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How Lou Gerstner’s Project Priority Process at IBM killed off the notorious “U-Curve”.

A lot of executives lack the persistence and personal motivation to push their changes through. It’s easy and exciting to think up the ideas; it can be painfully slow to implement those same ideas.

We all know that motivation to implement new changes decreases over time. Fitness clubs and gyms know this, too. It’s how they make their money: get people to excitedly sign up for the year in January. Then do nothing when the same people lose their motivation on dark, wet winter Wednesdays in February.

The core problem is executives who see change implementation from a purely intellectual perspective. They forget the emotional side of change.

The two key questions to ask your managers about all new projects are:
1.    What’s the long-term benefit (a) for the company and (b) for you?
2.    Where’s the fun in this project?
The first question is intellectual, focused on business outcomes. The second question is emotional, focusing on the individual motivation for implementing change.

Lou Gerstner took these foundational concepts a step further. When he became IBM’s CEO they were in a real mess. The strategy was unclear and confused – a little bit of everything. Investors wanted IBM broken up and sold.

One symptom of IBM’s failure, and potential success, were the projects that executives chose to do. There were hundreds of project proposals – a positive sign of IBM’s innovative culture. These projects were started great enthusiasm and energy, but shockingly only 15% were completed.

The motivational U-curve kills implementation
Lou Gerstner saw the obvious: the project proposals were too optimistic, focused totally on the business benefits and ignored the emotions in implementation. Managers’ motivation was a “U-curve”: high energy at the start – low in the middle – euphoria on completion. The problem was 85% of projects got stuck at the bottom of this curve. This was a huge waste of time, resources, employee satisfaction and so on.

Gerstner’s reaction: the introduction of a new project prioritization process – one that forced executives to evaluate the business logic and the personal desire of the project owner to complete the project, i.e. motivation. Apparently, no senior executive had done this before at IBM.

This minor change had two major effects: fewer projects were started and a massive 95% of projects reached their aims. This change, along with a clearer strategy and a handful of other vital changes, turned IBM around. Gerstner saved the company, motivated the employees, and changed the investors’ opinions too. The rest, as they say, is history.

By forcing managers to examine their emotions from the start, you prepare them for the barriers they will face. So managers become more deeply connected to their projects and are more determined to succeed.

Six criteria to maintain high motivation on project implementation
Gerstner introduced six questions / criteria for the manager proposing a new project. Each project must pass all six before it gets the green light.

#1 Give me/us a crystal clear picture of the project goal(s).
When the end goals are clear it helps executives to assess what resources to back the project with. Plus, it let's everyone know when the project is complete (or not) and stops scope-creep and project drift.

#2 What are the outcomes of this project for our (wider) business?
Many projects make sense, but only a few of those will fit the company’s chosen strategy.

#3 What are the personal advantages for you of managing and completing this project?
There’s not much point asking a manager about their motivation, “Are you motivated?” The answer is not going to be “No”. It’s much better to ask what they want ot get from the project, probe further with questions for clarification and understanding. Use intuition and common sense and you get a clear picture of the motivational factors that manager has.

#4 What are the business risks of doing this project?
Projects need optimism. It's a key part of self-belief and motivation to get the job done. But projects also need realism (not defeatism). The project owner has to be realistic about the internal and external business risks and their impact on the project.

#5 What are the personal disadvantages for you of starting this project?
Questions to explore include: What would it cost me to personally do this project? What do I have to stop doing? What else would I do if I didn’t take up this project?)

#6 What are the critical events that, if they happen, would end this project early?
Examples include: project initiator pulls out, lack of critical resources, end of executive support.

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Leading this product launch has taught me to be effective doing what I find naturally easiest – using trust and supporting people each step of the way. It augments my chances of making sure future product launches are as successful as this one.

MN Vice Director - Medical Marketing Europe

This process allowed people to re-appraise how this [senior team of managers] group was functioning or, rather, not functioning correctly. The tendency for each member of our group to see himself as an isolated beacon of excellence – which acted against the vital need for cooperation between members – were eased and communication is already becoming more 'normalised'.

RS Senior Director

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