Currently, there is an increasing number of crisis signals, be it regarding climate change and its consequences or the corona virus. The effects are often very personal and leave a clear mark on specific industries, organisations and projects.
It is in the nature of the crisis that we humans are first of all in a state of uncertainty, react emotionally and show reflexive patterns of action. One of these patterns can be denial. As a result, it can happen that the reaction to an event occurs too late and the disaster unfolds fully. This can be observed, for example, particularly in relation to climate change. This is probably due to the fact that this change occurs unconsciously and gradually. At some point, however, the scope for action is so limited that the only way to react is to take radical measures. Another pattern is the over-reaction based on reports, stories from other people, the media or a lack of judgement regarding the actual threat. For example, the consequences of a flu epidemic are far more serious than the corona virus, but the uncertainty and lack of knowledge about the causes and consequences lead to an over-reaction. However, we do not want to deal with human reaction patterns here, but primarily with how enterprises, managers and especially project managers can (should) react to projects in trouble.
What we unfortunately experience all too often in the practice of project management is one of the above-mentioned patterns of action. Thus, signs of trouble in projects are ignored, measures are postponed, because one believes “we can still manage it” or the discontinuation means losing face. However, a project can bring an entire company into crisis or even put the existence of many employees at risk. The top management then often reacts even more fiercely and overreacts to the project crisis in order to demonstrate its ability to act and its competence to the outside world but does more harm than good in doing so. This is what we call “fire fighting” – and of course this is not what leads to success.
What are the approaches for projects? First of all, of course, prevention, i.e. on the one hand to think about what could possibly have negative effects on the project. This includes risk analysis, the evaluation of uncertainty, i.e. the “unknown unknowns” or the application of sensitivity analysis to predict dynamic trends. However, all of this does not replace the ability of project managers to identify, on the basis of weak signals, developments that could have a negative impact on the project, e.g. moods in the team, among the customer or small signals of dissatisfaction on the part of the sponsor. Not ignoring these, addressing them in a tangible way and assessing their impact on the project is an ability that has unfortunately been lost all too often.
Of course, it is helpful to react as early as possible to any adverse situation in projects before they enter a crisis. Here it is particularly important to be open to a realistic assessment and not to put one’s own motives first. In this respect, a moderated team process is a good way of developing alternative solutions for dealing with the crisis based on the team’s practical experience. An external moderator can accompany this team process from a neutral perspective. It often makes sense to set up a “taskforce” before the problems escalate further. However, it is a mistake to release the project manager from responsibility in the event of a crisis project, as this would mean losing all experience gained during the project. In this case, it seems to us more reasonable to place an experienced crisis manager at the side of the project manager and team, who has the appropriate competence and the necessary trust of the top management. Even the cancellation of projects should not be an exception but an acceptable solution. Predefined criteria, how far the project goals may deviate from the expectations of the customer or sponsor, make the decision more transparent.
The increasing frequency of events with negative effects on the economy, companies and projects requires a strategy for improving resilience. Cape Town experienced extreme drought between 2015 and 2017 and the city was at risk of running out of water. With the help of clever management and an appropriate programme, the crisis was overcome. The city took this occasion to adopt a strategy to improve its resilience. In this document, resilience is defined as “the capacity of individuals, communities, institutions, businesses and systems in a city to survive, adapt and thrive no matter what kind of chronic stresses and acute shocks they experience.”
With a resilience strategy, the entire attention of the management is focused on specific fields of action and the portfolio of projects and interventions are prioritized. This is particularly important in view of scarce resources. The proactive management of challenges and the targeted use of resources for resilience initiatives will ultimately lead to concrete benefits. It may be called the “resilience dividend”. This is where we need to start, so that a crisis really does become an opportunity.
Authors: Reinhard Wagner, CEO of Tiba Managementberatung & Andreas Doba, IPMA