Emotional Intelligence and Project Success

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Emotional

Intelligence

and Project

Success

The effect of Social

Complexity

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Rijksuniversiteit Groningen

Faculty of Economics and Business Business Administration

Specialization: Change Management

Deloitte Risk Services B.V.

Controls Transformation Transformation Risk Services

Author

Sammy-Jo Liefveld

Student number: s1688227

Supervisors

Dr. Cees Reezigt (Rijksuniversiteit Groningen) Mr. David van Gogh (Deloitte Risk Services B.V.) Ms. Marthe Uitterhoeve (Deloitte Risk Services B.V.)

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PREFACE

This thesis was written as part of the study Change management, a specialization of the Master of Business Administration at the University of Groningen. I started this research on the first of March 2012 within Deloitte’s Transformation Risk Services team. The goal was to gain more insight in the role of leadership in organizational changes. A subject that I got very interested in during the courses of my studies. Because leadership is a very large and comprehensive concept, I chose to focus my research on the emotional intelligence of project managers in change projects.

This was the first time that I performed an empirical research individually while using several investigation methods. During my internship at Deloitte and the execution of the research, I learned a lot about relationship management and contacting people in the business. I learned how to interview experienced project managers and how to adequately report my findings. During the interviews I learned that project management and change management are highly interrelated and that changes always have both hard and soft components that need to be managed. This resulted in the fact that my interest in hard factors as budgeting, planning, risk and resource management grew and that I would like to learn more in these areas.

Finishing this thesis would not have been possible without the help of numerous people. Dr. Cees Reezigt helped me a lot in the start-up phase of my research by giving me feedback on my research proposal and research methods. He also challenged me to keep improving my thesis from an academic perspective during the process of writing my thesis. I would like to thank David van Gogh for our almost weekly talks on the progress of my research, giving me helpful feedback and for helping me with getting in contact with several project managers and colleagues from Deloitte. Furthermore, Marthe Uitterhoeve has helped me enormously in the start-up of the research and has reviewed my work also from an academic perspective. I would like to thank all the project and program managers for their time and openness during the interviews. They gave me a lot of new insights and provided me with information from various perspectives. Finally, I would like to thank the Transformation Risk Services team for giving me the opportunity to write my thesis in an environment where I could meet many interesting people and learn about a challenging and dynamic company as Deloitte.

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ABSTRACT

Background - Change projects do not always have a clear goal and are associated with high

ambiguity. Moreover, they often have a large impact on people and their behavior in an organization, which makes traditional project management methods lose their efficiency.

Purpose - In this research, the role of emotional intelligence of the project manager in change

project success is examined and also the effect of social complexity on this relationship. Emotional intelligence is defined as the capacity to perceive emotions, to use emotions in productive ways, and to understand and regulate emotions and is expected to become more important as social complexity rises in a change project.

Methodology - An online questionnaire was filled in by 55 project managers, which was

designed to statistically examine the effect of emotional intelligence and social complexity on project success. In order to investigate these relationships, the program SPSS was used to perform regression analyses. Of these 55 respondents, 23 project managers were questioned during personal interviews. These interviews were analyzed by using the program Atlas.ti.

Results - The interviewees acknowledged the importance of emotional intelligence in change

projects. However, no significant evidence was found for a moderating effect by social complexity on the relationship between emotional intelligence and project success. A direct positive effect of emotional intelligence and a direct negative effect of social complexity on project success appeared to exist.

Conclusion – When social complexity rises, there is more potential for the emotionally

strong project manager to use his or her competences to improve project success. A trend was shown, that project managers with a high emotional intelligence are more successful in managing socially complex projects than project managers with a low emotional intelligence, but this was not proven.

For project sponsors, the results imply that selecting an appropriate project manager for a change project requires careful attention towards the degree of social complexity. A highly socially complex change project will be delivered more successfully when managed by a project manager with a high emotional intelligence.

Keywords: Project Management, Change projects, Emotional Intelligence, Project Success, and Stakeholder Satisfaction.

Research theme: Emotional intelligence in Change Projects

Supervisor Deloitte: David van Gogh and Marthe Uitterhoeve

Supervisor University: Cees Reezigt

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3.2. Data collection... 27 3.3. Measuring instruments ... 28 3.3.1. Change projects ... 28 3.3.2. Project success ... 28 3.3.3. Social complexity ... 28 3.3.4. Emotional intelligence ... 29 3.4. Data analysis ... 29 3.4.1. Qualitative research ... 30 3.4.2. Quantitative research ... 30 4. RESULTS ... 33 4.1. Results: interviews ... 33

4.1.1. Characteristics of change projects ... 33

4.1.2. Role of stakeholders in change projects ... 34

4.1.3. Role of the project manager in change projects ... 35

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4.1.5. Conclusion ... 37 4.2. Results: questionnaire ... 38 4.2.1. Preliminary analyses ... 38 4.2.2. Extreme values ... 39 4.2.3. Normal distribution ... 39 4.3 Regression analysis... 40 4.3.1. Emotional intelligence ... 40 4.3.2. Social complexity ... 42

4.3.3. Quantitative and qualitative results combined ... 44

5. DISCUSSION ... 47 5.1 Introduction ... 47 5.2 Emotional intelligence ... 47 5.6 Social complexity ... 48 6. CONCLUSION ... 51 6.1 MANAGERIAL IMPLICATIONS ... 52 6.2 FURTHER RESEARCH ... 52 6.3 LIMITATIONS ... 53 7. REFERENCES ... 55 8. APPENDICES ... 59

8.1 Appendix A : framework for hard and soft dimensions ... 59

8.2 Appendix B : Continuum between control and chaos ... 60

8.3 Appendix C: background of the project managers ... 61

8.4 Appendix D: overview of the interview questions ... 63

8.5 Appendix E: screenshots of the questionnaire ... 69

8.6 Appendix F: Interview results: frequency tables. ... 75

8.7 Appendix G: Factor analyses ... 83

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1. INTRODUCTION

In their turbulent, constantly changing surroundings, businesses need to make changes. These may be culture changes, the implementation of a new system, turning an idea into reality. Managing change is difficult. Organizations have to change what they do, and how they do it much more rapidly as it was once the case. The discipline of project management is often used to manage these organizational changes (Kloppenburg and Opfer, 2002). Project management implies a task with a clear objective or goal, and a fixed time-scale at which point the job can be described as complete. Project managers face many challenges concerning time, money and the quality of the project results. Projects are complex, because they require the coordinated inputs of numerous members of the organization (Pinto, 2010). Furthermore, it is hard to gather information about the state of the project (Boddy and Buchanan, 1996). To overcome these problems of uncertainty, many structured methods and techniques have been developed to keep the project on target.

