Good OM Reading: The Pitfalls of Project Management Reporting
Will every corporate project be on time and deliver what was promised? Maybe — but maybe not, write four profs in MIT Sloan Management Review (Spring, 2014). Accepting 5 inconvenient truths about project status reporting can greatly reduce the chance of unpleasant surprises.
INCONVENIENT TRUTH 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. Most executives expect and assume that employees will report when they see problems that might adversely impact a project. In negotiations between the U.S. and the Soviet Union, President Reagan’s signature phrase was “trust, but verify.”
INCONVENIENT TRUTH 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. Executives tend to attribute misreporting to poor ethical behavior on the employee’s part. But one of the best remedies is building diverse teams, which can help balance out culturally specific behavior that might inhibit accurate project reporting.
INCONVENIENT TRUTH 3: An aggressive audit team can’t counter the effects of project status misreporting and withholding of information by project staff. The importance of promoting trust between those who report project status and those who receive the reports is the solution.
INCONVENIENT TRUTH 4: Putting a senior executive in charge of a project may increase misreporting. Research actually suggests that the stronger the perceived power of the sponsor or the project leader, the less inclined subordinates are to report accurately.
INCONVENIENT TRUTH 5: Executives often ignore bad news if they receive it. Executives should not only listen to a variety of stakeholders but should also take the warnings they receive seriously. If they do not, they may unwittingly contribute to a climate of silence in which employees grow even more reluctant to report bad news.
This research study nicely complements our treatment of Project Controlling in Chapter 3.