Here is a brief excerpt from an article co-authored by Fabian J. Sting, Christoph H. Loch, and Dirk Stempfhuber for MIT Sloan Management Review. To keep product development projects on schedule, they explain why establishing psychological safety and promoting cooperative behavior can be just as important as good planning. To read the complete article, check out others, register to access content, and/or obtain subscription information, please click here.

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Roto’s roof and solar technology division developed a formal help process that resulted in a measurable improvement in product development project cycle times.

In turbulent business landscapes with rapidly changing technological platforms, many organizations are trying to accelerate product introduction cycles by prioritizing project delivery. However, many projects have two characteristics that make optimal delivery times elusive: First, the projects themselves tend to involve uncertainty (for example, they develop a new product function whose feasibility has not yet been established); and second, the workers have information about the status of their project tasks that is not observable to anyone but themselves, which many don’t share.

Therefore, behavioral issues are as important in project timeliness as diligent planning. These behavioral issues include the following:

o Willingness to communicate and collaborate under uncertainty and interdependence. Why should employees seek help for a problem or help resolve a colleague’s problem when they can leave the problem to later stages or hide behind their own task responsibilities?

o Individual buffers. If project workers face penalties for missed deadlines, why should they share private knowledge about task duration rather than “padding” their estimates of the amount of time they need to complete a task?

o On-time incentives. Why should employees exert themselves to finish their assigned tasks rather than fill time with fringe work or free ride on extra time buffers built into the project?

This article examines the difficulties of project planning and execution and describes a management innovation at Roto Frank, a German company that produces hardware for industrial and residential windows and doors. Roto, headquartered in Leinfelden-Echterdingen, Germany, has augmented its project control system with a formal help process that encourages workers to seek and provide mutual assistance. We found that Roto’s help process achieved a measurable improvement in project cycle time without changing formal incentives or other management systems. The initiative’s success is based largely on two factors: establishing psychological safety, and encouraging cooperative behavior by emphasizing interdependence among workers. Because of its flexibility, we argue that this help process has the potential to accelerate projects in many environments.

Roto’s Management Innovation

Of course, project management professionals have long thought about how to plan and execute projects in robust ways. An important strategy for handling uncertainty in projects is creating buffers of extra time. But if buffers are applied at the task level, task owners sometimes hide behind them and almost always use them. The alternative is to aggregate the individual buffers into a combined project buffer, although it remains unclear how workers can be encouraged to give up their individual buffers.

In general, it’s difficult for incentives to encourage people to work hard, reveal private information and collaborate with coworkers.

Another approach to uncertainty is to set task goals or deadlines.However, there are side effects: Unless penalties are set for not meeting the goals or deadlines, workers tend to estimate their project completion times too optimistically (a problem often referred to as the “planning fallacy”). Yet when workers are threatened with penalties for being late, they tend to protect themselves by building safety margins into their announced task-time predictions, sometimes referred to as “padding.” In summary, studies on project planning work have focused on rational management, ignoring behavioral issues (for instance, reporting exaggerated estimates of task duration).

Yet another approach to project planning is the application of “lean manufacturing” concepts to project management, which refers to principles including value for the customer, smooth flow of products through the value-creating steps and constant efforts to eliminate defects. (In fact, Roto’s project planning innovation was originally triggered by an idea from a lean-thinking workshop.) Lean thinking promotes adherence to flow standards and quick correction of deviations. However, this can’t be directly applied to product development project management because new product development projects are characterized by uncertainty about the nature of the tasks; typically, standards have yet to be established. Moreover, until the system is worked out, the interdependencies among the elements of the system are not known; one worker may cause unforeseen deviations for another. Hence it is not clear what a “smooth flow” is and what needs to be monitored.

The final method that seems similar to Roto’s system is “agile development” (a term coined in software development), which includes flexible development processes that incorporate quick feedback and iterations, and product architectures with built-in flexibility. Although agile development systems rely on collaboration among project employees, they don’t explicitly encourage such collaboration — a key change that was developed at Roto.

In developing a project planning and monitoring system that encouraged project workers to reveal private information about their tasks, Roto did not rely on incentives. In general, it’s difficult for incentives to encourage people to work hard, reveal private information and collaborate with coworkers. Information disclosure and collaboration require that the workers feel mutual obligation, as well as safety in reporting problems. Behavioral research has shown that employees can be more open to sharing what they know when offered psychological safety. Research has also examined the role of informal group dynamics, trust and respect, and supportive organizational contexts. Indeed, incentives don’t necessarily need to be monetary or career focused; they can also be social and geared toward building positive relationships.

We have found no study that investigates how the formal components of a project management system interact with mutual relationships and psychological safety in promoting project success. How, exactly, do the formal components of a project management system interact with psychological safety? What forms of incentives can lead to reasonable expectations of reciprocity? Which combinations of managerial actions are most likely to succeed at harnessing behavioral tendencies? Our study describes an actual system that works, displaying how psychological safety and mutual reciprocity can be incorporated into a fully implemented system. (See “About the Research.”)

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Here is a direct link to the complete article.

Fabian J. Sting is an associate professor at Rotterdam School of Management, Erasmus University in Rotterdam, the Netherlands. Christoph H. Loch is dean of the Cambridge Judge Business School at University of Cambridge in Cambridge, United Kingdom. Dirk Stempfhuber is head of engineering at Roto Frank Bauelemente GmbH, in Bad Mergentheim, Germany.