Game Theory in Management

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Modelling Business Decisions and their Consequences

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Training Rats To Do PM

The Ministry of (Project) Magic vs. Stanley T. Raspberry

Does Mars Really Execute a Figure-8?

Hybrids, or Mutants?

Sherlock Holmes on Project Management

Training Rats To Do PM

I like spending space in this blog ripping into openly fraudulent management science precepts that have somehow crept into the generally-accepted mainstream. I got to thinking the other day, how do these ideas get introduced in the first place, in such a way as to make them appear valid or attractive when they are plainly suspect? And I was instantly reminded of the book Walden Two.

For those of you who are (blessedly) not up-to-speed on the theories of B. F. Skinner, Walden Two was a utopian novel about an isolated community that was structured around the theories of behaviorism he would later expound upon in the infamous Beyond Freedom and Dignity. By basically shedding the norms of societal behavior that did not fit into the mold of stimulus-response-reward/punishment, this isolated community – surprise, surprise – became highly profitable and successful, populated by happy, well-adjusted people. The narrator, a reporter, who has come out to do a news story on the community, is so impressed that he abandons his reporter life, and joins the community.

Imagine that.

So, essentially this Harvard psychology professor advances his pet theory initially in a utopian novel (Walden Two preceded Beyond Freedom and Dignity by more than twenty years). Something similar happened with Critical Chain, where the technique long-known as “crashing the schedule” (i.e., transferring resources from non-critical path activities to critical ones in order to shorten the project’s overall duration) got a new name and, in a fictionalized setting, succeeds at several levels, among them in the project management realm.

Imagine that.

This kind of approach irritates me no end. I think it’s highly disingenuous, and ought to be considered ipso facto evidence of charlatanism. If you happen to belong to a well-led organization, a standard operating procedure is that, should your manager receive a communication that criticizes the work or character of a member of the project team, but such a communication is unsigned, it goes straight into the trash can, no exceptions. Indeed, organizations that do not have such a practice, formally nor informally, should be automatically assumed to be poorly-led. I think something similar needs to happen in the PM arena: if your profound, wide-ranging idea is introduced, not through a peer-reviewed publication such as the Project Management Journal, but rather through a fictionalized setting, such as a novel, well, your idea is probably too silly to be considered in a valid academic setting, no exceptions.

But that’s the purist in me talking. In the real world, many goofy ideas (my regular readers know I’m thinking about risk managers, communications experts, and GAAP practitioners, among others, who attempt to make inroads into the PM realm) arrive with so much glitter on them, it takes a hard-bitten blogger to call them out as suspect, much less mock-worthy.

But perhaps I’m mistaken. It’s happened before. So, I say, let’s do a test: we’ll set up two colonies of rats (the white, cute ones, not the grey mean ones, no matter how closely the latter resemble my critics). Colony A will receive electric shocks each time they refuse to perform risk analysis, enhanced communications practices, or adequate asset management, and will be rewarded with food pellets each time they are observed pursuing these objectives. Colony B will simply be fed the food pellets they retrieve at the end of the maze.

Care to bet which colony gets fat?

Posted on: May 27, 2016 11:39 PM | Permalink | Comments (0)

The Ministry of (Project) Magic vs. Stanley T. Raspberry

I found myself in the docket, in a room that looked very much like the courtroom scene at the beginning of Harry Potter and the Order of the Phoenix. In fact, the people assembled in the gallery were dressed similarly to the characters from that movie.

“Stanley T. Raspberry, do you know why you are here?” said the fellow in the judge’s seat, in a sonorous voice.

“Sure. I received this rather formal-looking summons to be at this place at this time. I did a quick internet search – you guys aren’t a branch of law enforcement, are you?”

“We’ll ask the questions here!” the “judge” stormed. “Were you or were you not involved in a case recently, where an Information Technology firm hired you to look in to why they were consistently overrunning their software projects, and finishing late?”

“Define recently. That stuff happens all the time.”

“On or about April 17.”

“Let me think … oh, yeah, that was the O’Malley case. Pretty simple solution, really.”

“And did this ‘solution’ of yours involve issuing a stop work order on the subcontractor firm performing risk analysis?”

“Yeah, of course. Conventional risk analysis is almost always useless in project management, but it’s especially so in IT projects.”

A collective gasp went up in the room, and one woman cleared her throat in a way as to suggest she was attempting to gain everyone’s attention.

“So silly of me” she began, “but I thought I heard you say that risk management is useless.”

“On IT projects, yes, absolutely, and probably everywhere else, too.”

