Tag Archives: Stakeholder Management

The100 Most Inspiring People in Project Management

RecognitionTimeCamp, the developers of TimeCamp online time tracking software that measures time spent on projects and tasks has created a list of the 100 Most Inspiring People in Project Management; congratulations to many friends and colleagues who’ve made the list.

While we’re not sure of the process used to develop the list (the links are mainly to Twitter), it’s great to see Lynda at #12!  And it’s good to know her work promoting stakeholder engagement, effective communication and team development is being recognised globally.

Defining Stakeholder Engagement

Two earlier posts have discussed the concepts of stakeholder engagement.

Stakeholder Engagement GroupThis post builds on these foundations to look at the tools and techniques of proactive stakeholder engagement. Effective stakeholder engagement is a mutually beneficial process designed to enable better planned and more informed policies, projects, programs and services.

For stakeholders, the benefits of engagement include the opportunity to contribute as experts in their field or ‘users’ of the deliverable, have their issues heard and participate in the decision-making process. This should lead to:

  • Greater opportunities to contribute directly to the development of the outputs from the work;
  • More open and transparent lines of communication, increasing accountability and driving innovation;
  • Improved access to decision-making processes, resulting in the delivery of better outcomes;
  • Early identification of synergies between the stakeholders and the work, encouraging integrated and comprehensive solutions to complex issues.

For the ‘organisation’, the benefits of stakeholder engagement include improved information flows, access to local knowledge and having the opportunity to try out ideas or proposals with stakeholders before they are formalised. This should lead to:

  • Higher quality decision-making;
  • Increased efficiency in and effectiveness of delivery;
  • Improved risk management practices – allowing risks to be identified and considered earlier, thereby reducing future costs;
  • Streamlined development processes;
  • Greater alignment with stakeholder interests – ensuring outputs are delivered in collaboration with stakeholders and provide outcomes which meet their needs;
  • Enhanced stakeholder community confidence in the work being undertaken;
  • Enhanced capacity to innovate.

As with any stakeholder management process, ‘not all stakeholders are equal’ some stakeholders should be engaged because they are important to the work being undertaken, others simply need to be kept informed by appropriate levels of communication (for more on this see The three types of stakeholder communication).

The various levels of stakeholder communication, management and engagement are:

  • Inform: You provide the stakeholder with an appropriate level of communication, generally either PR or reporting.
  • Manage: You direct your communication to achieve a desired change in the attitude of the stakeholder or to manage an emerging situation.
  • Consult: You invite the stakeholder to provide feedback, analysis, and/or suggest alternatives to help develop a better outcome.
  • Involve: You work directly with stakeholders to ensure that their concerns and needs are consistently understood and considered; eg, the business representative involved in an Agile sprint).
  • Collaborate: You partner with the stakeholder to develop mutually agreed alternatives, make joint decisions and identify preferred solutions; eg, typical ‘alliance’ and ‘partnering’ forms of contract.
  • Empower: You place final decision-making in the hands of the stakeholder. Stakeholders are enabled (but also need to be capable) to actively contribute to the achievement of ‘their’ outcomes.

Stakeholder CollaborationThe first three bullets above are Stakeholder Management activities, the last three various levels of Stakeholder Engagement. Deciding which level of interaction is appropriate is a key driver of success, in any project, program or other work, some stakeholders will be best managed by simply keeping them informed, whereas the higher levels of engagement such as collaboration and empowerment require stakeholders with sufficient skills and knowledge to be able to actively participate in the endeavour, and importantly the desire to be involved!

The Stakeholder Circle® methodology provides the foundations needed to understand your stakeholder community and decide on the appropriate level of engagement for the ‘high priority’ stakeholders affected by the work. When you get to ‘Step 4 – Engagement’ the additional questions that need answering include:

  • What is the purpose and desired outcomes of the engagement activity?
  • What level of engagement is required to achieve this outcome – consult, collaborate, empower?
  • What method of engagement will you use?
  • What are the timing issues or requirements?
  • What resources will you need to conduct the engagement?
  • Who is responsible for engagement?
  • What are the risks associated with the engagement?

Finally, as with any stakeholder management process, the success or otherwise of the overall process needs to be reviewed regularly and appropriate adaptation made to optimise outcomes (step 5 in the Stakeholder Circle® methodology)

Summary:

Stakeholder engagement is not a ‘one-size-fits-all’ solution to managing stakeholders and needs to be planned into the overall development of the work:

  • Some of the questions outlined above need asking at the very earliest stages of a project or program during the ‘strategic planning phase’ and will affect the way the whole of the work is planned and undertaken.
  • The culture of the organisation undertaking the work will determine how open it is to inviting stakeholder collaboration or engagement, a degree of ‘culture change’ may need to be planned into the work.
  • Stakeholder engagement is always a two-way process, the skills, capability and culture of the key stakeholders will also be a constraint on what is feasible or desirable. You may need a strategy to ‘get the stakeholders on-side’.

