can cause people to misreport about project status; individual personality traits, work climate and cultural norms can all play a role.

3. An aggressive audit team can’t counter the effects of project status misreporting and withholding of information by project staff.

4. Putting a senior executive in charge of a project may increase misreporting.

5. Executives often ignore bad news if they receive it.

In the full article, the authors outline specific recommendations for each point. For instance, for point #1, the authors urge a policy of “trust, but verify” and a healthy degree of skepticism.

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Comment (1)
Leslie Brokaw
Interesting stats from McKinsey and Oxford University on this theme: large software projects on average run 66% over budget and 33% over schedule -- with as many as 17% of projects going so badly "that they can threaten the very existence of the company." 

Read more in the new McKinsey article "Achieving success in large, complex software projects," online here: http://www.mckinsey.com/insights/business_technology/achieving_success_in_large_complex_software_projects