The several dozen or so people in the gallery suddenly began talking amongst themselves in earnest at this point. The judge slammed some sort of metal sphere the size of a tennis ball against a sound block on the desk in front of him. The gallery quieted down.

“And did another part of this so-called solution involve a suspension of formal baseline change control processes?”

“Yes” I said emphatically. “Look, in extremely fast-paced projects, some of the more traditional and formal aspects of PM must be de-emphasized, or abandoned altogether, in order to improve the odds of project success, and change control is near the top of that list. For cryin’ out loud, haven’t any of you people ever heard of Agile, or Scrum?”

Again the gallery exploded into side conversations, and again the judge pounded the steel tennis ball on the sound block.

“Have you no appreciation for proper PM techniques at all?”

“Sure” I began. “But what all of you have to understand are the effects of hybrid project management. When a management science hypothesis appears to be effective in improving actual project performance – like the introduction of Agile/Scrum in IT projects – such ideas are often modified and tested in analogous project situations. That’s how PM theory is advanced in the real world.”

“These ‘hybrid’ ideas, as you call them” the sonorous-voiced judge began, “we refer to them as ‘muddles.’ And it’s one of the jobs of this ministry to eliminate all muddles from the project management world. They’re simply too impure, too far outside the existing codex.”

“Interesting” I responded. “And how, exactly, do you plan to go about doing that?”

“We will reveal that you do not have our approval as a licensed project management investigator.”

“You didn’t license me in the first place.”

“A minor detail.”

My secretary met me outside the courtroom on the steps leading to street level.

“How did it go in there?”

“Pretty weird. The short answer is that they’re going to recommend revocation of my PM investigator’s license.”

“That’s sounds terrible!” she cried. “Can they do that?”

“Well,” I began, as I caught up on my smart phone messages, “they can make any recommendations they want, though they’re clearly not associated with PMI®. Hey, check this out: three large clients have dropped us, but 17 others are asking about my availability. I think we’ll do fine.”

Meanwhile, back in the courtroom, a dark figure emerged from the shadows.

“Everyone performed well” the Monolithic executive stated in a guttural voice.

“What happens, lord, if he continues to defy us?” asked the judge.

“Then we’ll just have to find another way of setting him back.”

At this, the room erupted in a sound that can be best described as what happens when someone tells a really funny joke at a Darth Vader impersonators’ convention.

 

Posted on: May 23, 2016 09:30 PM | Permalink | Comments (2)

Does Mars Really Execute a Figure-8?

My regular readers are aware that I often invoke the brilliant Thomas Kuhn, author of The Structure of Scientific Revolutions, who evaluated the way that scientific theories replace their obsolete predecessors. One of the examples Kuhn offers up has to do with cosmology, specifically the way that the Copernican Model replaced the Ptolemy version of the way the Solar System operated. Ptolemy, in the first century A.D., theorized that the galaxy revolved around the Earth, and cosmologists in-between the first century and 1543 (and for a while thereafter, embarrassingly) held to that model. However, when data started being collected that challenged the Ptolemy model, additional assertions were added to the Ptolemy theory, known as “epicycles,” that appeared to explain the anomalous data within the then-accepted theoretical framework.

Part of these epicycles involved the observed behavior of the planet Mars. In order for the Ptolemy model to be correct, Mars would have had to perform a little mini-circle in addition to its nominal orbit, essentially executing a figure-8 as a normal matter of course. Why an orbiting body would behave in such a fashion was never really adequately explained, for the simple reason that it couldn’t. Mars didn’t do a figure-8, commonly-accepted theories notwithstanding.

With the invention of the telescope in 1608, it wasn’t long before Copernicus’ model, of the Solar System’s bodies orbiting the Sun, was perceived to do a far superior job of explaining the known data. The movement away from the Ptolemy model towards the Copernican version was a “paradigm shift,” a term coined by Kuhn.

Meanwhile, back here in the PM world, the longest-held overarching theory in management science is that the point of all management is to “maximize shareholder wealth.” To that end, there are several anomalies in management information, such as the notion that the data coming from the General Ledger is all that’s needed to manage a business, or that Gaussian Curves have some utility in quantifying the way the future unfolds. Project Management, as a discipline, represents a paradigm shift in the management science world, but has yet to be as widely accepted as it should. For example, pick up any college-level business school text on the topic of quantitative analysis in business. I can almost guarantee that it will not include methods for taking into account Earned Value or Critical Path-generated information streams; instead, they invariably predicate their entire analysis techniques on information from either the General Ledger, statistical analysis, or both. In essence, they want us to believe that Mars executes a figure-8.

