Stakeholder

One of the key skills required by project managers, in fact all managers, is the ability to motivate team members and the wider stakeholder community.

Most business approaches to motivation are based on extrinsic motivators – if you achieve ‘A’ we will reward you with ‘B’ and if you are really good and make ‘2A’ we will give you ‘2B’. The theory used by business is based on the assumption the larger the reward the greater the motivation; provided basic principles such as fairness are applied and the reward is commensurate with the effort needed and expectations of the person being motivated. It is assume the increase in motivation will flow through to increased performance.

Management scientists way back to Henry Gantt had established that in the ‘carrot-and-stick’ approach to motivation, fear and the ‘stick’ had little effect, the ‘carrot’ and reward had measureable effect. However, these studies were applied to manual workers.

More recent work by researchers such as Hertzberg in his ‘Hygiene Theory’ (1959) and Maslow’s pyramid of need (1943) placed salary (wages/reward/income) relatively low down the list of motivators. As long as the ‘pay’ was what was expected it had little extra value; inadequate rewards could quickly de-motivate, but once adequate levels were reached ‘pay’ simply came off of the table. This is a basic part of our PMP courses, hardly new or exciting….

However, I have just watched a fascinating video on TED, by Dan Pink, on the surprising science of motivation: starting with a fact that social scientists know but most managers don’t: Traditional rewards aren’t always as effective as we think.

A brief summary of the presentation is that traditional rewards do work for simple manual tasks. However, as soon as creative thinking is needed extrinsic rewards have the opposite effect by focusing effort in a narrow band and stopping the more creative thinking needed to solve the problem. The results are measurable negative performance, increasing as the reward increases.

According to Pink, the motivators that do work are intrinsic:

• Autonomy: control and self-direction over the work.
• Mastery: the ability to excel at the work by getting better and better at difficult tasks.
• Purpose: the work contributes value to the organisation and others (in the service of something larger).

These motivators are very similar to the ideas of Maslow and Hertzberg briefly discussed above, and McGregor (Theory X, Theory Y – 1960). What’s fascinating in Pink’s presentation is the fact most organisations reward their senior decision makers with huge pay bonuses to solve some of society’s most difficult problems (and wonder why they fail so often…).

To see the presentation, go to the TED website at: http://www.ted.com/talks/lang/eng/dan_pink_on_motivation.html – whilst there it is well worth browsing, there are dozens of other fascinating presentations.

The military doctrine of ‘command and control’ heavily influenced the structural approach to management characterised as ‘Scientific Management’ and the works of Taylor (1911). Scientific management assumes, amongst other things, that ‘supervision must be achieved through a clear chain of command and through the application of impersonal rules’ and that ‘only those at the top have the capacity and opportunity to direct the enterprise’. This philosophy has strongly influenced the development of project management (see: The Origins of Modern Project Management). But does this represent effective military management?

Following the defeat of the Prussian armies by Napoleon at the battles of Jena and Auerstedt in 1806, the concept of ridged process-oriented command and control structures has been progressively replaced by the concept of ‘auftragstaktik’, or directive command. These ideas were originally championed by Major General Gerhard von Scharnhorst and were formalised by German Generalfeldmarschall Helmuth von Moltke who was the chief of staff of the Prussian Army for thirty years from 1857.

The core concept of auftragstaktik is ‘bounded initiative’. Provided people within the organisation hierarchy have proper training and the organisational culture is strong, the leader’s role is to clearly outline his/her intentions and rationale. Once this is understood, subordinate personnel can formulate their own plan of action for the tasks they are allocated and design appropriate responses to achieve the objectives based on their understanding of the actual situation, exploit opportunities and mitigate problems.

The investment necessary to achieve this capability is not simply a question of financial and material resources – time is critical both for the training of individuals and the development organisations. In von Moltke’s army, a junior Prussian commander exercising his initiative on the battlefield was most likely drawing upon a variety of resources at his disposal including:

1. his understanding of his commander’s explicitly stated directive that would have provided him with an appreciation of the situation, a specific task, and a description of the commander’s intentions;
2. his beliefs about his organisation, his role within that organisation, and the degrees of freedom available to him in the exercise of that role;
3. his expertise in the technical aspects of the military profession and
4. his understanding of his commander and his peers.

