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Silly Management Mistakes – the Importance of Fair Process

I recently read a Harvard Business Review article, ‘Fair Process – Managing in the Knowledge Economy’, during my MBA programme that reminded me of some foolish team and team lead mistakes I made a few years ago.

The Background for the Story

I participated in Dr. Paul D. Giammalvo’s engineering economics course in Jakarta.  The course taught integrated Asset, Portfolio, Programme and Project Management, and is based not only on the fundamentals of Engineering/Environmental Economics but also on applied Earned Value Management as well as other “best in class” references.  The course included a couple weeks in Jakarta, six months online, and another couple of weeks back in Jakarta.  During the class, we established and were part of a programme with several projects that had weekly deliverables (usually blog posts demonstrating what we had learned that week, time sheets etc.), and using these, the team conducted costing and scheduling exercises based on rotating team roles and responsibilities.  Every week, one of us would be the project manager responsible for collating deliverables and updating cost and scheduling reports.  It provided a hands-on experience for advanced earned value management tools and techniques.  Challenging, but a lot of fun.

Earned Value
Exhibit 1: Example of an earned value report

Experience – My Silly Mistakes

Earned Value
Exhibit 2: Original Dashboard
Earned Value
Exhibit 2: Updated Dashboard

When it was my turn to produce the weekly dashboard reporting I had this “incredible” idea to make some changes to our working reporting spreadsheet… which was quite complex by this time.  I spent hours overhauling this spreadsheet to make it easier to use.  Centralized lookups, cleaned up and standardized the interface, put in checks and balances, all sorts of fun things—absolutely wonderful.  A lot of the design came from an excellent business case course I took with Solutions Matrix, and from their business case templates.

I got so wrapped up in this I missed the weekly deliverable deadline for our sponsor, who of course was Dr. Paul.  He comes from the oil and gas, construction and telecommunications industry, where one doesn’t become a project manager until after years of costing and scheduling experience and one is at least in his or her 40s.  Profit is in the single digit EBIT range, and failure isn’t an option.  Dr. Paul was a “challenging” sponsor.  So my first mistake, which I knew, was being late on a deliverable without giving advanced notice and confirming with the client.  So I was publically disciplined for that.  Rightly so.

Then I provided the updated work of art spreadsheet, and the team was mortified. I hadn’t included them in the idea, discussion, process, redesign or review… I just handed them the final product. And they hated it. Obviously, they were also right to do so.

The fair process article reminded me of the mistakes I made and why they were so bad for my team—and me.

 

Fair Process

Fair process demonstrates that:

  • “People care about the decisions you make, but they care even more about the process you used along the way.”
  • Most people will accept outcomes not wholly in their favor—if they believe the process for arriving at those outcomes was fair” (Kim & Mauborgne, 2003).
  • People will even dislike a positive outcome if they do not believe in the process that arrived at that outcome was appropriate.

Here’s a brilliant paragraph that argues against the economist’s assumption that people only care about outcomes:

“For the purposes of their theories, economists assume that people are maximizers of utility, driven mainly by rational calculations of their own self-interest. That is, economists assume people focus solely on outcomes. That assumption has migrated into much of management theory and practice. It has, for instance, become embedded in the tools managers traditionally use to control and motivate employees’ behavior—from incentive systems to organizational structures. But it is an assumption that managers would do well to reexamine because we all know that in real life it doesn’t always hold true. People do care about outcomes, but they also care about the processes that produce those outcomes. They want to know that they had their say—that their point of view was considered even if it was rejected. Outcomes matter, but no more than the fairness of the processes that produce them” (Kim & Mauborgne, 2003).

The fair process approach is as follows:

  • “Engagement – involving individuals in decisions by inviting their input and encouraging them to challenge one another’s ideas.  Engagement communicates
    management’s respect for individuals and their ideas and builds collective wisdom. It generates better decisions and greater commitment from those involved in executing those decisions.
  • Explanation – clarifying the thinking behind a final decision. Explanation reassures people that managers have considered their opinions and made the decision
    with the company’s overall interests at heart. Employees trust managers’ intentions—even if their own ideas were rejected.
  • Expectation clarity – stating the new rules of the game, including performance standards, penalties for failure, and new responsibilities.  By minimizing
    political jockeying and favoritism, expectation clarity enables employees to focus on the job at hand” (Kim & Mauborgne, 2003).

Fair process is critical in knowledge-based work, and it’s also critical to maintain trust. As explained in the article, the price of unfairness often can’t be made up with your stakeholders, as their response (though appearing irrational) is also quite understandable.

 

Lessons Learned

The first lesson doesn’t have to do with fair process but is just professional etiquette 101 (and estimating/scheduling 101)… integrity is black and white, with no grey zone. Do what you say you’re going to do. Keep your eye on the ball. Keep your word. If there’s a possible risk with your ability to keep your word, reach out, let the right stakeholders know and work out an acceptable solution as far in advance as possible—never after the due date.

The second lesson: Involve the team in any changes that will affect them, and get their insight and suggestions. Make them a part of the process. Explain why you’re suggesting this and what the benefits will be. If you’re in charge (which technically I wasn’t) you don’t need a consensus, but you do need to ensure they understand and have clarity on the new expectations. As members of the team, though, they had to be involved in the review and acceptance process.  The article helps explain the psychology and explanations for why this is so important.

Remember:

  • Engagement
  • Explanation
  • Expectation clarity

If nothing else, the HBR article is a quick and interesting read.  It’s also a helpful reminder even for those of us who should know better.

References

The image above came from

http://survivorsucks.yuku.com/topic/61865/GauchGauch-ranks-his-50-favorite-Simpsons-episodes-DONE?page=5#.Vo8g8FJ3nJI

Kim, W. Chan, & Mauborgne, Renee. (2003). Fair Process: Managing in the Knowledge Economy. Harvard Business Review, 81(1), 127-136.

Peter Milsom

Peter Milsom is an entrepreneurial advocate for sensible, sustainable change delivery practice. Peter has come to realize that sustainability is the perfect catalyst for Project / Programme / Portfolio / Risk / Value / Business Case and Benefits Management improvement. As an entrepreneurial methodologist Peter's unique value proposition is the vast array of tools and techniques that he brings to every engagement using the most cost effective and efficient methods based on the situation and tailored to meet your needs. This is based on his unique combination of experience and extensive training / certifications in change delivery, value / risk / benefits management business case, and business architecture.

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