Address Sustainability Project Failure Fallacy
In 2002 Princeton University professor Ph.D. Daniel Kahneman won the Nobel Prize for economics. His groundbreaking research at the intersection of business and psychology disproved humans are always rational actors and demonstrated our penchant for making irrational decisions.?
When we apply Ph.D. Kahneman’s practical findings to our sustainability project plans we quickly realize the delta between known behaviors and our current approaches.
A research study of 300 companies cited 98-percent of sustainability programs fail to achieve or exceed their aims according to Boston, Massachusetts based consulting firm Bain & Company.
The same study found 88-percent of broader corporate transformation programs fail. As many companies are taking their first steps on their sustainability journey it is somewhat understandable that the failure rate would be initially higher.
The key takeaway from the data is less about pinpointing the specific failure percentage rate. Our daily work tells us failure rates are too high.
Define Failure Through Different Lens
To start we need to reassess our definition of failure- not to make us feel better- far front it, but to accelerate our success. Failure is simply an answer to a question not a final result outcome. Venture capitalists (VCs) are notorious for being experts at generating high returns placing financial bets on risky startups. Interestingly VCs value the hard lessons learned through entrepreneurial failure.
I experienced the value placed on failure while raising seed capital for my second startup, SupplyAssist . One VC partner asked me directly why my first startup failed. In my head I felt nervous, even a bit ashamed. I gathered myself and laid bare my past challenges and struggles. Most importantly I shared what I took away from the experience. Hands-on applied knowledge is unlearnable in books that must be lived to be fully appreciated.
After my explanation the partner smiled. To my surprise he seemed almost excited. He then shared that “he would rather invest in a sophomore project than a freshmen project.” VCs have learned statistically that initial struggles on major endeavors, whether starting a company or pursuing sustainability goals, forge more hardened skills that outperform in the long run.
Plan to Learn to Accelerate Successes
If we asked 10 employees, shareholders, customers, and suppliers if they were satisfied with the companies’ sustainability results, we know the answer. Simply put, many of our stakeholders are not satisfied with the company’s progress to date. We also know that it is impossible to satisfy every team member with their varying needs and aspirations. Knowing what academic research and professional experience tells us, why then do we approach each new sustainability project with the expectation it will be on time, on budget, and deliver on all our colleagues’ wildest dreams?
To improve your sustainability project outcomes, you must define in detail what success looks like upfront. Once your sustainability project plan is not meeting your success criteria, don’t pretend it will get back on track without direct intervention. Further, as no company and industry are static, you need to prepare for your needs to evolve as you learn and grow over time. Chart a practical sustainability project plan upfront that incorporates experiments outcomes not as failures but as valuable learnings which enable you to make small adjustments that ultimately accelerate your goals. ?
What is Project Planning Optimism Bias?
As we unpack the science further, we uncover our irrational decisions are often clouded by our strong desire to realize positive outcomes. This overly positive view is a type of cognitive bias called optimism bias: an overly optimistic viewpoint that overestimates favorable outcomes and underestimates unfavorable outcomes.
This can be especially true for sustainability projects. As an example, team members could interpret negative customer feedback data as validating green product demand because “sustainability is the right thing to do.”
Sustainability projects should be pursued that are a net benefit to all stakeholders, including the company. If a project costs more than the net benefit gained it is not sustainable by definition.?
Unfortunately, our yearning for intended results has unintended consequences. Excessive confidence in individual's and/or team’s knowledge and abilities can have catastrophic effects on project outcomes. The below additional types of bias can further hamper our ability to establish early project momentum.
There is a thin line between diligent planning and analysis paralysis. Incorporating time throughout your project plan to assess status, discuss learnings, and make micro adjustments can help you strike a balance between getting started and sitting on the sideline.?
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Why project failures persist?
Our best laid project plans are only a good as our ability to realize them. As author of Speed & Scale: An Action Plan for Solving Our Climate Crisis Now and Silicon Valley investor John Doerr once said, “execution is everything.”
As a human species we have survived in large part due to our wit not our brawn; our ability to first visualize then bring our vision to reality is a unique skillset. However, it is our learned, seemingly automated, small habits formed through repetition that can cause us trouble enacting business change when things don’t go as planned. During the deployment of a new project early data forecasting budget overruns or subpar performance can be subconsciously interpreted to validate an executives’ desired goals.?
Our tendency to process information to look for information that is consistent with our beliefs is another form of cognitive bias called confirmation bias. This bias is especially troublesome as it causes inaccurate judgment or illogical interpretation of status reports all of which hinder team’s ability to pivot project plans.?
Leaders must acknowledge cognitive biases to improve project outcomes. We must provide training to our teams on enhanced decision-making tools upfront during project planning and reenforce concepts throughout deployment. Share project learnings, good and bad, to foster a safer environment to fail sooner and learn quicker.?When tasks aren’t working own it by avoiding the sunk cost paradigm. Encourage teams and partners to practice transparent communication and avoid figure pointing to improve decision making.
Ultimately, we must make data driven decisions not through individual conviction but through collective reasoning. To best accomplish this, empower teams to make the tough calls, not to bullheadedly “push harder to make it work” but to tenaciously adjust direction when needed.?
What can be done to mitigate project headwinds?
Our project timeline and budget buffers are often trimmed, and in some cases eliminated, during the planning process.
Embrace company need commonalities: Your team, processes, and technologies have unique qualities that allow you and your team to compete and win in the marketplace. However, there are likely more similarities across companies and industries than differences when it comes to your company’s business needs and sustainability use cases. Welcome proven project plan best practices and lessons learned along the journey.
Redefine expectations to change outcomes: Does your company have a track record and/or recent project failure? Spoiler alert most do, and you are not alone. Acknowledge the past so that you can chart a new course forward.
Remember that failures are simply answers to questions not a result. Train teams on historical industry deployment results and making data-based decisions to recalibrate expectations and generate better outcomes.
Receiving unbiased assessments and informed recommendations for forging sustainable supply chains can be hard for the best of companies. Whether for deploying proven sustainability projects or planning for new technology applications it is difficult for executives to acquire the sheer volume of information required to make ongoing informed decisions due to the infrequency of the company’s needs and execution.
As a result, if a past project failed, many feel our default option is to accept it, or wait to fix it until the next budget season. It is impossible for companies to make all their diverse stakeholders wildly satisfied with their wide-ranging needs. A contrarian view is not that there is a magic answer to solve your project issue(s) but that there are practical project plan adjustments that can get tasks back on track and enable you to meet or exceed your intended goals.
It is reasonable to expect that you don’t have to live with a failed project or that your only is option is to spend substantially more to get your project back on track. Interestingly, a deployment failure doesn’t mean the initial plan, or goals were wrong; at times the answer might be a realigning the order and timing of tasks within your project plan.
Recommendations
Level set a realistic baseline and strive for methodical forward momentum. To best help shape an environment that deploys projects that delivers your sustainability and business goals:
Hiring an expert can go a long way toward improving sustainability project planning, execution, and ongoing maintenance effectiveness and efficiency. Seek a trusted advisor that is comfortable challenging your view and pushing your team to combat cognitive bias so that you can see alternative approaches more easily. Strive for practical planning and informed decision making to elevate your sustainable supply chain success.??