But the most pernicious aspect to these epicycles lies in the fact that their proponents got us, the PM aficionados, to adopt them in the first place. Neither the general ledger nor statistical analysis has anything to do with assessing project performance – as stated previously, those pieces of information are derived exclusively from Earned Value and Critical Path methodologies. Performing regression analysis on a project’s spending behavior to estimate at-completion costs, or using a Monte Carlo simulation to determine probable end-dates, are epicycles of an obsolete theory, that the best methods for generating the information streams that guide decisions towards that end are predicated in generally-accepted accounting principals, or GAAP, or else in statistical analysis techniques. Somehow, though, both techniques made it into the PM codex, where they absolutely do not belong. Real PM-types know perfectly well how to calculate at-completion costs and probable project end-dates, and they have nothing to do with risk management, nor GAAP, period. To be blunt, they’re not our epicycles. We PM-types know how to derive projected at-completion costs and end-dates, and shouldn’t have to account for the flaws inherent in rival management science theories.

In short, we know Mars doesn’t have a figure-8 orbit. Why doesn’t everyone else get that?

Posted on: May 16, 2016 09:21 PM | Permalink | Comments (0)

Hybrids, or Mutants?

In Stan Lee’s Marvel Comics universe, the X-Men are people who usually look like the rest of us (in Mystique’s case, literally), but are actually endowed with various superhuman abilities stemming from being born with a genetic mutation. There are mutants other than the X-Men, some of whom follow Magneto (who can manipulate metal without touching it) and represent the X-Men’s ideological adversaries, and some mutants who are un-aligned and just go about their lives.

And then there’s the rest of us, who have to endure seeing projects that took millions and millions of dollars and represent iconic aspects of American life – like the White House and the Golden Gate Bridge – ripped to pieces by the mutants who are trying to decide an argument  about an appropriate equilibrium point in human/mutated-human relations. Due to an entirely understandable reluctance to see iconic American structures ripped to pieces, considerable effort is expended in the X-Men universe to devise a method or machine that can reliably detect mutated humans, so that the mutants can be readily identified and dealt with, one way or the other.

Meanwhile, back here in the project management world, we see epistemologically similar conflicts, where certain long-held precepts about PM are challenged, or overthrown, by technical approaches that look like traditional PM, but have really been modified to fit specific types of project work. The modified versions appear to be in compliance with the PMBOK Guide®, but are actually different, and often times far more powerful – so powerful, in fact, that they threaten to shred some of the more traditional models. In our universe, there is also considerable effort dedicated to ascertaining which management approaches are consistent with basic PM precepts, and which represent something outside our codex, and need to be identified as such, les they infiltrate and blow us up (in the arena of competing management science hypotheses, of course) with their circumstance-specific greater power.

As it turns out, my second book, the one this blog is named after, happens to address this very issue, that of which easily-articulated tests could be employed to ascertain those management information systems that are effective, and for which purposes, and which, well, aren’t. The underlying theory behind this mutant-identifying machine (strikethrough) information stream validator is predicated on the idea that all project management information systems exist to answer at least one of the following questions:

  1. Is the product or service being provided that which was originally agreed to for the price?
  2. Once the project or activity is completed, is there an audit trail that allows a reconstruction of the decision-making process?
  3. What is the cost and schedule performance of the work as it’s in-process?

Depending on which of these questions is important to the contractor or customer, the available PM techniques can be abandoned, or embraced.

Take #1, whether or not the product or service is what was negotiated for the price. The variations of this are those times where either (a) the product/service is sub-standard (quality management, scope definition), or (b) the contractor attempts to increase the price for the same amount of work (change control/configuration management). In those instances where there is little chance of the product/service being sub-standard or a price increase (e.g., contractual delivery of a commodity), then all that PM stuff about quality and scope can be abandoned safely.

Number two is obviated by the use of firm fixed price (FFP) contracts. Using these types of contracts means that there’s no valid use for all of the basis of estimate detail, variance analysis reports, change control justifications, and schedule analysis that are often demanded from projects by the customer(s). Which leaves us with…

Number three, the ability of PM techniques to report on cost and schedule performance as the project is on-going. In the cases of Scrum or Agile, the latitude to jettison the PM artifacts of the other two information demands allows a streamlining of the technical approach. Note that, in Scrum/Agile, one of the first things abandoned was the formal change control process, which existed in the first place to address issue #1 – something that has considerable more latitude in, say, software development projects than it would in the construction of an iconic bridge linking San Francisco to Marin County, or an executive mansion for the President of the United States.

