Optimism will sink a project

© 2014, Cognizant Technology Solutions. All Rights Reserved.
Greg Hyde
Senior Director
Cognizant Business Consulting, Australia
Optimism will sink a project

1 | ©2014, Cognizant
Presentation objective
To present an analysis of project leadership attitudes and organisational
cultures…
• That gave rise to a number of catastrophic events that either ended
disastrously or successfully; and
• Examine the underlying events, that helped or hindered.

Agenda
• The sinking of the Titanic and NASA’s Challenger shuttle tragedy.
• Miracle on the Hudson and Qantas Flight QF32.
• Analysis of project success and failure.
• Failure avoidance management.
• Maintaining optimism in the face of reality.
• Countering project optimism.
• Project quality and project ‘pre-mortems’.

Why did the Titanic sink?
• The ship’s speed was too fast for the iceberg conditions.
• The shipping company’s managing director was obsessed with crossing the
Atlantic in six days, so he pressured the Captain not to slow down.
• The ship’s rivets were made of sub-standard iron and the impact caused
the Titanic to break apart.
• The watertight compartments didn’t reach as high as they should have
because the shipping company wanted more room for first class
passengers.
• …. and it hit an iceberg!
None of these ‘faults’ alone caused the ship to sink. Together
however, disaster was inevitable.

NASA’s Apollo space program
• NASA’s management strategies in the 1960’s were
“pessimistic”.
• The drive to put a man on the moon was governed to prevent failure.
• Reliability and failure avoidance motivated NASA, not efficiency.
• The core principle was to find fault before lasting damage occurred.
• Testing and analysis for failures were critical features of design and
construction processes.
• Wide information channels - NASA’s leadership received lots of good and
bad news.
• All critical decisions (including launch) were independently reviewed by
special high-level units inside and outside the project.

Challenger shuttle tragedy
Factors contributing to the disaster*
• NASA reversed it’s Apollo strategy - focusing on cost control
and scheduled launch dates.
• Adopted “success-orientated management”, assuming everything will
work as specified.
• Ignored warnings, disregarding even the clearest signs that something
was wrong.
• Optimism was of such a high order that when erosion of the ‘O’ rings was
detected after earlier shuttle launches, they dismissed it out of hand.
• Expenditure was kept to a minimum, by eliminating failure avoidance
systems; parallel development; independent checks; and tests.
• Assuming success, testing was reduced and no spare parts were built for
the engines.
* The arrogance of optimism – Landau & Chisholm – June 1995

Miracle on the Hudson
The facts
• On 15 January 2009, US flight 1549 suffered a bird strike and lost both
engines shortly after take-off from La Guardia airport.
• Captain Sullenberger discussed with air traffic control, the possibilities of
returning to LaGuardia airport or attempting to land at Teteraboro Airport
in New Jersey.
• Sullenberger decided that neither was feasible, and that ditching into the
Hudson River was the only option for everyone’s survival.
• The crew glided the A320 over the Hudson River, before ditching it just 3
minutes after losing power.
• The plane was virtually intact, partially submerged and slowing sinking.
• All 155 occupants on the plane were evacuated safely and rescued by
nearby ferries.

Capt. Sullenberger’s philosophy 1/2
• “You need to be a long-term optimist, but a short-term realist.”
• “You can’t be a wishful thinker… you have to know what you know and don’t
know, and what your airplane can and can’t do in every situation.”
• Sullenberger was aware that many US Air Force pilots waited too long
before ejecting from their planes…
 Ejecting at too low an altitude, hitting the ground before their
parachutes opened, or
 Going down with their planes.
Q: Why did these pilots spend extra seconds trying to fix the unfixable?
Q: Did they fear retribution if they lost million-dollar jets? Cont/…

Capt. Sullenberger’s philosophy 2/2
• “I could have tried to return to LaGuardia so as not to ruin a US Airways
aircraft. - But I chose not to.”
• “I could have worried that my decision to ditch the plane would be
questioned by superiors and investigators. - But I chose not to.”
• “When it’s no longer possible to complete all your goals, you need to
sacrifice lower-priority goals.
By attempting a water landing, I was sacrificing the ‘airplane goal’ for the
goal of saving 155 lives.”

Flight QF32 1/2
The Airbus A380 incident
On 4 November 2010, Qantas flight QF32 made an emergency landing at
Singapore’s Changi Airport after suffering a failure of the port inboard (No. 2)
engine.
• Shrapnel from the exploding engine punctured part of the wing and
damaged the fuel system causing multiple leaks and a fuel tank fire.
• More than 70 penetrations under the wing, 7 on top, and 500 impacts on
the fuselage.
• Disabled one hydraulic system and the anti-lock brakes, causing No.1 and
No.4 engines to go into a ‘degraded’ mode.
Cont/…

Flight QF32 2/2
• Damaged landing flaps and lack of controls for the outer left No.1 engine.
• Pre-landing assessment showed…
 aircraft was 42 tonnes over maximum landing weight; and
 centre of gravity well to the rear of the aircraft and no ability to correct.
• Landed safely after the crew extended the landing gear using the gravity
drop emergency extension system, travelling 35 knots faster than normal
and blowing 4 tyres.
• No injuries reported among the 440 passengers and 29 crew on board the
plane.

