Management Blind Spot 5 – Misleading Metrics
Conflicting measures for cost, scope, and schedule turn project managers into negotiators. Separate the necessary conditions from the goal.
Eli Goldratt wrote, “Tell me how you measure me and I will tell you how I behave. If you measure me in an illogical way… do not complain about illogical behavior.” People will act based on how they believe they are being measured, and managers get what they measure.
I’ve written about measurements and how they shape the behaviors that drive performance. I’ve discussed the dilemma between managing an organization’s expenses and achieving its goals. In a project management context, tension exists among holding down costs, maintaining the schedule, and achieving the project scope: the classic project management triangle. Conventional thinking is that you can have two but not all three.
In many projects (particularly in matrix organizations), separate entities divide these objectives. For example, resource owners bear the project’s expenses and control labor costs. The same pattern holds for other projects. Resources are not owned by the project but are allocated within a planned budget. Yet another group – the customer team or the engineering team – determines the project’s scope or deliverables, but they do not have the resources or the budget to achieve them. The schedule is the only aspect the project manager wholly owns. Take “ownership” with a grain of salt, as an outside party (customer, market, management, etc.) often dictates a due date the project must meet.
The resource manager’s primary objective is to hold down costs – spend as little as possible.
The customer team’s objective is to get every feature or aspect of the design they want.
The project manager’s main objective is to deliver on time (or as quickly as possible) while somehow resolving the inherent conflict within the organizational structure.
Most managers aren’t even aware they’re dealing with a systemic conflict. How does it play out in project execution? The conflict shows up as a sacrifice, then a compromise.
Resources aren’t available when needed. There aren’t enough resources. The scope is changing (emerging?). Poor supplier choices (low reliability or quality). Reshuffling of task priorities. Compromises on scope, budget, and delivery.
The project manager cannot resolve the conflict; all he or she can do is try to make the best of it. This is why I claim that in a conventionally managed organization, the best project managers are the best negotiators. The best negotiators can get others to act against their own self-interest to meet the project's demands!
But what to do? The real, permanent solution is to change the company’s measurement system. However, most project managers can't address a problem of this scope. They’re too busy slaying the dragon before them to reach the dragon’s lair. Everyone is locked into a no-win situation.
The conflict can be resolved if we recognize that there are two types of objectives in a project:
- Satisfying the necessary conditions
- Achieving the goal
Therefore, for example, we do not need to reduce costs to the lowest possible level, only to the lowest acceptable level. In other words, as long as the overall budget is not jeopardized, further reducing expenses or costs provides no additional benefit. We do not need to add more features or additional quality checks, as long as we have satisfied the project requirements; better quality does not necessarily improve project results. What is left is schedule. Does it make sense to get the project done faster? In many cases it does; in others, it does not.
So project champions must be clear about the project's purpose. What is the “goal”? This is the foundation of the performance management system. We check that we have not violated any necessary conditions, but we work toward the goal.
I ask the project teams I work with to adhere to a single objective. This sometimes means temporarily suspending the “normal” local performance measures during the project. This is where the negotiation takes place: at the start of the project, when you decide its purpose and write its charter. You must identify measurement conflicts and resolve them early, or you will run into execution problems. The five threats are in Blindsided!