Yes, in the mutant (strikethrough) hybrid world of PM, some icons can be (cinematically) blown to smithereens. Knowing the conditions that need to be in-place prior – that’s the superhuman power.

Posted on: May 09, 2016 10:03 PM | Permalink | Comments (0)

Sherlock Holmes on Project Management

It was relatively late in the morning when my friend Sherlock Holmes[i] emerged from his bedroom and into the sitting room at 221B Baker Street.

“Was that the post I heard earlier?”

“Yes,” I replied, “it was addressed to the both of us, so I went ahead and opened it. It appears to be an interesting case.”

Holmes sat down in his familiar chair, put his feet upon the ottoman, then closed his eyes as he placed his fingertips together, resting them on the bridge of his nose.

“Pray, read the letter, Watson.”

“It’s from a fellow who’s responsible for a large military project, and he needs to know about his performance.”

“Did the project come in on-time, and within its budget?”

“That’s just it, Holmes … the project isn’t finished yet.”

“This is hardly worthy of our time, Watson. All he has to do is compare his progress against his objectives to where he had planned to be, and then compare a monetized version of this progress against how much he’s actually spent, and those two figures should give him a fairly accurate idea. In fact, this solution is so straight-forward and easy, I’m rather surprised this PM did not go to that fellow in the United States – what was his name again, Raspberry? – for a solution.”

“Stanly is already engaged; besides, this fellow is here in the UK.”

“Very well, send along the answer I just articulated, and be done with it.”

“But that’s just it, Holmes” I started. “His support staff keeps telling him that he ought to use other comparisons to determine his performance.”

“What devices is this Project Manager subjected to that he’s expected to use to determine such things?”

“He includes a list here: statisticians tell him the odds of something bad happening.”

“Irrelevant – nothing more than quantified worrying.”

“The accountants project his costs based on the rate he’s spending now.”

“Without an assessment of his percent complete” Holmes replied, “that is also irrelevant.”

“His communications specialists monitor the number of stakeholders he has engaged.”

“Also irrelevant, and maybe even harmful. What are the criterion for these ‘stakeholders’?”

“He doesn’t say.”

“Are there any more?”

“Yes, one – this PM has estimators who are constantly re-estimating the cost of the remaining work.”

At this, Holmes suddenly sat upright, dropped his hands and opened his eyes.

“This is the worst of all!” he cried. “It’s not only irrelevant and inaccurate, but it takes time and energy to develop, and replaces its valid counterpart!”

“Valid counterpart? What do you mean?”

“An accurate assessment of at-completion costs and dates is probably the most valuable information that a PM can access, but you can’t get a precise figure by constantly re-estimating the cost or schedule baseline. Every last one of the data items that goes into such an ‘estimate’ is entirely subjective, and the more subjective data you allow into the analysis the less reliable the final product becomes – the very definition of a rubber baseline. They’re irrelevant and inaccurate clues. The at-completion data must be provided based on objective data, otherwise it’s worthless. Small wonder our PM is in the dark about how his project is performing.”

“But Holmes, if he has all of these so-called experts feeding him irrelevant and inaccurate information, and he needs to know his performance and valid at-completion dates and costs, what is to be done?”

Holmes reclined back in his chair, and again closed his eyes with his fingertips resting on the bridge of his nose.

“Reply to our intrepid and grasping PM that he need only divide his percent complete into his cumulative actual costs, and he will have a valid, accurate, and easy to employ estimate of his costs at completion. Have him do the same with his cumulative duration, and he will know within ten percent his projected end date.”

“What if such an analysis returns that he is doing poorly?”

“Then more robust project controls techniques are called for to isolate the issues. But that wasn’t what this fellow asked of us – he only requested to know how he was performing, and what I just told you is the way to ascertain that.”

“Are you sure?”

“Completely. Those data elements are almost exclusively objective in most cases, and only mildly subjective in others. Their results will tell him the answer to his original inquiry.”

“What should he do with all of his other so-called experts? They’re certain to impugn your intellectual integrity.”

“He should tell them to report back to Moriarity that their attempts to hopelessly complicate basic performance measurement on this particular project have come to naught.”

 

 


[i] Sherlock Holmes and Dr. Watson were characters developed by Sir Arthur Conan Doyle – I’m just borrowing them for this blog.

Posted on: May 02, 2016 10:00 PM | Permalink | Comments (3)
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