By Lynda Bourne
Are your stakeholders biased? The short answer is: yes. To make matters worse, your opinions of your stakeholders, your team and yourself are also biased.
As in all relationships, complete objectivity is nearly impossible to achieve in stakeholder relationships. We are all innately biased. We must be aware of our biases and work to minimize their effect on decisions, actions and communication. We also need to allow for the effect of bias in the reactions of stakeholders toward our communications and project, and seek out a diverse group of team members to mitigate biases.
Here are some of the more important biases in the way we interact with stakeholders.
Confirmation bias.We tend to proactively seek out information that confirms our existing beliefs and associate with people who think like us. While this makes sense in one respect, it also means we subconsciously begin to ignore or dismiss anything that threatens our views.
Given that most project managers, sponsors and steering committees start out thinking their project is going to be a great success, confirmation bias can cause them to ignore the subtle early warning signs of problems until it’s too late.
The comment from the project scheduler about the loss of float on noncritical activities may be caused by a poor process and the scheduler’s lack of skills, or it may be an early warning of a lack of productivity that will emerge later as a major project delay. If you believe the project is going great, confirmation bias will lead you to dismiss the warning, while an awareness of the bias may allow you to investigate further.
Confirmation bias also affects our memories. In a 1979 experiment at the University of Minnesota, participants read about a woman named Jane who acted extroverted in some situations and introverted in others.
Later, the participants were divided into two groups. One group was asked if Jane would be suited to a job as a librarian; the other was asked about her having a job as a real-estate agent. The librarian group remembered Jane as being introverted and said she wouldn’t be suited to a real-estate job. The real-estate group did exactly the opposite: They remembered Jane as extroverted and said she would be suited to real estate.
The “swimmer’s body illusion.”This occurs when we confuse selection factors with results. Rolf Dobelli’s book, The Art of Thinking Clearly, explains how our ideas about talent and training are completely off-track.
Professional swimmers don’t have perfect bodies because they train extensively; they are good swimmers because of their physiques. Similarly, are the top-performing universities the best schools, or are they able to choose the best students (because of their reputation), who then do well regardless of the school’s influence?
When reviewing project success and failure, one of the key questions is: Was the project manager the factor that created the success or failure, or was the project predestined to one outcome?
Consider two organizations that decided to undertake identical projects with a normalized value of US$1 million. Organization A assessed its project and set the budget at US$800,000. Organization B assessed its project and set the budget at US$1.2 million.
Organization A’s team ended up spending US$900,000—a cost overrun of US$100,000, nominally a project failure. Organization B’s team spent US$1.1 million—under budget by US$100,000, nominally a project success.
But considering that both projects produced the same output, which project manager was actually most successful—the one that exceeded stakeholders’ expectations by coming in under budget, or the one that delivered the same results with a smaller budget?
The sunk-cost fallacy. The term “sunk cost” refers to any cost (monetary, time or effort) that has been paid already and cannot be recovered.
As psychologist Daniel Kahneman explains in his book Thinking Fast and Slow, organisms that placed more urgency on avoiding threats than they did on maximizing opportunities were more likely to pass on their genes.
Over time this has become an automatic, subconscious bias—the prospect of losses is a more powerful motivator on everyone’s behavior than the promise of gains.
Consider this scenario: You buy a movie ticket only to realize the movie is terrible. You could stay and watch it to “get your money’s worth” since you’ve already paid for the ticket (sunk-cost fallacy), or you could leave the theater and use that time to do something you’ll actually enjoy.
More than half the population will waste their afternoon by staying to avoid the loss.
The anchoring effect. The anchoring effect works like this: Rather than making a decision based on pure value, we factor in comparative values.
Behavioral economist Dan Ariely, author of Predictably Irrational, uses the following experiment to illustrate this. He sells two kinds of chocolates in a booth: Hershey’s Kisses and Lindt Truffles. The Kisses are priced at 1 cent each, while the truffles are 15 cents each.
Considering the quality differences between the chocolates and their normal prices, the truffles were a great deal, and the majority of visitors to the booth chose the truffles.
