White Paper: Mitigating Decision-making Risks in Project Management
Using decision intelligence to reduce risk and support agile portfolio and program management decision-making
Summary
The white paper looks into the top risks associated with decision making in Portfolio, Program and Project Management:
Decision delays impacting project schedule
Unnecessary resource utilization inflating costs
Rework for decisions that don’t stick
Cognitive bias and subjectivity
Rushed decisions driving poor outcomes
Lack of governance and audit-ability of decisions
It explores the hierarchy of decision making in program and portfolio management and proposes methods for mitigating these risks in an agile manner.
Enhancing Project Success through Structured Decision-Making
The effectiveness of project and program management relies heavily on the quality and efficiency of decision-making processes. Despite adopting agile approaches and investing in tools and training many organizations still experience delays and setbacks in their projects. The root cause often lies in the overlooked decision-making processes. This document delves into the critical role that decision-making plays in project success, identifies risks associated with poor decision-making, and examines how decision intelligence can be used to mitigate these risks.
“The key to successful project management is making sound decisions” Tom Peters
Janua Decision Flow software offers a powerful decision intelligence solution by simplifying and structuring the decision-making process. It promotes collaboration, transparency, and accountability, allowing for swift, well-informed decisions. This software not only optimizes decision-making workflows but also enhances project visibility, reduces delays, and facilitates better results.
Is Decision-making Derailing Your Projects?
Ever wonder why your projects are not moving fast enough despite adopting the latest agile approach? You've made the necessary investments in tools and training to deliver the project, yet delays persist. In organizations striving to be lean and agile, the decision-making process is often overlooked as a crucial facilitator for achieving the desired results and managing risk.
Even the best Project Managers, Product Owners, Chapter Leads and PMOs cannot escape the cost that poor decisions have on their products and projects success. Not to mention the toll on team morale and personal reputation. The inability to decide on project risks and issues efficiently poses a serious risk to the project itself. If the McKinsey survey of over 1,200 global business leaders reported that decision-making costs the average Fortune 500 company 530,000 days of managers time, think how this relates to your enterprise and translates to many project hours lost.
Successful transformation execution is highly dependent on effective organisational decision-making. Projects require many decisions to be made frequently and swiftly and are a pivotal determinant of a transformation’s success or failure. Although there are many project management tools, depending on ad hoc procedures for formal decision-making creates significant delivery risk.
Many organisations still struggle with decision-making with more than 50% of Australians feeling that their workplaces lack a decision-making process that promotes inclusion and good decision-making according to the We Are Unity survey. A decision log is not enough as decisions should be a well-orchestrated process that is measurable and visible. After all, decision making is a process not an event. No wonder delays persist and outcomes deviate from organizational objectives in the absence of a standardised approach.
Ineffectual decision-making processes lie at the heart of this challenge with decisions taking too long, the right people not being engaged, insufficient analysis, workplace politics and inconsistent record keeping. With increasing uncertainty, high risks and complexity, driving decision-making accountability and enabling empowerment are fundamental to lifting the game.
It doesn’t matter whether your organisation has adopted an agile or waterfall framework to deliver projects, they still get stuck because the decision-making process itself is not agile. What does it mean to have an agile decision-making process? Decisions can be made swiftly and nimbly to adjust to new knowledge, opportunities and challenges while keeping stakeholders in sync and involved. And yes, you can use the waterfall methodology and benefit from agile decision making.
How can you be truly agile without adopting a standardised decision-making process? Ongoing delays in projects are proof that you have not reached full agility. Furthermore, why not make use of the greatest decision intelligence available to enhance delivery outcomes and reduce project risks? Decision intelligence technology, such as Janua Decision Flow, provides a well orchestrated and standardised decision making process that is transparent and measurable.
