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Why Do Project Managers Need Escalation Procedures?

written by: Jean Scheid • edited by: Linda Richter • updated: 5/20/2011

Monitoring projects is a must, and project leaders, as much as they may want to let things slide through, can harm a project—even resulting in project failures. So, why do project managers need escalation procedures? Jean Scheid explains.

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    What Are Escalation Procedures?

    Escalation Procedures Projects can fail for all sorts of reasons, but probably the biggest reason is the failure to monitor the project and implement some “what if" scenarios. Beyond your risk management plan and your change control process, escalation procedures can work for project managers in one of two ways:

    If you’re wondering why do project managers need escalation procedures, don’t fret. In the next sections we’ll look an example where a project escalation procedure meant success and, if not implemented, why there was failure. By analyzing real-life examples, you’ll gain a better understanding of why project managers must not miss the mark when it comes to escalation procedures.

    Image Credit - MorgueFile/rosevita.

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    Successful Escalation

    Because escalation procedures in project management are so critical, first you must trust your team and offer up some power and accountability so teams can act or react. Because I’m in the auto industry, let’s take a look at the Cash for Clunkers program. Depending on each dealer’s escalation procedures and how quickly they implemented a plan, it really did mean success or failure.

    Under the Cash for Clunkers program, new car buyers were encourage to trade in their less fuel efficient cars for newer, more fuel efficient cars. With this program came rebates that lowered the sale price of the new car by up to $4,500, depending on the model purchased.

    When the program was announced, it was explained in detail to car buying consumers, but not fully explained or understood by auto dealers. This is a great example of why dealers needed escalation procedures to ensure they reaped the rewards of this program.

    Smart dealers and their sales staff saw right away that because the rebates would be coming from the government and not the manufacturer, there would be a time delay. To prepare for this, dealers often expanded on capital loans for cash they would need during the lengthy wait, or negotiated with manufacturers on when they would have to actually pay for the vehicles (floor plan liability)—meaning they asked for extensions from five days to up to a month.

    Some dealers realized that more cash flow would be needed during the program and reached into their other factory receivable accounts to replenish needed cash during the program.

    Basically, the well-prepared dealers saw the risk, prepared a solution, and were successful while the program lasted.

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    Escalation Failure

    Some not-so-smart dealers not only didn’t see the risk, but also never read the Cash for Clunkers rules, weren’t aware of the process, what vehicles qualified as a clunker and what vehicles were considered the most fuel efficient under the program. These dealers also didn’t account for the lack of cash flow they would experience awaiting the rebate money from the government—often stuck with no cash to pay floor plan liabilities and other operating expenses.

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    Elements of an Escalation Plan

    Monitor Your Project With Escalation Procedures To help you learn why project managers need escalation procedures, consider the five elements of an escalation plan:

    1. Team Responsibility – Here’s where you’ll need to trust your team to inform you if a risk or problem area is discovered. Each team member must be trusted (and relied upon) to deliver the issue or problem to the appropriate stakeholders within the project.
    2. Manage the Plan – As the project manager, you can’t drop the ball when a risk is identified but instead, deal with it via set guidelines prepared by you.
    3. Document - Your escalation plan should have a log much like a risk register to keep track of problems, how they were handled, and the priority of each issue.
    4. Be Time Aware – Leaders need to work with teams and stakeholders on a timely basis to ensure the risks are dealt with to recover any mishaps, make them minimalistic, or diminish the problem.
    5. Communicate – An effective way for the entire team to communicate is also key in an escalation plan. Make sure the communication plan you set up is accessible to all throughout the duration of the project.

    Image Credit: MorgueFile/images

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    Using the Escalation Plan

    When it comes time to utilize your escalation procedures and plan, keep in mind the two critical time areas discussed earlier—during or at the end of a project. If risks are identified during the project or within a phase or stage of the project—don’t move on until the risk is mitigated and solved.

    If a project outcome is not acceptable, as the project manager, use your escalation plan to determine what was reported, what action (if any) was taken or not taken, and look at team accountability and documentation procedures to identify why the outcome was not as expected.

    Using the five elements to develop your plan and then using the plan effectively will ensure that not only do you have the answer to the question, why do project managers need escalation procedures, but also, that the plan works by careful monitoring and leadership.

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    Project Management Gems – Project Management Escalation Process, Gar Houston (2007) retrieved at: