Beware The Asset Manager Paradigm

 

GTIM Nation is aware that one of my favorite targets for (wholly deserved, of course) criticism is the Asset Managers. It’s not personal, and I don’t do it out of spite. It’s just that what we know as double-entry bookkeeping can trace its origins back to the late 1400s Italy, and has largely become the basis for much of what passes for accepted management science today. Quick question: what other field of science is still predicated on 600-year-old theories? In a very real sense, the whole of Project Management can be seen as a revolutionary concept, and a direct challenge to the Asset Management paradigm. We PM-types disagree that the point of all management is to “maximize shareholder wealth,” preferring to focus on accomplishing set scope within pre-defined parameters of cost and schedule. We use different tools and methods to accomplish our aims, often to the chagrin of the nice folks in Finance and Accounting. In almost every single organization I’ve worked, there’s a kind of rivalry (if not out-and-out hostility) between the accountants and the Program Management Office, much of it stemming from this very divergency of management science world views.

In previous blogs I have taken the Asset Managers’ approach to resolving business problems to task on the grounds that their approaches aren't always valid. This lack of validity stems from a derivative of the old expression “When all you’ve got is a hammer, everything starts to look like a nail.” I would paraphrase that to say “If you believe that the source and residence of all management information involving costs is the general ledger, then every problem that comes your way is going to present as needing a solution centered on ‘maximizing shareholder wealth.’” All of which serves to deliver us to the specific subject of this week’s blog, that of how this particular approach to management can influence organizational culture (ProjectManagement.com’s theme for July). I’ll start with a personal experience.

I was providing PM support to a certain department. This department had around two dozen people, and they were trying to implement a new software platform to handle the information streams they needed to do their jobs. I had come up with a schedule for all of the activities from their Work Breakdown Structure, including durations and schedule logic, and it became apparent that the overall project was going to experience a delay due to one particular activity on the critical path. This activity was being performed by a team of four people. I pointed out the likely delay and the responsible activity/team to the head of the department. It just happened to be on a Friday.

“Have the entire department work this weekend!” was his snap decision.

“Wait a second – your whole department doesn’t need to come in for the weekend. If you can just get this one team to put in the time it takes to wrap up this specific task…” I began.

“No, I want the entire department to come in. I can’t have this project come in late.”

And that was that.

I have often wondered since then what all of the non-critical-path activities’ team members did when they came in over that weekend, and if they had to cancel anything important to do so. Outside the four people on that one team, the others were very likely unable to do anything to help ensure speedier scope delivery, but the director was probably expecting them to at least look like they were doing so.

And what of the director himself? He was, no doubt, taught that the remedy to almost any managerial problem is to get more out of the existing assets, to maximize their “return.” Since these professionals were all on salary, the demand for more of their time carried with it no direct monetary costs. Sure, morale would take a hit, particularly when these professionals realized that their ruined weekends didn’t do a darn thing to help attain on-time milestone delivery. But so entrenched in this director’s mind that greater asset performance was the answer to this particular problem that, even when shown that his was the wrong response, he would not abandon it. This inflexible, highly formulaic approach is common fare among most University’s business schools, and I think it’s a shame.

And yet this is a rather common way that the mindset that the general ledger is the ultimate yardstick for evaluating various management strategies or problem-solving tactics manifests in organizational cultures everywhere. Do you have it in your organization, or are you even an initiator of it? A simple mental exercise can answer that question.

Imagine coming across a singularly difficult problem in the middle of a project. I’ll use the analogy of the Pied Piper of Hamelin. You and your team have done everything you can think of to overcome this problem, but have not succeeded. Suddenly a consultant arrives, and proposes that she can overcome the difficulty – guaranteed – and you propose a price. She solves the problem, but does so in a way that requires minimum effort and time. Essentially, she makes the solution look exceptionally easy, especially in light of your teams’ failed efforts. Here’s the question:  Are you resentful that it was so easy for her, or are you completely okay with it, and happy to pay her the agreed price?

The Asset Manager is more likely, by training, to take the earlier stance, the PM to take the latter. We have Grimm’s fairy tales telling us of the potentially bad consequences of the former, but none on the latter. I don’t think that’s a coincidence. I think it’s an illustration of the mindset that dramatically increased efforts are always needed for improved performance, and the undesirable consequences of that mindset.

If you are in an organizational culture beset by this mindset, you have probably already observed some of the following manifestations:

• Your value as an employee is at least somewhat predicated on how much time you are actually at work, and at your desk,
• …but not on how much you actually accomplish. In fact, if you accomplish a significant amount, but appear to do so easily, it’s often counted against your perceived worth.
• Cheerfulness at work is also considered a negative, since it indicates a cavalier attitude towards shouldering your part of the team’s burden.

Don’t misunderstand – by no means am I asserting that all organizations headed by Asset Managers are poorly led, or prone to less-than-optimal, formulaic solutions. After all, many of these managers went on to get their PMP®s…