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When Not To Be Persuaded

When Not To Be Persuaded“Defined-contribution plans rely on the promise that workers are making rational retirement decision.  So the companies’ responses are an admission that the defined contribution system is failing many of their employees. That raises the question: If employers don’t think their workers can manage the shift to defined-contribution retirement plans, why make it? …  Here, the companies were remarkably candid.  Asked what drove the design of their plan, 63 percent cited cost, while just 46 percent mentioned workers’ ability to retire with a reasonable level of benefits. … That cost-cutting approach may be shortsighted.”  Facing America’s Other Middle-Class Squeeze, Bloomberg Businessweek, Oct 20, 2014.

It was me, an account manager, the general manager the COO, the CEO and the owner who was also chairman of the board.  It was all about how to improve delivering products to our customer.

We had just gone through an exercise where we had finished negotiating with our biggest customer on how and what we were going to deliver to them over the next year.  It was a rational assessment, based upon recent past performance, and was something we could realistically deliver.

The customer had agreed.  They even admitted it was about time we gave them realistic promises.  The problem occurred when someone else in the customer’s organization said we should be challenged to do more.  This challenge came back to our company but not through me.

When challenged the account team and the COO said “ok, we’ll do that!”  It was insane and undid the growth and cooperation both companies had achieved.  Later, after the next underwhelming delivery of a product, the customer would give us feedback that said “You are too nice.  Don’t agree if you can’t do what we ask you to do.”

Now, however, we were still stuck.  Into this discussion the account manager walked up to the whiteboard and sketched out how we would deliver our products over the next year.

Huh?  What does he know about product delivery?  Nothing, as his team was the one who instead of pushing back on the customer’s challenge had blind sided us all by getting the COO to agree to a ridiculous increase.

The account manager’s totally made up and unrealistic description, including some humorous simplistic assumptions on performance, intrigued the owner and chairman of the board.  After about ten minutes it became our plan.  Again, complete insanity.

I also failed as I was unable to and I admit unwilling to fall on my sword to try and carry the plan back to a sound and realistic basis. It was because my solution was very boring and it was simply to go back to our original and agreed plan that the customer had challenged us on.

See why at Successful Projects Are Boring

The “it sounds good” characteristic is what did me in.  The account manager was of course a marketing and sales guy, so he had much more practiced and capable persuasive abilities than I had.  My arguments just didn’t sell.

The article above reminded me of this ignoble defeat.  Here the author of the article makes what seems to me too many leaps of faith.  For an economic argument in a business magazine, it was strangely absent all sorts of readily available data on how poorly business defined pension plans were doing.

The article, in my reading, fundamentally was hinting that companies were responsible for ensuring employees’ long term retirement plans were successful.  It struck me that maybe the grocer and restaurateur were responsible for ensuring our weight and heart health were good. The car salesman was therefore responsible for any car accidents we got into, as she sold us that car.  (I won’t use the gun example — too emotional an argument.)

Whether one agrees with these underlying assumptions or not, we need to be aware of how people insert them into proposals and arguments.  If the underlying assumptions are not foundational, don’t address root causes, then acting on them will rarely achieve our goals.

In the case of the “people are not smart enough to manage their own retirement plans” I would argue the solution is in the problem statement.  Educate people. Also, set up a process that defaults to what at the time is a reasonable approach (e.g., contributing to a 401(k) is the default unless one opts out in writing). Finally, make it a challenge to withdraw from retirement savings.   Of course, just about all these things are already in place or are becoming more common.  Change, however, scares a lot of people.

The implied solution is to return to the defined pension plan which the author indirectly identifies through the phase “confronting the lightning-fast erosion of adequate retirement plans.” The author slips in the word “adequate” while ignoring the history of failed defined pension plans.

The underlying assumption feels like it is based upon a fear of change. Even though defined pensions turned out to be too expensive and were bankrupting companies and governments (e.g., a General Motor’s VP once joked that they were an insurance company that sometimes made cars) the author seemed less fearful of that fact and more concerned about what could theoretically go wrong with other pension approaches.

For example, the author argues that people will work longer in a given job because they now need to make more money with the new pension approach and this was a bad thing. Yet I know from my Fortune 500 experience that defined pensions were one reason people stayed in place because most pensions had a “hockey stick” shaped benefits scheme that motivated one to stay with one company until the bitter end. The author’s argument sounded logical until it was compared to a wider understanding.

Looking at the implied assumptions will help us sort out if the problem we are trying to solve is the real problem. Only in this way can we help determine if what we are hearing is persuasive or not.  It will also help us to persuade more senior managers of the holes often hiding in plain sight in any given presentation. In the worst case when seeing the unstated assumptions we can plan for and risk manage them when they spring their trap. Too bad I wasn’t better at this on that one ignoble day, but I’ve learned a lot since then.

Compare with What happens when we give the customer everything they ask for.

Are you looking for the unstated assumptions hidden within a project proposal?

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