Most of us believe that we make organizational decisions on the basis of organizational priorities alone. But it just ain't so — sometimes we take into account personal consequences, using organizational influence to limit negative consequences for our own careers, status, and compensation.
Often this behavior is quite ethical. It's encouraged — even embedded into compensation structures. Our stock option plans and profit-sharing plans exploit the pressure of personal consequences by aligning personal and organizational interests. At least, that's the theory.
But sometimes decision makers use their influence to achieve effects that confirm their own personal self worth in less benign ways — sometimes for personal economic gain, as in the case of stock options and profit sharing, and sometimes for other reasons. Those other motives include personal risk management.
Personal risk management is the practice of using organizational influence to protect one's career, personal status or personal compensation. This behavior can occur even when organizational consequences are clearly negative. Here are three typical illustrations.
- Aggressive project schedules and budgets
- Project sponsors who advocate very tight project schedules and budgets might be doing so for personal advantage, when gaining commitments to those goals might reflect well on them. The failure to meet those goals might reflect badly also, but if the sponsor intends to be long-gone by then, that risk is mitigated.
- To limit this behavior, limit project goals and shorten project schedules. Short schedules enhance the likelihood that aggressive sponsors will suffer the consequences of aggressive goals.
- Padded estimates
- Project managers sometimes "pad" cost or schedule estimates to protect against the personal performance penalties associated with budget or schedule overruns. Much padding behavior is anticipatory — it provides protection from sponsors who are overly aggressive about budget and schedule, and against externally imposed requirements volatility. But some padding is just "insurance."
- To limit Unrealistic project schedules
and pathologically tight
budgets are sometimes
little more than career
advancement tacticsthis behavior, monitor budget and schedule underruns. Investigate patterns to determine whether padding is being used for insurance.
- Unrealistic promises to customers and investors
- Account executives or enterprise executives who promise customers or investors aggressive performance might please the promise recipients, but the organizational cost can be unbearable. This behavior is most common at the ends of quota or fiscal periods, or near commission thresholds, or during time-limited "incentive" periods. It's all a consequence of using extrinsic rewards to enhance personal performance.
- To limit this risk, avoid extrinsic rewards, or failing that, include in the calculation of personal incentives a negative effect for promises to customers or investors that are unsupported by prior organizational commitments, whether or not they're achievable or achieved.
Although most personal risk management strategies conflict with organizational goals, asking people to just stop doing it is usually futile, because they're caught in a system that demands it. To bring an end to personal risk management, we must change the systems that cause it. Top Next Issue
Are your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!
Your comments are welcomeWould you like to see your comments posted here? rbrenljWqAbpjkAIFYOuWner@ChacEihqLdXdVtLaiuUOoCanyon.comSend me your comments by email, or by Web form.
About Point Lookout
Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.
Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.
Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.
More articles on Ethics at Work:
- You Have to Promise Not to Tell a Soul
- You're at lunch with one of your buddies, who's obviously upset. You ask why. "You have to promise
not to tell a soul," is the response. You promise. And there the trouble begins.
- Budget Shenanigans: Swaps
- When projects run over budget, managers face a temptation to use creative accounting to address the
problem. The budget swap is one technique for making ends meet. It distorts organizational data, and
it's just plain unethical.
- Non-Workplace Politics
- When we bring national or local political issues into the workplace — especially the divisive
issues — we risk disrupting our relationships, our projects, and the company itself.
- Virtual Termination with Real Respect
- When we have to terminate someone who works at a remote site, sometimes there's a temptation to avoid
travel — to use email, phone, fax, or something else. They're all bad ideas. Terminating people
in person is not only a gesture of respect. It's good business.
- Extrasensory Deception: I
- Negotiation skills are increasingly essential in problem-solving workplaces. When incentives are strong,
or pressure is high, deception is tempting. Here are some of the deceptions popular among negotiators.
Forthcoming issues of Point Lookout
- Coming July 25: Exploiting Functional Fixedness: II
- A cognitive bias called functional fixedness causes difficulty in recognizing new uses for familiar things. It also makes for difficulty in recognizing devious uses of everyday behaviors. Here's Part II of a catalog of deviousness based on functional fixedness. Available here and by RSS on July 25.
- And on August 1: Strategies of Verbal Abusers
- Verbal abuse at work has special properties, because it takes place in an environment in which verbal abuse is supposedly proscribed. Yet verbal abuse does happen at work. Here are three strategies abusers rely on to avoid disciplinary action. Available here and by RSS on August 1.
I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenZySJlsrtvpprwJlxner@ChacfolTSbVPoGlEKArKoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.
Get the ebook!
Past issues of Point Lookout are available in six ebooks:
- Get 2001-2 in Geese Don't Land on Twigs (PDF, USD 11.95)
- Get 2003-4 in Why Dogs Wag (PDF, USD 11.95)
- Get 2005-6 in Loopy Things We Do (PDF, USD 11.95)
- Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, USD 11.95)
- Get 2009-10 in The Questions Not Asked (PDF, USD 11.95)
- Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, USD 28.99)
Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500 words in your inbox in one hour. License any article from this Web site. More info
- The Power Affect: How We Express Our Personal Power
- Many people who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.