However, change projects might not always have a clear goal and there is often much ambiguity about what the end result should be (Boddy and Buchanan, 1996). Moreover, change projects have a large soft component, which means that they will impact people in an organization and that there is a larger degree of interaction between stakeholders who have different interests and different viewpoints regarding the change project (Crawford and Pollack, 2004). These soft aspects tend to decrease stability and non-linearity in projects which makes traditional project management methods and mechanistic thinking lose their efficiency (Saynish, 2010). The structured traditional project management style mentioned earlier may not be sufficient to manage change projects successfully. Wateridge (1999) states that projects have often been perceived to have failed due to project managers not paying due attention to soft criteria.

Earlier researches have investigated the role of emotional intelligence, which is related to the capacity to perceive emotions, to use emotions in productive ways, and to understand and regulate emotions, in general project management (e.g. Dulewicz and Higgs, 2000; Turner and Müller, 2006; Druskat and Druskat, 2006). Dulewicz and Higgs (2000) have shown that 36% of the variance in project success was explained by the emotional competences of the project manager. In this research you will read about the role of the emotional intelligence of a project manager in a change project. It is expected that to manage the soft aspects of a change project, a high emotional intelligence of the project manager is needed.

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the change project (Westerveld and Hartogh, 2010). Logically, it will become more difficult for the project manager to satisfy the needs of all stakeholders and make sure the results are adopted by key users. Turner and Müller (2006) have found that moderately to highly complex projects need more emotional competences to succeed. However, a distinction between hard and soft projects has not been made yet. In this research we would like to investigate what the effect is of social complexity, which will be explained later, on a change project and its success.

For this research, the main objective is to provide more insight in the relationship between

emotional intelligence and project success, and the effect of social complexity on this relationship.

To investigate this relationship, a triangulation of methods will be used. First, a literature study is performed and definitions of the constructs under investigation are formed. Qualitative data resulting from personal interviews with project managers provide more insight in the characteristics of change projects, the role of stakeholders and the role of the project manager in change projects. Finally, the relationship between emotional intelligence and project success in different social complexities is tested through the analysis of quantitative data from an online survey. Information from these three sources allows us to formulate conclusions, determine managerial implications and make suggestions for further research.

This research is focusing on the soft aspects, such as emotional intelligence of the project manager and the social complexity of the project. Therefore, factors as time, budget, hard objectives, technical complexity and hard skills are out of scope. Although these hard aspects do have a major effect on project success, the aim is to see the relationship between the emotional intelligence of the project manager, on the soft side of project success such as stakeholder satisfaction and user adoption, in different social complexities. It is important to note that for change projects, the title of the person leading the change may vary. Names as project manager, change manager or program manager are used depending on the form the change project takes. In this research the term project manager needs to be broadly interpreted, referring to the person leading the change project.

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2. THEORY

In the following section, literature on the constructs of this research will be examined. Definitions will be given for projects and change projects. We will discuss several success measures for change projects and determine which measures will be used in this research. Literature on emotional intelligence and social complexity will be examined. Furthermore, we will examine the relationships between the constructs and hypotheses will be formulated.

2.1. Projects

Projects are defined by the Project Management Institute (1996) as “temporary endeavors undertaken to create a unique product or service.”

Turner and Cochrane (1993) propose another definition for projects. They state that a project is “an endeavor in which human material and financial resources are organized in a novel way, to undertake a unique scope of work of given specification, within constraints of cost and time, so as to achieve unitary, beneficial change, through the delivery of quantitative and qualitative objectives.”

This definition indicates that the work is unique, the organization of resources is novel, and the change is unitary, being achieved at once, on a certain day, although the benefit of the change is long-lasting (Turner and Cochrane, 1993).

Project work can be used to achieve certain strategic results. Cleland (2001) suggests that projects are the building blocks in the design and execution or organizational strategies and entail crossing functional and organizational boundaries.

2.2 Change projects

According to Dvir, Sadeh and Malach-Pines (2006) there is a common misconception regarding projects in that they are all alike, so one can use similar tools for all project activities. Shenhar (2001) referred to this as the project-is-a-project-is-a-project syndrome. In reality, projects differ in many ways.

The focus of this research is on change projects. Change projects are a type of project and are therefore also temporary and unique. However, to further investigate the concept of change projects it should be established what is defined as a change project within the wider concept of a project.

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different views of the real world situation are acknowledged. This means that there is not one best method and many possibilities for action will exist, each valued differently by stakeholders (Midgley, 2000) According to Crawford and Pollack (2004) soft projects have ambiguously defined goals and intangible output, and the success of these projects is hard to measure. Furthermore, they are highly subjected to external influences, have no clear solution, many stakeholders are involved and they have many different expectations of stakeholders to take into account. The complete framework of hard and soft dimensions by Crawford and Pollack (2004) can be found in appendix A.

Boddy and Buchanan (1992) mention five characteristics of a change project. First of all, the novelty factor of a change project is high. As stated before, a project is unique and will not have been done before in exactly the same way. There will be much uncertainty about what can be achieved and how to get there in a change project. Second, the change comes with a high degree of unpredictability. It is very easy to underestimate the resources and time needed to implement the change. Furthermore, changes in one area of the organization may cause ripples elsewhere, in areas where the project manager may not have direct authority over the people. To prevent these ripples from disrupting the change, they need to be managed. Fourth, change projects are often part of a cluster, which means that more major changes are occurring simultaneously. The more turbulent the environment of the organization, the more uncertain the project situation will be. Finally, the project manager has to deal with rising expectations from various stakeholders (Boddy and Buchanan, 1992). These might cause conflicting pressures which the project manager has to deal with.

