Leadership in Project Management

During my career I have specialized in failed and troubled projects as well as teaching program and project management.  The teams that I have worked with have been incredible but in most cases were disjointed and in conflict before we seriously invested time and energy in building the team.  Process is a vital part of project management and ensures that critical steps are followed such as risk, scheduling, cost and change management.  However, I continue to find it disturbing that PMI and most training facilities deliver Project Management training courses without spending any time on the role that leadership traits play in the delivery of successful projects.

PMI does reference team development in the Human Resource knowledge area, but fails to address the role that effective leadership and leadership traits play in the building of high performing teams.  Hogan, Curphy, and Hogan (1994), describe leadership as a process that “involves persuading other people to set aside for a period of time their individual concerns and to pursue a common goal that is important for the responsibilities and welfare of a group” (p. 493).  As such, leadership is not the management of personnel or mandating directives, but instead the motivation of team members to work towards a common goal and vision.  A true leader is someone who was naturally charismatic, intrinsically motivated, visionary and empathetic.  In addition, a leader must be able to not only create a vision but also to communicate that vision to team members achieving overall buy-in.  Without this capability, a project will inevitably fail.

On one project that I was asked to take over, the project had been going on for 6 months in the creation of an online software application and the client so unhappy with the progress they canceled the program.  At that time, the team consisted of five contracting companies, located around the globe, and almost 60 total team members.  I was asked to take over and restart the program.  The very first thing I did was to travel to each of the organizations involved in the project and ask for them to tell me what the project was to look like in its end state.

Each of the teams, and some individuals within teams, presented differing and sometimes conflicting views on the software end state.  This was not a question of the client and contractor having differing views based on their skill sets, but instead contractors and development companies conflicting externally and internally on the vital aspect of what the program would be.  I was left with the distinct view that if we cannot envision what we are building, how can we possibly build it?

When I returned from my site visits, with a very confused view of the project, I sat down with the client to understand their desire for the application and amazingly enough; I heard yet another vision for the project.  Obviously the policies, procedures, documentation and all the formal meetings were meaningless if the teams did not understand what they were building.

The failure on the project was not the methodology or the conformity to a set of procedures instead it was the leadership of the program and the inability of the Project Manager to establish and communicate a vision motivating disparate parties to all contribute towards a common goal.

The exercise was painful, and I admit that the vision had to be mandated to some hard-liners, but eventually everyone was on the same page for what the program would look like and what it would be.  Once we had this common vision established, the project was able to get back on track with each party working on their components contributing to a master schedule and starting to form into a team.

After six months into the effort we had a team lunch with 20 members from all five of the contracting firms and the client.  A senior manager who had not been involved with the project earlier was amazed that they could not tell which company anyone came from as they all seemed to work together and contribute equally to the conversation.  These 20 team members had moved from a conflict ridden environment to one where they could perform together to achieve a goal that they all believed in.

It is important to recognize that the PMI framework for Project Management was implemented and the teams generally operated with an Agile development approach, but without leadership and a common goal success was a long-shot.  Many hurdles were ahead but with the clearly defined vision, roles and responsibilities the teams were able to dispense with meaningless infighting and start focusing on developing a solution on-time, on-budget and exceeding client expectations.

Program Management and Leadership

Program Management is rapidly becoming a driving force in the successful delivery of solutions.  Standards such as the Project Management Institute’s Program Management Standard and Prince2 Program Manager Certification outline the tasks and responsibilities, inputs and outputs, and knowledge areas.  Though these processes can definitely contribute to the successful delivery of services there is much more to being an effective Program Manager.  Certification, education and experience are all beneficial, but what does a truly successful Program Manager look like?

A program is defined by PMI as:

“A group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually.  Programs may include elements of related work outside of the scope of the discrete projects in the program. “

(The Standard for Program Management, Second Edition)

The primary responsibilities for a Program Manager are defined by PMI as 1) Benefit Management, 2) Stakeholder Management, and 3) Program Governance.  These three key areas permeate everything that a Program Manager does.  Although process and knowledge areas go into great depth and detail, everything these process areas contribute to a program can be directly aligned with the three key tenets.

Yet the approach taken by the Program Manager in leading the team, Project Managers, and stakeholders is crucial to the overall success of the effort.  It is the Program Manager that sets the tone and creates the environment through which the teams will operate.  The PM will create a formal or informal environment, establish communication patterns, autonomy and reporting levels and will set the standards that all team members are held to.  As such the Program Manager will create an environment that appears somewhere on the spectrum from hostile and toxic to rewarding and high performing.

A team that operates in an open and honest environment will tend to be more creative and innovative, working towards a common goal, while the same team in a more hostile situation will become risk intolerant and communication channels will begin to close down.  The positive side of the spectrum enables open communication, personal commitment, tolerance and innovation while the hostile environment will create finger-pointing, hidden concerns, and unvoiced risks.