Overall time and effort spent on stakeholder engagement will pay dividends (see: Valuing Stakeholder Management), stakeholder engagement is simply the most proactive way of helping your stakeholders to help you deliver their requirements successfully.

PMP® exam is changing on 11th Jan. 2016

PMPThis post offers a detailed look at the new PMP examination content and what you can expect to see different in a exam taken after the 2nd November 2015.

Notes:

  1. PMI have moved the start date back from the originally publicised date in November to January 2016.
  2. There will be no changes to the CAPM exam or any other PMI credential other than the PMI-ACP.
  3. Our free daily PMP questions are now aligned to the new exam see: http://www.mosaicprojects.com.au/Training-PMP-Q-Today.html
  4. All PMP of our courses starting from September 1st will be aligned to the new PMP examination, see:  http://www.mosaicproject.com.au/

The starting point for this update is the PMP Role Delineation Study (RDS) completed in April 2015, which has provided an updated description of the role of a project management professional and will serve as the foundation for the updated PMP exam. To ensure its validity and relevance, the RDS update has captured input from project management practitioners from all industries work settings, and regions. The research undertaken to update the RDS included focus groups, expert input and a large-scale, global, survey of Project Management Professional (PMP)® certification holders.

Overview of Changes

The RDS defines the domains and tasks a project manager will perform plus the skills and knowledge that a competent project manager will have. The five ‘domains’ of  Initiating, Planning Executing, Mentoring & Controlling and Closing remain unchanged, although there has been a slight reduction in the importance of ‘closing’ and an increased emphasis on executing (reflected in the allocation of questions). The other major changes are:

  • An emphasis on business strategy and benefits realisation: this new, included because many PMs are being pulled into a project much earlier in its life when business benefits are identified. There is also an increased focus across all of the other domains on delivering benefits (not just creating deliverables).
    See more on benefits management.
  • The value of lessons learned now has added emphasis: lessons should be documents across the whole project lifecycle and the knowledge gained transferred to the ‘organisation’ and the project team. See more on Lessons Learned.
  • Responsibility for the project charter shifted to the Sponsor: Most project managers are not responsible for creating the charter; the Sponsor or project owner is primarily responsible.  The PM is a contributor to the development and is responsible for communicating information about the project charter to the team and other stakeholders once the project starts.
    See more on the Project Charter.
  • Added emphasis on enhancing project stakeholder relationships and engagement: The RDS sees stakeholder engagement as a two way relationship rather than a one-way reporting function. Communication is expanded include an emphasis on relating and engaging with stakeholders. This is the theme of our last post, see: The Elements of Stakeholder Engagement.

Major Content Changes
Changes

A summary of the major content changes is:

Domain 1 Initiating the Project

Percentage of questions unchanged 13% =  26 questions.

Three tasks added:
–  Task 2: Identify key deliverables based on business requirements.
–  Task 7: Conduct benefits analysis.
–  Task 8: Inform stakeholders of approved project charter.

One task deleted:
–  Old Task 2: Define high level scope of the project.

One task significantly changed:
– Task 5: changed from ‘develop project charter’ to ‘participate in the development of the project charter’.

Major changes in the knowledge and skills required for this domain.

Domain 2 Planning the Project

Percentage of questions unchanged 24% =  48 questions.

One task added:
–  Task 13: Develop the stakeholder management plan.

One task significantly changed:
–  Task 2: expanded from ‘create WBS’ to ‘develop a scope management plan (including a WBS if needed)’.

The knowledge and skills required for this domain have been revised but basically cover the same capabilities.

Domain 3 Executing the Project

Percentage of questions increased from 30% to 31% =  62 questions.

Two tasks added:
–  Task 6: Manage the flow of information to stakeholders.
–  Task 7: Maintain stakeholder relationships.

One task deleted:
–  Old Task 6: Maximise team performance.

The knowledge and skills required for this domain have been revised but basically cover the same capabilities with the exception of the addition of ‘Vendor management techniques’.

Domain 4 Monitoring and controlling the project

Percentage of questions unchanged 25% =  50 questions.

Two tasks added:
–  Task 6: Capture, analyse and manage lessons learned.
–  Task 7: Monitor procurement activities.

One task deleted:
–  Old Task 6: Communicate project status to stakeholders.

The knowledge and skills required for this domain have been revised and expanded.

Domain 5 Closing the project

Percentage of questions reduced from 8% to 7% =  14 questions

No new tasks added or significantly changed.

The knowledge and skills required for this domain have been revised but basically cover the same capabilities.