Top 6 Project Risks Associated with Decision-making
There are numerous risks associated with decision-making that have the potential to adversely impact the outcomes of programs and projects if not managed in a structured way. The following are the top decision making risks that can derail your project:
1. Decision Making Delays Impacting the Project Schedule
This is the risk that a poor and undefined decision-making process creates prolonged decision timelines that lead to missed project schedules. Delays become routine when decision-making processes lack clarity and structure, jeopardizing project success and potentially culminating in failure. It is possible that the team has not even identified what the root cause is. But if you are leaving meetings without clear decisions or escalating indecision, chances are it is because there is no structured approach to decision-making. Symptoms include the valuable time wasted in endless discussions, unresolved debates, and unnecessary layers of bureaucracy. Frustrated project teams struggle to make progress, leading to decreased morale and productivity.
2. Unnecessary Resource Utilization Inflating Costs
In this risk valuable resource time is drained leading to increased costs as their efficiency is diminished by waiting for decisions to be made. Ad hoc decision-making processes prove to be inefficient and resource-intensive, yet such practices are commonplace in most organisations. Unnecessary consumption of project resources occurs as project team members are drawn into an array of ineffective, bloated meetings ostensibly aimed at 'discussing' decisions. Meetings often include the wrong people, too many people, or both. Without a clearly defined decision process, these meetings devolve into ongoing discussions with no definitive actions assigned other than the scheduling of more meetings.
3. Decisions That Don't Stick, Rework Required
Making subpar decisions in a project that later requires revisiting can set off a chain reaction of sub-optimal consequences. This risk is that decisions will not be able to be effectively executed, with the impact of significant time wasted as the project's momentum is disrupted by the need to backtrack, reassess, and reimplement decisions. Reworking inadequate decisions impacts the project’s schedule and budget, as well as carefully guarded reputations.
The knock-on effect is to erode stakeholder confidence and team morale. Additionally, revisiting decisions generates confusion, and requires project professionals to spend time on additional communication efforts to ensure alignment among stakeholders, diverting their attention from essential project tasks. The impacts of poor decisions requiring rework extend beyond immediate setbacks, influencing project efficiency, stakeholder relationships, and the overall likelihood of attaining project objectives.
4. Cognitive Bias and Subjectivity
Making subpar decisions in a project that later requires revisiting can set off a chain reaction of sub-optimal consequences. This risk is that decisions will not be able to be effectively executed, with the impact of significant time wasted as the project's momentum is disrupted by the need to backtrack, reassess, and reimplement decisions. Reworking inadequate decisions impacts the project’s schedule and budget, as well as carefully guarded reputations.
The knock-on effect is to erode stakeholder confidence and team morale. Additionally, revisiting decisions generates confusion, and requires project professionals to spend time on additional communication efforts to ensure alignment among stakeholders, diverting their attention from essential project tasks. The impacts of poor decisions requiring rework extend beyond immediate setbacks, influencing project efficiency, stakeholder relationships, and the overall likelihood of attaining project objectives.
5. Rushed Decisions Driving Poor Outcomes
Projects always operate within tight schedules, and decision-makers may feel pressured to make quick decisions to keep things moving without the right consultation and consideration. Rushed decisions can lead to inadequate analysis, skipped consultation steps, and oversight of potential risks and opportunities. This can result in poorly made decisions that may negatively impact the project's progress and outcomes. “I wish I knew then what I know now” is not acceptable if you are unable to provide evidence of a sound decision-making procedure. Provide proof of excellent analysis and participation, though, and stakeholders will be willing to embrace continual decision-making improvement in a fast delivery context.
In a rushed decision where decision criteria and goals are not well-defined, or are constantly changing, decision-making becomes difficult. It can result in confusion among stakeholders, ambiguity in evaluating options, and difficulty in measuring success. This lack of clarity can lead to decisions that are inconsistent with the project's overall objectives.
Having a well-structured and thoughtfully considered decision is significantly faster overall than circling back to rework a poor decision. With clever and simply engineered decision making processes more decisions can be made with less rush, thus increasing the capacity of the team as a whole.