These latter aspects are captured in the notion of ‘implicit intent’, would provide him with the basis for his course of action and bound the solution space available to him.

A General may wish to defend a city, a Brigade Commander defend his designated sector and within the sector, a Platoon Commander may be tasked with establishing a road block which involves one of his NCOs establishing a strongpoint. The General does not need to instruct the NCO on how to site the strong point, camouflage it or man it. At each level, good leaders will think ‘two levels up’ and provide oversight ‘one level down’. The process is not random, Standard Operating Procedures (SOP) define how specific tasks should be accomplished and ‘bounded initiative’ allows the individual leader to optimise the SOP for the specific circumstances he or she encounters to best support the overall intent of the commander. Von Moltke emphasised that he wanted to ‘steer’ initiative in the right direction.

These concepts are closely aligned with the human resources approach to management, which developed in the 1950s and 60s and emphasise a symbiotic relationship between individuals and organisations where ‘democratic leadership is the most effective means of managing’ and ‘openness and participation are the most effective means of demonstrating democratic leadership’.

On very small projects, a project manager may be capable of directing and controlling the work of everyone in the team. However, as soon as the team or the technology grows beyond a relatively simple system direct ‘command and control’ becomes impossible and attempting to impose a ridged hierarchy based on formal instructions will lead to inefficiencies. Effective leaders need to establish clear guidelines and a system of protocols, chain of command, and standard operating procedures so that everyone in the project team knows what they to do and who is accountable. The overall action of the team is unified by the leader’s intent; within this space sub-teams and smaller work groups are allocated their individual missions and tasks within that higher intent. Once this framework is in place, properly trained team members can go straight into the performing stage of their activity.

This alternative to ‘command and control’ developed by the Prussian military in the 1860s allows a far more effective and efficient use of resources. Auftragstaktik is not an easy option, the team needs better leadership, better training and the willingness to engage in taking ‘bounded initiatives’ but overall it offers a much better way of achieving the project’s objectives.

Applying these concepts does not reduce the importance of the normal project management artefacts such as the schedule and cost plan; what changes is the way these artefacts are used. In a decentralised management structure, the Project Plan defines the guidelines and framework the team will work within rather than attempting to prescribe how they will work (for more on this see: Project Controls in the C21 – What works / What’s fiction).

This is just a short post to clear my mind of some converging thoughts. The first background element is the announcement this week that the UK government has slashed its school building program (although the new government is still likely to do more then the old); and finding a place in an Australian University is a difficult as ever.

The second element is a couple of radio features discussing the evolution of mankind in particular the key point some 100,000 years ago when our ancestors developed trade and probably saved themselves from extinction. Followed by the development of agriculture some 10,000 years ago followed by cities that allowed the time for arts and science to flourish.

Arguably, the shift from low density, low interactive populations of hunter gatherers to the relatively high density, high interactive communities of the late Stone Age and Early Bronze Age facilitated the emergence of early civilisations in the Middle East, Indus Valley and Central America some 3 to 4,000 years ago.

The third element is a book on ‘The Lunar Men’ a group of natural philosophers, scientists and business men that largely kick started the industrial revolution in the UK Midlands (Birmingham) in the 18th Century. This group were the last of the European ‘renascence’ which itself was based on the ability to communicate effectively assisted by the development of printing and inter European communication.

All of these leaps in knowledge were based on the ability to interact and communicate in a more effective way than was previously possible. The supporting elements are improvements in trade and commerce and the ability (in latter times) to overcome entrenched opposition to new ideas. A modern example of this phenomenon is Silicone Valley and the massive leap in the way the world interacts caused by the development of the Personal Computer.