The environmental setting is so crucial to the success of the effort that it is a key factor in achieving success and sets the standards for everything from communication to technical effectiveness.  Mello (1999) states that leadership studies have taken place for over a thousand years, dating from the ancient Chinese, Greek and Latin classics, as well as both the Old and New Testaments of the Bible. Fulmer and Conger (2004) point out that in the first few years of the 21st Century, over 15,000 books and articles have been published on leadership alone. As such, it is curious that when taking on managing a large and complex effort such as a program, that the standards so effectively miss this crucial critical success factor.  However, I have yet to find a standard dealing with the management of complex efforts that outlines the role that effective leadership plays.  Process and policy, tasks, roles and responsibilities are crucial, but to be truly effective a Program Manager must be an effective leader.  The standards provide the steps but as Peter Drucker (2003) cautions “no book will ever make a wise man out a donkey or a genius out of an incompetent” (p. 7).

This article will attempt to identify some key leadership traits that contribute to successful Program Managers as related to the process and standards of the Project Management Institute.

Benefit Management

Benefit management is the identification, realization, and communication of tangible benefits that the program will deliver to the stakeholder community.  The benefits of a program are most likely to be lost or forgotten with time and general impact of delivery.  The Program Manager is ultimately responsible for ensuring that the benefits are useful and aligned with the organizational objectives, communicated throughout the organization, and when realized, validated to ensure that the benefits intended were those that were realized.

Therefore, the Program Manager must be capable of envisioning the future state, providing a gap analysis between the current and future, and ensuring that stakeholders and program team members all recognize and see the value of the future state.  A program that is undertaken with no tangible benefits has little support from the organization and will often be challenged on the basis of cost, organizational impact and resource consumption.  While a program with great benefit will receive the vast amount of support and resources to ensure that it is able to achieve established goals.  At the same time, the greater the benefits the more pressure to deliver in a timely manner.

For any and all efforts the PM must be able to align pain points with benefits so that stakeholders can recognize that the future state will be a better one and are prepared to deal with any temporary pain points while waiting for the new set of benefits that will be an outcome of the effort.

A successful program will also leverage the program team to work together in the development of a solution.  The environment created by the Program Manager will determine the level of personal contribution, investment and innovation that the team delivers as a whole.  Each participant is a key player in achieving success.  The PM must ensure that every team member clearly understands the benefits of the program, the future state and is on the same page working towards the same vision.  Without this, teams will head in disparate and sometimes opposite directions burning time, resources, and dollars without tangible benefits.  Thus, as the responsible party for Benefit Management not only must the PM define the environment but they also must be someone who can envision the future and must be an exceptional communicator to ensure that everyone involved with the program whether a contributor or user is operating to the same vision and expectations.

Stakeholders need to have clarity in what will be forthcoming, when things will occur, and when they will receive information.  Without this, the program soon becomes a “black box” which is often resented by those waiting for benefits.  Regardless of the technical or managerial knowledge of the stakeholder community, there is an expectation that they will be capable of observing some level of progress.  Often this progress can be demonstrated through tangible achievements but there are times, especially early on in a program, where the progress is more intangible.  The PM must be able to effectively communicate progress and schedule throughout each stage of the effort.  Stakeholders need to know not only what the status is, but when they will hear additional status updates and the form that communication will take.  In the PMI Standard, this is accomplished through the communication plan but it also is anticipated that the PM will be able to respond to questions, deliver status on a moment’s notice and recognize when the communication schedule needs to be adjusted to better meet the needs of the community.

Stakeholder Management

Stakeholders must also clearly understand what the program will and will not deliver.  Expectations that are not directly aligned with the program deliverables will create a level of frustration and cause a loss of support for the effort.  Communicating the program expectations in terms of features, functionality, schedule, cost and quality must be an ongoing dialogue validating that stakeholders clearly understand what is proposed and how the program will meet needs.

In working with various stakeholder communities I find that not only must the PM be able to communicate they must also be beyond reproach in the information they communicate.  A PM cannot be inconsistent, illogical, or demonstrate a lack of knowledge.  They must be aware at all times of the many statuses of projects, efforts, and tasks.  They must be able to discuss, at any level, the progress of the effort, technical challenges, financial issues, and resource concerns.  When this pattern is found, the general outcome is one of honesty, reliability and trust. Honesty and reliability work together to build trust and it is the trust of the stakeholder community that is crucial to success.  A PM communicating progress who is not trusted is not believable and therefore the progress, program status, financial estimates and risk identification all become questionable.

The reality is that all programs have good days and bad days.  There are times when risks are realized, issues encountered, and the unexpected hits causing tremendous concern for the program outcome.  Yet a Program Manager will need to communicate openly and honestly the good and bad of the program regardless of the potential outcry from the stakeholder community.   The news must be put into context and balanced between the fears of failure and the realities of issues encountered.  A PM full of all bad news, or all good, soon loses credibility with the community. Therefore the PM must be courageous in communicating issues and avoid cheerleading when the effort appears to be firing on all cylinders.

At the same time, the Program Manager is responsible for the work performed by the teams that they manage.  In the event that an issue or problem occurs, the PM must defend the team and maintain control of the effort.  It can often be painful to stand up to executive managers, but a PM who takes responsibility for failure and passes success on to the team creates an environment of internal trust, confidence, innovation, and success.  I have always believed that “Failure is mine, success is the teams, and failure is not an option”.  This quick motto helps to create an environment where the team can operate with best efforts and not fear.  It also fosters the overall level of communication and ensures that the Program Manager is aware of the facts, good or bad, and has the ammunition to clearly brief stakeholders.  The team that is protected by management becomes more willing to innovate and create knowing full well that they will not be “punished” for attempting to solve challenges.  This creates a safe environment regardless of the organizational culture and encourages greater internal communication and contributions eliminating hostile or toxic traits such as finger pointing, sabotaging, withholding information and focusing on personal success over organizational.