6. Governance and Auditability lacking
Projects always operate within tight schedules, and decision-makers may feel pressured to make quick decisions to keep things moving without the right consultation and consideration. Rushed decisions can lead to inadequate analysis, skipped consultation steps, and oversight of potential risks and opportunities. This can result in poorly made decisions that may negatively impact the project's progress and outcomes. “I wish I knew then what I know now” is not acceptable if you are unable to provide evidence of a sound decision-making procedure. Provide proof of excellent analysis and participation, though, and stakeholders will be willing to embrace continual decision-making improvement in a fast delivery context.
In a rushed decision where decision criteria and goals are not well-defined, or are constantly changing, decision-making becomes difficult. It can result in confusion among stakeholders, ambiguity in evaluating options, and difficulty in measuring success. This lack of clarity can lead to decisions that are inconsistent with the project's overall objectives.
Having a well-structured and thoughtfully considered decision is significantly faster overall than circling back to rework a poor decision. With clever and simply engineered decision making processes more decisions can be made with less rush, thus increasing the capacity of the team as a whole.
Mitigating Decision-making Risks
To mitigate these risks, project professionals need to develop effective decision-making skills and leverage the latest decision intelligence tools. This includes being able to gather and analyze information, identify and evaluate alternative solutions, and facilitate decisions that are in the best interests of their projects. Project professionals should also be able to communicate decisions effectively to stakeholders and get their buy-in.
Mitigating the risks associated with poor or ad hoc decision-making processes in projects involves a comprehensive approach centred around establishing a structured decision-making process and upskilling project professionals in decision intelligence. This entails adopting a clear, well-documented framework that outlines the entire decision-making process, from decision identification through assessment, selection, execution and retrospection. Each decision should be precisely defined, specifying its scope, objectives, and expected outcomes. Responsibilities in the decision-making process should be clearly assigned, ensuring that stakeholders understand their roles in the decision-making process.
Documentation plays a pivotal role in achieving traceability and governance. Every step of the decision-making journey, including the rationale behind choices, alternatives considered, and the analysis conducted, should be thoroughly documented. This documentation serves as a historical record that provides insights into the decision-making context, facilitating better understanding and informed adjustments if necessary. An audit trail of decisions helps establish accountability, transparency, and a basis for effective evaluation and continuous improvement.
By adhering to this mitigation approach, a project can minimize the risks of poor decisions and subsequent rework. When there is clarity around the decision and roles, the team can move quickly through the process and avoid wasting time in unproductive meetings. A good decision-making process will give everyone involved in the decision a voice and reduce the impact of biases and subjectivity.
A structured decision-making process fosters consistency, clarity, and alignment among stakeholders. It reduces the likelihood of ad-hoc or arbitrary choices, and the detailed documentation ensures that decisions are well-informed and rooted in sound analysis. As a result, the project gains the resilience to navigate challenges, maintain stakeholder trust, and achieve its intended outcomes with greater efficiency and effectiveness.
Understanding where your projects decision-making risks and delays stem from
The hierarchy of decision making is an important part of how organizations function and is critical to how projects are delivered. It helps to ensure that decisions are made in a timely and efficient manner, and that they are aligned with the organization's overall goals. As McKinsey research determined, executives spend nearly 40 percent of their time on decisions. Understanding how the decisions are made and influence the success of projects is key to facilitating how to make them more efficient and effective, and reduce their inherent risks.
At the top of the hierarchy are strategic decisions that are typically more risky than operational decisions, require more information, expertise and urgency. These may include investments in new technology platforms such as cloud computing or ERP systems, acquisitions and new markets. These decisions cascade down the transformation decision hierarchy and while they are usually beyond the Project Management’s control, they are the foundations of its success.