Waves of innovation seem to be partially serendipity, you need the right people and the right ideas, but this is helped by the quality, density and flexibility of the communication network between them. Discussion, argument, collaboration and competition in an environment that allows multiple independent threads to develop concurrently seems to be the catalyst for literally changing the world. Based on this construct, my prediction is the next massive wave of innovation is likely to come out of China.

The one statistic that for me sums up where China is going is the 60 million qualified university graduates that enter the workforce each year. Many of China’s Universities are world class and the concept of an annual intake of new graduates entering the workforce that is three times the total population of Australia speaks volumes for the skills, innovative capability and sheer energy being generated in this vast economy.

The region I visited was the Yangtze River Delta. This region has always been a major industrial centre and the emergence of Shanghai as the economic capital of China has simply accelerated its development and expansion. Today, this part of China has double the foreign trade of the entire Indian economy and represents 25% of China’s GDP.

The China I saw actively encourages innovation and technical development, has effective communication and a very large talent pool. All that is needed is a little serendipity and who knows what may be developed. In the same way efficient steam engines created the industrial revolution (Watt and Boulton were both Lunar Men) and the PC created the knowledge revolution anything may be possible (and predicting the outcome in advance is nearly impossible).

There are alternatives – the internet allows everyone to communicate so location is no longer a central issue to collaboration; and the major limitation on the Renascence was the entrenched interests of the Church and secular authorities. However, overall I feel the next major wave of innovation cannot be far away what it looks like and where it starts are open questions but slashing access to quality education and limiting the desire to learn certainly won’t help the UK or Australia be in the forefront.

On a smaller scale, every organisation can help its people innovate by creating the right environment for ideas to emerge.

It has been a fascinating 24 hours in Australian politics. The former Prime Minister Kevin Rudd was dumped and we now have our first female Prime Minister Julia Gillard. The unfolding drama was a mixture of ruthless efficiency in the coup to oust the previous Prime Minister, immediately followed by the start of a process of inclusion and healing.

Managers faced with difficult decisions can learn a lot from today’s events. My thoughts on several key issues are:

1. Ethical dilemmas are always difficult and need decisions. As Henry Kissinger said: “Competing pressures tempt one to believe that an issue deferred is a problem avoided, more often it is a crisis invented”. There is no right answer to a dilemma, every option has a downside. Leaders choose a way forward and live with the consequences.
   [See: Ethics and Leadership]
    
2. When you do decide on a course of action, don’t hide the issues that created the dilemma in the first place, explain your reasoning and acknowledge both the greater good and the consequential harm. When a Deputy takes over from her leader there are inevitable questions of loyalty and trust, honest reasoning lets observers understand the reasons for the decision.
    
3. Conversations and transformational negotiations lead to better outcomes than win-lose transactional negotiations but often you need to make the first concession to start down this path [see: Win-Win Negotiations]. The Government and the mining industry were locked in a head to head battle over a new tax. In the space of 5 hours the new Prime Minister had unilaterally cancelled government advertising over the issue and offered open negotiations. The mining industry had reciprocated and suspended their advertising campaign. The negotiations may or may not reach a consensus (no one like having their taxes increased) but both sides are likely to end up with a better outcome if the transformational negotiations work.
   [See: Negotiating and Mediating]
    
4. In a disagreement over principles, you only need to achieve your objective; you don’t need to destroy the other party. The former Prime Minister has been offered a position of his choosing in the new government. If accepted, this means his talents and knowledge are still available to the team. Reluctant allies are better than committed opponents.

It’s certainly been an interesting day watching a really effective communicator in action in action; I feel as though I have learned a lot.

Your project will only be considered successful if its key stakeholders perceive the project’s outcome as a success. These perceptions of success or failure are heavily influenced by the effectiveness of the project’s communications, and relationships, with its stakeholder community, particularly senior managers. Communicating effectively is both a science and an art framed within a relationship.