The trait of courage and expertise leads to a level of confidence that a Program Manager should demonstrate.  Stakeholders who are concerned about program success will look to the Program Manager to instill confidence in the objectives.  In addition, team members will be more successful in following someone who is confident in the approach and where they are leading the team.  Uncertainty, fear, and anxiety will come across as a lack of belief in the program and potential benefits.  This negative will feed the communities concerns and when issues are encountered the stakeholder community will immediately interpret their concerns as valid.

On the other hand, a leader who demonstrates confidence in the team, program objectives, potential benefits, technical approach, and evangelizes the solution will generate a following of stakeholders who begin to believe that success is achievable.  It is only through this confidence, communication, and trust that a Program Manager can ever hope to develop a true high performing team.  And it is the high-performing team that can achieve the impossible.

High performing teams are achieved through a shared vision, communication, trust, confidence and also motivation.  Individuals need to be motivated to move beyond the 8-5 work day and begin to take pride in the work they are producing.  When motivated team members come together to deliver a solution every aspect of the effort becomes important.  A high performing team blurs the boundaries between responsibilities as team members begin to assist each other and work towards the common goal setting aside their personal ambitions for a short time and focusing on success.  Internal communication increases as the team shares knowledge and issues among themselves, and therefore lessons learned becomes a dynamic process that takes place throughout program development.

Governance

While much of this article has focused on the delivery and motivation of teams, one aspect that is critical is the assurance that information required is available and the process is complied with.  Although a transformational leader motivates a team to greater levels of communication, creativity and innovation they must also make sure that the effort does not stray from the required processes.  Skipping over critical areas because of momentum in others is a sure way of creating program failure.

An effective leader will need to ensure that the team complies with all aspects of governance implemented so that individual efforts, projects, or tasks do not go astray.  A program is a combination of smaller component efforts (projects) that when combined offer a greater benefit than managing each project alone.  Therefore, Project Managers and team members must comply with processes such as schedule management, financial management, performance measurement, and project reporting to provide the foundation on which the effort eliminates redundancy, disparate efforts, and disconnects between projects.

Although the PM is focused on many positive leadership traits, the compliance with process is one that may require some level of transactional or authoritative traits to constrain non-conformity.  Obviously, it is better to communicate the end-state, vision, and challenges that a program will encounter encouraging team members to willingly comply, an effective PM will also have the authority to require conformance where necessary.  Often this is more a demonstration of courage than standing up to stakeholders as many Project Managers can be quite skilled leaders in their own right.

Conclusion

I am a big fan of learning and leveraging the process of PMI and other methodologies.  I hold PgMP, PMP, and PMI-RMP, but while the knowledge of process is a definite contributor to success, effective leadership traits are also necessary to be able to consistently achieve success.  Teams respond to quality leaders and to positive working environments.  Authoritative managers forcing an unnecessarily formalized environment will create a more uncomfortable working environment and may inadvertently decrease communication, innovation, creativity, and personal investment.

 

Although certifications are quite useful in ensuring that a manager has the tools to lead a team, there is much more to program management.  To be successful as a Program Manager an individual must be:

 

• Transformational / Charismatic
• A visionary
• An effective communicator
• A trustworthy colleague
• Courageous
• Confident
• A motivational leader

 

 

 

Organizational Toxicity Can Posion Programs and Projects

Over the last 10-15 years, I have found myself in various corporate and government environments as a contract Program / Project Manager.  Although many experts believe that a qualified PM can be effective in any environment, the culture or situation in which an individual operates has a tremendous impact on his or her willingness to introduce innovation, ability to introduce change, and potential to influence the morality of decisions made. Organizational environments that are harsh, negative, and derogatory, and where failure is loudly broadcasted, can inherently disable the ability, or willingness, of individuals to rise above the self-preservation instinct in the pursuit of change or entrepreneurial drive. These environments create a culture of risk aversion, leaving leaders fearful to step outside acceptable corporate boundaries.

Gabriel and Carr (2002) propose that the organization itself can become “neurotic”, which then affects every participant, member or partner. They extend this description to posit that “neuroses” can generate beneficial behavior to the organization, encouraging work-alcoholism and personal-drive, or negative, creating a hostile and/or toxic environment. Where a negative environment exists, it impacts on all who interact with it. This “toxic” organization is something that creates its own set of issues relating to leadership and the drive towards innovation.

The toxicity of an organization can create environments where hostility and backstabbing is rewarded, where the “old-school” guard quashes new ideas and creativity, or where ridicule is used to counter new and innovative ideas. Organizations demonstrating toxicity will often stifle creativity, use personal attacks against the source of new ideas, and criticize without facts.  In addition, these organizations will often demonstrate a lack of employee empowerment, regular HR related issues, and high attrition rates.

When such a negative environment exists, is it possible for organizational change to exist within a firm in which those involved in initiating and leading the change are inherently driven to ensure their own survival, values, and culture?

