Project Management

Virtual Pandemics and Project Management, Part II

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

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In last week’s blog I teased that I was going to reveal a strategy to deal with the natural human instinct to act out of self-interest well before the benefit of the group, after having established:

  • The standard template for establishing a Project/Program Management Office (PMO) for the intent of advancing an organization’s PM maturity is both (a) ineffectual and (b) extremely susceptible to individuals looking out for their own interests over the goals of the macro organization, and
  • Such self-interests-based behaviors cannot simply be rooted out, particularly and especially via attempts to leverage organizational power over the targeted groups (in other words, it’s very close to impossible to force an organization to advance its capability maturity, especially Project Management).

So, impossible puzzle, right? Maybe. I mean, after all this time and all the articles, columns, and, yes, blogs on the topic of the optimal strategy to advance PM within the macro organization, you would think that a workable solution would have been developed long ago. And yet, here we are, the universal acceptance (embrace, really) of the Asset Managers’ business world-view, while we PM-types can only point to an uneven utilization of our techniques, at best.

Before jumping into my ideal implementation strategy, I’d like to take a moment to examine the implications of the situation laid out in the previous paragraph. Let me state this now, loud and clear, and for the record:

The main reason that the Asset Managers’ take on management science dominates the business world and academia is solely based on governments’ need for tax revenue.

Not only is the previous sentence true, but any manager who has given it a few minutes thought knows it to be so intuitively. It is governments who see corporations as potential sources of revenue, and it’s the Asset Managers who maintain that the point of all management is to maximize said revenue. Individuals view corporations in terms of what those organizations can provide, and at what price point. It’s all the non-government actors in the free marketplace who care about things like quality, availability, and cost, which is another way of saying real people care about scope, schedule, and budget, the main three pillars of Project Management philosophy and science. Only those who are (at least) one step removed from the actual transactions that take place in free market economies are focused on things like taxable liability, or the “bottom line” on the Profit and Loss statement.

Now, allow me a moment to introduce a radical concept into the faculty lounge where all the “true” management science stuff is made up derived. The fact that the Asset Managers’ approach to monitoring any and all businesses’ fiscal performance must be in place prior to these businesses opening their doors HAS NOTHING AT ALL TO DO with whether or not the information streams emanating from such approaches represents an optimal (or even adequate) basis for making management decisions. Nothing. Unconvinced? Follow me on a little intellectual exercise.

Recall one of my previous assertions, that there are three types of management: Asset, Project, and Strategic, each with their own goals, methods, and information streams. What if governments taxed corporations on the basis of market share (i.e. the Strategic Managers’ realm)? Say, for every 10% of a given market controlled by a given corporation, the tax rate would be 5%, so that, for a monopoly, they would have to pay a 50% tax rate on gross revenue, and so forth. Do you think any business owner would give a second thought to the claimable depreciation rate on the copier just purchased? Or, what if (I love this one) those organizations engaged in project work could see their tax rates lowered based on the percentage of projects that came in on-time, on-budget? PMI® would, virtually overnight, wield far more power than any other professional organization.

(GTIM Nation: So, what’s this strategy already? Me: I’m getting there, honest.) This all comes back to the fact that human nature will always win over optimal management science techniques or strategies. Always. As long as the proper incentives are in place, advancing a specific management capability is going to be straight-forward and achievable. Absent the incentives that appeal directly to the decision-makers self-interest, those attempting to convince the macro organization to do things differently will always be on the outside, looking in.

In short, to advance the technical agenda of the PMO, stop hectoring other people with policies, procedures, and, well, nagging. Establish and articulate an implementation strategy that places PM techniques squarely within the organization’s pursuit of its members’ self-interest. If this requires a rejection of those PM guidance-generating orgs that mandate stuff like, oh, I don’t know, risk management (no initial caps), then that’s just too bad…

Posted on: April 13, 2020 11:35 PM | Permalink

Comments (3)

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Thanks for sharing, very interesting article.

Interesting article and view point on this topic.

A good resolution to last week's post! Thank you again. It's funny that we so often refuse to adopt or rebel against systematic measures. The limits and weaknesses of the human mind are pretty well known and we see time and time again what these can lead to in all types of situations and while we are capable of amazing feats, we are also too often depressingly prone to hurting ourselves or the collectivity for personal or short term gains. Hence the need for robust systems that promote our more positive abilities and limit the damage we can do when we are driven by the less inspiring aspects of our minds. Seems like such systems, including PM methodology, would be easy sells, but no such thing.

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