Cross Cutting Knowledge and Skills

Cross cutting knowledge and skills are capabilities required by a project manager in all of the domains.  This areas of the RDS has been increased significantly.  The full list of knowledge and skills is
(* = included in previous RDS):
1.   Active Listening*
2.   Applicable laws and regulations
3.   Benefits realization
4.   Brainstorming techniques*
5.   Business acumen
6.   Change management techniques
7.   Coaching, mentoring, training, and motivational techniques
8.   Communication channels, tools, techniques, and methods*
9.   Configuration management
10. Conflict resolution*
11. Customer satisfaction metrics
12. Data gathering techniques*
13. Decision making*
14. Delegation techniques
15. Diversity and cultural sensitivity*
16. Emotional intelligence
17. Expert judgment technique
18. Facilitation*
19. Generational sensitivity and diversity
20. Information management tools, techniques, and methods*
21. Interpersonal skills
22. Knowledge management
23. Leadership tools, techniques, and skills*
24. Lessons learned management techniques
25. Meeting management techniques
26. Negotiating and influencing techniques and skills*
27. Organizational and operational awareness
28. Peer-review processes
29. Presentation tools and techniques*
30. Prioritization/time management*
31. Problem-solving tools and techniques*
32. Project finance principles
33. Quality assurance and control techniques
34. Relationship management*
35. Risk assessment techniques
36. Situational awareness
37. Stakeholder management techniques*
38. Team-building techniques*
39. Virtual/remote team management

Two skills that have been dropped are knowledge of:
–  PMI’s Code of Ethics and Professional Conduct
(although this continues to have a major influence on the approach PMI
     expects project managers to adopt in the exam and the ‘real world’).
–  Project Management Software

The effect on the exam

PMI have advised that 25% of exam content will be new, focused on new topic areas (ie, the eight new tasks) added to examination, in addition, many other questions will be updated to reflect changes in the descriptions of tasks and changes in the underpinning skills and knowledge requirements.  We will be updating our materials from September 2015 to take these changes into account. Fortunately a large percentage of the ‘new’ materials from the RDS are already part of our PMP course (because we felt they were essentially good practice) or in other training courses we offer – overall this update makes very good sense.

Many aspects of the PMP exam are not changing including the eligibility requirements, formal training requirements, the passing score (which remains secret) and the design of the questions, many of which are scenario based seeking information on what should you do.

There is no change to other PMI exams, the CAPM, PMI-SP and other credentials remain unaltered.

Will there be more changes?

The sort answer if ‘yes’! Changes in the RDS occur every 3 to 5 years and as a consequence, the exam content outline changes, new topics are added, and shift in weighting occur.

In addition, the PMP exam also changes when the PMBOK® Guide is update (this is due in 2017). Changes in the PMBOK® Guide cause changes in terminology, changes to elements of process groups and exam questions are changed to reflect these alterations. However, many other references are used to create PMP content in addition to the PMBOK,  and if the PMBOK has contents not reflected in the RDS this section not examined.

So moving forward, the current version of the exam is active until 1st Nov. 2015; the new version of the exam is available from 2nd Nov. 2015, and the next change will be in mid-to-late 2017.

For this change, there is no change over period (including for re-sits) – the ‘old’ exam applies up until the 1st, the new exam from the 2nd November.  Both before and after the change, your exam results available immediately if you take a computer based test.  For more on the current examination, fees, eligibility requirement, etc, see: http://www.mosaicproject.com.au/pmp-training-melbourne/.

A different set of changes has been announced for the PMI-ACP (Agile) credential (visit the PMI website for more details).

PMI have also announced changes to the way PDUs are earned as part of their Continuing Certification Requirement (CCR) program, effective from the 1st December 2015.  For more on this change see: https://mosaicprojects.wordpress.com/2015/06/06/pmi-pdu-update/

The Elements of Stakeholder Engagement

Effective stakeholder engagement is a two-way interactive relationship that encourages stakeholder involvement in the organisation for the benefit of both the stakeholders and the organisation.  The trend is increasingly clear; organisations that effectively serve the needs of their stakeholders outperform those that do not.

However, what is also apparent is confusion on the part of many managers as to precisely what stakeholder engagement is, and what systems facilitate effective stakeholder engagement.  This post suggests there are three basic systems that together form the foundation for effective stakeholder engagement in most organisations, but the foundations are just that, necessary underpinnings, stakeholder engagement itself rises above the foundations to create an entirely new way of engaging with stakeholders. Let’s start with a look at the three basic components:

Stakeholder Engagement

PR = Public Relations

PR is probably the oldest of the three foundations (particularly if you include advertising within the overall ambit of PR).  For thousands of years people and organisations with something to sell to ‘the public’ have recognised the need to tell potential customers about their offering and suggest there is a good reason for the potential customer to become an actual customer or client.

Camel Market

Smart merchants realised they needed to give potential customers a reason for doing business with them (rather than someone else) and that competing on price alone was not a good move in a crowded market place.

The role of advertising is in part to make potential customers aware of your offering and in part to create a desire for the type of goods or services you are providing. Effective advertising creates a ‘call to action’ which the customer heeds.

