The power of data-driven decision making

We often meet infrastructure leaders having to make decisions without the benefit of timely and accurate data. In these situations, decisions are made either in the absence of data, or worse, unknowingly using data that is inaccurate or out of date. The decisions are primarily based on experience, influenced by subjective, often verbal reporting.

Implementing a digital platform to provide trusted insight into the state of the project can enable better, more effective decisions to be taken and improve the delivery performance of projects. The benefits of using a digital platform to inform decision making include:

  • Mitigating the bias in project status reporting
  • Providing accessibility, consistency and reliability of project data
  • On demand dashboards and reports
  • Uncovering previously unknown risks or issues by following a digital thread

The problem with subjective project reporting

An article in the MIT Sloan Management Review [1] identified five inconvenient truths associated with project status reporting. The first of these truths is that leaders cannot rely on project staff to accurately report project status information. The reasons for staff applying a positive spin when reporting include a desire to be perceived as competent and where the organisational climate is not receptive to bad news.

One infrastructure leader we worked with had suspected the positive bias in project status reporting but it wasn’t until we started providing the data based reports that he realised the extent. Suddenly he now had the data to question what he was being told, and be able to effectively direct resources to solve issues or prevent them from occurring. The dashboards were used at status meetings through to the end of the project.

Accessibility, consistency and reliability

Much of the data needed to understand the state of a project and inform decisions already exists in some form. Sometimes this has some structure (spreadsheet, database, software) but also exists in documents, emails or peoples heads. This data is usually inconsistent, unconnected and with varying reliability. The difficulty is being able to access, analyse and present the data in a way that provides timely, meaningful insight to decision makers.

Projects usually have data based reporting in some form but often the wrong metrics are being used or the way the metric has been calculated is not robust. These watermelon metrics (green on the outside but red on the inside) provide a false sense of confidence, supporting the positive bias reporting.

Fostering an open culture

To maximise the value of implementing a digital platform it is important to consider the holistic business change, both within the project team and the wider value chain.

Project teams can initially be reluctant to engage, especially when the data may present a negative picture. Fear of exposing problems they may be associated with and losing control of the narrative can lead to closed behaviours. Leaders need to be supportive, building trust and fostering this more open culture, including being receptive to bad news. In our experience, once people see the benefit of being able to pre-emptively solve a problem or having additional resources directed to support them the change in culture can be relatively quick.

The most common challenge with extending the platform into the supply chain is that suppliers fear the data they provide will be used against them commercially. In practise, when implementing mid-way through a project, the level of data sharing acceptable is likely to vary between suppliers based on commercial relationship and lifecycle stage and follow a more gradual transition.

The openness principle also applies to the contractor in being open with the contracting authority. One of the unexpected benefits of implementing data based reporting for a project we supported was the positive change in attitude of the contracting authority. Although the data showed the project was not as advanced as they had been told, they could now trust what was being reported. The contracting authority then started using the data to see where they could help move the project forward.

[1] The Pitfalls of Project Status Reporting, Mark Keil, H. Jeff Smith, Charalambos L. Iacovou and Ronald L. Thompson. MIT Sloan Management Review March 18, 2004