For the next stage of his experiment, Ariely lowered the prices by one cent each. So now the Kisses were free, and the truffles cost 14 cents. Of course, the truffles were even more of a bargain now, but since the Kisses were free, most people chose those instead.
From a project perspective, the first price or cost estimate will always anchor everyone’s consideration of “better or worse.”
These are just four examples out of many hundreds of biases. The good news is you can seriously limit their effect by being aware of the problem and embracing diversity. Everyone has their own set of biases; working with a diverse group of people can balance out many.
Conversely, taking the comfortable option and surrounding yourself with people who think like you will amplify the effect of biases.
How objective do you think you are?
Seattle's Troubled Tunnel: 3 Communications Tips for Regaining the Public's Trust
Human Aspects of PM,
PM & the Economy,
PM Think About It,
Categories: Best Practices, Change Management, Communication, Complexity, Ethics, Generational PM, Government, Human Aspects of PM, Leadership, Lessons Learned, PM & the Economy, PM Think About It, Program Management, Project Delivery, Project Failure, Project Planning, Social Responsibility, Stakeholder, Strategy, Teams
One of the biggest public works projects in the United States right now has some major problems. It’s a more than $3 billion effort in Seattle, Washington to replace the Alaskan Way Viaduct, an aging elevated highway on the city’s waterfront, with a 2-mile-long tunnel. If you’ve been keeping an eye on the project, you know that the tunnel-boring machine (dubbed “Bertha”) broke down more than a year ago, creating various challenges and overruns. Public outcry is mounting.
Now, if you’re like me and believe in the power of communication to ensure that projects run more smoothly, the tunnel project has highlighted the need for more openness, better stakeholder management and speaking to your audience in understandable ways, instead of falling into buzzwords or corporate speak.
If I were working on the project right now, here are three things I would look at to regain the public’s trust and help everyone in Seattle and the state of Washington understand exactly where the project is.
1. Be willing to convey incomplete information. The project’s big challenge is that the machine built specifically for drilling the tunnel encountered a setback when it struck a metal pipe during the excavation process. Unfortunately, it took project leaders over a week to convey the extent of Bertha’s problem, the course of action and any sort of timeline to get things back on track. Since Bertha stopped working in December 2013, information has trickled out to stakeholders.
The project’s leaders could have set a much different tone early on by stating what they know and what it means to the project—along with an acknowledgement that they really aren’t 100 percent sure what the solution is, and a clear statement that they will work to provide status updates to all stakeholders as often as possible.
Instead, it’s been “hard to get straight answers,” as the Seattle radio station KUOW put it.
2. Be honest. This really goes hand in hand with the first point about having the confidence to convey information that is accurate, even if it is incomplete. The public has begun to doubt that project leaders are being honest about the tunnel’s current status and future. This is partly because when the city’s department of transportation (DOT) or the state government has updated the community about the project, they have given information that seems farfetched and is tough to believe in light of Bertha’s lack of progress.
Case in point: A DOT official recently toldSeattle’s City Council that the project was “70-percent complete.” That claim was met with a great deal of skepticism by journalists and members of the community.
The lesson for project managers is: Don’t fudge information to avoid blowback. In the long run, you are putting your project at a strategic disadvantage because you may lose funding or you may come under heavier oversight…or worse. So just explain things in an honest and forthcoming manner.
3. Be consistent in the delivery of information. A lack of consistent communications has been one of the big failings for the Seattle project team. And when there’s an information void, it will usually be filled by something you aren’t going to like. In this instance, the lack of communications has led to a real breakdown of trust.
That’s why you need to make a plan for communicating consistently with stakeholders. It should include the best ways to communicate with specific stakeholder groups, and a plan for gathering accurate, up-to-date information from the project team. To ensure timely gathering, build the consistent delivery of information into day-to-day project activities. Set a schedule of when you want your team members to communicate information to you, and hold them accountable.
In turn, you need to inform key stakeholders of when and how you’ll communicate information to them, and then stick to that plan.
In most cases, communications comes down to recognizing the importance of clarity in effective project leadership. In Seattle, you can see what a lack of a clear process can do to the trust between stakeholders and the project team. I’m confident that most unsuccessful projects began to unravel when communications stopped being clear and consistent.