Public Relations (PR) has a different focus.  Good PR is built around creating a positive image of the organisation in the minds of its wider stakeholder community. PR is not directly aligned to sales in the way advertising is, but does seek to make the organisation appear to be one that most stakeholders in its target audience will want to be associated with.  This may be because of exclusivity, or status, because the organisation is seen to be ‘good’, or for any one of a dozen other reasons.  Effective PR has many purposes including:

  • Underpinning its advertising by creating a ‘good first impression’ of the organisation, thereby allowing the stakeholder to take note of its advertising.
  • Explaining the value of the organisation to a wider community minimising resistance to the functioning of the organisation and facilitating its operations.
  • Making the organisation appear to be a desirable ‘citizen’ within its community; etc.

Good PR is of course authentic and reflective of the true nature of the organisation, in the modern age ‘spin’ is easily uncovered and can be very damaging.

The fundamental nature of both PR and advertising is ‘push’ communication – the organisation pushes its message out to the wider community, hopes someone listens, and then measures its impact after the event with a view to improving the ‘message’ and the effect.

 

CRM = Customer Relationship Management

CRM is focused on providing a great experience to every customer.  The commercial driver for CRM is in part the generally accepted fact that it is far cheaper to retain an existing customer then to attract a new one and in part from a win-win view that the ability to quickly and efficiently service the unique needs of each customer reduces the transaction costs for the organisation.

Customers or clients are clearly stakeholders with a significant interest in the organisation, so focusing effort on providing them with the best possible level of service, delivered quickly and efficiently is a win-win outcome. Happy customers are more likely to recommend an organisation to their friends and colleagues as well as becoming regular clients of the organisation.

Unfortunately the concept of CRM seems to have been hijacked by software systems, overseas call centres and ‘big data’; bought with a view to ‘reducing costs’.  There’s nothing wrong with any of these concepts provided the outcome is improved customer service. Where the outcome is a reduction in service, any cost savings are likely to be offset by reduced business and the cost of attracting new customers to replace the ones lost by poor service.

Whilst CRM at its best is interactive and focused on a win-win outcome for both the organisation and its stakeholders, the stakeholders directly affected by CRM are limited to the organisations customers and clients.

 

Stakeholder Management

Stakeholder management is process focused; it involves planned interaction with a wider stakeholder community, both to manage the consequences of any crisis as well as providing information and facilitating two-way communication with key stakeholders.

Good stakeholder management is a proactive process, focused on facilitating regular communication and anticipating needs, issues and problems that are likely to arise within the stakeholder community. Tools and methodologies such as the Stakeholder Circle® are designed to facilitate efficient stakeholder management. Stakeholders are identified, there needs assesses and their relative importance determined. Based on this assessment, communication and other interactions are initiated to gather the support and assistance needed by the organisation and to head off or minimise any threats or problems.

The focus of stakeholder management tends to be ‘defensive’, and is aimed at creating the best possible stakeholder environment to allow the organisation to do its work efficiently   The process is interactive, seeking to engage constructively with the organisations stakeholders and looking for win-win outcomes that benefit the organisation and the stakeholder, but is driven by the organisation, from the perspective of the organisation.

 

Stakeholder Engagement

Stakeholder engagement builds on these three foundations (particularly ‘stakeholder management’) to create a different paradigm.  Stakeholders are encouraged to actively engage with the organisation and contribute to its growth and development whilst at the same time the organisation and its staff engage with their community through Corporate Social Responsibility (CSR) initiatives and the like. These engagement processes build a strong, two-way relationship in which the stakeholders and the organisation work together to build a common future that is both mutually desirable and beneficial.  I will be writing about stakeholder engagement in a future post.

 

Conclusion

The three foundations of Stakeholder Engagement: ‘Stakeholder Management’, CRM and PR are quite different processes focused on achieving different outcomes.  In a well managed organisation all three functions work together to crate a supportive stakeholder environment and a successful organisation. However, whilst the systems need to be aligned and compatible they are very different and should not be confused.

In particular CRM and Stakeholder Management systems have very different objectives, focus on quite different stakeholder groupings, need significantly different information sets, and have very different measures of success:

  • CRM focuses on customers (or clients). Whilst customers as a ‘class’ of stakeholder are important, generally an individual customer is not. The focus of a CRM system is managing large amounts of data to provide ‘all customers’ with a generically ‘good’, potentially ‘tailored’ experience.
  • Stakeholder Management focuses on indentifying the key stakeholders ‘at this point in time’ that require specific management focus as well as the wider group of stakeholders that need to be engaged (or at least watched). In most situations very few individual clients or customers would be sufficiently important to feature in this list, but there will be lots of stakeholders who are highly unlikely to ever become ‘customers’, for example suppliers and competitors.

The shift to ‘stakeholder engagement’ does not add new systems but does require a paradigm shift in thinking. The key element of stakeholder engagement is opening up to the ‘right stakeholders’ and either inviting them into the organisation, or reaching out to them, to help create a mutually beneficial future – more on this later.

