Bad News Doesn't Get Better With Time

I remember being told an invaluable piece of advice earlier in my career which stuck with me.

Management don't like surprises. Good news and Bad news shouldn't be a surprise to anyone when delivering a construction project. After all Bad News will not get better with time. In fact it tends to only get worse.

Despite this, mistakes often get covered up. Key Performance Indicators manipulated to hide the truth and a positive spin taken on performance measurements. If we just took a step back and analysed the real information wouldn't that give us the information to implement a change that actually made a difference? What a novel idea yet this simply doesn't happen often enough.

The construction industry has tight profit margins and high levels of risk. Its definitely a tricky game to get right so you'd expect everyone was on the ball. Learning from previous mistakes, problem projects, delays , lower than expected performance, a project that didn't go right etc... are all opportunities to learn from.

Lets take a scenario for you.

You've been on a project for a couple of months and its time to report to management how things are going. You've achieved 25% of the scheduled activities but spent 30% of the planned budget.

How do you think this is going to be reported?

Option 1: A slight overspend due to the initial learning curve on site but were confident we can bring this back on budget and there's nothing to worry about

Option 2: We have a 20% overspend on our cost against our programme, something is wrong.

Id bet that most would find Option 2 too negative and uncomfortable to report early on in a project. After all there's plenty of time to bring it back in right?

Most with the attitude of Option 1 will do the report and convince themselves nothing is wrong and they just need to cut a bit of cost and crack on!

This is where projects fail to deliver.

Option 2 would instigate an in depth review of where the overspend is and why its not in line with the plan. Great, you've reported the bad news early and caught is before it gets worse.

How long would you stay in business for if all projects overran? Maybe a while, loads of stress and at the end going bust and maybe starting over again.

A great tool for identifying project performance is Earned Value Management. Its whats being used in Option 2. Using Earned Value Management a problem job can be highlighted as early at 15-20% into the project allowing it to be resolved or mitigated.

Earned Value Management is often dismissed as too complicated or only suitable to major projects. Rubbish! It can be used for any project as long as you understand how to use it for the size of project your on. If you want to know how it can help you then give us a call.

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