The starting point if you wish to be taken seriously is to develop a reputation for credibility. Senior management need to recognise that if you say something, it is backed up by facts, and if you commit to something, it is delivered. Credibility is earned by performance, but there is no harm in quietly making sure your performance is noticed in the right places. Your reputation is a general underpinning to all internal organisational relationships. Developing a specific relationship needs a specific, culturally appropriate focus before you can expect to communicate effectively.

Also, the last few years have seen significant changes in people’s understanding of acceptable behaviours and have forced a re-evaluation of the way Project and Program managers need to communicate to influence their stakeholders; particularly when ‘advising upwards’ and dealing with difficult people. The first key to building any effective relationship is to avoid stereotyping. Upwardly mobile managers with a focus on being promoted, frequently have a different life focus to project managers. These differences are not uncommon in successful senior executives and need to be respected as a component in the relationship, not denigrated.

The second key is to recognise that in every relationship there is a power dimension. How a senior manager uses his or her power is to an extent a generational issue. As long as they understand their purpose, many younger managers would see nothing wrong in a more junior manager setting reasonable boundaries and procedures to the relationship and communication. Older managers used to operating in a command and control environment are likely to react negatively to a ‘junior’ pushing rules upwards.

The solution is mutuality. You need to understand what you need from the relationship (support, resources, backing) and also what the senior manager needs from the relationship. Then, work within the relationship to negotiate mutually beneficial outcomes that meet both sets of requirements. It is by linking your needs to the achievement of the senior manager’s requirements; you can start to achieve real communication.

As already mentioned, crafting advice to senior management to achieve effective outcomes from the communication is as much an art as a science. Communicating for effect requires a clear understanding of the objective of the communication and the skills to create messages that are focused:

• On the right people
• At the right time and carry
• The right information in the right format.

Mutuality and credibility are the two keys to advising upwards, but in the end, all relationships depend on the situation. If you are seen as a serious contributor to the organization’s success and can link your needs to the needs of senior management, there’s a high probability of achieving your desired outcome and benefiting the organization at the same time.

My next book, Advising Upwards: A Framework for Understanding and Engaging Senior Management Stakeholders, will be published by Gower in 2011. For more on the book see: http://www.mosaicprojects.com.au/Books.html#AdvisingUpwards

In the meantime, our popular workshop, The science and art of communicating effectively will be run in Sydney and Melbourne over the next few weeks. For more information see: http://www.mosaicprojects.com.au/Training-Comms.html

Research by Dr. Brian Hobbs, University of Quebec at Montreal, Quebec, Canada published in a White Paper prepared for the Project Management Institute (PMI) highlights the precarious existence of the majority of Project Management Offices (PMOs). Approximately half of the PMO’s in existence are seeing their relevance or very existence questioned.

Whilst PMOs have been popular since the middle to late 1990’s and new PMOs are being created at a relatively high rate; PMOs are also being shut down or radically reconfigured at a similar rate. As shown in the figure below most PMOs in existence today are rather recent creations. The sample suggests more than half the PMOs in existence today (54%) were created in the last two years and only 17% have been in existence for more than five years.

This data suggests a PMO often has only a short time to demonstrate its ability to fit into the organisations culture and create value before it is restructured or closed down. We have looked at some of the issues and challenges associated with PMOs in a Mosaic White Paper ‘PMOs’.

Based on years of observation, the key to achieving an effective start up for a PMO has more to do with the PMO’s management being able to effectively manage their key stakeholders, particularly in the executive suites than any methodology or reporting processes the PMO may import or develop. For more on this see the numerous papers we have published [paper listing]. The key message is technical competence is never going to be enough to justify the existence of a PMO.

Trust is a key element in the effective management of project teams and contracts. Trust speeds everything up and lowers costs but you have to continuously demonstrate you are completely trustworthy or people will quickly lose confidence in you. As the level of trust goes down, the speed of doing business goes down and costs go up. When levels of trust are low, or distrust exists, relationships and communications are ineffective and everything has to be proved or validated.

Balancing the cost of validation, checking and supporting legal documentation, the requirements of no trust, against the speed and cost effectiveness of trusting the information and actions of others is an interesting dilemma. How much is enough to pay for the lack of trust? Where are the pragmatic limits??

