I was once on a project at a major Food distribution company somewhere in Mid-West US. The company had to do an SAP implementation and was about to complete it when the management suddenly changed. The new management, headed by an ex-SAP consultant, trashed what had been done and started afresh Project planning since he didn’t think the things had been done correctly. Upwards of $5, mn had been spent and they all were to be re-spent with a different consulting integration partner now.How to Plan Your Project Based on How Company Makes Its Decisions Click To Tweet
Much before that, I was on a new world-wide large SAP implementation with an Oil & Gas major. They implemented the entire suite of SAP along with the Oil & Gas specific install and just as we had finished everything, it was acquired by another Oil & Gas major. This acquiring company also had their own version of SAP. The two management looked at this most critical backbone system and decided that a team will be created for Merger-Integration which will look at both the systems and come out with a detailed Fit-Gap and suggest what is the best way forward for each functionality. It goes without saying that people on both sides were emotionally attached to their “way of doing things”! The idea was to recoup and enhance what had already been spent through extra diligent detailed work for Fit-Gap.
Two very different way of handling decisions. One on personal likes/ego and other based on pure reason.
Let me tell you about something interesting. I didn’t have the stock of the Oil & Gas company before or during the implementation, but looking at how they made their decisions, after a year or so I bought their stock – once I had left the final project once it had closed. The food company in the first case study had one heck of a market and I was always tempted to buy its stock, but after my experience regarding project planning and handling according to them, I never did.
The stock of the Oil & Gas has done really well over the years and that of the Food Distributor has done abysmally!
I learned over time that decision-making is part of an organization’s DNA. And it also makes the impact on project planning. The way an organization makes decisions flows all the way from top to the last person on the block. If the top management loves to go with the Egotist Decision Making way, then the whole organization does that. And one that follows reason, cascades it all the way down to the last person.
Here are three decision-making frameworks that I have seen in most organizations. Some are debilitating and some empowering. And, they manifest from personality types at the top. Even when the person at the top does not mean to institute anything in that regard, s/he actually does! Unbeknownst.
1 Decision-Retribution Framework: When the top guy makes all the decisions and decisions are tightly linked to the titles (as is the downside of bad decisions is) then people stop making decisions. In an organization where decisions are means to put blame on people – a tool for retribution – as opposed to a tool for growth, things start devolving very fast. This happens when the top management is forever on some witch-hunt or the other. Because each decision carries so much downside for everyone, no one is trusted. It encourages managers to be very close to new things or new technologies and most play safe. In fact, for the most part, decisions do not happen at all. Actually, Decisions happen not made. Circumstances force decision, managers don’t really make them.
Have you seen that happen? In such organizations, project suffer big time! Those design sessions that you need the users to make the decision on the functionality and IT team to find the right solution – simply end up being painful. UATs are the toughest because the business users do not let even simple workarounds pass the scrutiny. Even the simplest of bugs that are at best “nice-to-haves” are made really big and become roadblocks to sign-offs.
2 Decisions-Reason-Growth Framework: The freedom to make decisions is given to people and it is important to have a logical backup for the reasons leading to a decision. If the backup due-diligence shows that a particular decision was the best way to go, and one goes ahead with it. The defining factor is that it should be beneficial for the company’s top line or bottom line. As long as one has done the due diligence, there is no discussion on that decision.
In such organizations, users make quick decisions and they do not require sanction or sign-offs from senior managers. Decisions can be made right there during the design sessions. The IT development team also can make solution decisions really quickly. Meetings are more productive because too many people do not need to be there for “forcing” a decision. Whoever represents is capable of a decision.
3 Decision-as personal statement Framework: In such scenarios, decisions are made by folks who have charisma and charm as well as power to sway people. Even when the decisions do not make any sense in any way, it is often observed that decisions in such a situation are a factor of one person’s whims. S/he has enough clout with the top person and no one really questions him/her. In such organizations, this person creates surrogates who are close to him and can represent him. They get to make decisions – often in line with the thinking of that individual.
Projects in such organizations get delayed. After all, only a few loyalists have the power to make a decision. And the decision is not really per any norm or analysis. Rather project planning needs to fit into that person’s scheme of things!
Does Behavior and Values of Authority Impact Throughout the Company?
The obvious question to us all is – if the same executives in the middle management and at the lower level perform well under one type of top management, why would they – given their values and own style – do poorly in another? How does the top management, especially the CEO have such a big impact? Well, the most fundamental shift that happens is changing of the people who matter close to the CEO. They resonate the top person’s whims. And that cascades down. Beyond that strange changes can manifest.
Jonathan Doochin discusses psychological biases in organizations in this Harvard Business Review article.
For example, studies on “conformity bias” have shown that individuals with otherwise strong levels of judgment will perform 32% worse on an exam question if a group of confederates around them all label the obviously wrong answer as “correct.” Other studies have illuminated a concept known as “reciprocity bias,” in which people are more likely to purchase a product they normally wouldn’t, after receiving a very small gift.
Also, in 1963, Stanley Milgram a professor at Yale performed social experiments on obedience to authority figures. What he found is very interesting… and disturbing!
They measured the willingness of study participants, men from a diverse range of occupations with varying levels of education, to obey an authority figure who instructed them to perform acts conflicting with their personal conscience; the experiment found, unexpectedly, that a very high proportion of people were prepared to obey, albeit unwillingly, even if apparently causing serious injury and distress.
It obviously raised questions at that time on how dictators like Adolf Hitler may have impacted the administration of Germany in those days.
Advice to Project Managers
When you go to manage projects in a new organization where you have not worked before, quickly gauge the way power devolves in that company. Who calls the shots and how do people make decisions. Once you understand the type of that company, then make your plans on how to handle different project phases accordingly. For the Egotist kinds, be flexible!! Things can change rapidly. In organizations where decisions do not come easy make sure you have the right people in your meetings and set deadlines for decisions.
It is important to adapt your ways of handling and project planning to the ways of the company you are working at. Hope this helped you a lot next time in project planning. Please share your thoughts on some of the situations below.
Resources for further learning
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