Integrity Revisited: How Trust contributes to Project Performance

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With the current goings-on in the industry and signs of distressed Infrastructure projects showing up, people regularly ask my opinion regarding what the cause of the problems might be?

Every project of course has specific circumstances at play, and like most complex problems there typically is no simple answer. However, I do believe a common element that’s missing in many projects is effective Leadership.

Some time ago I wrote about the concept of integrity and its wide-ranging application in improving team performance. I was recently reminded of this by a colleague who sent me a McKinseys 2017 report “The art of project leadership: Delivering the world’s largest projects”.

McKinseys laments the performance of large capital projects around the globe which has historically been poor, there being many instances of significant budget and time overruns.

We do have an innate tendency as humans to focus on high-profile failures rather than unreported successes (a behaviour known as the “availability heuristic” is going on here) and of course there are many examples of successful major projects. However, when large and complex capital projects fail, the cost in terms of money as well as suffering by the teams responsible for recovering the situation is horrendous. It’s certainly well worth focusing on ways to reduce the risk of failure in this space.

McKinseys’ report explores the contribution made by the “art” of project delivery to successful large projects, comprising elements such as leadership, organisational culture, mindsets, attitudes and behaviours of project owners, leaders, and teams.

The authors acknowledge what is arguably the key “scientific” contribution to successful project delivery: careful allocation of risk between owner and contractor (deliverer) and appropriate alignment of incentives. In practice, this looks like project Owners thoughtfully delegating only those risks that the contractor is better positioned to manage. Sounds simple in concept yes? Regular risk misallocations bear out the challenges in getting this right for major projects on a consistent basis.

The report’s main focus is on exploring the extent to which the art of effective leadership contributes to successful projects, based on evidence drawn from a wide range of interviews with experienced practitioners. The essence of the conclusions is as follows:

  1. An effective Owner has a mindset oriented towards taking FULL ownership of project outcomes – be they good or bad. Owners and contractors work best as a business partnership with a mindset of “we win together or lose together”. Productive contractor-owner relationships are based on mutual trust and collaboration in joint problem solving.
  2. Unsurprisingly, the setup phase of the project is the best opportunity to establish healthy management practices that deliver successful project outcomes. In this setup phase, project Leadership is about articulating purpose, role modelling expected attitudes and behaviours and nourishing the desired culture. Leaders should take the time to connect with team members on a personal level. These practices go to creating project teams with a unique and shared identity and a culture of mutual trust and collaboration.
  3. Strong and transparent trust-based relationships with stakeholders enable prevention and rapid resolution of problems. The setup phase needs leadership with a strong focus on building constructive relationships (and particularly trust) with both internal and external stakeholders. This enables issues to be addressed early in the project timeline that would otherwise impede delivery. Building trust is also critical to productively addressing the inevitable crises that arise in projects of significant size and complexity.

SO if the Report identifies “what” needs to be done by effective Leaders to create trust and collaboration, “how” does effective project leadership go about making this happen?

Look no further than the concepts drawn from work by Werner Erhard, Michael Jensen and Steve Zaffron in creating a new model of integrity: “Integrity: A Positive Model that Incorporates the Normative Phenomena of Morality, Ethics and Legality” – available at http://ssrn.com/abstract=920625

The concept of Integrity in this context is defined as a state or condition of being whole, complete, unbroken, unimpaired, sound and in perfect condition. Integrity is distinguished as a matter of one’s word being whole and complete. One’s word is whole and complete when one honours one’s word.

 

Further, keeping one’s word is distinguished from honouring one’s word. Honouring one’s word, as defined, means either “….keeping your word or as soon as you know you will not, you say that you will not, and cleaning up any mess you cause by not keeping your word. Thus, even when you do not keep your word, you have a way to maintain your integrity.”

 

Honouring one’s word provides both a powerful and actionable pathway to earning the trust of others.

 

You might at this point consider how this plays out in practice for the many interactions that happen every day in busy Projects….

 

The process for restoring integrity by honouring your word is as simple (and as challenging) as this: Every time you find yourself breaking your word with your Manager, fellow team member or subordinate and being “out of integrity” (eg. not doing something that you agreed to do) just follow these steps:

 

  1. Acknowledge who came to whom with the intention of resolving the situation
  2. Acknowledge the broken agreement
  3. Recognise the impact of the broken agreement – this may involve personal as well as business impacts
  4. Figure out and what you will do to deal with the fall out; and
  5. Figure out what will you put in place to avoid this happening in the future.

 

Sounds like effective Leadership in action to me…….

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