Happiness and Motivation

HappinessWe touched on the ‘power of happiness’ a couple of years ago in an article looking at the dramatic improvement in the performance of the Australian cricket team caused by the change from a coach focused on ‘driving individual performance’ to one focused on ‘creating a performing team’, that improvement in performance continues to the present time (see The Power of Happiness). This post takes a wider look at the way happiness (and unhappiness) affect both the people working in an organisation and the organisation itself.

Everyone wants a motivated and productive workforce, there seems to be a direct link between worker satisfaction, motivation and performance – a happy workplace tends to be a productive workplace; and there is definite evidence that unhappy and de-motivated workers are less productive. What is less clear is does motivation generate happiness or are happy people more inclined to be motivated and productive?

Looking at the negatives first, a 2010 survey by the Australian Institute of Management, of more than 3,000 business people revealed that negativity, apathy and disillusionment are present in the executive ranks of many Australian organisations:

  • 40% of respondents surveyed did not feel appreciated by their employer.
  • 20% of participants expressed negative sentiments about working at their current organisation.
  • Almost one in three of those surveyed criticised the workplace culture of their organisation.
  • 34% of respondents admitted they could be putting more effort into their current role.
  • 33% of those we surveyed said they are considering leaving their employer.

Surveys in the USA have shown similar trends with up to one third of the workforce disengaged or actively working against the interests of their employer, and nothing much seems to have changed in the period since the surveys.

One of the largest employer’s world-wide is the UK Civil Service headquartered in Whitehall London. The wellbeing of its workforce has been studied over many years, starting in 1967, with the findings published in the ‘Whitehall Studies’ (see: http://www.ucl.ac.uk/WhitehallII). The focus of these studies is the health of the Civil Service workforce, but there are strong links between wellbeing and motivation.

The Whitehall Studies and similar studies in Europe and Australasia show a clear relationship between position in the social hierarchy and mortality. This social gradient is present for most of the major causes of death, and has dispelled two myths. The first is that people in high status jobs have higher risks of heart disease. The second is that the gradient of health in industrialised societies is simply a matter of poor health for the disadvantaged and good health for everyone else. This aspect of heath outcomes is important, but outside of the control of any manager.

Whilst most managers within organisations cannot do much about the external factors affecting health and wellbeing (although good employers do a lot in this area) they can have a major influence on the work environment which is the other major factor in the overall wellbeing of all employees. The studies conclusively demonstrate that a motivated, happy, workplace is more productive and has better health outcomes than an unhappy one.

Within this aspect of wellbeing, the key finding from the Whitehall studies is that stress at work is the number one cause of lost time, but understanding ‘stress’ so it can be managed is not straightforward. Conventional wisdom has it that a stressful job is one characterised by a high degree of pressure and responsibility. New research, to which Whitehall II contributed, shows that negative stress at work tends to result from an imbalance between the psychological demands of work on the one hand and the person’s degree of control over the work on the other. The combination of high demand and low control generates stress leading to measurable increases in illness; with low control being especially important. ‘Figure 2’ below taken from Whitehall II clearly shows people in jobs characterised by low control have higher rates of sickness.

Whitehall-2

High demand on its own appears to be far less damaging – for many people a ‘stretch assignment’ or new challenge may be demanding but the ‘positive stress’ associated with tacking the challenge by using skills, including opportunity for developing skills, if managed correctly is a stimulus to enhanced performance.

The other antidote to negative stress is the team environment. Working with supportive colleagues and managers improves health and reduces sickness as shown in ‘Figure 3’ below:

Whitehall-3

Another controllable factor is the balance between effort and reward. High effort in the work place is a desirable quality. The Whitehall findings demonstrate that high effort must be matched by appropriate rewards. The way work is organised and the climate of feedback in the workplace all potentially affect each of the three crucial aspects of rewards; self-esteem, status and income (I will discuss rewards in the next post).

 

Creating a happy, committed, high performance team.

The Whitehall II study focused on illness and the negatives in a workplace, the place I want to finish the post is on the positives of creating a happy and productive workplace.

As a starting point, almost all of the negative influences on health defined in the Whitehall reports are juxtaposed to well established motivational theories – provide people with the right motivation and you eliminate most of the problems defined above.  The evolution of these theories has been outlined in our post The Evolution of Motivation and the various xxx are defined in our White Paper WP1048 – Motivation.

The key is designing the work so that everyone in the team experiences:

  1. Job satisfaction
  2. Good relationship with co-workers
  3. Good relationship with their manager
  4. New and interesting challenges
  5. Feeling valued by the organisation.

Once these elements are in place, the key challenge is allowing people to enjoy working. In this respect setting hard targets can be counterproductive!  A target is a predetermined level of performance that people are expected to achieve, the problem is if people have the know-how to achieve the target, there is little motivation to surpass the target. But if they do not have the know-how to achieve the target, they are left with two options: distort or game the system.  Goals may cause systematic problems in organisations due leading to unethical behaviour, increased risk taking, decreased cooperation, and decreased intrinsic motivation. As the ongoing banking crisis has demonstrated, aggressive goal setting within an organization will foster an organisational climate ripe for unethical behaviour (see more on this in: The normalisation of deviant behaviours).