Temporary organisations such as project teams (particularly virtual teams), where people are brought together to complete a given task that requires a high degree of collaboration, within tight timescales and with a high cost of failure don’t have time to allow trust to develop naturally. They have to work out their differences on the fly and blindly trust one another to do their jobs. This is ‘swift trust’ and can be a powerful force but it is fragile and easily broken.

In other places a reputation for integrity and trustworthiness can be established and may pay dividends.

We are working on a White Paper looking at the role of trust within projects. Any thoughts of comments will be welcome. Previous White papers can be downloaded from http://www.mosaicprojects.com.au/WhitePapers.html

I deliver a significant number of training sessions each year through Stakeholder Management and Mosaic Project Services; including both face-to-face classroom courses and using our Mentored Email™ distance learning methodology.

One of the interesting observations is how the rate of information absorption (ie, learning) varies from person to person. The rate of learning does not seem to be correlated to a person’s IQ, industry or role in the workforce. If anything, people who absorb the learning more slowly seem to retain the information longer.

It would appear the ability to learn is a skill that is exercised naturally by younger people, but as one grows older this natural ability seems to fade with only some adults maintaining their innate capability to learn, frequently linked to active practice via university courses, etc. When presented with a large volume of new information (eg, a PMP course) the rest of us need to learn how to learn!

Some of the easier ways to absorb, make sense of, and retain information include:

Using analogies and metaphors
You can learn abstract processes by creating metaphors for more common events. So whenever you learn a fact, ask yourself what the idea is similar to in the tangible world; eg, a data store in a software program may be a cupboard with different things on each shelf.

Build mental pictures
If you break apart a complex mathematical formula into components, you can try to imagine what it would like as a graph or how each component influences each other in a railway switchyard.

Build on the basics
Do a bit of extra research on your most difficult topics focusing on their foundations. You might not understand the more complex theories perfectly, but it makes understanding your testable material much easier.

Become the teacher
The act of explanation creates connections. Ask yourself how would you explain what you’re learning to someone else? Teaching forces you to simplify and break down complex ideas and then re-connect them to build the overall picture.

Stop writing transcripts
Try to free yourself from rigid note taking (the course handouts fulfil this need), instead write down ideas in branches and connections. Add your own thoughts, diagrams and arrows linking ideas so you have a web of information. ‘Mind mapping’ tools are great for this but pencil and paper work just as well.

Draw Diagrams
Most people think in pictures and maps. Research suggests drawing will increase your concentration and help develop the connections between ideas. A picture may not be worth a thousand words, but it can often illuminate the connections that lead to a greater understanding.

There are many more sophisticated memory techniques available in a range of books on the subject but certainly in our areas of teaching, the ability to link ideas and understand the flow of both ideas and information seem to be the key to real understanding.

This opens up a second strand of thought – making the best use of a training course. Some simple tips that will help you to get the most from your training course include.

Before the training course

• Have a clear picture of what you hope to get from the training course expressed in terms of the benefits to you: a pay rise and promotion is more motivating than a PMP credential.
• Do any pre-course reading and make a note of any questions to bring along and ask the trainer. You won’t pay extra if you make the trainer work hard……

At the training course

• Arrive prepared
• Be open to learning new concepts, even if these challenge your previous understanding
• Don’t be afraid to ask the trainer to clarify points; remember that if you don’t understand something, it is likely that you are not the only one
• Share experiences when they are relevant and learn from others in the group, they are likely to be from different industries and have different experiences; take advantage of the fact that you’re surrounded by people with diverse work backgrounds.
• Dedicate time each evening to completing your homework activities, or reviewing the work covered during the day (our training courses cover a great deal of content in a condensed fashion – reviewing the material each day helps to cement the ideas in your mind).