The soft aspects of change projects may vary. Some change projects will have a large focus on technical matters, others will have a larger organizational or people element (Boddy and Buchanan, 1992). The soft aspects of changes will be the focus of this study.

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2.3. Change project success

"An architect may consider success in terms of aesthetic appearance, an engineer in terms of technical competence, an accountant in terms of dollars spent under budget, a human resources manager in terms of employee satisfaction, and chief executive officers rate their success in the stock market."

- M. Freeman and P. Beale (1992) Within the literature on project management, a lot is written about the definition of project success. However, there is still not one universally accepted definition of the concept. The difficulty with defining the success of a change project is that its assessment may differ, depending on a specific point of view. As the quote of Freeman and Beale (1992) suggests, different parties may have a different perception of project success. Therefore, to investigate how the success of a change project can be achieved, it is needed to determine what “success” is.

2.3.1. Project, product, purpose

There are projects which were perceived as a success internally, while they were poorly received by the client (Pinto, Slevin, 1988) On the other hand, there are projects that excessively consumed resources and were considered internal failures, but were positively received by the client and became a source of revenue for the company the following years (de Wit, 1986).

When defining a project, Turner and Cochrane (1993), distinguish between the project, which refers to a collection of tasks, undertaken by the skill types involved; the product, which refers to the goals and deliverables of the project; and the purpose, which refers to the beneficial change or the raison d’etre of the project. In this section it will be shown that this distinction of Turner and Cochrane also appears in the various definitions of project success. Definitions of project management success, project product success and project purpose success are recognized.

Project management success

Project management success refers to maybe the most used definition of project success: the Iron triangle, which is about time, cost and quality of a project (De Wit, 1988). According to Pinto and Slevin (1988) project management success is mainly determined internally in the project, meeting schedule, budget and performance objectives. This type of success is mainly characterized by the level of efficiency in which the project is executed (Jugdev and Muller, 2005). These success measures are mostly quantitative in nature and are most appropriate to measure the success of hard projects mentioned earlier (Crawford and Pollack, 2004).

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Triangle, project management disregards incidents where a project was run efficiently, but eventually did not meet organizational expectations.

Project product success

In determining the success of a change project another important aspect is the product that is delivered. Pinto and Slevin (1988) suggested that in more advanced stages of the project, external factors such as customer/organizational needs and satisfaction become more important in the definition of success. Pinto and Mantel (1990) defined aspects of success as the implementation process itself, which is focused on the internal efficiency of the project, the perceived value of the project and the client or user satisfaction, which are both focused on the external efficiency of the project. A research conducted in the USA on some 650 completed projects showed that a projects is considered an overall success if the project meets technical performance specification and/or mission to be performed, and if there is a high level of satisfaction concerning the project outcome among key people in the parent organization, key people in the project team, and key users of the project effort (Baker, Murphy and Fisher, 1983). Ika (2009) indicated, furthermore, that project success criteria include the realization of the strategic objectives of the client organization, satisfaction of end users and satisfaction of other stakeholders. We could say that this type of success is characterized by the degree to which the project was effectively executed and therefore the project’s goals were achieved and the desired project was delivered.

Project purpose success

The final type of success that is distinguished is related to whether the beneficial change is actually made. Where project management success focused on the efficiency of the project and project product success on whether a product with the desired specifications is delivered, the project purpose success is focused on the actual change that is delivered by the project. Successful implementation of change requires an understanding of the human response to change (Lewis, Romanaggi, Chapple, 2010). Boddy and Buchanan (1992) stated that even if the project comes to an apparently successful conclusion, it is easy for the forces of inertia or opposition to reassert themselves, and to undermine or reverse what has been achieved. Once the project is completed, people in the organization have to make sure the change is implemented and maintained successfully. Whether or not a project is successful has a lot to do with whether or not employees adopt the inevitable changes that are advocated (Hornstein, 2012). This implies conscious efforts to embed the change in the organization, and to ensure that the maintenance of the change is a realistic part of someone's role (Boddy and Buchanan, 1992). The product and purpose success measures are qualitative measures and have to be taken into consideration when measuring the success of a soft project (Crawford and Pollack, 2004).

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between the circles refers to situations where two or more success criteria are met. Achieving all three criteria would be the most difficult.

Figure 2.1. The relationship between project management, product and purpose success

As this research will mainly focus on change projects, which include many soft dimensions from Crawford and Pollack’s framework (2004), we feel that the “hard,” quantitative success measures as meeting schedule, budget and performance objectives are inappropriate, as often, the primary goal of a change project is to reach its benefits and making sure the change is implemented in the organization. Eventually, the change project’s success will be measured according to the level of satisfaction concerning the project outcome among key people in the parent organization, key people in the project team, and key users of the project effort (Baker et. al, 1983) and whether project users/recipients adopted the changes (Hornstein, 2012). There will therefore be a focus on the product and purpose success of the change project. Project Success is defined as the level of satisfaction concerning the project outcomes among key stakeholders and the extent to which key users/recipients adopted the change.

2.4. Emotional intelligence in change project management

As mentioned in the introduction, uncertainty and lack of structure are inherent in the nature of change projects. This and the often large soft aspect in a change project make it much less likely that problems can be dealt with by the use of a structured project management methodology (Saynish, 2010). Research conducted by the University of Technology, Sydney, has clearly brought into focus difficulties that can arise when attempting to apply ‘standard’ project management practices in complex, multi-stakeholder environments, especially where organizational change projects are involved (Crawford et. al, 2003). The project manager will be much more successful when moving his or her emphasis towards the human, organizational and political aspects of the change (Boddy and Buchanan, 1992).

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In this research the focus is on the human aspects of the change project. The relationship between emotional intelligence of the project manager and project success will be investigated. In earlier researches, emotional intelligence is shown to be of high importance in effective leadership in organizations (Dulewicz and Higgs, 2003). Furthermore, Druskat and Druskat (2006) argue that the characteristics of projects contribute to the importance of quickly building new relationships in which emotional intelligence is essential. However, before looking into this relationship, the concept of emotional intelligence needs to be clarified.