Shift from ‘management setting targets’ to a process of challenging everyone to help move the organisation from where it is now to where it needs to be and you encourage the achievement of the best possible outcome.

–  Challenge people and teams to improve the way work is done by redesigning their work methods.
–  Challenge them to develop systems that provide clear business value.
–  Challenge them to devise an architecture that will meet future growth projections.
–  Challenge them to create new products that will be successful in the marketplace.

Challenges empower people; they provide the opportunity for autonomy and mastery in pursuit of a clear purpose (all strong intrinsic motivators).  Then all that is needed is for leaders to respect and acknowledge the individuals in their team, provide support and protection to the team, and importantly to celebrate the successes of the team (see The Power of Happiness). But remember, leadership is not a position description – see more on the attributes of a leader.

happiness-3

The challenge for a leader is to create the environment for happiness to flourish, a supportive and successful team. After that it is largely up to each individual to decide to enjoy the opportunity to ‘be happy’!  To an extent the multitude of self-help advice on the subject is correct, each person decides if they wish to be happy of miserable. The good new is happiness tends to be contagious, in the right environment it only takes one or two happy souls to start the ball rolling and over a relatively short period of time most people will ‘learn to be happy’.  For the few who insist on spreading negativity and unhappiness, remember another trait of high performance leaders is “getting the right people on the bus, [and the] the wrong people off the bus “ (Jim Collins – Good to Great).

 

In summary – a well led, motivated team will be a happy team and happy teams are productive teams.  They are great to lead and great to be part of!   The alternative is the type of problems identified in the Whitehall studies.  The challenge is creating the culture change needed to allow people to enjoy working on your team – it may not be easy, but it is worth the effort.

Governance and stakeholders

CrisisBoth stakeholder theory and the modern concept of organisational governance place importance on the organisation fulfilling the needs of all of its stakeholders. The older, generally discredited ‘stockholder’ theory suggested the primary purpose of an organisation was to maximise value for its owners – generally interpreted by those in power as looking after the short-term interests of ‘those in power’ or the few with a direct investment in the organisation.

Three on-going sagas demonstrate the fallacy of taking a short term ‘stockholder’ approach to creating value.

1. The FIFA Crisis: Ignoring the alleged criminality of many of the key actors, my view is the biggest ‘governance failure’ in FIFA for the last decade or more has been the perceived method of allocating development funds to national soccer authorities. The perception is that most of these funds were distributed at the behest of Sepp Blatter, and therefore if the associations wanted to keep on receiving their development funding they needed to vote for Blatter.

There is nothing wrong with funding the development of the game – it is one of FIFA’s primary objectives. The governance breakdown was in the lack of a robust and transparent process for allocating the money to soccer associations that could make the most beneficial use of the funds and requiring accountability for the expenditure. The $billions in largely unaccounted largess distributed on a less than transparent basis is I suspect the root cause of much of the evil besetting FIFA at the present time.

Its too early to determine the damage to both FIFA and the game of soccer (football) from the breakdown in governance but one thing is already very clear, the big loser over the last decade has been the game, its players and its supporters – ultimately the stakeholders who really matter.

2. The on-going Banking Crisis: The focus of banks on employing and rewarding greedy people focused on maximising their bonuses at the expense of the Banks customers and shareholders lead to the financial crisis and a series of other failures, reviews and prosecutions in the USA, UK and Australia at least.

In Australia, the governance failure was senior managers and the Board’s Directors putting short-term profits ahead of the long term development of the bank. Front line sales people were paid to sell inappropriate products to clients – they do not get bonuses for not selling product even if it is in the best interest of the client. Middle managers were paid to ignore potential problems – their KPIs and bonuses were driven by the sales volumes of their staff, etc.

The banks and their stockholders did very well for a while, now many of the problems created by this governance and cultural failure are starting to emerge, the short term stock speculators are taking their profits and dumping bank stocks. Trust in the banking system is at an all time low (financial advisers are deemed less trustworthy then politicians). Very few of the stakeholders in the baking industry, including employees, long term investors, clients or governments are on the ‘winning side’. I’m waiting to see what game changing ‘disruptive innovation’ emerges – anyone offering a viable alternative to the banks has a once-in-a-lifetime window of opportunity to start up in a market looking for a viable alternative to ‘big banks’.

3. The on-going Child Abuse Crisis: The Australian Government’s Royal Commission into child abuse continues to uncover major breakdowns in governance in a vast range of organisations. The thing I find most upsetting is the abject failure of the leadership in most of these organisations to uphold the values of the organisation. Abuse was ignored, covered up, secret payments made to ‘settle complaints’, etc. The focus of the various churches, school and other institutional leaders was always a short term attempt to protect the institution from ‘bad publicity’. Hide the perpetrators of the evil and diminish the claims of the abused children (causing even more distress and harm).

