Set goals for behavior — Avoiding the Experience Trap

NOTE: 10th post of a series on an HBR article by Prof. Kishore Sengupta, et al on The Experience Trap.

The paper outlines some unexpected consequences of the way in which we typically estimate, especially on goals (I’ve quoted liberally from the paper, so I’ve split this post).  I never seriously considered the impact on PM behavior of the interrelationship between scope changes and original estimates:

Another weakness of estimation tools is that their projections are usually based on product size (for example, how many lines of code or function points), which is extremely difficult to predict in the planning stages. Moreover, product deliverables can change over time in ways that are difficult to anticipate. Thus, initial estimates don’t make good goals.

And of course, what are our KPIs?  The baseline cost and schedule targets generated by the estimate that became the SOW…

[W]hen managers know they will be measured against targets based on unreliable estimates, they seek additional slack by opting for “safe” estimates and then proceed to squander the slack through make-work and by embellishing the project with unnecessary features. There is thus a strong case to be made for rethinking the way goals are set.

So far, this pretty expected.  What comes next are the money quotes:

[E]stimates function best as devices for planning and control, and goals as mechanisms for promoting desired behavior.   First they should decide on the behavior they wish to foster, and then they should set goals that encourage such behavior.

I like the explicit divorce of planning and control from goals and objectives.  It is too easy to simply focus on cost and schedule, while forgetting about deliverable and outcome.  An example follows:

In a single project, an organization might decide it wants its managers to minimize turnover on the project team (doing so can increase productivity and learning, and reduce errors). This can then be an explicit part of the goal set. To meet that goal, managers would have to formulate ways to cushion their teams from schedule pressures and from the impact of normal attrition.

FInally, the authors hit on one area that is emerging as a differentiator among initiative leaders — the ability to optimize among the alternatives within their portfolio.  To give PMs exposure to the bigger picture, we are building portfolio management into our standard PM curriculum.

We’ve found that when managers have responsibility for multiple projects, their goals should promote behavior that maximizes the success of the portfolio (rather than individual projects). In setting such goals, the organization must give managers a certain degree of freedom, allowing them, for instance, to negotiate trade-offs between scope and schedules to preserve team stability or prevent problems from infecting other projects. Additionally, to ensure greater commitment, organizations must give managers a say in composing the goals.

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