A leader’s acceptance and ability to rise to challenges is one of the factors used to define him or her as a leader (Kouzes & Posner, 2007). Based on the definition of a leader provided by Hogan, Curphy, and Hogan (1994), “leadership involves persuading other people to set aside for a period of time their individual concerns and to pursue a common goal that is important for the responsibilities and welfare of a group” (p. 493). Since a leader envisions a future and motivates followers to achieve that future state, leaders, as a general rule, would be incapable of imagining a successful future without their own involvement, regardless of their personal biases, preconceptions and prejudices, since their vision is what they are pursuing. Thus, leaders can either help or hinder an organization, depending on the alignment of vision, cultures, values, and motivators. If organizations rely on new ideas to remain competitive then the value brought to the organization by a leader is the introduction and implementation of new ideas.

A leader’s reaction to his or her survival instincts is one of the most basic functions individuals will encounter (Maslow, 1943). It is possible that leaders may drive decisions and actions to avoid risk in an attempt to protect their jobs, persons, or health. The avoidance of threats and the achievement of a level of gratification can reach a point where individuals avoid any behavior that would threaten their security.

As professional Program and Project Managers, the challenge is to find a path to success regardless of the toxicity or negative factors encountered.   Any number of techniques and approaches can be leveraged to overcome hostile environments:

Communication – In a negative environment, clear and concise communication is often one of the greatest tools a PM can use to ensure that stakeholders are aware of facts rather than opinion and innuendo.

Courage – A PM faced with constant attacks, both professional and personal, must be able to stand behind the plan, schedule, and the vision of the effort.  This can be very difficult, especially when the PM is an employee of the organization.  However, the path to success is to achieve regardless of the arrows along the way.  Therefore, a PM must be able to demonstrate the courage of their conviction and protect the team in such a way that the team is able to produce and not get sidetracked by attacks.

Humor – My experience is that humor creates a positive environment where teams can let off steam, avoid negativity and relax with peers and colleagues.  Using humor provides a sub-culture that is supportive and positive regardless of the outside environment.  The project/program team must feel comfortable in their working environment to encourage innovation, creativity and open communication.  Quite often, humor is a very effective tool for the development and maintenance of this environment.

Patience – Program / Project Managers who rise to the challenge of every attack often find that they are spending more time battling issues than delivering solutions.  Often the deliverables and benefits that the effort generates can be used to speak for themselves and don’t require defense.

Political Savvy – Although we would like to hide this aspect of leadership, a truly effective leader will have sufficient savvy to recognize unfounded criticisms versus very real concerns and will work to overcome the concerns of stakeholders.  Facing this storm is vital for ensuring that stakeholder commitment is maintained throughout the lifecycle of the effort.  Quite often, a PM will have to utilize their political skills to refute unfounded issues without direct or hostile confrontation to ensure that they are effective and maintain their perceived expertise.

Benefit Management – Program Managers are now being trained to ensure that benefits of the initiative are identified and communicated early to ensure that any negative impacts on stakeholders are countered by the potential advantages that will come from the effort.  Clearly communicating the value and anticipated benefits of the effort generates stakeholder support.

Risk Management – My personal favorite tool for overcoming negativity is the management of risks.  Communicating risks and documenting response strategies can be a fantastic deterrent to avoid potshots and negativity towards an effort.  Through this process potential problems are identified early and often throughout a program life-cycle.  Quite often potential issues brought up by detractors can either be found in the Risk Management register, or should be added to it.  Accepting negatives from detractors and making them a part of the success of the effort is an effective tool for minimizing negativity.

Of course, these are just a few approaches to operating within a toxic environment and achieving success.  Toxic organizations are constantly growing out of economic concerns, unchecked ambition, and the very human trait of accepting bad news without supporting evidence, while good news must be questioned. Quite often, toxic organizations are a direct impact from executive management.  If negativity is welcomed and encouraged, or even rewarded, the behavior will grow at the top levels making it very difficult to overcome.

The most important thing to keep in mind is that if a PM were to give in to a negative culture they are giving away their success factors and their ability to achieve.  Maslow (1943) in his Hierarchy of Needs points out that fear and threats to safety can drive an individual to begin to protect themselves rather than focus on the innovation and creativity that is necessary to achieving success. Acknowledging this personal driving force, a self-aware individual can make a conscious decision to overcome it and to instead focus on the effort that was undertaken.

Can stakeholders and political agendas kill a program?

One of the key factors in managing any effort today is the impact that the stakeholders and internal politics can play on the overall effectiveness of program management. Stakeholders are directly responsible for scope creep, financial issues, panic, and risks. However, it is the Program Manager’s responsibility to overcome the impact that any factor (internal or external) can play on the delivery of program benefits.

In many situations, I have had top level government executives, CEO’s, Chairman of the Board, Vice Presidents, Managing Directors, you name the title, come to me and demand that the program will add features, functionality or operate with a decreased budget and/or schedule. So, do we bow to this pressure out of concern for our job? Should we simply determine that since they are in charge we must do what they say? The simple answer is an emphatic no!

