Contextual understanding of a project is very important to a project manager. The reason is quite simple: By understanding the circumstances about a project, he or she can develop a meaningful plan and respond more effectively to expected and unexpected situations.
Failure to understand context can result in very serious consequences, especially later in a project life cycle.
A project manager could adopt an incorrect or unsatisfactory strategy, that is, one inappropriate for the circumstances. He or she may employ resources, for example, based on an unrealistic scenario, resulting in an inefficient and ineffective execution of the project.
It can cause enormous tension, even negative conflict, due to the failure to identify important assumptions and facts. Teaming with stakeholders may be, for example, especially difficult because everyone operates in a "I thought he or she thought" syndrome. If negative conflict does not arise early, it will surely arise later and with greater intensity.
It can result in a lack of commitment and ownership. A project manager may involve the wrong stakeholders and overlook more important ones. From the very beginning of project execution, he or she may experience resistance for not paying attention to the context.
If not enough, unrealistic plans can be the product. Inadequate assessment of circumstances can easily affect the quality of planning. For example, if he or she fails to identify assumptions and stakeholders, the negative impacts will appear in the plans and throughout project execution.
A poor contextual understanding reflects poor decision making. Whereas a good contextual understanding of a project can help a project manager make decisions at the right time, a poor contextual understanding provides the opposite ; decisions become quixotic, chasing nonexistent or insignificant issues.
A poor contextual understanding can result in poor, even no, coordination. That is because no one, including the project manager, can distinguish between what is and is not important. Consequently, the wrong people focus on the wrong priorities. For example, some stakeholders may consider a schedule important, but others consider quality paramount, and then for some strange reason, the project manager focuses on the budget, which represents his or her contextual understanding.
The ultimate consequence of having a poor (or lack of) contextual understanding is that it can cause poor project performance. People, individually and as a team, immediately become inefficient and ineffective, contributing ultimately to poor schedule and budget performance, perhaps due to rework .