After the training course

• Use the resources provided during the training course to help you integrate the concepts into your every day work life (the first 24 hrs after the course are a critical period for reinforcing learning by practice).
• Make the effort to change if you have discovered better ways of approaching your work, but remember you will need to explain the benefits of the change to people who did not attend your training sessions.
• Recommend the training to any colleagues that you believe will benefit from it

Learning new things should be an enjoyable process at all stages of life and career, and is becoming increasingly important to stay competitive in a rapidly changing world. Learning how to learn effectively is the first step along the journey.

There have been a series of posts on the Mosaicproject blog discussing the illusion of control and the limitations of statistical analysis for predicting or controlling the future. The key posts are:

• Seconds From Disaster
• The illusion of control: dancing with chance
• If it can go wrong……

Another dimension to the illusion of control, identified in a study by Nathanael Fast and Deborah Gruenfeld at Stanford Graduate School of Business, Niro Sivanathan at the London Business School and Adam Galinsky at the Kellogg School of Management at Northwestern University, show that power can literally ‘go to one’s head’, causing individuals who have power to think they have more personal control over outcomes than they, in fact, do. Across three experiments, using two different instantiations of power, the researchers found that power led to perceived control over outcomes that were either uncontrollable or unrelated to the power.

Galinksy reported, “In each experiment, whether the participant recalled power by an experience of holding power or it was manipulated by randomly assigning participants to Manager-Subordinate roles, it led to perceived control over outcomes that were beyond the reach of the individual. Furthermore, the notion of being able to control a ‘chance’ result led to unrealistic optimism and inflated self-esteem.”

The authors note that positive illusions can be adaptive, helping power holders make the seemingly impossible possible. But the relationship between power and illusory control might also contribute directly to losses in power, by causing leaders to make poor choices. They conclude that “the illusion of personal control might be one of the ways in which power often leads to its own demise.”

These results, reported in Psychological Science, a journal of the Association for Psychological Science, have implications for how power, once attained, is maintained or lost. From an organisational perspective, the ability of knowledgeable technical managers to effectively advise upwards is a powerful counterbalance to unreasonable hubris [for more on the report see: Power And The Illusion Of Control].

My next book, Advising Upwards: A Framework for Understanding and Engaging Senior Management Stakeholders seeks to define the skills and knowledge needed to make sure important information is passed up the chain to senior managers.

One of the most combative industries world-wide is the building and engineering industry. Many legal systems have dedicated construction law courts and others have enacted legislation designed to specifically manage construction industry disputes. In Australia alone, it is estimated the construction industry could save AU$7 billion through better stakeholder and contract management processes that minimise or eliminate avoidable disputes.

Research in reducing theses excessive costs has resulted in the publication of The Guide to Leading Practice for Dispute Avoidance and Resolution. The Guide recommends management strategies to avoid contractual disputes between clients, contractors and other stakeholders, and where disputes cannot be avoided, to manage disputes effectively. Whilst this research was developed by the Australian building and construction industry it has a much wider application and is recommended reading for any manger involved in establishing or overseeing a major project.

The Guide was developed by the CRC for Construction Innovation prior to its closure in 2009. To achieve a balanced view, the CRC-CI engaged with a cross section of organisations in the built environment industry supply chain including the Association of Consulting Engineers Australia, Australian Constructors Association, Australian Procurement and Construction Council, Civil Contractors Federation, Queensland Dept. Transport and Main Roads and Main Roads Western Australia in the work leading to this report.

The CRC for Construction Innovation completed its work on the 31st December 2009 and has closed down. To keep these valuable reports in circulation we have created a repository on the Mosaic web site. The following publications and documents are available to download from the ‘Legal Papers section of the Mosaic site:
- Guide to Leading Practice for Dispute Avoidance and Resolution
- Guide to Leading Practice for Dispute Avoidance and Resolution: An overview
- Dispute Avoidance and Resolution (literature review)
- Causal Ascription of Disputes (report)
- Strategies for Dispute Avoidance (report)
- An exploratory study of project dispute pathogens (journal article)
- Causal Modelling of Construction Disputes (refereed conference paper)

Download The Guide and associated reports