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Blind Spot 5 – Misleading Metrics

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 take actions based on how they believe they are being measured and managers get what they measure.

I’ve written on the topic of measurements and their impact on the behaviors that drive performance here.  I’ve discussed the dilemma between managing the expenses of an organization and achieving the goal of the organization. In a project management context, there is tension between holding down costs, maintaining the schedule, and achieving the project scope; the classic project management triangle.  The conventional thinking is that you can have two, but not all three.


In many projects (particularly in matrix organizations), these objectives are divided into separate entities.  For example, the expenses of the project are borne by the resource owners and they control the labor costs.  It is similar for other projects as well, the resources are not owned by the project, but are allocated – on a planned budget.  Yet another group – the customer team or engineering team, determines the scope or deliverables of the project but they do not have the resources or the budget to achieve them.  The schedule is the only aspect wholly owned by the project manager, “ownership” is to be taken with a grain of salt, as often there is a due date dictated by an outside party (customer, market, management, etc.) that the project must achieve.

The resource manager’s main 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 present in the organizational structure.

Most managers are not 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.

The resources aren’t present when they’re needed
There aren’t enough resources
The scope is changing (emerging?)
Poor choices in suppliers (low reliability or quality)
Reshuffling of task priorities
Compromises on scope, budget, and delivery

The project manager is unable to resolve the conflict; all he or she can do is try to make the best of things.  This is why I claim that in a conventionally managed organization, the best project managers are the best negotiators.  The best negotiators are able to get others to act against their own self-interest in order to meet the demands of the project!

But what to do?  The real solution, the permanent solution, is to change the measurement system of the company.  However, most project managers are unable to address a problem of this scope.  They’re too busy slaying the dragon before them to get to the dragon’s lair.  Everyone is locked into a no-win situation.

The conflict can be broken if we recognize that there are two types of objectives in a project:

1.  Satisfying the necessary conditions
2.  Achieving the goal

Therefore, for example, we do not need to reduce costs to the lowest possible level, only the lowest acceptable level.  In other words, as long as the overall budget has not been jeopardized, there is no additional benefit to reducing expenses or costs.  We do not need to add more features or additional quality checks, as long as we have satisfied the requirements of the project; better quality does not necessarily result in improvement to the 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.

Thus, project champions must be clear about the purpose of the project.  What is the “goal”?  This is foundation of the performance management system around.  We check to make sure we have not violated any necessary conditions, but we work towards the goal.

We ask the members of the project teams we work with to live by one common objective.  This sometimes means there is a temporary suspension of the “normal” local performance measures during the project duration.  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 the measurement conflicts and resolve them early or you will have problems in execution.

Read more about the measurement conflicts in our eBook Blindsided! Five Invisible Project Threats Successful Managers Must See.

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