The role of inertia in explanations of project performance: A framework and evidence from project-based organizations
Research Highlights
► New framework for analysing inertia and the search for explanations of performance. ► Identifies the role of inertia in the adoption of alternative routes for search. ► Draws on interviews with senior project managers at global organizations. ► Case studies highlight key issues for practitioners. ► Suggests future research agenda.
Introduction
Inertia is defined as a continued commitment to ‘questionable strategy’ (Schwenk and Tang, 1989). It manifests at individual, team, project and organizational levels. Inertia accumulates over time as a cognitive and behavioural orientation, and confines explanations of performance so that these compromise the quality of strategic decision making (Bielby, 2000). It is a function of rigidities that limit the search for possible explanations of performance, where ‘performance’ refers to the attainment or failure to achieve strategic, project or operational objectives and goals (Gibson and Birkinshaw, 2004).
Managing inertia successfully is a hallmark of ‘ambidextrous’ organizations that do well at balancing continuity and change (Duncan, 1976, Miller and Chen, 1994, Tushman and O'Reilly, 1996, Genus, 2004). Arguably, these organizations counter rigidities effectively by creating an exploratory space conducive to searching in a more open-minded way for explanations of performance. How this occurs is a key theme of this paper. Further, the paper is concerned to examine how inertia governs the search for explanations of performance in ways that impair the quality of feedback obtained and jeopardise ongoing strategy making.
The examples chosen to illustrate this phenomenon are ones featuring organizations which focus on projects as vehicles for realising business or corporate strategy. Projects are widely considered to moderate inertial tendencies (e.g. Lindkvist, 2008). However learning relevant to strategy is often impaired by rigidities about how to understand and explain project performance. A convergent organizational- or project-level mindset is typical of a ‘lack of variety’, which over time constrains exploration of different routes that could help explain project performance to the benefit of wider strategy (Miller, 1994).
Past studies have looked at project failures and successes to identify explanatory factors. Such studies investigate the nature of organizational mindsets in relation to the exploration of different ways in which to understand performance (e.g. Shore, 2008, Nguyen et al., 2004). However, none of these studies discuss the more fundamental question of why organizations are unable to search more deeply or extensively to explain and, by extension, to learn more effectively from past project performance. This paper is oriented towards the strategic management implications of projects (i.e. with the organization as the unit of analysis) rather than more narrowly to project management (where projects per se are the unit of analysis). It focuses on project performance by positing that there are different search routes that are taken to explore and to explain project performance. It presents a framework that can help practitioners to moderate myopic convergence towards particular search routes. Further, the framework contributes to a theoretical understanding of the implications of inertia for making sense of strategy and project performance.
The paper has the following structure. First, the next section presents a review and critique of relevant literature, linking the effects of inertia with the construction, interpretation and rationalization of project performance. This underpins the novel three-stage framework outlined in the third section, which may facilitate analysis of connections among inertia and the search for explanations of project performance. The fourth section presents two case study vignettes concerning project performance in project-based organizations to illustrate this framework and the different search routes taken to explain such performance. The fifth and concluding section highlights implications of the paper for research and practice in the much-debated area of how to enable strategic learning about past organizational success or failure, particularly from projects. It focuses on the ‘search process’ that underpins the acquisition of feedback necessary to facilitate such learning and the nature of blockages to more open-minded explanation of performance.
Section snippets
Inertia and the explanation of past performance
What makes inertia of interest to researchers, students and practitioners of management? Well, one response from the mainstream strategy literature is that organizations operating in dynamic environments need to be adaptable if they are to remain competitive. On this view, successful firms will have been able to maintain a strategic fit through adaptive change. Easterby-Smith (1997) identifies several perspectives of learning from experience that can orient the search for explanations of
Research framework: the search process
The literature discussed above may be synthesized to connect inertia with explanations of project performance in organizations, understood as the overall extent to which projects in an organization's portfolio meet their stipulated objectives. In so doing, it provides the foundations for the analytic framework proposed here. The framework comprises three elements: risks associated with the search for explanations of performance; scoping of search; and ascription for project performance. Fig. 1
Development of ‘project-based’ vignettes
Organizations vary in how they choose to support and control strategically significant projects. This denotes the ‘project orientation’ of organizations, and is a function of both the business area and type of projects in which organizations are involved (Lampel and Jha, 2004a). The management of major projects is also shaped by more subtle issues to do with experience of such ventures. The two case study vignettes are related to how two global organizations seek explanations of project
Justifying performance: the business of poverty alleviation
To maintain anonymity the focal organization central to the first case study is labelled Rapid. This organization has classified its area of business as ‘poverty alleviation’. Project narratives at this organization are an interesting expression of how feedback about project performance translates into rich yet often ignored narratives of performance. The need to account for public funding received by Rapid is a concern, and traditionally the business of poverty alleviation has been a tough
Discussion
It is suggested here that a high level of complexity concerning factors affecting performance is associated with projects at Rapid. In addition, the need to legitimize public spending has situated sense making about project performance in what can be termed as a ‘defensive avoidance’ mode (Hodgkinson and Wright, 2002). Examining and presenting performance ‘differently’ is seen as high risk and especially so if ascription is not externalized. In a scenario where performance has traditionally
Conclusions
Performance is probably the most popular dependent variable in management and contemporary strategy research. The construction of performance ‘determinants and their effects’ is flawed, however, in that it omits analysis of structures, experience, beliefs and perceptions (March and Sutton, 1977) which condition definitions, assessments and explanations of performance.
In examining the role of inertia in shaping the search for explanations of project performance, the paper has provided a
Acknowledgements
This paper draws on workshop discussions and in-depth interviews with senior project practitioners in two global organizations. They were undertaken as part of an EPSRC-funded project: ‘Project based Organizational Learning’ (PROBOL 2003, project reference number GR/R12473/02). The authors wish to thank the participants for their contribution to the study and the EPSRC for supporting it. The authors also wish to thank the anonymous reviewers for their comments on earlier drafts of the
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