Industrial Engineering

Misreporting Triggers Mismanagement

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INDUSTRIAL ENGINEER – VOLUME 46 NUMBER 6
Team Delineates Factors That Obfuscate Truthful Status of Projects

Evaluating an unsuccessful project before it expands into a major problems can be a difficult management task. But the absence of warning signals makes it even harder.

So a team of researchers from Wake Forest University, Georgia State University and the Miami University of Ohio have chose together five main reasons behind the misreporting of project statuses.

The findings come from 14 previous investigations conducted over the past 15 years:

  1. Employees don’t accurately report when projects are failing. This often happens when organizations aren’t receptive to bad news, and executives should double check employee reports.
  2. The reasons people misreport matter. Individual traits, work climate and cultural norms all play a role. Some people are overly optimistic. Some take risks. So executives should pay attention to the personality traits of their project team members.
  3. Audit teams proliferate misreporting. In one study of government managers, projects participants tried to thwart the auditors. The auditors, who concluded the team was incompetent or deceptive, increased their security. This led to more defensiveness and misreporting.
  4. Putting a senior executive in charge might increase misreporting. The career aspirations of higher-level managers often skew results toward the positive. A project management office can help alleviate this.
  5. Executives often ignore bad news. Turns out power decision-makers also have the occupational hazard known as overconfidence.

The team’s findings are in the spring 2014 edition of MIT’s Sloan Management Review