2.4.1. Emotional intelligence

Emotional intelligence (EI) refers to individual differences in the capacity to perceive emotions, to use emotions in productive ways, and to understand and regulate emotions (Mayer, Salovey, Caruso, & Sitarenios, 2003). Emotional intelligence, defined in this manner, is an intellectual capacity that connects reasoning with feeling (Brannick, Wahi and Goldin, 2011). It is not the absence of cognitive intelligence (measured by an IQ test). Rather, it involves noticing and understanding emotion and its implications and using this understanding to improve cognitive thinking including the quality of actions and decisions (Druskat & Druskat, 2006). Goleman (1995) was one of the first to make the connection of emotional intelligence and work performance. Together with Boyatzis, an expert on job competences that underlie superior work performance, he produced a model of work related emotional competences. These competences can be divided into four categories: self-awareness, self-management, social awareness and relationship management. These categories are shown in figure 2.2.

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Self-awareness

Self-awareness refers to the ability to be aware of one’s own emotional states and to be conscious of one’s impact on others. According to Druskat and Druskat (2006) this category is considered fundamental to the development of the competences in other categories. This means that one needs to be able to be aware of his or her own emotions in order to manage his or her emotions. Competences in this category are emotional self-awareness, recognizing our emotions and their effect; accurate self-assessment, knowing our strengths and limits; and self-confidence, a strong sense of our self-worth and capabilities.

Self-management

The second category of EI competences is called self-management and involves managing one’s emotions to control those that may be disruptive, to display emotions in productive ways and to focus one’s emotional drive to achieve standards of excellence (Druskat and Druskat, 2006). It involves competencies as keeping emotions under control, being transparent, being positive and persistent, adapting to change effectively, achievement orientation and taking initiative.

Social Awareness

Social awareness involves the ability to attune to how others feel and to ‘read’ the emotional tone in interpersonal situations (Druskat and Druskat, 2006). Social awareness is related to the ability to sense other’s feelings and perspectives and taking an active interest in their concerns, which is referred to as empathy (Boyatzis and Goleman 2000). Furthermore, organizational awareness, defined as the ability to read the emotional currents and political realities in an organization or group, is part of social awareness. Also service orientation, the ability to anticipate, identify and meet client’s often unstated needs is an important part of social awareness (Boyatzis et al, 2000).

Relationship management

Relationship management focuses on the ability to lead others or working with others. The competences that are part of this category involve actions that are made effective because of someone’s self-awareness, self-management and social awareness (Goleman, 2001). For example, effective leaders use their competence at being in tune with their employee’s needs (empathy) and in tune with the organizations’ needs (organizational awareness) to take appropriate and effective actions to develop their employees in ways that help them succeed (Gowing et al., 2005).

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2.5. Relationship between project emotional intelligence and

project success

Successful project management in today’s business environment is increasingly complex. Effective management of the intricate “people side” is the glue that holds together a project of any caliber.”

Barbara Anderson, 2010

Most researches about emotional intelligence have investigated the effect on job success (Druskat and Druskat, 2006), team motivation (Leban and Zulauf, 2004), overall project success (Muller and Turner, 2007; Dulewicz and Higgs, 2003) or on leadership style (Sunindijo et. al, 2007). The relationship between emotional intelligence competences and stakeholder satisfaction and user adoption within change project management has not yet been researched.

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In this research the relationship between emotional intelligence and the satisfaction of stakeholders and user adoption specifically will be examined, focusing only on the ‘people side’ of project management. It is expected in this research that achieving stakeholder satisfaction and user adoption will be largely influenced by the emotional intelligence competences of the project manager, and the following hypothesis regarding this relationship will be investigated:

Hypothesis 1: the level of emotional intelligence of the project manager positively influences project success, defined as stakeholders’ satisfaction, and the adoption of the

change effort by key users.

2.6. Social complexity

We defined change projects earlier as temporary, novel and unique endeavors, characterized by high uncertainty, unpredictability, and crossing boundaries of functional and organizational areas, involving many stakeholders and interests, situated in a changing environment and resulting in a (partially) intangible outcome. Because of their high uncertainty and unpredictability, but also because of the stakeholders and interests involved, change projects can become very complex to manage. In this section, the concept called social complexity will be explained. However, before diving into social complexity, a definition of complexity in project management needs to be established.

The term “complexity” is used in many contexts and many people will have an own understanding of it. The term originates from the Latin ‘complexus,’ from ‘com’ (together) and ‘plectere’ (to weave, bread). Many definitions logically entail multiple parts which are interrelated. Baccarini (1996) defines project complexity as “consisting of many varied interrelated parts” and he characterizes complexity in terms of detail complexity – the number of varied elements, and dynamic complexity– the degree of interrelatedness between these elements.

According to Remington (2011), all projects can be placed on a continuum between control and chaos. This continuum can be found in appendix B. Simple projects are on the control end and out of control projects on the chaos end of the spectrum. However, not many projects are simple, because all projects involve people and people have the tendency to make things complicated (Remington, 2011). Complicated projects can be challenging, but usually there is a way through it. Remington suggests involving experts to solve problems in these situations. Once we move into the complex part of the continuum, connections between causes and effects are more difficult to distinguish. A more collaborative leadership style is suggested (Remington, 2011).

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described by Westerveld and Hertogh (2010). Westerveld and Hertogh (2010) describe technical, social, financial, legal, organizational and time complexity. As the focus of this research is on the social aspects of project management, only social complexity will be investigated. All other types of complexity will be out of scope in this research.

Change projects are subject to many stakeholders and differing interests (Boddy and Buchanan, 1992). Technology, organization, finance, time and other types of complexity are important in managing change projects. However, managing the social arena of stakeholders is arguably the most critical in change projects (Boddy and Buchanan, 1992). Central in social complexity are the project stakeholders. In the following paragraph, project stakeholders will be defined and their role in social complexity explained.