Airbus A380 quality principle
The leadership lesson:
“Dear Richard,
Heading up the A380 aerodynamics team, our job was to make sure the
aerodynamics of the wing combined with the weight of the airframe
provided the best possible performance for the aircraft, consistent with
meeting all the certification criteria.
The Airbus Handling Qualities group wanted an unusually high level of
residual control in the event of systems failure cases, thereby providing
more resilience, but resulting in a heavier airframe.
Having struggled to get close to the weight and drag targets, I was
reluctant to accept this philosophy.
After your incident, I am very proud that I was overruled and that the
Handling Quality group got their way.”*
* Extract from QF32 – Letter to the pilot of QF32, Richard De Crespigny

What did these incidents have in common?
• Good leadership and decision making before and during the crisis.
• Good teamwork in the cockpit and in the cabin.
• Everyone knew what they needed to do and trusted each other to do it.
• Identified faults and system generated warnings were called out.
• Regular communication from the cockpit to the crew, and as appropriate,
to the passengers.
• The pilots were experienced, with thousands of flying hours.
• Regular and targeted training programs increased capability to handle
mid-air situations with confidence.
• Underlying executive support for in-flight decisions made by the captain.
• Unwavering commitment to quality in the design, build and test phases
for each aircraft.

Project failure rates
• 50% of IT projects with budgets over $15m
o Run 45% over budget
o Run 7% behind schedule
o Deliver 56% less functionality than predicted.
 Therefore, at least half the time, to achieve at least $15m in benefits
requires a project spend of $59m.
- McKinsey-Oxford study on reference-class forecasting for IT projects - 2012
• 70% of organisations have suffered at least one project failure in the prior
12 months, and
• 50% of respondents indicated that their projects failed to consistently
achieve what they set out to achieve.
- KPMG New Zealand Project Management Survey - 1012
There are thousands of ways for projects to fail…
They’ve all been tried and they all work!

What is success?
A project that delivers what’s required,
… and meets all expectations.
“The single best payoff in terms of project success
comes from having a good project definition… early.”
- RAND Corporation

Why aren’t some projects successful?
Some contributing factors include:
• Expectations not understood or agreed to by all parties.
• Key assumptions and risks not identified, validated or managed.
• Inadequate stakeholder engagement.
• Managing to a cost or date at the expense of quality.
• Loss of focus on the project’s business case benefits.
• Poor implementation and handover to operational teams.

An Australian saying, which means:
Whatever’s wrong, will fix itself
…eventually.
“She’ll be right!”

Failure avoidance management
The law of increasing optimism
• The longer the time since the last catastrophe, the more management
believes that another won’t occur.
Optimism vs Pessimism
• Optimism restricts anticipation of errors, minimises its probability, and
leads to concealment of its occurrence and the severity of its effects.
• Pessimism is seen as negative, slowing down progress.
• Optimism is seen as decisive, making things happen.
Organisational design
• We need to ‘institutionalise disappointment’– make it okay to discuss.
• The key element of decision-making should not be about efficiency or
optimisation, but a system of internal criticism and self-correction.

Maintaining optimism in the face of reality
• Unrealistic optimism is a pervasive human trait.
• People’s estimations of the future are often unrealistically optimistic.
• A scientific assessment* found a marked asymmetry in belief updating.
 Participants updated their beliefs when information that was better than
expected…. but made no allowance for information that was worse.
 Regions of their prefrontal cortex (in their brains), tracked estimation
errors, when these called for a positive update.
 Highly optimistic participants exhibited reduced tracking for estimation
errors that called for a negative update.
* Sharot, Korn & Dolan - Nature neuroscience – October 2011

Dilbert on project optimism

Project ‘pre-mortems’
What is a project ‘pre-mortem’?
• A hypothetical opposite of a post-mortem.
• Undertaken at the beginning of the project, after the team has been
briefed on the details of the plan.
• Different to a risk assessment, where consideration is given to what might
go wrong
 A pre-mortem assumes the project has already failed spectacularly.
• Project team members are encouraged to identify plausible reasons for its
failure, particularly with regards to its critical components.

Benefits of project ‘pre-mortems’
• Helps identify problems early in the project’s life cycle.
• Enables the project plan to be improved.
• Reduces the optimistic attitude often assumed by people over-invested
in the project.
• Team members feel valued for identifying weaknesses that no one else
has mentioned.
• All participants learn from the input and experience of other members.
• Sensitises the team to pick-up early signs of trouble once the project
gets underway.

Countering project optimism 1/2
1. Reduce size of projects to align with organisational capability and past
success.
2. Confirm the time-cost-quality relationship with the primary stakeholders.
3. Engage primary stakeholders for all major decisions, especially scope or
funding changes.
4. Know the strengths (and weaknesses) of project team members and
decision-makers.
5. Undertake ‘pre-mortems’ on failure scenarios for the overall project and
each critical component.
Cont/…

Countering project optimism 2/2
6. Engage the ‘real’ SMEs (subject matter experts) as early as possible
 they’ll give early warning on issues impacting their area of expertise.
7. Encourage potential faults and issues to be communicated upwards and
early.
8. Incorporate issue identification and rectification into project status reports.
9. Identify and assess all assumptions in terms of impact on critical
components.
10. End-user stakeholders to define criteria for migrating into production /
operations
 don’t allow the project team to ‘dump and run’.

The last word
“Laws” of the universe
Murphy’s law: Anything that can go wrong, will go wrong.
Sod’s law: Anything that is to go wrong, will do so at
the worst possible moment.
O’Toole’s law: Both Murphy and Sod were optimists.

Optimism will sink a project

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