Why Management Doesn't Get Bad News Until It's Too Late
SMALL BUSINESS OPERATORS NEED TO BE ESPECIALLY COGNIZANT OF DEVELOPING PROBLEMS...
Preface: A longer version of this article was originally published on LinkedIn, where it accumulated in excess of 11,000 views and more than 400 likes and comments. It is adapted here to be of use to small-business managers and owners.
I work primarily in the yacht and commercial vessel construction sector. I mention this so you can understand the context in which I make these remarks, namely, one in which major, long-duration, high-dollar projects are the order of the day.
In that context, one of multi-million dollar projects, it is critical to assure a continual flow of accurate information from line-foremen and project-managers to upper level managers and ownership, concerning the status of projects in process. Yet, my experience is that, almost invariably, bad news concerning how a project is tracking doesn't get to upper level management, until it is too late to do anything about it .
You don't have to be a nuclear physicist (or an MBA) to understand why this is the case...
Nobody "on the line" in a long-duration project likes to pass bad news upward even a day sooner than he or she is forced to. If a project's schedule is slipping badly, or its budget being depleted at too high a rate, everyone "on the line" (supervisors, foremen, mid-managers) expects there will be hell to pay. The only question in all of their minds is for how long.
If at the 50% completion mark of a project with a one-year duration, the project or production manager reports his or her serious concern about eventual outcome, everyone will have to live with teeth gnashing and daily exhortations to do better -- for six months. On the other hand, if the line supervisor or middle manager waits until the last month of the project, when it will be impossible to ignore the problems, the reaction will no doubt be worse. But the pain caused by disclosure will last for only a month or so, as executive management's attention is by then likely to be drawn to the next project.
If we're talking about a project with a two- or three-year duration, the temptation to extemporize is even greater. Surely, the self-justification goes, we can crash the schedule and remedy the slippage. Surely, we can cut some better deals on materials, and make up the developing deficit. Surely we can grab some more revenue by up-pricing the change orders that will inevitably come in. Surely. Surely. Surely.
Hope springs eternal... and provides psychological rationalization for not giving the boss the bad news any earlier than one is forced to...
So how do you deal with this, when you have bottom-line responsibility, yet depend on the flow of information you receive from subordinates? First and foremost, recognize the human realities of the situation . Then develop and follow a modus operandi that encourages, rather than discourages subordinates when it comes to giving you bad news. In particular:
— Never kill the messenger. If you allow yourself to vent frustration and disappointment on the person who brings a developing problem to your attention, nobody will.
— Always ask specific questions. If the core of your project status review meeting consists of "So, how are we doin' guys?", the answer will almost always be "Doin' great, boss!" Instead ask questions like, "Have we completed the installation of the main propulsion system 100%?"
— Make it a habit to follow up initial broad questions with several more detailed and specific ones. Even if the answer to the above question is yes, do not leave it at that. Instead, follow up with something like, "Does that mean the engines are fully mounted? The transmissions coupled up? The propeller shafts and bearings all in?
— Do not wait for major milestone dates to arrive before asking for project status information. Treat every duration between milestones as if it were a project in itself, with the upcoming milestone as the terminal date. This minimizes the tendency for people to think they have plenty of time to make up for schedule slippage and budget overrun.
— Do not throw fits when you get bad news. No matter how you're really feeling, keep a calm outward appearance and concentrate on developing with your subordinates workaround plans to pick up production progress, and cost-containment measures to stem the budget bleeding. Maintain an air of, "We're all in this together", not one of, "Get this straightened out, or get ready to hit the road!"
— Do not rely entirely on your line- and project-managers to evaluate project status. Discipline yourself to spend some time every week on the production floor, in order to see for yourself what is happening and what isn't. This assumes, of course, that you understand what you're looking at when you're on the production floor...which, in the sector I work in, you most likely do...or you wouldn't be where you are.
None of these suggestions will be entirely new to you. Indeed, you can probably add several more to the list on your own. These suggestions are, however, worthwhile to refresh in one's mind from time to time, because they are too easily forgotten, or at least ignored in the day-to-day press of issues and problems . And by following them religiously you can avoid getting the bad news after it is too late to do anything about it. — Phil Friedman
Author's notes: The truly beautiful sailing cutter you see above is a Puffin Model, with photo included by permission of Dutch ShipYard in the Netherlands. Neither the yacht, nor the shipyard has anything to do with the substance of this post. I just thought it might lift your spirits, as it does mine, to see this magnificent sailing yacht.
If you found this article of value, you may want to take a look at some of my other writing about small business operations, management, and marketing:
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About me, Phil Friedman: With 30 some years background in the marine industry, I've worn numerous hats — as a yacht designer, boat builder, marine operations and business manager, marine industry consultant, marine marketing and communications specialist, yachting magazine writer and editor, yacht surveyor, and marine industry educator. I am also trained and experienced in interest-based negotiation and mediation. In a previous life, I taught logic and philosophy at university.
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Text Copyright 2016 by Phil Friedman — All Rights Reserved
Images: GoogleImages.com, Dutch ShipYard, and Port Royal Group
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