2.6.1. Project stakeholders

Project stakeholders are defined as all individuals or groups who have an active stake in the project and can potentially impact, either positively or negatively, its development (Wheelen and Hunger, 1992). Social complexity arises through all types of stakeholders and the interactions between them. As Pinto (2010) states: “In managing projects, we are challenged to find ways to balance a host of demands and still maintain supportive and constructive relationships with each important stakeholder group.” Assudani et al. (2010) classify stakeholders in three groups; the stakeholder groups internal to the performing organization, internal to the customer organization and external to both organizations. Pinto (2010) also distinguishes internal and external stakeholders. Internal stakeholders include the top managers, other functional managers, project team members, staff, etc. who are inside the organization of the project. External stakeholders, on the other hand, are for example suppliers, competitors, environmental, political or other intervenor groups. All these stakeholder groups can have a large impact on the social complexity of the project.

Westerveld and Hertogh (2010) describe three elements of social complexity in large infrastructure projects: conflicts of interest of various stakeholders, which cause friction and debate, different meanings and perceptions of the project by various stakeholders, and the large impact of the change on people. We will describe these three elements below, and we will indicate how these elements are also recurring in change projects (to some extent, large infrastructure projects are also change projects).

Conflicts of interest

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conflicting information from stakeholders, directional complexity will increase (Remmington and Pollack, 2007). Facilitating the development of some sort of agreed position or working direction may be half of the battle of actually completing the project.

Different meanings and perceptions

As we have already described in the section about complexity theory in project management, people can have different perceptions of and give different interpretations to objects. To continue the example of the LIP described by Westerveld et. al (2010), engineers will like the technical challenges that LIPs face, whereas an HR-manager will focus on the development and satisfaction of employees within the project organization and a financial controller wants to see a convincing business case. Frame (2002) stated that a project consumes human and nonhuman resources and is multifunctional in the sense that they cut across several functional lines. Project teams will therefore consist out of a diverse group of people from different functional areas, who will all have a different perception of what needs to be done to finish the project successfully. This increases social complexity.

Large impact

“Large [infrastructure] projects cross large areas of land or are constructed at important locations. Their influence is far more widespread than the specific land needed for the project itself; projects have an impact on future developments in the whole area surrounding the newly built infrastructure” (Westerveld et. al, 2010). Similarly, change projects will have a large impact on the people within the organization. To finish the project successfully and to make sure changes are accepted, people affected by the change need to be aligned and motivated (Kotter, 1995).

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Figure 2.3. Five factors of social complexity

2.6.2. Project management and social complexity

In a change project various stakeholders are involved. They may be promoters or supporters of the project, they may be affected by it, and they may be resisting the change project. Stakeholders have an interest in the substance and the results of the change project and in how the change is managed. They can make a difference to the situation and project managers need to gain and keep their support (Boddy and Buchanan, 1992). As described before, building new relationships and establishing trust swiftly is a constant part of the project manager’s job. These trusted relationships should also be built with relevant stakeholders in the project. According to Druskat and Druskat (2006), emotional intelligence competences such as self-confidence, emotional self-control, transparency and empathy can help in these situations. Therefore, it is expected that a positive relationship exists between the emotional intelligence of the project manager and project success (defined as stakeholder satisfaction and user adoption).

After reviewing literature on the social complexity of and within projects, we expect that the emotional intelligence of the project manager will become more important as social complexity rises. If more stakeholders are involved which are highly interrelated, and they have conflicting interests, while various perceptions exist on how the change project should be executed and the change has a large impact on the change recipients, a higher emotional intelligence is expected to be necessary to bring the change project to a successful ending. In combination with the previously formulated hypothesis, we will test the following hypotheses, which are also displayed in figure 2.3:

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Hypothesis 2: Social complexity has a significant moderating negative effect on the

relationship between the emotional intelligence of the project manager and project success.

Social complexity is formed by - The number of stakeholders

- The level of interrelatedness of stakeholders - The degree of conflicting interests

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2.7. Conceptual model

Figure 2.4. Conceptual model for this research

After reviewing literature on project management and change management, the conceptual model as displayed in figure 2.4 was developed. Emotional intelligence is expected to have a positive relationship with project success. Project success is in this research defined as the level of satisfaction concerning the project outcomes among key people in the parent organization, key people in the project team, key users of the project effort and other stakeholders and the extent to which key users/recipients adopted the change. Social complexity, formed by the five factors “number of stakeholder,” “Interrelatedness of stakeholders,” “conflicts of interests,” “different meanings and perceptions,” and “the size of impact on people” is expected to negatively influence the relationship between emotional intelligence and project success.

This results in the earlier mentioned hypotheses:

Hypothesis 1: the level of emotional intelligence of the project manager is positively correlated with project success, defined as stakeholders’ satisfaction, and the adoption of the change effort by key users.

Hypothesis 2: Social complexity has a significant moderating negative effect on the relationship between the emotional intelligence of the project manager and project success.

Project Success

Social complexity through: a. Number of stakeholders b. Interrelatedness of stakeholders c. Conflicts of interests

d. Different meanings and perceptions e. Large impact on people

Emotional intelligence of the project manager

H1

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3. METHODOLOGY

3.1. Sample and procedure

To investigate the variables “Emotional Intelligence,” “Project Success,” and “Social Complexity,” an online questionnaire was filled in by 55 project managers, of which 23 project managers were questioned during personal interviews. To get the number of project managers, necessary for this research, a snowball-sampling method was used. This means that recommendations were used to find project managers experienced with change projects. First, project managers and other colleagues from Deloitte were asked to cooperate. Project managers from Deloitte’s clients were approached as well. These project managers were asked to contact other project managers in their network.

3.1.1 Background of the project managers

Most project managers were hired as external project managers (64%). The larger part of the project managers had experience in various different industries (28%). 19% of the project managers was experienced in change projects in the public sector. Most project managers in this research were male, 79%. Furthermore, a large part of the respondents is trained in Prince2 (36%), but also 21% has followed no training in project management at all. The respondents on average had 15 years of experience in project management. All change projects discussed in this research were completed after 2004. A graphical overview of the project managers’ backgrounds can be found in appendix C.