The cascading decisions made at each level are interconnected and interdependent. For example, the strategic decision to implement a new technology platform will have implications for the portfolio decisions that are made, then the program decisions that are required, and the subsequent project decisions needed. And while there is more sophisticated data than ever before upon which to make decisions at each level, decision-making productivity has not improved. The amount of time spent on decision making has not decreased.
These decisions are not made in isolation, but rather cascade down from the strategic level to the operational level. For example, the strategic decision to adopt a new technology platform will have implications for the technical, operational, financial, and people decisions that need to be made. These are in turn translated into the various transformation related activities through the web of decisions that give life to the strategy proposed.
The specific decisions that need to be made will vary depending on the organization's specific needs and circumstances. However, the cascading decision-making process is a valuable tool for ensuring that all of the necessary decisions are made and, in this example, that the new technology platform is implemented and managed effectively. Imagine having the complex web of decisions clearly available? This makes a significant difference for determining where to prioritize effort to complete the transformation strategy, and creates a substantial basis for adeptly reviewing and refining delivery decisions and approaches. Organizations can only be really agile if they implement decision intelligence solutions, which allow the series of decisions to be managed effectively.
Once the decision has been made to proceed with a strategic initiative and the initial layer of decisions are made, this course of action is translated into reality through the enterprise's transformation process. This is where the rubber hits the road and what is decided is handed over to project professionals for execution.
By understanding the differences between portfolio decisions, program decisions, and project decisions, organizations can make better decisions about their investments in strategic decision execution. Furthermore, by determining where structured decision-making and decision intelligence can be utilized, organizations can be more efficient, speeding up transformation cycles and reducing project risk. Let’s review the transformation decision-making chain:
Portfolio decisions are the highest-level decisions that organizations make about their investments in projects and programs. They are made to ensure that the organization's investments are aligned with its strategic goals and objectives. For example, deciding which projects to invest in and which to de-prioritize.
Program decisions are made to manage a group of related projects that work together to achieve a common goal. They are made to ensure that the projects are coordinated and that they are delivering the desired results. For example, deciding how to sequence the projects in a program and how to allocate resources across them.
Project decisions are made to manage a specific project that has a defined scope, budget, and timeline, and are made on a daily basis. They are made to ensure that the project is completed successfully. For example, deciding how to scope the project, who to assign to the project team, and how to manage risks.
Product management decisions are iterative in approach and made on a regular basis, often as frequently as every sprint. These are typically made in stand-ups with a product development tool to facilitate and capture decisions made by the scrum master, product owner and development team. For example, deciding on which product features will be developed in what order.
Decision intelligence solutions are essential if organizations are to maintain agility and speed throughout all levels of the transformation cycle. Delivery decisions require transparent collaboration between stakeholders with clear documentation, and shouldn’t have to depend on who was in the room. Leveraging a decision-making workflow solution means that decisions are not held up at endless governance forums and committees.
With the flow of cascading decisions there is a bottleneck or gap in capacity and capability, as the frequency and number of decisions grow. This can be addressed with well-defined processes and supporting decision intelligence technology to network strategic decisions through to their tactical choices. The current surge in project technology and sophisticated data merely makes better project judgments possible. It does not expedite the decision-making processes, and in turn flow decisions through to daily project execution. However, savvy project professionals are now turning to decision intelligence solutions to facilitate more effective decision making so they can get on and execute successful projects.
Adopting Common Decision-making Models
There are a number of well-known decision-making models that can be adopted to support project and program managers to mitigate risks. These include RACI/RASCI, RAPID®, DACI and the Advice Process to name a few of the better-known ones. These models will help project managers to assign specific roles and follow the steps to take the team through the decision-making process.
Using these models requires someone to lead the decision-making effort, assign the roles, coordinate the process, document each step, and communicate the progress and outcomes. This additional effort can seem like an unnecessary burden for project professionals, which helps explain why these models are seldom used. But in reality, utilizing decision-making models is a key aspect of successful project management and with AI tools lightening the administrative load more effort can be devoted to learning and applying this expertise.
