Dan Ariely’s excellent book Predictably Irrational, describes an interesting study. He divides a class of students into three groups, which were required to hand in three papers during a course. He gave the three different groups different instructions concerning these papers.
Group 1: Could hand in the papers at any time of the semester. The student would themselves set the deadline for each paper. If the self proclaimed deadlines were not be met, there would be a penalty. All students had the option to set the deadlines on the last day of the class but they could also use the deadlines to force themselves to start working earlier and work during the whole semester.
Group 2: This group would have no deadlines and they could hand in their papers at any time and there was no risk of penalties as long as they did hand in their papers before the end of the class.
Group 3: This group were given specific, evenly spaced deadlines for each paper and there penalties if the deadlines were not met.
One paper was a proof reading report. These are the results:
The third group consistently had the best grades and the second group got the worst grades.
The results of the first group were more interesting. Only 27% of the students chose to submit all three papers on the last day of class despite this being the logically best option that gave the greatest flexibility. Most appeared to be aware of their tendency to procrastinate, and set themselves deadlines to help them get through the work. The studies show that these deadlines did improve performance over only having a deadline at the very end. However, the results are still suboptimal compared to the subjects who were given equally spaced externally imposed deadlines.
Ariely points at our tendency to procrastinate, which makes us delay important tasks and the best way to avoid this is for a formal figure to give us specific deadlines. Self imposed deadlines help but are not as effective. So why do we procrastinate? This is an effect psychologists attribute to ‘hyperbolic time discounting’: the immediate rewards are disproportionally more compelling than the greater delayed costs. In other words, procrastination itself is the reward.
This book and the studies offer powerful insights for PMOs and project managers when dealing with stakeholders and in particular, contrators. The results clearly suggest that contract deadlines at the ‘end’ of a project are of no real benefit; they are too far away to matter until it is too late.
Optimal performance is likely to be achieved if the PMO or project manager can impose a series of milestones that ‘matter’, with penalties attached, that are evenly spaced throughout the course of the work. If this is not feasible, then the next best option is to encourage the contractor or stakeholder to develop its own deadlines and monitor these closely.
There is a paper on the Mosaic website written in 2002, ‘The Power of Regular Updates’ that reached similar conclusions. Apparently relying on the good intentions of others is not the optimum solution for anybody.