3.2. Data collection

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3.3. Measuring instruments

The interview consisted of three parts. First, some open questions were asked about the project manager’s experience with change projects. Then, project success and social complexity were measured for the last completed individual change project. Third, the interview ended with a short questionnaire measuring the emotional intelligence of the project manager.

3.3.1. Change projects

To get more insight in the characteristics of change projects and the role of stakeholders and emotional intelligence, 10 open questions were asked. These questions were about the background of the project manager, the characteristics and challenges of a change project and the role of stakeholders in change projects. Furthermore, questions were asked about the role of the project manager in the context of stakeholder management and the project manager’s opinion on the role of emotional intelligence in change projects. The complete interview can be found in appendix D.

3.3.2. Project success

Project success is defined in the literature review as: the level of satisfaction concerning the project outcomes among key stakeholders and the extent to which key users/recipients adopted the change. Resulting from this definition, the degree of project success of the projects was measured by the following aspects:

- The level of satisfaction concerning project outcomes of the project sponsor - The level of satisfaction concerning project outcomes of project team members

- The level of satisfaction concerning project outcomes of key users or recipients of the project effort

- The level of satisfaction concerning project outcomes of other stakeholders (specified by interviewees)

- the extent to which key users/recipients adopted the change

To determine the degree of stakeholder satisfaction and user adoption of the outcomes of the project, the interview questions were based on the project success assessment questionnaire developed by Shenhar and Dvir (2007). From this assessment, only the measurements for “impact on user” and “impact on team” were relevant and included in the questionnaire. Next to the users and team members, the project sponsor was identified as a stakeholder. Finally, a question about the extent of change adoption by the users/recipients was added.

3.3.3. Social complexity

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meaning and perceptions, and size of impact of the change. These aspects of complexity were operationalized as follows:

Complexity through conflicts of interests: the degree to which the interests of all and the most powerful stakeholders conflicted with each other.

Complexity through differing meanings and perceptions: the number of different disciplines involved in the project, the degree to which these disciplines were involved concurrently and the degree to which these disciplines were familiar with each other.

Complexity through the size of impact on people: the number of stakeholders that was required to make the change, how broad the impact of the project was across the organization and how large the change was for key stakeholders from a personal perspective.

3.3.4. Emotional intelligence

To measure the emotional intelligence of the project manager, the Schutte Self-Report Emotional Intelligence Test (SSEIT) was used. This test is developed by Schutte, Malouff, Hall, Haggerty, Cooper, Golden, and Dornheim (1998) and was based on Salovey and Mayer’s (1990) original model of emotional intelligence. The SSEIT is a 33-item self-report inventory, in which respondents rate themselves on the items using a five-point scale, ranging from “strongly disagree” to “strongly agree.” The 33 questions can be divided in 4 factors: Perception of emotions (items 5, 9, 15, 18, 19, 22, 25, 29, 32, 33), Managing own emotions (items 2, 3, 10, 12, 14, 21, 23, 28, 31), Managing Others’ emotions (items 1, 4, 11, 13, 16, 24, 26, 30) and utilization of emotion (items 6, 7, 8, 17, 20, 27) (Schutte et al., 2009). Some example questions are: “I am aware of my emotions as I experience them” and “I find it hard to understand the non-verbal messages of other people.” The scale has been used in many studies of emotional intelligence and has been much written about, as indicated by over 200 publications listed in the PsychINFO database as citing the Schutte et al. (1998) article that first described the scale.

Three of these factors will be the focus of this study: perception of own and others’ emotions, managing own emotions and managing others’ emotions. We expect that these factors of emotional intelligence are essential in managing relationships with project stakeholders. They are in line with the concepts self-awareness, self-management, social awareness and relationship management, explained earlier. Therefore, the questions measuring the utilization of emotion will be excluded from the questionnaire.

3.4. Data analysis

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with respect to the validation of results, the interpretation of statistical relationships and the clarification of puzzling findings (Sieber, 1973).

3.4.1. Qualitative research

The qualitative data (the open questions) are analyzed by using the program ‘Atlas ti.’ Interviews were transcribed and codes were assigned to important quotes from the respondents. The quotes were divided into categories to facilitate interpretation. Furthermore, network views were developed to have a clear overview of the relationships between categories.

3.4.2. Quantitative research

To analyze the data obtained from the closed questions in the interviews and the online questionnaire and to see whether there is statistical evidence for the stated hypotheses, SPSS 18.0 was used.

All questions were rated on a 5-point Likert scale. First the reversed questions in the questionnaire about emotional intelligence were recoded. Furthermore, the incomplete questionnaires were removed from the dataset. Most respondents stopped at the question “How many stakeholders were involved in the project?” This could have been information that the project manager did not remember and that he or she had to look up. The incomplete cases were not useful for further analysis. This resulted in an n of 47. The variables were renamed and labels were added.

Factor and reliability analyses were performed to see whether the items could be combined into the variables that they were intended to represent. The factor analyses for project success, social complexity and emotional intelligence will be described in more detail in the results section.

Boxplots, Kolmogorov-Smirnov tests and Shapiro-Wilk tests were performed to check the normality of the resulting factors in the sample. The null-hypothesis assumes that the distribution is normal. If the p-value is ≥ 0,05, the null-hypothesis will not be rejected. If the p-value is <0,05, the null-hypothesis will be rejected, meaning that the distribution is not normal.

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the relationship between emotional intelligence and project success changes in these three situations.

Figure 3.1. Moderator model by Baron and Kenny (1986).

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4. RESULTS

In this section, first the results from the personal interviews will be presented. Quotes are divided into various categories for analysis. Characteristics of change projects will be discussed, the role of stakeholders and the role of the project manager will be investigated and respondents’ opinions about the role of emotional intelligence in change projects will be given. Second, the results from the online questionnaire will be presented. Before moderating analyses can be discussed, preliminary analyses are done to ensure the quality of the results.

