Project Management

The high (and often hidden) costs of project team dysfunction

Tackling project team dysfunction may not seem like a priority on the surface, but don't be fooled -- it can turn into a voracious fire, tallying significant losses along the way.

Image: iStock/killerbayer

Each year business owners, executives, team leaders, and project managers encounter some form of team dysfunction that requires satisfactory resolution to avoid or reduce project and business disruption. The question is rarely does project team dysfunction exist, but rather when, where, and how much. More importantly, knowing how to recognize and effectively resolve project team dysfunction is of greater significance.

Why are teams dysfunctional?

Patrick Lencioni, founder of The Table Group and author of 11 books including The Five Dysfunctions of a Team, says, "Teams are dysfunctional because they are made up of human beings with varied interests and frailties. When you put them together and leave them to their own devices, even the most well-intentioned people will usually deviate toward dysfunctional, unproductive behavior. And because most leaders and managers are not schooled in the art of building teams, small problems are left untreated and spiral further and further into ugliness and politics."

When can team dysfunction turn catastrophic?

When the impact of team dysfunction is at the senior levels of organizations the outcome can be catastrophic. Dr. Matt Barney, Industrial/Organizational Psychologist, author, Founder and CEO of LeaderAmp, says, "The science suggests that senior leadership conflict hurts the firm's financials in several ways. First, in one study of 73 high-tech companies, the degree to which top management teams had strong internal and marketplace networks predicted sales growth. One meta-analysis that looked at 28 studies of teamwork suggested the reason for this — the more conflict in the team, the worse their performance and satisfaction. If senior leaders aren't sharing their valuable networks, it is likely to hurt the firm, and each other. Consequently, there's substantial science to suggest that they should be investing in each other, to float all boats.

"In addition, leaders' internal networks are hindered when they under-invest in relationships, and over-invest in conflicts and politics. These relationships are often required in the most innovative, disruptive projects that require cultural transformation. And most companies experience a 50-70% failure rate of transformational projects, in part, because senior leaders don't influence these changes well. Investing in senior leader relationships is paramount, so they can lean on each other's unique expertise, and help in harvesting all gains and mitigating risks in transformational organizational projects."

SEE: Project Management Resource Kit (Tech Pro Research)

What are some of the costs of dysfunction, and how does this translate into lost opportunity costs?

There are many hard to measure tangible and intangible costs and lost opportunities that result from various levels of team dysfunction; here are just a few.

Poisoning of the well due to lack of trust is an area that is not impossible but far more difficult to quantify. Sometimes one or more project team members, stakeholders, or even members of the management team may be discontented, and choose to spread this sentiment to other team members rather than trying to resolve any concerns directly with a project manager. When this happens they poison the well, making it extremely easy for other members to get pulled into the dysfunction and aggravate the situation further. Regardless of the level of impact to other members, negative consequences permeate throughout project work, team interactions, and dynamics. This is where the buy-in becomes an issue, creating disinterest and distrust that compromises the merits and benefits of the project.

The silent killer of intrapreneurial spirit is another hard to measure consequence tied to the individual team member's state of mind in relation to how they view their role and level of contributions. Imagine if all project team members considered themselves intrapreneurial in their approach to project work. It would create the potential for each member to reduce limiting factors in their minds and instead consider all possibilities their skill sets could afford them. This could further enable higher-level thinking and create a heightened sense of accountability and ownership.

Now consider the opposite, due to increasing levels of team dysfunction and dissatisfaction that instead dampen intrapreneurial mindsets; those same team members may instead become discouraged and simply contribute no more than the required effort. Team output within the project becomes minimalistic, resulting in minimal success.

Reduced accountability and the fear factor creeps in once team dysfunction, mistrust, and disinterest exist. Individuals start to think solely as individuals rather than part of a team. With this individual mindset, finger-pointing, and looking out for "number one" begins, making it almost impossible for accountability to remain intact. Absent accountability, individuals are no longer working at maximum capacity nor able to make the connection between their efforts and the success or failure of a team-based project. Instead blame starts to rein supreme, further feeding into increased fear, distrust, and reduced effort as well as diminished buy-in.

A productivity pipeline blockage ultimately occurs if one or more project team member suffers from a disconnect from other team members, executives, stakeholders, or the project manager. Their interest, dedication, and contributions to the project start to lesson as a result. Project workflows are undesirably impacted due to this slowdown in productivity, creating a bottleneck which can have further damaging effects on project timelines and scope in general.

An increased rate of errors due to lack of care and concern also takes place when dysfunction exists simply as a result of the same disconnect, reduction in accountability and buy-in. These errors impact the quality and accuracy of the work, product, or service and project activities in general, increasing the chances of rework. This rework translates into additional time, costs, frustration, and ultimately missed objectives, and risks client satisfaction.

Significant amounts of squandered time are realized by many companies annually in the process of trying to resolve unnecessary conflict. This creates both tangible and intangible repercussions, not only to projects, but it also puts an overall drain on business activities as a whole. Additional time may seem innocent until quantified in terms of compensation rates for all parties involved in the conflict, parties that are impacted directly and indirectly, as well as project managers and management tasked in the conflict resolution process. Then also consider the lost time that could be better spent focusing on project activities aimed at achieving business goals. When taking all of this time into consideration, the total cost of misallocated time can be alarming.

A high increase in project failure is the end result and is definitely a high cost of team dysfunction. Much of this can be mitigated by dealing with issues immediately as they arise rather than allowing conflict and dissatisfaction to fester and spread. Understanding the various forms of dysfunction and recognizing the signs is critical in helping to alleviate unnecessary team stressors. Transparency, trust, and common ground can also help to create a more amicable playing ground and encourage team members to think as a more cohesive and successful team.

Remember team dysfunction to some extent may always exist — the catch is to recognize the extent of the dysfunction, the ultimate price to the project and stakeholders, and finding optimal ways to resolve the issues directly, fairly, and preferably in a permanent manner.

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About Moira Alexander

Moira Alexander is the author of "LEAD or LAG: Linking Strategic Project Management & Thought Leadership" and Founder & President of Lead-Her-Ship Group. She's also a project management and IT freelance columnist for various publications, and a contr...

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