How to Compensate For Overoptimistic Project Leaders

  • Leslie Brokaw
  • August 04, 2014

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

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. “Instead of taking an employee’s status report at face value, executives should solicit the opinions of others who are close to the project,” the authors write. “In doing so, it is important to obtain views from different levels within the organization. If everyone corroborates the status, the executives can have much greater confidence in the accuracy of what has been transmitted.”

The article also includes a self-diagnostic tool — the “Are You At Risk?” survey — for executives to evaluate their own vulnerability to these important realities of status reporting. The survey is one of the sidebar links within the full article and is downloadable in PDF form.