4.1. Results: interviews

The interviews with project managers were held to get more insight in the role of emotional intelligence and social complexity in change projects. The data from this qualitative research were classified into a number of categories. First, to get some more insight in change projects, the characteristics, difficulties and reasons for failure will be discussed. Next, the role of stakeholders in change projects will be elaborated on. Furthermore, the role of the project manager in change projects will be investigated. Finally, the project managers were asked their opinion about the role of emotional intelligence in change projects. It is important to note that the titles of the persons interviewed varied between project manager, change manager or program manager, depending on the form in which the change project was executed. In this section the term project manager needs to be broadly interpreted, referring to the person leading the change project.

4.1.1. Characteristics of change projects

From the interviews it can be concluded that change projects are characterized by a combination of hard and soft factors. The project managers interviewed conclude that the difference between change projects and other projects is the people factor. One interviewee clearly described that “a change project has an end state that needs to be realized by directly involved people (sponsor, stakeholder, suppliers) where attention is paid to the instrumental as well as the social aspects of the change” (Interviewee 4). The interviewees also recognized that change projects are often very complex and time-consuming endeavors, which often causes them to be executed in the form of a program.

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you. However, I think that the eventual goal of a change project is to make the company a better functioning company. Satisfying the project sponsor who leaves in two years will not help the company” (interviewee 12).

To get some more insight in the challenges of a change project, interviewees were asked about the main difficulties they encounter. Many project managers mentioned that it is often very difficult to get the people in the organization motivated for the change. “In a change project there are as many opinions as there are people involved. A project manager will do his best to get everyone involved and enthusiastic about the change. But with everything that you do, people will agree and disagree with you. A project manager will simply not succeed in getting everyone enthusiastic” (Interviewee 8). Furthermore, really embedding the change in the organization, making sure that people will work with the change, proved to be challenging as well. “You cannot change people externally. People can only change themselves.” (interviewee 17). “The main challenge for me is to cause a change in the mindsets of people. As a project manager, I want the people to decide for themselves that they have to change in order keep functioning” (interviewee 14).

The degree to which people in the organization will work with the change highly depends on the commitment of the line management in the organization. “Do the line managers understand the changes and are they willing to confront their organization with these changes?” (Interviewee 13). Time pressure makes this even more difficult according to the project managers, since these social aspects of the change take time. Project management is often a very structured activity. “In a situation where the project manager has to meet deadlines, less time and attention is devoted to the human aspect of the change” (interviewee 1).

Furthermore, dealing with resistance in the change, creating a shared vision with the people in the organization and defining the goals of a change project were deemed very difficult in change projects. One main reason of failing change projects mentioned by the interviewees is the fact that many project managers rely mostly on project management methods in change projects. “A project manager is often trained in structured methods, but the social components are underexposed in these methods. When social aspects are underexposed, the change implementation will fail” (interviewee 23). An overview and a frequency table of characteristics and challenges of a change project can be found in appendix F.

4.1.2. Role of stakeholders in change projects

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Managing stakeholder interests becomes even more difficult when differences in interests are not clearly visible. “Things will become more complex when resistance and concerns are unexposed. People will not act as they promised” (interviewee 5). The project managers interviewed agreed that the number of stakeholders will not have a direct influence on the success of a change project. It is the differences of interests that increase complexity. “In my opinion, the more interests, the more difficult to manage. However, the interests must be contradictory to make it more complex to manage. It is mostly about the differences in interests” (interviewee 21) “The project manager must bring all these different interests together” (Interviewee 12). To manage stakeholders, a project manager should determine different approaches per stakeholder group. “Stakeholder management is about communicating with people, involving people in an appropriate way” (interviewee 17).

4.1.3. Role of the project manager in change projects

To see what the project manager’s role is in socially complex environments, the interviewees were asked whether the project manager had an influence on the satisfaction of stakeholders and what the role of the project manager should be in the context of stakeholder management. Mostly mentioned were that the project manager has the important task to involve people in the change. “You have to instruct people in a proper way, let people participate in the change. You always have to deal with some degree of resistance and through involvement, coaching, informing and training better results will be achieved in the change project” (interviewee 4). “The role of a change manager starts at defining the project. If you don’t involve people in project definition they will eventually build up resistance at the implementation stage.” (interviewee 7). From the interview results furthermore appeared that a project manager should always be open and transparent. “The most important in change projects is to be transparent. As a project manager you need to be honest about what is happening and the status of the project. If something goes wrong, stakeholders need to be informed, expectations need to be managed” (interviewee 3).

Understanding the goals of stakeholders was mentioned as an important task in stakeholder management. “Someone in his late 50s will have different goals than an employee in his early 30s. The younger employee is full of ambition; he wants to have his success to get to a next career step. The older employee cares about the people in his organization and wants a change to be implemented carefully. As a project manager, you need to understand these differences” (interviewee 15). Furthermore, all stakeholders should have some kind of task in the change project. “I tend to give all stakeholders some kind of task in the change project to get them involved. Also the resisting stakeholder groups. They can provide a critical look on the project.” (interviewee 7). Role definitions are essential. The project manager mainly acts as a facilitator in the process of the change and he tries to get people on board of the change and explains the change. “The role of the project manager is more facilitating and signaling. Eventually the line management is responsible for realizing the effects and intended results of the change” (interviewee 12).

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that are clear to all of them. “I was constantly translating and making sure the parties would understand each other. Once they understood each other, we could work towards a solution” (interviewee 14) “To make a change work; you have to make sure that the dot on the horizon is clear to everyone. It needs to be clear for all people involved where we are heading.”(interviewee 18).

The project manager acts as an intermediary between parties. “To some extent, in my role as the project manager, I am negotiating between different parties to get them to a shared goal.” (Interviewee 19). “I was mainly the intermediary between different parties during a change project.” (interviewee 1).

Furthermore, on a personal level, a project manager should understand what drives people, appoint feelings and concerns, be able to adapt behavior to others, be able to communicate at different levels and build trust. “People say about me that I am very easy going. I can talk to the executive board, but also to the doorman downstairs. I think that is very important in change management.” (Interviewee 11).