What do you think?
The new Knowledge Area, stakeholder management, was cheerfully welcomed in A Guide to the Project Management Body of Knowledge (PMBOK® Guide)—Fifth Edition.
Figure 1: Lack of stakeholder management leads to poor results. (Trentim, 2013)
Most of us rely on soft skills, communication and leadership to manage stakeholders. But while they’re helpful, interpersonal skills are far from being the sole way to implement stakeholder management. As a matter of fact, there are hard skills in stakeholder management — tools, techniques and methods that should be diligently applied to enhance stakeholder management and improve project success rates.
For example, there are at least 10 different tools for stakeholder identification. Often, project managers rely only on brainstorming to write a stakeholder registry, conforming to the methodology imposed by a project management office (PMO). That’s why I believe we need a paradigm shift.
A project manager’s goal is to add value. Value depends on stakeholder expectations and perception. Consequently, the project manager’s goal is to engage and involve stakeholders in value creation. This is what we call managing for stakeholders.
On the contrary, the term stakeholder management assumes we can manage expectations. This is wrong. We cannot manage people, to paraphrase U.S. author and businessman Stephen Covey. We lead people. We persuade and influence stakeholders.
In 2013, the Project Management Institute published my book, Managing Stakeholders as Clients. It presents a framework with a paradigm shift from traditional stakeholder management by first setting the premise that we can’t manage stakeholders or their expectations — we can only lead, influence and persuade people. To my surprise, I was the recipient of PMI Educational Foundation’s 2014 Kerzner Award* at PMI® Global Congress 2014—North Americafor my results in managing projects and programs. But in particular, the award recognized my creation of this stakeholder management framework and the results of its application.
The main difference between stakeholder management and managing for stakeholders is this: Stakeholder management’s goal is to manage stakeholders’ expectations, enhancing support and reducing negative impacts — a reactive measure. It’s almost as if project managers develop stakeholder management plans to protect themselves from external interference.
Managing for stakeholders means involving and engaging stakeholders in value creation, boosting their support and having them take ownership in a proactive way. Managing for stakeholders embraces change as a learning process.
While stakeholder management is instrumental, employing processes for conformity, managing for stakeholders is results-oriented. In summary, stakeholder management is an attempt to manage stakeholders’ expectations toward the project. On the other hand, managing for stakeholders is clearly oriented to manage the project and its results for the stakeholders, on behalf of their changing needs and expectations.
Now that it’s clear we should start approaching stakeholder management from a different perspective, in my next post I’ll share more tips and details from Managing Stakeholders as Clients. Don’t miss it!
How do you manage for stakeholders?
*The PMI Educational Foundationadministers the prestigious Kerzner Award. The Kerzner Award is sponsored by International Institute for Learning, Inc. (IIL)to recognize a project manager who most emulates the professional dedication and excellence of Dr. Harold Kerzner, PhD, MS, MBA.
Many project professionals find themselves in a position where they need to influence the decisions or actions of others, but lack the authority to impose an outcome. The ability to influence others is particularly important when managing teams in a matrix organization or when working as a consultant or expert advising line management or project management.
A Guide to the Project Management Body of Knowledge (PMBOK® Guide)—Fifth Editionincludes influencing in its list of key interpersonal skills and provides a brief outline in Appendix X3.5. Here are some practical options for building and using influence to benefit a project.
One of the standard references defining the problem and offering practical solutions is Influence Without Authorityby U.S. professors Dr. Allan Cohen and Dr. David Bradford. This book introduces the Cohen-Bradford Influence Without Authority (IWA) model that describes how to influence others through a give-and-take exchange. The model consists of six steps, starting with “Assume all are potential allies.” Then it moves with:
· “Clarify your goals and priorities”
· “Diagnose the world of the other person”
· “Identify relevant currencies, theirs and yours”
· “Dealing with relationships”, and
· Finally at the top, “Influence through give-and-take”
The IWA model is based on creating something of value to “trade” and then obtaining the best return from your investment. It is subtly different to the transactional approach of What’s in it for Me (WIFM).
