Model management: Tightening impossible deadlines

If employees consistently miss deadlines and are over-stretched and stressed, the answer is not to give them more time but to impose even tougher deadlines.

That, at least, is the view of Robert Austin, a professor at Harvard Business School.

Austin argues that setting deadlines that are almost patently unattainable keeps workers focused and stops them taking short cuts that might be potentially even more dangerous and costly than missing deadlines.

Austin uses software developers as an example in his article Effects of time pressure on quality in software development: an agency model published by the US-based Institute for Operations Research and the Management Sciences in the journal Information Systems Research.

Austin cites a manufacturing company where developers were working towards a deadline for installing software in a new plant. They realised that the software would be critical to plant operations and that failures would be expensive.

But when the team ran late on the project, they chose a shortcut they knew would eventually crash the system - but only after their role became less obvious. They met their deadline - and a few months later the software failed exactly as anticipated. The resulting unplanned shutdown was more expensive than a delay in installation would have been.

On the other hand, developers who were concerned about quality but feared the career impact of missing individual task deadlines usually tried to reduce this risk via their deadline-setting policies. A common method involves adding slack to best estimates when setting deadlines to alleviate time pressures believed to encourage shortcuts.

According to Austin, this is not a good idea. He used game theory and an approach called an agency framework to model the problem. Agency situations arise whenever one person relies on another to do a job. The issue is one of control, because the developer or worker - in effect an agent - acts in ways that are not observable to the manager.

The author relied on a game set-up to identify the situations in which it is not to the agent's advantage to take shortcuts. The analysis gives a counter-intuitive message for management: choose deadline-setting policies so that unachievable deadlines are more, not less, likely. The rationale for this policy is that if missed deadlines are common then there is little stigma associated with missing deadlines and less incentive to take quality-damaging shortcuts.

As a rule of thumb to make all this work, Austin suggests:

1. Add slack systematically to raw estimates to get corrected estimates that will be used in planning.

2. Subtract time systematically from best estimates to arrive at deadlines that will serve as behavioural objectives for developers. Organisations can (and do) accomplish this separation of planning estimates and deadlines by the way they frame deadline-setting policies, for example depicting deadlines as stretch goals that few developers regularly meet.

Paradoxically, says the author, software developers who habitually miss deadlines may produce better long-term results than their apparently better managed counterparts who rarely miss deadlines.

There is an alternative approach to all this, of course: which is to say that managing by deadlines is doomed to failure in the first place.

Faced with targets that are unrelated to the capacity of the system, people meet them the only way they can - by "cheating". Rather than devising cleverer rules for gaming between principals and agents, a better route might be to abolish the games altogether.

FTdynamo, the management website from FT Knowledge, where the latest in business thinking is put into context and delivered to your desktop, is now live. Visit us at http://www.ftdynamo.com and register for a FREE two week trial subscription.