The Strategic Dilemma of the Project Controls Manager

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

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Pity the poor Project Managment proprietor. Earlier this week, Pro Football Hall of Fame running back Emmitt Smith had this to say, about a proposed rule that would penalize a running back for hitting a tackler with the top of the helmet:

“I disagree with the rule altogether.  It doesn’t make any sense for that position.  It sounds like it’s been made up by people who have never played the game of football.’’

What does this have to do with managing a Project Management Office, or an organization of Project Controls specialists? Not much, except for the fact that, in most organizations, the answer to the question of how much project management or project controls support is needed for a given endeavor is almost never provided by people fluent in those arenas. The technicians, engineers, and programmers executing their projects’ scope often determine the level of project management and PM information systems support they need and, in my experience, they often get it wrong.

But the way they get it wrong offers a certain fascination. I first noticed a pattern of assessing PM talent demand when I was working for a rather large organization, which would periodically encounter on-the-job accidents. When these accidents occurred, upper management would respond in a very predictable way, decrying the lack of a “safety culture” within the organization, and mandating that all employees attend a series of safety presentations. A renewed focus on performing our jobs safely would then permeate the organization, even those elements that weren’t engaged in any particularly hazardous duties. As the accident rate dropped, so, too, did the overt emphasis on observing the myriad safety protocols put forward by the safety engineers. The unnecessary ones would be ignored first, with very little (if any) impact on the organization’s accident rate. Eventually, some of the basic safety principles would get worked around, and another avoidable, and yet somewhat grisly accident would occur, and the cycle would begin again.

It then struck me how similar this cycle is to the perceived demand for project management expertise. Projects would be muddling along, with the engineers wondering why they had to spend any money at all on project controls specialists or other PM-types, and making the case to save money by abandoning that area of expertise. Some projects would go on to finish successfully, reinforcing the narrative that money spent on the PMO was superfluous and a waste. But, inevitably and eventually, some project would go off the tracks, racking up huge delays and overruns, and all without the ability to have forewarned upper management that a problem even existed before it was too late to avert or mitigate the disaster. A cursory post-mortem would reveal an inadequacy in that project’s cost and schedule control systems, and the demand for those who could set up such systems would realize a dramatic increase. This would continue until a certain sense of complacency would re-enter the management culture, and the engineers would return to their questioning of the need for PM expertise.

All this time, the PMO managers, as well as those in charge of project controls organizations, were dealing with one of two problems: either the perceived demand for their organizations’ services was below supply (in which case they would scramble to find billable work for their people), or else demand far outstripped available talent, in which case their people were working overtime and experiencing burn-out. Depicted graphically, it looks something like this:


In this example, the appropriate level of expertise for this organization is 25 full-time equivalents (how does one calculate the “appropriate level”? For that, you will have to buy my recently-released, must-have book Game Theory in Management). Notice how, as complacency among the technical staff reduces their perceived level of demand to zero, the available talent lags in both amplitude and time. Because technical management is reluctant to come out against, well, reality, they will tend to not communicate their anti-PM sentiments until after these have become socialized and solidified, hence the time-lag in communicating the reduced demand to the owner of those assets. However, PM organization leaders also know that, at some point in the future, this demand curve will reverse itself, so that, even as perceived demand drops to zero, they won’t be rid of all of their talent. These managers will find a way to protect as many of their charges as they can. Note, also, that these managers won’t increase their talent pool to match the zenith of the curve, since they also know that the demand will inevitably drop once the risk of project disasters has faded from memory.

Organizations trapped in this cycle will experience myriad pathologies of business decision-making, which makes all these problems so frustrating to encounter. They are all so avoidable – but you can’t tell that to those who manifest a tendency to discount or even minimize what project management, as a discipline, can bring to the board room.

And that’s why we should pity the poor Project Management proprietor.

Posted on: March 17, 2013 05:50 PM | Permalink

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