WIFM focuses on finding a value proposition that provides a direct benefit to the stakeholders you want help from. It is a simple “trade” — if they help you achieve your project outcomes, they benefit from the success. WIFM is effective in situations where a senior stakeholder (e.g., the sponsor) can directly benefit from helping you succeed.
IWA is more effective when there is no direct benefit for the stakeholder you need help from and is based on “trading favors” or, more simply, the “you scratch my back and I’ll scratch yours” approach. We can and often do intuitively understand the give-and-take in a transaction for small things, such as sharing the effort to pick up the morning coffee. However, for large complex transactions, we need to be more methodical and think through our processes, goals and interests, those of our allies and those of the stakeholders we need to influence.
For starters, project managers who use IWA effectively know they get work done by working well within their peer network. If someone does something for the project manager, there’s a good chance the project manager will do something for him or her in return. It’s a two-way trade that benefits everyone. But even so, influencing without authority isn’t an easy task. The key to IWA is creating and banking “organizational currency” in advance of the time you need to use it.
Organizational currency comes in many formats:
· The ability to highlight and publicize good performance
· The ability to make useful connections for the person
· Useful or valuable information (for the stakeholder)
· Developing a good relationship that both people value
· Providing help or assistance needed by the other person
· Personal support, coaching or mentoring
Keep in mind you need to invest your time and effort to earn organizational currency with your stakeholders before you can “spend” it. Time isn’t a luxury many project managers can afford, but investing in relationship-building will ultimately help you to be more productive and generate quicker consensus with project team members, peers in the organization and senior managers.
The two key takeways for successful IWA? First, recognize that “give” comes before “take” in “give-and-take,” and second, make sure what you give is of value to the people you are engaging within their world. You need to understand what is important or useful to them.
What’s your number-one tip for influencing without authority?
As much as we wish these things didn’t occur, we sometimes find ourselves having to leave a project early or terminate a business engagement. This is always difficult to do, and how you do it can help you maintain your integrity and credibility throughout the transition.
Recently, I had to terminate a business relationship myself. Here are a few lessons that I learned that you can apply the next time you are in a similar situation.
1. Place the blame on yourself. I know you wouldn’t be leaving a project or quitting a business relationship if it were all your fault, but the key thing here is that you need to buck up and take responsibility for the business arrangement ending. There are several ways you can frame it to take the emphasis for the decision away from the other party. For example: “I’m sorry, but I just don’t have the ability to deliver the work to you in a manner that you have grown accustomed to” or “I find myself at a point where I don’t feel my presence best serves the project, and I think a new set of eyes is going to be helpful to getting things back on track.” Or, you can come up with your own. The point is that you take a little of the emphasis off the party that you are ending the relationship with and place it on yourself. This will lessen any bad blood or negativity from the decision. It is important to note that you must cast the decision in terms of your inability to continue to serve the client in a manner that he or she deserves.
2. If possible, present options for replacements.If you find yourself at a point of no return and need out of a business relationship, you can soften the blow even more if you provide alternatives. The question you are probably asking yourself is, “If I can’t work with this person or on this project, why would I refer them to someone else?” But the truth is, we are all in different businesses and at different stages of our career — and while your threshold for some clients may be zero, someone just starting out or looking to find a different focus may be more than willing to accept a challenge that you consider unnecessary. This goes back to the first point: If you can’t serve the client in the way that he or she deserves, you are doing the client a favor by removing yourself from the project and helping him or her find someone who can do better.
3. Be prepared for blowback.Even when these things go great, there will be some sort of blowback or negative impact. You might have spelled everything out with as much tact as a veteran diplomat, but you are still leaving the business relationship with a jilted partner who may lash out to other members of your organization or other potential business partners. In this instance, you can try to contain any negative feedback or impact on you and your career by preparing a standard statement that you give to everyone that explains your role in the dissolution of the relationship. It should cast a bad situation in the most favorable light for you. One I have used is: “I am sorry the project didn’t work out, but I made a series of unwise choices that made my effectiveness impossible, and to best serve the project, I felt it was best for me to step away.” That’s it — it isn’t perfect, but neither is the situation you find yourself in.
How have you found success in ending business relationships?
Join meon December 4, 2014, in my upcoming seminar on leadership in project management.