Making the Impossible Possible – Expectations, Loss, and Loss Leaders
Projects burdened by impossible objectives tend to fail, disappoint, and burnout performers. They are a sign that the decision-making process is broken. To avoid failure, make sure there is a solid understanding of the difference between possible and impossible goals and objectives and a well-thought-out decision-making process.
In the context of project engagements (see my recent article Engagement Management: A Key To Successful Projects), setting impossible objectives is often the result of a poor approval process, inadequate estimates, lack of effective pushback by project management to either an overzealous sales effort or an overly demanding client/sponsor.
Beware of an Over-Zealous Attitude
The tendency to set impossible objectives is strengthened by attitudes like the one expressed by Mandela and this one from Muhammad Ali:
“Impossible is just a big word thrown around by small men who find it easier to live in the world they’ve been given than to explore the power they have to change it. Impossible is not a fact. It’s an opinion. Impossible is not a declaration.”
The ‘can-do’ attitude is powerful and motivating. But, in fact there are some things that are, in fact, impossible. For example, changing the past is impossible, as are completely controlling the future or getting a ten person-day task like setting requirements done in a day by assigning ten full time people to it.
As the Serenity Prayer recognizes, it takes wisdom to know the difference between what is possible and what is not, and the courage to act.
Is It Worth It?
There are objectives that seem impossible but may be possible. A big question for project stakeholders is, what is it worth to find out?
In project management the “wisdom” referred to in the Serenity Prayer needs to be shared among sales, project sponsors, and clients and it needs to be embedded in the engagement management process.
Stretch goals push the edge of performance but achieving them can be costly and have a high probability of failure. Go for it if cost is not a significant constraint, achieving goals is highly rewarding in non-financial terms, and expectations are realistic.
For example, the cost of fighting and winning against the apartheid system in South Africa was not a significant constraint. People were willing to give their lives and livelihoods to win. The reward, freedom, was worth the cost. And expectations, while high, were realistic – people were willing to keep at it as long as necessary and had no idea how long that would be.
But in business and technology projects we have a different dynamic. The sales price, which is made up of costs plus profits, sets up a goal for the project manager and team that, if unmet, costs the organization and the team. The organization loses money, the team is faced with failure, clients and sponsors are disappointed.
In-house projects have a similar dynamic. The sales price is the cost estimate which with expected benefits drives project approval. Cost and schedule overruns and unrealized benefits are costly to the organization and the performance team. Clients and sponsors are disappointed.
A key question is – Is it worth it to attempt to achieve the stretch goals?
Decision Making and Consequences
Portfolio Management’s project approval process is the forum for making the decision to decide if ‘it’s worth it’. There is no problem when the answer comes out of a well thought out analysis of costs, benefits, alternatives, and risks, and expectations are well-managed.
But when the decision is made based on bad estimates and emotion, with a misguided understanding of what is and isn’t possible, there will be hell to pay.
Looking at two situations, considering costs, competition for resources, and benefits, we can see how project approval works.
1. In situation One a contractor organization is selling a project to a client. The sales team works with the client to find a price that the client likes. This comes out of a negotiation within the client’s procurement process. Ideally, the sales team considers input from estimators representing the performance team and comes up with a price that sells and is profitable.
If the sales team does not consult the performance team, the price is likely to be an impossible goal. If the performance team is consulted and says that they can do the job, but their costs would eat into or do away with profit, that’s where the decision makers come in. Their job is easy if the price and costs allow for sufficient profit.
If profit is lower than executives would like or if there is a loss, then the decision makers must decide whether to take on a loss-leader project that will, say, get the company in the door at a new client or keep competitors out of an existing client. They must assess whether this project is worth doing given limited resources and more profitable or critical projects.
If the decision makers decide to approve, they must (but often do not) set expectations with the performance team to let them know they are shooting for a rational target and why the project price is so low.
This scenario is linked to incentives – sales commissions pinned to gross sales price or to profit and bonuses for the performance team. And, of course, schedule – delivery targets, their priority, and time to completion – is a major factor.
2. Scenario Two is where the work will be done by in-house resources. In this situation the dynamic is different. The project price (the cost to the organization) may be set based on a well thought out or faulty cost estimate or based on available budget and a strong desire to do the project.
Instead of profit, decision criteria include benefits. While benefits are realized over years and often far exceed costs, available budget and contention for resources are constraints. A decision is made.
If the performers know they are shooting for a rational target all’s well. When they are driven to meet impossible objectives there are consequences like failure, poor morale, relationship issues, turnover, and burnout.
As always, assess your current situation and track record.
- Are project overruns frequent?
- Are estimates chronically inaccurate?
- Are staff members driven to do the impossible?
- Do you have a clearly defined well-functioning decision-making process that includes managing the impact on staff of stretch objectives?
- Who is accountable for project overruns, particularly when realistic project level estimates are ignored, and cost targets are set based on political or sales oriented criteria?
Based on that assessment what do you need to change and how will you change it?
And, of course, do not believe it when someone says, “it’s impossible.” Check the facts, get other opinions, use your intuition, then decide. Push the edge to do the impossible when it is worth it. Make sure expectations are well-managed.