Getting skilled up in Decision Science
With decision science increasingly taking the stage as the latest discipline to address the need for faster execution and provide better returns on investment it is important that project professionals are up to date with how to leverage its tools and techniques for better project performance and risk management.
As projects become more complex, it becomes more difficult to make decisions based on intuition or gut feel. Decision science can help project managers to make more informed decisions by providing them with a structured framework and workflow for evaluating options and making choices.
As projects become more data-driven, it becomes more important to use data to make decisions. Decision science can help project professionals to collect, analyze, and interpret data in order to make better decisions that can be captured for discussion and review in decision-making workflow.
As projects become more collaborative, it becomes more important to involve stakeholders in the decision-making process. Decision science can help project professionals to engage with decision contributors and communicate decisions to stakeholders in a clear and concise way through the shared workflow such as Janua Decision Flow.
Janua Decision Flow for Structured Decision Intelligence
Janua Decision Flow software provides a structured decision-making process that saves time, enhances visibility, reduces delays, and optimizes project spend. Janua supports RACI/RASCI, RAPID®, DACI, Advice Process and Janua frameworks so teams can choose the one that suits them best, or the one they are the most familiar with. (RAPID® is a registered trademark of Bain & Company, Inc.)
When using Janua, project teams eliminate the chaos and time lost surrounding decision making, ensuring that everyone understands their roles and responsibilities through an accountability driven workflow.
Decision stakeholders at all levels are transparently engaged with Janua Decision Flow, and enabled to view and participate in decisions, with easy reminders of what is due when. As for revising and reviewing what was decided, Janua provides an instant record with centralized decision-related information, providing a quick and easy audit trail.
Having an effective decision-making process is the most impactful thing you can do to improve the quality and timeliness of your decisions, leading to project success. Equip your transformations with Janua Decision Flow structured decision-making and save time, reduce delays, and get better results.
Harness the Power of Decision Intelligence
Successful project portfolio investment outcomes and program delivery are highly dependent on the effectiveness of organizational decision making. Project and program management typically requires many significant decisions to be made, usually under time pressure. Yet, despite the plethora of tools to support most aspects of project management, decision-making is often overlooked.
Ineffectual decision-making processes can have a detrimental impact on projects and programs, causing delays, rework, inflated costs and poor decisions. Under-documented decisions can impact governance and auditability of projects, and prevent teams from learning from their past successes and mistakes through a well-managed decision register.
Various decision-making models exist to support better decision-making processes, including RACI/RASCI, RAPID®, DACI, Advice Process and JanuaTM. Without an online collaboration tool, these models require time and effort to implement successfully, with a decision-making champion to educate the team, drive the process, create reports, and capture and communicate each step.
Janua Decision Flow is a software solution that simplifies and structures the decision-making process. It manages the workflow and promotes collaboration and transparency. It gives organizations visibility of the decision-making process and allows risk-free delegation by leaders to empower their teams to make decisions.
In projects and programs where decision-making plays an important role, ensuring that a structured process is in place is essential to manage risks. Without it, decision-making poses a significant risk that has the potential to cause delays, increase costs and negatively impact the project outcome.
By being a thought leader in decision intelligence you not only facilitate faster project outcomes and reduce risk, you demonstrate your ability to be at the forefront of applying the latest technology and proven techniques in leading change.
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Sources
1.“What is decision making?” McKinsey, March 2023 page 2
2.“Decision making in the age of urgency”, McKinsey, April 2019, page 5
3.“Introduction to Decision Intelligence”, Cassie Kozyrkov, Towards Data Science, Aug 2019, 4.Survey of 1,400 Australian professionals conducted by We Are Unity, June 2023 5.International Journal of Project Management, Aug 2012, page 645 (https://www.sciencedirect.com/science/article/abs/pii/S0263786312000063)