4.1.4. Role of emotional intelligence in project management

It can be concluded from the interview results that Emotional Intelligence plays a large role in change projects and their success. “A large part of managing change projects is about managing your environment. You cannot ignore your environment and I think you can really predict the success of a change project by measuring the EQ of the project manager” (interviewee 10).

Often mentioned was the fact that project managers should sense how people feel about the change and what their attitude is towards the change. “It starts with goal setting. How do you feel whether people are on board of the goal setting? When discussing objectives in groups, everyone will say yes, especially when the boss is in the room. It is very important to find out whether people really agree with and commit to the objectives” (interviewee 15). Many project managers described that it is very important to use your senses during a change project. “Sensing the attitude of stakeholders, knowing who you are talking to and feel where important interests are, that is very important for a change manager” (Interviewee 16) “I don’t use my head as a compass, but my stomach. I use my senses and intuition; my ratio is more of a management tool to me” (Interviewee 18). “When I feel something is sincere, I feel it in my stomach. My head is looking at the facts that are present around me” (interviewee 20).

In a change project it is important to know how to approach people. “I always look at the organizational culture. Are people in the organization thinkers, doers or feelers? You can convince thinkers with arguments; get doers in motion, but you have to talk to feelers” (interviewee 14).

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Many interviewees also stressed that the role of emotional intelligence is very dependent on the context of the project. “If the change project involves very technical or introverted people, a more structured way of managing the change might be more successful” (interviewee 23). However, even in these kinds of situations, the project manager needs to manage his or her environment and needs to work with a team. “Sometimes project managers need to be structured. They want to manage their resources and make sure that the project moves forward. Sometimes it is better to have less empathy. However, the project manager still needs to manage his environment; this cannot be ignored” (interviewee 10).

All frequency tables of codes in the interviews and the network views of the codes can be found in appendix F.

4.1.5. Conclusion

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4.2. Results: questionnaire

4.2.1. Preliminary analyses

Validity and reliability

To see whether the items could be combined into the variables that they were intended to represent, factor analysis and reliability analysis were performed. For the variables within project success and social complexity an exploratory factor analysis was performed.

The items “willingness of team members to participate in a similar project team” and “team motivation during the project” were excluded from the analysis. These items are related to the process of execution rather than the eventual project results. Furthermore, the factors of social complexity as formulated earlier could not be extracted from the factor analysis. Three factors emerged which formed social complexity in this research: “Number of parties involved” “Variety of interests” and “Number of disciplines involved concurrently.”

As the questions for Emotional intelligence were taken from an existing questionnaire, both confirmatory and exploratory factor analysis were performed using the programs Amos and SPSS. In table 3.4.2. an overview is given of the factors used in this research. Detailed information about the factor and reliability analysis can be found in appendix G and H. To measure emotional intelligence, it was initially intended to form three factors: perception of emotions, management of own emotions and management of others’ emotions according to the factors described by Schutte et al. (2009). However, these factors were not clearly distinguishable with confirmatory factor analysis. Exploratory factor analysis did not provide any useful results either. A reason for this could be the small sample size. Therefore, emotional intelligence was taken as one score, calculated as the sum of scores of 23 questions on emotional intelligence as suggested by Schutte et al (2009). The questions “perception of emotions 10” “management of emotions 8” “management of others’ emotions 1 and 5” were excluded, because of their low correlations and low factor loadings in the factor analyses. With a Cronbach’s alpha of 0,807, the reliability of this factor is acceptable. The steps taken in the factor analysis can be found in appendix G.

After the factor analysis, some of the models under investigations changed. Instead of investigating 6 variables related to social complexity, now 4 variables for social complexity are examined. The factors ‘interrelatedness of the stakeholders’ and ‘intensity of impact on people’ could not be distinguished from the data. A reason for this could be that the questions asked were based on theories from literature, and were not tested on reliability before this study.

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Table 4.1. Overview of the factors used in this research

Outcome of reliability analysis Variable number of items Cronbach's Alpha Project success 6 0,850 Emotional intelligence 23 0,807 social complexity total 8 0,626

4.2.2. Extreme values

Boxplots were used to detect outliers or extreme values in the dataset. Three cases showed extreme answers. To keep the dataset as large as possible, these outliers were replaced by the mean minus two standard deviations or the mean plus two standard deviations, depending on the direction of the extreme value (Field, 2005).

4.2.3. Normal distribution

A Kolmogorov-Smirnov test and a Shapiro-Wilk test were performed to see whether the new factors are normally distributed. No problems with normal distributions of the variables arose.

Table 4.2. Outcomes of the Kolmogorov-Smirnov and Shapiro-Wilk tests

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4.3 Regression analysis

To see whether social complexity moderates the relationship between emotional intelligence and project success several steps are taken. First, to examine the relationship between emotional intelligence and project success, the independent and dependent variable, a simple regression analysis was performed. Next to that, multiple regression analysis was used to examine the relationships between emotional intelligence and project success, moderated by social complexity as a total score of variety of interests, number of parties and the number of disciplines involved concurrently. A split sample method was used to graphically display the interaction between emotional intelligence and the moderator variable. The complete regression analysis performed can be found in appendix H.

4.3.1. Emotional intelligence

First, a regression analysis is performed to investigate the main effect of emotional intelligence of the project manager on the success of the change project to see whether there is a causal relation between the two variables.

Table 4.4. Simple regression emotional intelligence and project success

Variable entered Dependent variable Project Success (N=47) Step 1 Emotional intelligence (EI) 0,258 F for regression 3,202 F for change 3,202 R-square 0,066

Main table contains standardized coefficient betas VIF < 2 * p =< 0,05

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4.3.2. Social complexity

To investigate whether there is a moderating effect of social complexity on the relationship between emotional intelligence and project success, a multiple regression analysis was performed.

Table 4.5. regression analysis with total social complexity as a moderator

Variable entered

Dependent variable Project Success (N=47)

Step 1 Step 2 Step 3

Emotional intelligence (EI) 0,258 0,370 * 0,370* Social Complexity -0,308* -0,308* EI X SC -0,009 F for regression 3,202 3,837* 2,501 F for change 3,202 4,241* 0,004 R-square 0,066 0,149 0,149