Are your Stakeholders too Optimistic?

Many experienced project managers will have come across this scenario: the project sponsor appears to ‘get’ what you are trying to achieve and the difficulties faced by the project team, but when you hit an issue, they are wildly optimistic about the project’s benefits or how likely it is that you can fix things.

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ProworkflowOptimistic stakeholders are generally good people to work with. They aren’t all doom and gloom and they don’t constantly ask you to justify your decisions. But at the end of the project, if the project manager hasn’t successfully managed their expectations, they can be bitterly disappointed with what has been achieved.

As a project manager, part of your role is to build good working relationships with stakeholders at all levels and an element of that is helping to manage their expectations. The UK’s National Audit Office reported recently that the challenges of delivering the £345bn portfolio of government projects were made more difficult by “endemic over-optimism”. In other words, government officials and other stakeholders believing that projects would deliver more than they realistically could. This has contributed to many government projects being deemed failures.

The NAO identified 5 factors that contribute to over-optimism. Which of these do your projects share?

1. Complexity

There’s an incomplete understanding of what the project is exactly going to deliver and the challenge that this presents for the teams. Failure to allocate skilled resources on project teams means that complexity cannot be adequately managed. This can result in poorly prepared estimates so the project actually takes longer or costs more – or that the wrong solution is selected in the first place. Never a good result, and it creates problems for the project team later.

2. Accountability

Poor governance leads to projects being approved even though the business case is flawed. Lack of oversight and independent challenge means that planning issues are not picked up until it is too late.

Responsible governance has been shown to link to project success. The NAO reported that the project that introduced the ability to file tax returns online used good governance practices including having a Senior Responsible Owner (sponsor), board meetings, full documentation and a good approach to risk and issue management. As a result, the project delivered on time and within budget, and increased the number of people filing their tax returns online – a win for everyone.

3. Culture

The short-termism of project horizons and the working environment’s culture contributes to people being over-optimistic, when projects could typically have a much longer payback period. This is particularly the case in the public sector, where budget cycles and short political cycles can influence what people believe – and over-optimism isn’t always conscious or deliberate.

However, it can be deliberate and this sort of strategic misrepresentation could be caused by project sponsors trying to achieve personal gain or through a misplaced view that they need to present the project in a particular way in order to gain funding.

4. Poor data

Project success is predicated on having good data, but often stakeholders make decisions based on little evidence or inaccurate estimates. This leads to the benefits being over-stated and further contributes to that over-optimism on the part of stakeholders. For example, a calculation error in the UK’s Department for Communities and Local Government’s modelling for the New Homes Bonus led to a mistake about the impact of the project. The model originally predicted that 140,000 new homes would be created but this was reduced by about 22% when the maths was corrected.

5. Other stakeholders

The project team aren’t the only people concerned with this project. There are often lots of other stakeholder groups to take into account, and this is certainly the case with public sector projects. Understanding the influence these groups have and how they are motivated can make or break a project – get it wrong and the project can fall flat or fail to deliver the expected benefits.

The NAO’s report shows that government teams have a tendency to be over-optimistic about their ability to align different stakeholder groups behind the project’s objectives and that they underestimate the amount of time that successful stakeholder engagement will take. They also make assumptions about how different groups will behave, despite having no influence over them. All that adds up to an over-optimistic view of what the project can achieve.

A powerful example of this is the FiReControl project, a national control system for Fire and Rescue Services. The government department in charge of this initiative failed to consult with fire services and a Select Committee investigation concluded that the Fire and Rescue Services opposition to the project was the greatest risk to success. It was finally cancelled, after an investment of £482m.

Do your projects suffer from any of these factors? If so, act now to try to manage those stakeholder expectations to something more realistic! And keep checking throughout the life of the project so that you can maintain expectations at a suitable level. Being positive about your project is a good thing, but allowing people to believe it will deliver more than it can will only lead to disappointment.

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Elizabeth Harrin
Elizabeth is a career project and programme manager as well as an award winning writer and blogger. She is the author of Social Media for Project Managers, Customer-Centric Project Management and Shortcuts To Success: Project Management in the Real World (now in its second edition). She is Director of The Otobos Group, which is a project communications consultancy that helps people tell the story of their project more effectively.