The long term damage this short-sighted policy of ‘cover-up’ and ‘look-the-other-way’ will cause to the churches in particular has yet to emerge but I suspect there will be massive consequences that damage both the institution and the people the institutions serve, their congregations.

Summary

In each of these cases, the governance failure started at the very top of the organisation, the Executive Committee, Directors, and Bishops failed to develop a culture focused on achieving good outcomes for all of the respective organisation’s stakeholders and allowed corrupt cultures to develop focused on advantaging a very select group of ‘stockholders’. The resulting crises will be causing damage to the organisations and their stakeholders for decades to come. Unfortunately in the vast majority of cases the people responsible for the breakdown of governance in their organisation are still hanging on to their jobs and pretending the failures are the fault of people lower down the organisational hierarchy.

Avoiding this type of problem is not easy but it starts with the governing bodies recognising that they, and they alone, can set the cultural and ethical tone for an organisation. The functions of governance outlined in our White Paper may seem soft and fuzzy concepts but if they are not implemented effectively and rigorously the next crisis will only be a matter of time. Long term success can only be assured by governing for all stakeholders, which in turn requires an ethical framework and a culture that demands transparency and accountability (as well as technical excellence) from everyone working in the organisations hierarchy.

The Evolution of Motivation

Everyone talks about ‘motivation’ – the purpose of this post is to briefly track the key concepts and theories.

The framework for modern management is firmly rooted in the concepts of scientific management developed during the industrial revolution, formalised by Frederick Taylor and the Gilbreths. Workers were closely supervised, the method of working designed in detail (time and motion studies) and payments were based on work accomplished (piece rates). Where piece rates were not practical, supervision was intensified[1].

This approach aligns with ‘Theory X’ developed by Douglas McGregor[2] in the 1960s, in which managers believe individuals are inherently lazy and unhappy with their jobs, and as a consequence an authoritarian management style is required to ensure fulfilment of objectives.

X-Y

The first steps towards McGregor’s ‘Theory Y’ (which assumes given the correct leadership, employees can be ambitious, self-motivated, exercise self-control and are willing to take on some amount of professional responsibility to achieve the objectives) came from the work of Henry Gantt.

Gantt’s approach to motivating workers involved training and paying bonuses for achieving production targets. A worker received a reasonable wage, was paid whilst being trained and both the worker and his foreman received bonuses once the worker had learned to achieve the production target. Gantt was fully aware of culture and the need for people to want to succeed but did not develop a ‘motivational theory’ as such[3]. The other limitation is this type of motivation is ‘extrinsic’ and can be very effective in the right circumstances. However, this type of motivation only works where the work items can be counted

One of the first people to develop a true motivational theory was Abraham Maslow.

 

Maslow’s Hierarchy of Needs[4]

In his 1943 paper “A Theory of Human Motivation”, Maslow states the five levels of the hierarchy of needs as Physiological, Security, Social, Esteem, and Self-actualizing.

  • Physiological needs are described as those needed for survival such as food, water, and sleep.
  • Security needs include safety, steady employment, and shelter from the environment.
  • Social needs include the need for love, affection and being part of a team or group.
  • The need for esteem is centred on the individual’s personal worth, social recognition, and accomplishment.
  • The highest need is self-actualization, which is where the individual is less concerned with other’s opinions and is more focused on achieving their full potential.

maslow-hierarchy

A point worth noting is that Maslow stated that the predominance of a need assigned by the individual determines its’ importance not the order presented.  This point is brought up because Maslow’s theory is commonly represented as a pyramid and the assumption that the first need must be satisfied before the next need is even addressed.

 

Vroom’s Expectancy Theory of Motivation[5]

Vroom developed his Expectancy theory (1964) through his study of the motivations behind decision making. It proposes that an individual will decide to behave or act in a certain way because they are motivated to select a specific behaviour over other behaviours due to what they expect the result of that selected behaviour will be (ie, their expectations based on pervious experience or observation).  This theory emphasises the needs for organisations to align rewards directly to desired performance and to ensure that the rewards provided are both deserved and wanted by the recipients[6].

Vroom

 

Herzberg’s Two-Factor Theory of Motivation[7]

Herzberg (1965) theorized that satisfaction and dissatisfaction were affected by different factors and thus could not be measured on the same scale. This theory is known as the two-factor theory; Herzberg’s motivation-hygiene theory; and/or the dual-factor theory.

  • Hygiene factors are those that pertained to the job and were comprised of supervision, interpersonal relationships, work conditions, salary, and company policy. Hygiene factors cannot produce motivation only satisfaction or dissatisfaction.
  • The motivational factors are such items as recognition, a sense of achievement, growth or promotion opportunities, responsibility, and meaningfulness of the work itself.

Herzberg

Hygiene factors need to be removed (cleaned up) before motivation factors can take effect. This theory was developed in the same timeframe as McGregor’s ‘Theory X – Theory Y’.