A Program Manager is generally judged on their ability to perform and to deliver the required benefits of a program within budget and timeframes. Of course, client satisfaction is crucial but in the end client satisfation is generally driven by delivery. In addition, communication and politics are always included in the mix. A PM will recognize that demands are going to come and expectations will change. Therefore, regardless of pressures to the opposite, we must find ways to manage the expectations, demands, and constraints on a program to ensure that the program can deliver on-time, on-budget, and exceeding expectations. Program Managers must plan for these situations to occur and must be fully prepared to deal with them immediately when they occur.

On one recent program, I had a sponsor who would suddenly shift the focus to some “new idea”. The ideas were always good ideas and always included the phrase “this is a non-starter if we don’t have these additional features”. Of course this is tremendous pressure. The sponsor of the program has a new idea and feels that everything will fail if their new idea is not included.

As a PM, I work with the sponsor and executives to follow a clear change management process. Every idea has to be studied for its impact, feasibility and additional costs before it can be approved. In addition, schedules have to be modified. As long as the change has been signed off and schedule/cost changes are approved then the effort can include the change. If however, the change is not approved but instead mandated a political fine line has to be walked.

I find that exposing tradeoffs openly is the key. If a change is mandated, the sponsor / executive has to be informed that it can be done, but there is a cost. Quite often the analogy that nine women cannot have 1 baby in a month is effective. I also use car repair and sports metaphors to communicate that work has to be performed before additional features can be added.

In my experience, the key is honest and open communication. No matter how great the desire to tell the sponsor/executive what they want to hear, we must be firm in communicating the honest truth.

For example, on one project I was working on the biggest issues we faced was that the company hired small contractors and then did not sign the contracts (having contractors working at risk) as well as not paying bills on time. In this project, I had to communicate to the executive board that if these internal issues were not resolved, they would have no contractors and the project would be shut down. Admittedly, telling the CEO his greatest problems were internal was not something I wanted to do, but I found that telling him the honest truth earned more credibility than telling him what he wanted to hear.

So, although I have mentioned communication, honesty and leadership, courage is vital. A successful Program Manager must have the courage to tell the truth, push back, and sometimes inform others of facts that they would rather not hear. It is this honesty and courage that brings an effective Program Manager success regardless of the situation that they face.

Implementing Performance Measurement Analysis

When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind….”

-William Thompson (Lord Kelvin), 1824-1907

Performance Measurement Analysis (PMA) and Balanced ScoreCards provide insight into lead and lag indicators within an organization and enable managers to better align initiatives with strategic objectives. By 2005, 50% of Fortune 1000 companies had invested in some form of a performance measurement approach. Yet the advantages of this methodology are not readily accepted by everyone. Instead, many organizations large and small are still struggling with lag-based financial reports as indicators of successful strategic implementation. Of those who have attempted a scorecard solution, a 1998 study by Paul McCunn indicated that 70% of attempted scorecard solutions fail — often as a result of lack of buy-in at the executive management level. So, should an organizational unit implement a scorecard if executive management has not embraced the concept?

The Balanced ScoreCard (BSC), proposed by Kaplan and Norton, enables an organization to leverage lead and lag indicators in a “balanced” view, but it is not an approach that solely benefits the corporate structure. In many organizations, a forward-thinking manager implements a BSC in his/her business unit. Smaller efforts like this will grow over time and result in the integration of other units — both peripherally and hierarchically. In many cases, these “grassroots” efforts can be more successful than top-level initiatives.

Across the board, organizations have tried to implement a Balanced ScoreCard using an enterprise-wide approach. Although useful, research shows that it is probable that this level of mass change played a critical role in the failure of 70% of the initiatives. Organizations implementing anything on a mass scale run the risk of resource limitations, resistors, and obstacles that, when not overcome in the established timeframe, disable the effort from achieving its potential.

A Balanced ScoreCard requires a detailed analysis of each and every business unit, department, and team under the parent organization. As such, the complexity of organizational-wide implementation increases proportionately. Even at the organizational level many have implemented the program — with pilots and phases bringing each unit on as time and resources permit. Yet even with this strategy the task is a time consuming and daunting one. At each level manager’s must buy-in, resistors must be swayed, and obstacles overcome. In one large corporation (>3000 staff members), the entire process took 24 months to complete. By that time, detractors had already started to deride the effort — pointing out that the promised benefits had not been realized. And once the initial implementation was complete, each business unit had to invest in further evolving their metrics and measures to reflect organizational and strategic changes that the firm had gone through. So, although the benefits of an enterprise BSC are agreed upon by most, the time frame, cost, and impact creates major concerns and can contribute to the eventual failure of the effort. An organization that survives this complex implementation can reap benefits, yet the odds are against success; and failure will result in the loss of an extremely useful tool that provides visibility, strategic alignment, and ensures that achievements are clearly identified and recognized.

In the vast majority of performance measurement contracts in which I have been involved, the focus has been on implementing the framework at a divisional or organizational unit level — due to the motivation and needs of forward-thinking managers. These efforts eventually grew to encompass the entire organization, but did so from the ground up, with each division voluntarily recognizing the benefits achieved by their peers rather than responding to a high-level directive.

