Would it bother you to find out that 80% of your staff is betting against your success?
I'm not suggesting they want you to fail. In fact, most probably wish things would work out. But in spite of their hopes, they're pretty certain your grand plans will circle the drain in a matter of months.
That's what we found in our survey of 1,000 employees. More than 8 out of 10 people said their company had some organization-wide initiative underway that they believed was likely to fail. You might call this armchair quarterbacking until you take into account that 78% also reported that they currently were working on a "doomed project."
Call me a cynic, but our track record for executing on corporate initiatives speaks for itself. Sustained research shows that across the U.S., estimated failure rates for corporate projects range from 66% to 91%. What's more, companies' collective inability to execute on major projects costs many billions of dollars a year. For example, it is estimated that of the $255 billion spent annually on IT projects in the U.S., more than a quarter is burned up in failures and cost overruns.
The problem isn't limited to IT. Look no further than the Freedom Tower in New York City and you'll see…nothing. The tower was generously given a decade for completion. Unfortunately, by the 2011 deadline, progress on the tower will barely be visible. Not to be outdone, NASA reports that two-thirds of its projects are routinely over-schedule and over-budget.
Poor execution is written in red ink
So whether you're building a warehouse, launching a new product, or adding vegetarian options to your cafeteria menu, it turns out that our collective ability to execute in most organizations stinks.
While leaders could scoff at flushing millions down the drain in times of plenty, circumstances have changed. The enormous cost of poorly executed projects can mean the difference between profit and loss.
If it's consistent, it's predictable.
Given how reliably organizations perform unreliably, my colleagues and I decided to study this predictable trend. We looked for patterns of behavior behind employees' dour expectations—events and issues they had observed—that told them things might be headed south. What we found startled us.
We discovered five early warning signs that are remarkably predictive of ultimate failure. In fact, you can forecast with up to 85% accuracy whether your efforts are doomed by observing how your people respond when any one of these five issues arises.
five triggers for company failure
Here's the most important thing to understand about our findings: The existence of these five problems is not the key issue. How your people react to these problems is what causes the mischief. Consequently, leaders who actively influence how people behave when these issues inevitably emerge vastly increase their chances of getting things done on time, on spec, and on budget—by 50% to 70%.
Allow me to present the five triggers of execution failure:
#1: Fact-Free Planning. Doomed projects are born in the planning stages. People watch leaders set tight deadlines or allocate implausibly thin budgets with no consideration for reality. Eighty-five percent of leaders say this kind of fact-free planning happens regularly. Yet our study showed that the occurrence of fact-free planning does not doom a project. It's how people respond when leaders pressure them to make unrealistic commitments that makes or breaks results.
#2: AWOL Sponsors. The second predictor of project demise occurs when senior leaders are absent without leave. Those who should provide guidance, accountability, and support fail to show up when needed. When this happens—which it does in 65% of projects—participants lose hope. And if the participants don't respond in the appropriate way, there's a 75% chance this project will fail.
#3: Skirting. This happens when powerful leaders bypass formal decision-making, planning, and prioritization processes in order to redirect a project to suit their own interests. For example, in one Six Sigma effort, the vice-president of research and development asked Black Belts to simply join his functional teams rather than generate the unique projects they had been tasked to do. We found that such shenanigans happen all the time; if not addressed these actions spell disaster 90% of the time.
#4: Project Chicken. Once a project is underway, it can derail when sub-teams or team members fail to honestly report project risks. Almost every organization reported some form of "Project Chicken," and more than half of project managers say they face it regularly. This costly game resembles the lunatic practice of driving cars head-on as a test of nerves to see who swerves out of the way first. The corporate version is played when project participants fail to admit they need more time to meet deliverables. Instead they hope another group at risk will speak up first and take the blame—while they benefit from the extra time. "Project Chicken" happened during the disastrous development of the Airbus A-380. CEO Gustav Humbert seemed to be the last to learn that he'd have no airplane to roll out—hours before the big unveiling. When bad news is suppressed, leaders lose the option of responding gracefully to setbacks and end up enormously embarrassed.
#5: Team Failures. Eighty percent of project leaders report being hobbled by team members who don't show up at meetings, fail to meet deadlines, or lack the competence to meet ambitious goals. Often these leaders have no say in selecting or replacing these nonperformers and they feel powerless to coach them. Instead they ignore their deficiencies and "work around" the problem.
Our research showed that any of these five negatives can afflict a project without putting it on life support. Luckily, there is a surefire cure for each of these problems—if leaders work assiduously to influence employees to do it. That cure? Speaking up.
The most fascinating finding in our Silence Fails study was that the way out of each of these five problems is precisely the same. Annoyances such as unrealistic commitments and AWOL sponsors do not turn into malignancies when people are willing and able to speak up and address them.
In one organization, senior executives worked tirelessly to create a culture in which people could open crucial conversations, no matter the level or position of the person they had to confront. Such access seemed to immunize the organization against project failures. While sponsors occasionally wandered off the reservation, team members periodically underperformed, and there were often pressures to make unrealistic commitments, the problems did not persist. They were routinely discussed and resolved because senior executives had persuaded employees to embrace skillful candor.
So if you want to create a culture where 80% of your staff members bet on your success rather than your failure, create a culture where crucial conversations are held promptly, routinely, and skillfully.