 

McClelland’s Theory of Needs[8]

McClelland’s theory of needs (1995) is a motivational model that attempts to explain how the needs for achievement, power, and affiliation affect the actions of people from a managerial context:

  • Achievement discusses how people with different levels of achievement needs seek tasks with a corresponding level of risk. The higher the achievement need the higher the risk.
  • Affiliation need is similar to achievement and differs only in the fact it is the need to be associated with or accepted by a specific group.
  • The power portion of the needs theory actually has two sub-sets, personal power and institutional power. Personal power describes the individual who wants to direct others and institutional power describes the individual who wants to organize the efforts of others for the betterment of the institution.

McClelland

 

Aldefer’s Existence, Relatedness, and Growth (ERG) Needs Theory of Motivation[9]

Clayton Aldefer developed his ERG theory as Existence, Relatedness, and Growth (2011) to bring Maslow’s needs hierarchy into alignment with empirical research. He re-categorised Maslow’s hierarchy of needs into three simpler and broader classes of needs:

  • Existence needs- These include need for basic material necessities. In short, it includes an individual’s physiological and physical safety needs.
  • Relatedness needs- These include the aspiration individual’s have for maintaining significant interpersonal relationships (be it with family, peers or superiors), getting public fame and recognition. Maslow’s social needs and external component of esteem needs fall under this class of need.
  • Growth needs- These include need for self-development and personal growth and advancement. Maslow’s self-actualization needs and intrinsic component of esteem needs fall under this category of need.

ERG

ERG Theory states that at a given point of time, more than one need may be operational and recognises the option for both advancement and frustration/regression.

 

Additional Theories:

This post only looks at a few of the theories of motivation some of the others include:

  • Theory Z (Ouchi): High levels of trust, confidence and commitment towards the workers on the part of management lead to high levels of motivation and productivity on the part of workers (based on observation of Japanese businesses in the mid 1970s – Ouchi suggests that when selecting a person for promotion to a different role [eg, a manual worker to foreman] it is better to select a person with a demonstrated commitment to the objectives of the organisation in preference to the most effective manual worker, the current demonstrated capabilities are not relevant and commitment overcomes obstacles).
  • Contingency theory (Morse & Lorsch): People need to develop a sense of competence and this need continues to motivate people after competence is achieved. A good fit between the organisation’s structure and the task leads to competence, creating motivation.
  • Goal-setting theory (Latham & Locke): Having clear, specific and challenging goals motivate people.
  • Reinforcement theory (Skinner): Human behaviour is shaped by the previous positive or negative outcomes experienced by a person as a consequence of an action. Only positive reinforcement (rewards) should be used to encourage desired behaviours.
  • Equity theory (Adams): People are motivated by their desire to be treated equitably. Perceptions of unfair allocation of rewards can lead to conflict.
  • Achievement motivation theory (McClelland) describes three relevant needs in work situations:
    • The need for achievement – the drive to succeed and achieve performance standards;
    • The need for power – the need for influence over others;
    • The need for affiliation or association – the desire for close, friendly relationships at work
  • Bureaucratic Vs humanistic value systems (Chris Argyris). Bureaucratic / pyramidal organisational values dominate most organisations (the equivalent to McGregor’s Theory X); relationships in this environment result in decreased interpersonal competence, fostering mistrust; intergroup conflict and leading to a decrease in success in problem solving; Humanistic values lead to trusting authentic relationships and improve interpersonal and intergroup cooperation.

 

Conclusion

You can judge for the number of theories outlined in this paper motivating people is a complex issue. Our White Papers on motivation and leadership try to bring these theories into a practical perspective (see WP1048 Motivation and WP1014 Leadership).

This post also supports two of the key themes in my latest book, Making Projects Work are leadership and motivating your stakeholders to help you help them by delivering a successful project. The book is based on the premise that effective motivation requires focused communication within a robust relationship.

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[1] For more on the development of management theories see:
http://www.mosaicprojects.com.au/PDF_Papers/P050_Origins_of_Modern_PM.pdf (page 8 to 14)

[2] For more on McGregor’s ‘Theory X – Y’ see: http://en.wikipedia.org/wiki/Theory_X_and_Theory_Y

[3] For more on the work of Henry Gantt and access to his books, see: Henry L. Gantt – A Retrospective view of his work http://www.mosaicprojects.com.au/Resources_Papers_158.html

[4] For more on Maslow’s Hierarchy of Needs see:
http://en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs

[5] For more on expectancy theory see: http://en.wikipedia.org/wiki/Expectancy_theory

[6] The problem of inadvertently rewarding undesirable behaviour is discussed in:
http://www.mosaicprojects.com.au/Mag_Articles/SA1018_What_you_measure_is_what_you_get.pdf

[7] For more on Herzberg see: http://en.wikipedia.org/wiki/Two-factor_theory

[8] For more on the theory of needs see: http://en.wikipedia.org/wiki/Need_theory

[9] For more on ERG needs see: http://www.managementstudyguide.com/erg-theory-motivation.htm