Managers at all levels are held responsible for the success and failure of their organizational units. In many cases, empirical evidence is viewed as a performance indicator, and accomplishments are difficult to document. Implementing a BSC at these lower levels provides managers with a “rudder” for their ship and the ability to more effectively communicate strategy and objectives, and measure individual contributions. A BSC effort at the divisional unit provides unique opportunity to implement and evolve a set of useful measures, avoiding most of the long-term negative issues found in enterprise-wide efforts. In these scenarios, as the implementation progressed, managers would put up posters on their office doors and walls displaying their BSC and KPI trending. The result was to further communicate internally on the achievements of the department, but also to create a buzz within the entire organization. Over time, other managers would inquire into the process, methodology, costs, and benefits. As they began to understand the BSC, oftentimes they would work to incorporate it within their own domain.

So why then is enterprise and executive management so important?

Enterprise-level BSCs offer executives the opportunity to view — at a glance — their entire operation, validating the implementation of strategic objectives and providing an opportunity to modify or even change goals to drive the organization in the direction that is most effective within their marketplace. Instead of looking at individual departments or financial-based lag indicators, the BSC enables managers to view past, current, and future measures, providing a more “balanced” view of organizational performance and achievement.

Each division/department or organizational unit will still have their own scorecard for managing within their area of responsibility, but KPIs will be consistent across the enterprise and will facilitate roll-up through the organization’s hierarchy. Therefore, implementing a BSC from an organizational unit focus still contributes to the enterprise and lays a foundation upon which others can build their programs in a bottom-up approach. This grass roots effort enables implementation to actually be successful more often than the enterprise-wide approach.

Yet the role of executive management really does not change, regardless of the size and scope of the initiative. Even though a business unit can achieve the benefits of a Balanced ScoreCard without the enterprise level effort, a single comment by an executive can easily torpedo any efforts. Resistors to change can be very public in their vocalization of obstacles and can therefore gain the attention of executive management. If they are rewarded, and the executive also questions the rationale behind the effort, the manager may be “dead in the water” before they even start. When a manager follows some simple steps for implementation, the success probability dramatically increases.

Success Factors

Implementing a business unit Balanced ScoreCard requires a number of key success factors to mitigate the risk of failure. Although the corporate/organizational culture will define the overall value of each step, experience has demonstrated that the factors that are most commonly found in successful implementations include:

• Executive Support
• Constant Communication
• Strategic Alignment
• Planning
• Identification of key      stakeholders
• Measures with meaning
• Minimize impact
• Evolve the program

Executive Support

The key to successful implementation will always rely on management support. When presented with a BSC, many employees remember quota systems and “big-brother” monitoring their every move. Management can overcome these concerns through open communication and commitment to the effort; yet at the same time executives can torpedo the effort with a single negative comment. The BSC enables greater visibility into the performance of each organizational unit and can even demonstrate individual performance; however, by maintaining a strategic alignment to metrics, the monitoring of employees can be left out of the picture, and individuals can instead be presented with their contribution to the organizational unit’s success. The concern that employees will have regarding the implementation of metrics cannot be understated. Those that believe themselves to be below the average will be the loudest, concerned that their performance will be revealed to the organization.

The intention of the BSC is to enable managers to monitor productivity, efficiency, and effectiveness in the pursuit of organizational objectives.

Constant Positive Communication

Performance Measurement is not intended to drive out bad behavior; instead it provides a mechanism for pushing performing behavior and process within the organization. Every BSC should start out with red and yellow indicators. These aren’t grades — they are opportunities to improve. By identifying areas for improvement, the BSC can demonstrate value by measuring the mitigation and management strategies employed: as the indicators turn from yellow to green, or red to yellow

Implementing a Balanced ScoreCard is an initiative on the same level as restructuring the organization. Individuals will have concerns, fears, and objections to the process, and there will be political battles to elevate one group over another. As such, the implementation must focus on communication as a key success factor to overcome these obstacles. Communication must also be a continual process, as obstacles will exist throughout the life of the process. Only by engaging in constant communication can these obstacles be identified and overcome. Each member of the organization must be given the opportunity to consider the effects of the process, have their concerns heard, and also be persuaded to support the effort. Communication is the best way to achieve buy-in at levels that will support the effort long-term.

When issues are handled with a positive mitigation strategy, the organization will begin to recognize the benefit of the approach. On the other hand, a negative approach to issues such as blame, lay-offs, and employee reprimands will result in an ineffective environment where accurate metrics are difficult to come by.

Strategic Alignment

Performance measurements are a quantitative set of values that indicate the level of accomplishment for tasks, services, projects, programs, and operational activities. Key Performance Indicators (KPI) are measures that most accurately reflect performance that is critical for the achievement of strategic objectives. As such, the identification of KPIs is a process that must be agreed upon by all, and each KPI must comprise a single version of the truth. For example, identifying the number of service calls resolved over a defined time period could have both the positive meaning of productivity as well as a negative meaning of effectiveness. Each call answered takes time and energy by support staff. At the same time, each call is an indicator of a service issue, which could reflect poor quality. Using metrics that have double meanings creates areas of contention among groups and can devalue the entire process.

In addition, metrics must reflect the strategic departmental accomplishments. They must “tell the story” of the department’s successes and must provide an accurate representation of the efforts, efficiency, and effectiveness demonstrated for past, present, and future. The identification of these numbers requires buy-in throughout the organization and something of an artistic flair for storytelling. Metrics themselves are nothing more than numbers that, when taken out of context, have very little meaning. The development of accurate and honest measures with single-truth definitions is neither a simple formula nor a set of numbers that can be picked from a list. Instead, the team responsible for identifying measures must clearly understand the environment, culture, and challenges faced and be able to identify metrics that speak to these areas.

