September 20, 2013 | Author: PM Hut | Filed under: Project Management Best Practices
Want Project Success? Kill the Ambiguity!
By Daniel Lock
Historically, managers have underestimated or entirely ignored organizational and change management issues in project management. In fact, most project failures could be traced to “ambiguity.”
More recently, the people factor – at least on the project side – has been addressed with “agile” project management methodologies. Indeed, a recent survey by VersionOne found 84% of organizations use some form of (or toolset from) the agile playbook.
Although agile methods have helped reduce the number of project failures, some go so badly that they can threaten a company’s existence. 17% to be exact, according to a 2012 McKinsey study. The study also found that large IT projects, on average, run 45% over budget and 7% over time, while delivering 56% less value than predicted. While not flattering, it is getting better. Why? Change management has played a big role by focusing on achieving the desired outcome and supporting people through their transitions.
The Problem of Project Ambiguity
If there’s one single root cause that prevents user adoption and usage it’s the uncertainty caused by a project – and how said project is managed. Economists call it “ambiguity aversion,” or the malaise that results from a lack of clarity.
Behavioral economists have known for years that people are more likely to invest in bonds and deposits rather than stocks because, in their perception, stock prices are more volatile. This behavior occurs even though over time the stock market outperforms cash investments.
This difference between how people make a risk assessment when probabilities are known (getting 3.25% return on my savings), compared with when probabilities are unknown (getting 11% from stocks over time) is significant. People will avoid making a decision altogether when faced with such uncertainty.
In our organizations, most of the decisions we face are a mix between risk and ambiguity. But what is ambiguity and how is it experienced in the workplace?
Although formally it has to do with uncertainty about the distribution of probabilities, psychologists tend to define ambiguity as the subjective experience of missing information relevant to a prediction.
This insight about ambiguity is why people not only treat ambiguous, inexact, incomplete, or vague information as insufficient, but actually discount the data altogether. The frustrating implication for project managers is that, as a result of this aversion, people behave as if they have no information at all.
Good change leaders must become good at converting ambiguous goals and plans into concrete, specific steps and messages to guarantee the behavior change they seek.
An Example of One Company That Got It Right
Take, for example, Emirates Bank. This organization excelled at succeeding in its innovative efforts despite unforeseen changes and daunting project goals. By maintaining focus and creating a clear project structure it was able to unveil an entirely new banking system only narrowly outside of both timeline and budget – a significant feat considering some projects exceed budget by as much as 200%, and schedule by 70%.
Part way into the project, the company announced it was merging with the National Bank of Dubai, which meant that the new system had to be compatible with both banks. Not only that – project managers had 18 months to finish development and release it with a bang.
In this instance, Emirates Bank did a few things right, all things that stuck to the word clarity. It kept on schedule despite the merger. It resisted change to the project’s scope and divided work into modules. It assembled a team that was not only capable, but consistent. Lastly, it measured every activity against a single objective: readiness to go live.
By streamlining the process for innovation, managers allowed ideas to flow freely within a framework. Project leaders created a supportive environment where every member of the team was on the same page and understood what needed to happen. At release time in late 2009, the bank was only behind schedule by 7% and over budget by 18% – despite the additional work the merger had added.
Providing some clarity
As an leader of change, look at the following areas of ambiguity around the objectives and goals of your project. Make some plans to reduce or eliminate them to provide more clarity to your business.
- Situational ambiguity
- Issues/problems that are unclear
- Unreliable data/conflicting information
- A vague scope
- Overload of competing goals
- Lack of clarity on how success will be measured
- Not enough resources and time to properly tackle the goal
- Poorly defined relationships
- Unclear hierarchy
- Unclear roles and responsibilities
- Politicking and favoritism
- Questions regarding processes
- Finger pointing; accusations and blame instead of cause
- High fluctuation of key personnel
- Poor understanding of cause and effect
As you study these it is likely that you will find one or two issues that could use clarification. If there are three or more, be prepared for your change efforts to slow down significantly. Aim for clear situations, boundaries, relationships, and processes. By providing the right amount of clarity, you just might find that all of your IT projects turn into a raging success.
Daniel Lock is the principal of Daniel Lock Consulting Group, a firm specializing in helping leadership to innovate to more rapidly achieve individual and organizational goals.
Daniel is a former project manager, and operational manager at Westpac Bank in Adelaide, Australia. He has managed both line and project functions, and overseen re-organizations and department amalgamations. He has been a speaker at Westpac charity workshops.