Projects that fail, especially significant projects that promise the moon but that end up costing the earth, can end your career in a heartbeat. Of course projects fail for all kinds of reasons, but one very common cause is picking the wrong project/vendor/partners/solution in the first place.
Picking the right project or solution may seem like a pretty straightforward decision, but it’s not. Work by leading decision-science researcher, Paul C Nutt, shows clearly that half of significant decisions fail and he identifies a few simple reasons for this. And one key reason is that executives will often “latch onto” one idea and not really look for others.
In Portfolio Land, this will often manifest itself as a pet project, or as one department head advocating over-strongly for his department’s projects.
This can be the kiss of death for your ability to put together and execute on a good portfolio of projects and this blog will help you avoid the trap.
Example of failure
Nutt illustrates his ideas with some quite spectacular failed mega-decisions such as the siting of the Euro-Disney theme park, but you don’t need to go as far as Paris to see this happening. It’s ironic, but we see it occasionally when organizations are selecting decision making software. We occasionally receive an RFP from an organization where it’s perfectly clear that they have already made a decision. They are not really looking for better alternatives, they are simply box-ticking… and this is a toxic mistake if you value your career.
Within your own portfolio of failed projects, go back and look at how many alternative solutions were considered and see how often you only really considered one solution. And be honest: did you really consider alternatives or did you go through the motions to justify the position someone has already taken?
Why do executives fixate on the first solution?
You’re under pressure. Something’s broken and everyone wants you to fix it. You need to show action and fast, and then… and then someone presents a solution. It sounds workable, others have used the same approach. Great – you can get into “action mode”, you can show you’re decisive.
And all you have to do is push it through the organization and get started.
But the problem is that, according to Nutt, half the time you’ve got the wrong solution.
Often, someone will raise their hand and question a decision made this way. In fact, this is one of the main value-add components of a good procurement team or a PMO; they will ask you to justify your decision, why this solution? But from the executive’s point of view, this can be seen as a distraction. They just want to get on with it.
I get why this is, but all the research shows that it a huge and entirely avoidable mistake. I get that you need to get going. I get that you’ve probably built a relationship with the vendor/solution provider. I empathize with the emotional (and reputational?) investment you’ve made in your current course of action
But pushing ahead at this point leads to other problems.
According to Nutt, the first problem is that you’re potentially solving the wrong problem. You’re potentially addressing a symptom rather than a cause. And of course, the problem usually reappears.
Nutt has spotted another failure. When someone questions your preferred solution, you invest resource in justifying your decision rather than on working out what your real options are. In some cases, like Denver airport, Nutt shows examples where millions of Dollars have been squandered “selling” a project that was fundamentally flawed.
So what’s the solution?
Whether you’re making a significant capital procurement, prioritizing projects, defining strategic initiatives, selecting a site for your next power station or developing your product road-map, the fix is the same:
Adopt a good collaborative decision-making process.
There are several processes out there, but at TransparentChoice we chose to develop tools around the analytic hierarchy process (AHP). Why? It’s simple and research over 40 years has it to be applicable in a vast array of situations. In fact, for prioritizing projects, a major recent review of over 100 decision methods showed that just 2 methods were suitable - AHP and DEA… so our “bet” when we built the product turns out to be a good one!
No matter what methodology you use, the first step is to frame the decision. Do a “five whys” on the problem statement to make sure you’re addressing the root causes (where possible). And then seek multiple, credible solutions. If you’re presented with a preferred solution, challenge that solution. Explore creative ways to solve the problem. Solicit ideas from others – in fact, that’s one reason we’ve included web-based ideation in our AHP solution.
Now this kind of challenge might seem like over-stepping the mark if you’re a PMO or if you’re in the procurement team. In fact, part of your role is to bring best practice to the organization.
So one way to start would be to read a little and improve your own skills. Paul Nutt published this book, for example, that sets out some common decision-making errors (I warn you, the content is good, but the reading is heavy-going).
With this background, you can then provide a little “training” to senior executives. Help them understand the importance of having a good, structured decision-making process in place. I’ve written a lot about why this matters in the context of project prioritization (this infographic is a good place to start).
The need for good decision-making structure increases where your decision;
Affects multiple stakeholders
Involves making trade-offs between business drivers (e.g. quality vs. speed)
Is high-impact or long-lasting
Has a “political” (or even Political) angle
The decision is emotionally charged
We’re building up a bank of decision-making articles to help you build your own skills, so keep checking back. This one, for example, is a light-hearted attempt to show that we’re not the rational decision-machines that we think we are.
Once you’re smarter and have some executive suport, a little software and a little communication will go a long way.
I can’t promise a good night’s sleep, but certainly you can cross one worry from your list. If those projects fail, it won’t be because you didn’t follow a good, defensible process for making the decision.
--------------Source material; Why decisions fail, Paul C Nutt