Most importantly, the program must be allowed to grow and the indicators to evolve. The numbers will not stay the same forever. BSCs are never completed; they are ever-changing and must constantly evolve to align with organizational goals.

Planning

When approaching performance measurement from an organizational unit perspective, the greatest risk will be that many may not agree with the need. The organization as a whole has not demonstrated a commitment and the effort may be interpreted as management meddling. The planning process can help to overcome much of this concern.

At the beginning of the effort, identify key stakeholders and ensure that you have included those who are most against implementing the program. These individuals will not only represent the greatest obstacle, but also the greatest resource. By including them in the planning, design, and evaluation aspects, their concerns can be addressed up-front, and the development of KPIs will benefit from the greater level of discussion and analysis. The involvement of these “naysayers” will force the team to delve further into the analysis phase and be better able to define the rationale for the final set of KPIs. This process enables the team to develop metrics with meaning that can be used to demonstrate the success of the organization. Expect the contentious participants to drive the conversation towards more meaningful numbers.

The involvement of managers who are not initially convinced of the program’s benefits will also enable you to develop strategies that minimize the overall impact to the employees. These individuals will often point out the flaws in collection mechanisms that would otherwise be missed; pointing out that productivity will be impacted if “everyone spends their days counting,” for example. This is a tremendously valuable resource that can be leveraged to determine the strategies that will generally enhance program results.

Evolve the program

Organizational objectives, strategy, and initiatives change over time. Performance Measurement and Balanced ScoreCards are meant to be living, breathing methodologies. When rigid and formalized, the tools become less effective, yet when a dynamic strategy for change has been implemented, the tools can be tremendously valuable. If metrics are not demonstrating issues and concerns or changing values, then change them. Move to metrics that better reflect the environment and do so as part of a dynamic initial plan enabling the program to evolve to a greater maturity level and ensuring that the reported outcomes provide meaningful and actionable information.

Develop a plan for managing change. Organize a board of team members to constantly evaluate the tools, metrics, and collection strategies. Simple contention will promote dialogue on the value of one indicator over another, and each subsequent stage of your BSC will demonstrate a greater representation of the organization’s progress.

Conclusion

Implementing a Balanced ScoreCard initiative is simply beneficial to any organization, regardless of the level at which the effort exists. Enterprise-wide efforts have greater value to executives and can demonstrate performance across organizational units and across hierarchical boundaries. Yet because these efforts are so extensive, the time, cost, and resources can be more than most organizations wish to invest in an unproven framework. Instead, utilizing a bottom-up process will constrain the resource costs and increase the potential for success. This “grass-roots” effort can then be more willingly embraced by other departments and consolidated into an enterprise-wide solution when sufficient components are already in place.

Most importantly, when considering the implementation of a Balanced ScoreCard, evaluate the ability of the individual managers to utilize success factors to potentially increase the probability of success. A failed initiative can cost the organization in terms of visibility, strategic focus, and the ability to remain competitive in the fast-paced global economy.

References

Paul McCunn, “The Balanced Scorecard…the eleventh commandment,” Management Accounting (December 1998): pp. 34-36

Christ, M., Sedatole, K.L., Towry, K. L. Thomas, M. A., When Formal Controls Undermine Trust and Cooperation, Strategic Finance (January 2008): 39-44

Swanson, R.A., Holton, E.F, Research in Organizations Foundations and Methods of Inquiry, (San Francisco, CA: Berrett-Koehler Publishers Inc., 2005)

Kaplan, R.S., Norton, D.P., Translating Strategy into Action, the Balanced ScoreCard, (Boston, MA: Harvard Business School Press, 1996)

Kaplan, R.S., Norton, D.P., The Strategy Focused Organization, How Balanced ScoreCard Companies Thrive in the New Business Environment, Boston, (MA: Harvard Business School Press, 2001)

Is bad management really that big an issue?

Bad managers provide a negative background that we don’t spend much time analyzing.  Most often the focus is on positive leaders and how they can contribute to organizational success.  Even the standard definitions of leadership are by definition positive.  Burns (1978) notes that there are more than 150 definitions of leadership and posits that “leadership is the reciprocal process of mobilizing, by persons with certain motives and values, various economic, political, and other resources, in a context of competition and comfort, in order to realize goals independently or mutually held by both leaders and followers” (p. 425).

Therefore, leadership is the positive achievement of results pursuing goals and objectives that are beneficial.  The focus on motivation, comfort, and reciprocal process all imply that the leader is working with the team over directing them.  Kotter (1980) draws a further distinction between management and leadership, in offering that management focuses on handling complexity, where leadership is centered on change and innovation in the organizational environment. Kotter points out that though leadership can complement management, it will never replace it. The manager has a short-term vision looking at administrative actions, focusing on the bottom line and doing things right, while the leader looks long-term, innovates, and does the right thing (Bennis, 1984). The leader directs the activities of a group to achieve a common goal (Hemphill, 1949). This common goal must not only be understandable, and agreed upon, but also communicated to the team in such a way as to ensure that the team clearly understands the objective and willingly follows the goal.

