What Government PMs Really Do Not Want

From the Game Theory in Management Blog
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Modelling Business Decisions and their Consequences

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A basic characteristic of Project Management which is often given short-shrift is the aspect of being particularly applicable to unique work. By definition, projects are unique, and have a definitive beginning and end, which occurs when the documented scope has been attained to the customers’ satisfaction. But new software, buildings, and devices are being created all the time, right? And, in most cases, these projects deliver an improvement or advancement over the thousands of software packages, buildings, and devices already in existence, while still sharing many (if not most) of their predecessors’ characteristics. So, yeah, the project is unique in many ways, but it’s also very much like hundreds, if not thousands, of projects that went before, which is where the performance goals of such work tend to be derived. And this is where a lot of government PMs get really frustrated.

Consider some of history’s greatest and truly unique projects, like the Manhattan Project, or the Apollo space missions. Yes, bombs, and rockets that could carry people into space, already existed, but these were different. No explosive had ever harnessed the power of the atom, and no space vehicle had ever come close to allowing an occupant to step foot on another heavenly body. Past the attainment of the primary scope, what could be used to evaluate these projects’ performance?

The unfortunate tendency here is for those outside the PM structure to invoke performance parameters from the asset managers’ realm, i.e., the accountants, with the Return on Investment (ROI) being prime. There is a rather funny story about a time when Manhattan Project scientists were creating a device that needed large amounts of copper, then in short supply due to the war effort. However, silver had similar electrical characteristics, so the scientists asked Undersecretary of the Treasury Daniel W. Bell for 6,000 tons of silver bullion. Bell responded “Young man, you may think of silver in tons, but the Treasury will always think of silver in troy ounces!”[i] A quick calculation later, and the request was amended to 430,000,000 troy ounces of silver, whereupon it was granted.

Now, put yourself in the shoes of a government oversight manager. Could you even begin to calculate the ROI of 6,000 tons of silver being diverted to industrial purposes? Even if you had the security clearance to know the precise nature of the science behind the request, it would be quite impossible to capture the value of contributing to the radical altering of the balance of geopolitical power that would result from the successful development of atomic weapons.

Something similar happened within the Apollo Program. Pushing mass into outer space is very expensive, and the need to miniaturize and lighten the electronics needed to reach the moon became a priority. The solution came in the form of the integrated circuit. As put by Sharon Gaudin at the Computerworld website,

The development of that integrated circuit, the forbearer to the microchip, basically is a miniaturized electronic circuit that did away with the manual assembly of separate transistors and capacitors. Revolutionizing electronics, used in nearly all electronic equipment today. While Robert Noyce, co-founder of Fairchild Semiconductor and then Intel Corp. is credited with co-founding the microchip, Jack Kilby of Texas Instruments demonstrated the first working integrated circuit that was built for the U.S. Department of Defense and NASA.[ii]

The total cost of the Apollo Program was reported to the United States Congress in 1973 at $24.5B (USD). Since integrated circuits, and their progeny the microchip, are used in virtually all computers today, what can be said of their ultimate “value”? Microsoft is worth $483B[iii], Google is worth $101.8B[iv], and Amazon is worth $430B[v], and these are just three examples of prominent computer-based enterprises. None of these organizations would be in existence if not for widespread use of personal computers, personal computers which would not be in existence if not for the technology that brought us integrated circuits and microchips. The government program to put a man on the moon in the 1960s would radically alter the world’s economies, to the point that the United States’ $24.5B investment—as hefty as it must have been perceived in 1973 – has to be seen as comically small in terms of the economic benefits it eventually wrought. Just the three companies cited above represent a 745% return, adjusted for inflation. But just 10 years after Apollo 11 landed on the moon, a Gallup survey indicated that only 41% of Americans thought the benefit of landing on the moon outweighed its cost.[vi] Really.

So, what is it that government PMs really do not want? They don’t want their truly unique projects’ performance to be evaluated unfairly. All things fail by irrelevant comparisons, and newly discovered technologies, by definition, are, at least to some degree, incomparable.

If nothing else, can we at least stop pretending that the Return on Investment figure has a place in evaluating project performance?


[i] Manhattan Project. (2017, November 20). In Wikipedia, The Free Encyclopedia. Retrieved 04:46, November 26, 2017, from https://en.wikipedia.org/w/index.php?title=Manhattan_Project&oldid=811268990

[ii] Retrieved from https://www.computerworld.com/article/2525898/app-development/nasa-s-apollo-technology-has-changed-history.html, 20:05 MST, 25 November 2017.

[iii] Retrieved from https://www.quora.com/How-much-is-Microsoft-worth, 20:12 MST 5 November 2017

[iv] Retrieved from http://metro.co.uk/2017/11/24/how-much-money-is-google-worth-7106408/, 20:14 MST, 25 November 2017

[v] Retrieved from http://money.cnn.com/2017/04/04/investing/amazon-stock-900-alltime-high/index.html, 20:17 MST 25 November 2017.

[vi] Retrieved from http://news.gallup.com/poll/3712/landing-man-moon-publics-view.aspx, 18:19 MST, 26 November 2017.

Posted on: November 27, 2017 09:20 PM | Permalink

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ROI is a performance indicator for a product, not a project.

Thanks for sharing!

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