Project Management

PM Really Is Different From All Other Management Types, And I Can Prove It

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

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GTIM Nation is familiar with my go-to delineation of the three management types, and how they use different tools, methods, and processes, because, well, they’re really different. For newcomers to this blog, these types are:

  • Asset Management, whose goal is the cliched “maximize shareholder wealth,” Their main source of information in pursuing this goal is the general ledger, which has led to the rather strange business model pathology of believing that any piece of information having to do with costs must be derived from the GL.
  • Project Management’s goal is to achieve the customers’ terms of scope, cost, and schedule. The PMs’ primary source of management information is derived from Critical Path or Earned Value Methodologies (CPM/EVM) in the form of Gantt Charts or Cost Performance Reports (CPRs).
  • Strategic Management is often confused with a hierarchical function, such as that typically performed by personnel rather high up on the org chart. This is inaccurate. Strategic Managers seek to maximize the organization’s market share, either through such benign actions as investing in an advertising campaign, or via more belligerent tactics, such as hostile takeovers.

Rather than spend pixel-ink re-defining these categories, I thought I’d introduce a table that more clearly supports that these three are different by type, and not degree.  Consider the following delineation of the three types’ goals in various industries.

 

Management Type/

Industry Goals

Asset

Project

Strategic

Law Firm

Maximize billable hours

Win the most cases possible

Handle the largest percentage of available cases in the vicinity

Football Team (NFL)

Get the furthest below the salary cap/ fill the stadium with fans

Win the most games possible

Own the largest percentage of fans, television ratings, and licensed apparel

Hospital

Recover the maximum amount of expenses, keep revenue ahead of costs

Cure or successfully treat the maximum number of patients

Attract a higher percent of (paying) patients than the other medical providers in the area

Software Company

Maximize profits, minimize costs (kind of general, but it’s also applicable to the other industries as well

Create software that will be used/enjoyed by the targeted customer base, and get it on the market soonest.

Dominate the market to the point that the organization is the go-to solution provider

 

This table makes clear a few takeaways, including:

  • The Asset Managers’ focus is almost exclusively inside the organization. If making a customer happy or acquiring greater market share is not capture-able in the notorious Return on Investment analysis (and, for the record, these are not), then it simply does not enter into their realm, and, therefore, will not have a place in the Asset Managers’ array of recommended strategies.
  • The Project Managers’ central efforts are always customer-oriented. To engage in a bit of hyperbole, they couldn’t care less about the decision to rent or buy the copier, unless it impacts their ability to meet customer expectations.
  • Strategic Managers may not realize it, but they are more heavily dependent on the PMs than they are the Asset Managers. Making customers happy on a consistent basis easily segues into more market share, based on (if nothing else) the old axiom that it’s five times more difficult to attract a new customer than it is to retain an existing one.[i]

Which brings us to the topic of talent management, ProjectManagement.com’s theme for July. Based on all this bloviating analysis, the cues for the most appropriate approach to attracting talent become:

  • If you are consistently achieving your clients/customers’ goals, and enjoy a high rating from them (from whatever feedback mechanism is available), and are moving up in market share, but are still losing money, then (mark this moment, GTIM Nation, for it will never happen again), you need to attract more Asset Management talent.
  • If you are making a good profit margin, and your customers are consistently seeing their needs met (or even exceeded), but there are organizations in your industry who still dominate, then your talent needs are in the Strategic Management world.

However, if your organization is hurting for lack of clients/customers, then there’s really only one type of manager who can set things aright. (Just BTW, I’ve occasionally wondered if I could write a blog where my signature transition phrase would be appropriate as the very last sentence. Today’s that day.)

Meanwhile, Back In the Project Management World…

 


[i] Retrieved from https://www.invespcro.com/blog/customer-acquisition-retention/ on July 18, 2020, 19:25 MDT.

Posted on: July 20, 2020 10:52 PM | Permalink

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Very interesting., thanks for sharing

Thanks for sharing

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