So with Burns and Kotter’s definition of leadership the words and outcomes for leadership are focused in the positive.  Management, on the other hand, is short-term, focusing on the bottom line and does not work with staff with a focus on motivation or empowerment.  On the other hand, Kotter points out that regardless of the leadership that we have in an organization, management is also necessary and will never be replaced.  Therefore, the need for implementing and directing administrative actions, focus on the bottom line and short-term visions are necessary for the achievement of long-term objectives.

Just about everyone I meet has a story about a bad manager in their career.  One of my personal favorites is the manager who walked into an office of staff members announcing that he no longer even saw people, just resources to be moved around the board.  One of the staff members announced that “the work stops now”, and she was serious for at least a week.

Oftentimes humorous, it begs a number of questions about the impact that the bad manager can really have on an organization.  Where leaders are driven to achieve results greater than the individuals alone can achieve, management is focused on doing what is necessary according to the directives that they receive.  Empirically, individuals in those scenarios can evaluate their own actions and the general results of peers, but without evidence it remains opinion.  Therefore, understanding the actual impact of management is vital to understanding what most workers inherently realize, bad managers kill organizations.  Thus, evaluating and understanding the actual impact that a bad manager can have on the staff is, and should be, something of great value to all of us.

Recently Ericson, Shaw and Agabe published an article in the Journal of Leadership Studies entitled “An Empirical Investigation of the Antecedents, Behaviors, and Outcomes of Bad Leadership”.  Although the article focuses on bad leadership approaches and styles it fits into the general premise of manager versus leader discussion in that it focuses on the outcome of a bad leader regardless of the individual’s title.

In this study 335 participants responded in full or part to the 21 question study and although the results are not surprising, they are evidence for empirical impressions established by most professionals.  Respondents were asked to focus on a personal experience that they had with what they deemed to be a bad leader and to answer the questions accordingly.

In the answers provided to this survey bad leaders were identified as those who had difficulty dealing with subordinates (17.6%), poor ethics / integrity (13.3%), poor interpersonal (11.5%) and poor personal skills (14.1%).  These issues resulted in employees feeling frustrated (11.6%), angry (15%) and causing lowered self-esteem (13.9%).  In addition, the bad leadership was directed attributable to the development of a bad organizational culture (17.3), overall performance loss (16.0%), attrition of employees (21.3%) and motivation loss (12.8%).

What was surprising, and somewhat disheartening was that when asked what happened to the bad leader 44.8 % of the participants stated that the bad leader was either promoted or rewarded and an additional 13.4% stated that nothing happened to the bad leader.  Therefore, 58.2% of the respondents reported a situation where the manager would most likely continue to have a negative impact on the organization and its staff.

With the motivation, performance, human resource, and cultural losses that a bad leader is able to cause in an organization how can that same individual end up promoted or rewarded?  Does the organization really understand the cost of this leadership and the impact that it has on its organization?  It seems not, for even the most ruthless of companies is focused on profits, market share, and growth and recognizes that the loss of performance, motivation and human resources are obstacles that must be overcome.

If a company actually understood what bad leadership was, and the overall impact that it can have on their organization, logic dictates that it would take action and would actively work to eliminate bad management from its corridors.

Therefore, the general assumption is that this study is one of the first to start to honestly identify what the cost of bad leadership/management is to an organization.  Hopefully additional studies will be performed that will drive this point home provided the motivation necessary for organizations to start to clean up bad managers and develop honest and valid leadership programs complete with metrics that outline the overall effectiveness of the leader.

Some of the key questions and responses from the survey are highlighted below.  Please reference the survey directly for a complete list.

What actions caused you to classify the person as a bad leader?

Unable to deal with subordinates                                                            17.6%

Poor ethics/integrity                                                                      13.3%

Poor interpersonal behavior                                                                     11.5%

Poor personal behavior                                                                  14.1%

How did the bad leader make you feel?

Angry                                                                                                 15.0%

Frustrated                                                                                         11.6%

Lowered self-view/self-esteem                                                     13.9%

What effect did the bad leader have on your work performance?

Motivation Loss                                                                               33.6%

What effect did the bad leader have on you personally?  

Negative effect on nonwork life                                                    15.0%

Negative effect                                                                                  15.9%

Increased my stress                                                                        29.3%

What effect did the bad leader have on the organization?  

Created a bad organizational culture                                                      17.3%

Human Resource loss                                                                    21.3%

Motivation loss                                                                                12.8%

Performance loss                                                                             16.0%

What happened to the bad leader?  

Bad leader was promoted/rewarded                                           44.8%

Nothing happened to the bad leader                                           13.4%

REFERENCES

Bennis, W. (1984, August). The four competencies of leadership. Training and Development Journal, 15-19.

Burns, James MacGregor (1978). Leadership. New York: Harper & Row.

Hemphill, John K. (1949). Situational factors in leadership. Columbus, Ohio: State University.

Kotter, J. (1990). What leaders really do. Harvard Business Review, 68(3), 103-111.

Erickson, A., Shaw, J., & Agabe, Z. (2007). An Empirical Investigation of the Antecedents, Behaviors and

Outcomes of Bad Leadership, Journal of Leadership Studies, 1(3), 26-43