High-status leaders’ projects can be hit-or-miss Tuesday, 3 January 2017
Project leaders who enjoy high status in their organisation find it easier to convince others to invest in an innovative project. Research by PhD graduate Balazs Szatmari of Rotterdam School of Management, Erasmus University (RSM) now shows that the unconditional support for projects that such managers tend to receive can lead to projects with good results, but more often they result in failures. Project leaders with a middle-ranking status typically produce the best results.
Innovative new ideas are often met with resistance by colleagues and senior management, says researcher Szatmari. It’s then the responsibility of project managers to sell the idea to senior management, and to motivate skilled colleagues to join their project. Having ‘social capital’, or a high status helps to achieve this.
It is known from earlier studies that projects led by people with high status are also judged more kindly and less severely by their peers. Szatmari suspects their projects go one of two ways: either flying sky-high because everyone enthusiastically jumps aboard, or they might fail relatively more often, because people are less critical of these projects and turn a blind eye to their flaws. In other words: he expected the variation to be greater for such well-connected leaders. His research shows this is indeed the case.
Szatmari studied the product development of video games to find out how the status of a project leader might influence the quality of projects. This is an inherently innovative industry in which up-front investments are high and outcomes uncertain. He selected 349 projects from a large online database that documents the development of video games since 1972, and for which a single project leader – or ‘producer’ in video game terms – could be identified.
He then established the quality of the video game projects by combining the scores from critics with customers’ reviews, taking into account the size of the project’s budget and how innovative it was. He determined if the project’s quality surpassed expectations according to the available budget. Szatmari's review also revealed if the game had succeeded despite resistance from within the firm, or in the market.
Finally, Szatmari's studied the status of the project leaders, comparing their importance in past projects.
Szatmari's analysis revealed that project leaders with a higher status contribute to better quality projects, but only up to a point. Projects from leaders with very high organisational status are generally the same quality as projects run by low-status producers, but the variation in project quality is much bigger. Leaders with a middle-ranking status typically deliver projects with the highest quality, his results show.
Szatmari says his research shows organisations need to be aware that the status of their project leaders can overcome irrational resistance, and can be used to speed up innovations. High status can also lead others to support projects that will fail. Neglecting this aspect allows such projects to be framed as a success, and only adding to the status of that project leader.
Download Szatmari' thesis 'We are (all) the champions: The effect of status in the implementation of innovations': http://bit.ly/2iy6Go5
Rotterdam School of Management, Erasmus University (RSM) is one of Europe’s top 10 research-based business schools. RSM provides ground-breaking research and education furthering excellence in all aspects of management and is based in the international port city of Rotterdam – a vital nexus of business, logistics and trade. RSM’s primary focus is on developing business leaders with international careers who carry their innovative mindset into a sustainable future thanks to a first-class range of bachelor, master, MBA, PhD and executive programmes. Study information and activities for future students, executives and alumni are also organised from the RSM office in Chengdu, China. www.rsm.nl
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