The Fourteen Most Terrifying Words In The PM Lexicon

 

As GTIM Nation knows well, I maintain that Project Management Information Systems (PMISs) in general, and Earned Value Management Systems (EVMSs) in particular, serve two primary purposes:

• They put into the hands of the organization’s decision-makers the information they need to make, well, informed decisions, and
• They provide an audit trail to help explain the reasoning behind the multitude of decisions made during the execution of a project, for the purposes of creating a lessons-learned document, or for other, more nefarious evaluations.

It’s these more nefarious evals that drive a particular business model pathology. Since the Earned Value and Critical Path Methodology information streams provide a window into how projects are performing, and clients can respond generally either in a positive or negative fashion, the four possible scenarios can be evaluated using the Game Theorists’ favorite tool, the payoff grid:

Since Scenario 1A almost never happens, at least not to customers who are actually paying out money for the Cost Baseline as agreed-to (Firm Fixed Price Contracts are a different animal, but this is still a rarity, since poor-performing FFPs are likely to finish late). Even if they present as being content in the Project Review Meetings, you can bet real money that, the nanosecond they leave the presentation, they will be seeking means of extra-project remedy.

As for Scenario 1B, consider your own reaction when, say, you learn that a long-awaited and highly-coveted item is to be delivered to your home, and your on-line tracking app tells you it will be delivered two days earlier than originally scheduled. You’re thrilled; but, when the new, early date arrives, and no delivery takes place, how do you feel? Are you not keenly disappointed, if not furious? The shipper would have been better off in customer retention space if they had never asserted an early date in the first place since, had they not done so, and managed to have the item arrive just one day early, you would have been much happier, no? But now, after they’ve “promised” the item two days early, and failed to deliver it then, if they do manage to have it arrive one day early, all of the good will that would have been nominally generated has been blown to smithereens. In short, providing good cost or schedule performance information to the customer can be a mixed bag.

I’m going to jump to Scenario 2B, for reasons that will become clear. Some clients are inherently difficult to please – if the customer reacts in a negative fashion when things are going well, the Project had better finish with stellar performance figures. Otherwise, your organization will be vulnerable to the kind of narrative review that usually accompanies poor performing projects.

Finally, when you hand over the Earned Value and Critical Path reports that show precisely how badly your project is performing, and brace yourself for the inevitably reaction, one thought simply cannot be avoided: If I don’t have to, why should I give up this information?

I’m going to score Scenario 1A as a 0.5, due to its rarity, and Scenario 1B as a 0.75, per its explanation. This means that, based on our Payoff Grid, an advantage to providing the customer accurate cost/schedule performance information only scores a 1.25 out of 4.00, meaning, in Game Theory space anyway, it’s a bad idea to volunteer it if it’s not contractually required (which is, no doubt, why Earned Value and Critical Path-based reporting are so often contractually required). Which leads us to the fourteen most terrifying words in the PM lexicon, sometimes uttered when (1) the PM realizes that there’s a downside to volunteering accurate cost/schedule performance information, and (2) the PM thinks the customer will put up with squelching said information from being passed along: “It costs as much as it costs, and takes as long as it takes.” To be sure, this is a fairly accurate statement for many a high-tech project, where no reasonable basis for forming a cost/schedule baseline nor assessing percent complete exists. But for all other projects, The Fourteen Words imply something far more disturbing: your PM does not perceive that he is beholden to the customer’s expectations of cost or schedule performance. The reason I’m bringing this up in September, with ProjectManagement.com’s theme of Agile/Hybrid PM, is because invoking an Agile or Hybrid Project Management approach or strategy can often be used in lieu of The Fourteen Words, and that’s truly unfortunate. A simple Earned Value system can easily provide accurate cost performance and at-completion forecasts, even in Agile/Hybrid environs, and anyone who tells you differently is, well, wrong.

Or perhaps they’re just trying to avoid providing such information without actually uttering The Fourteen Words…