The Reason Project Teams Detest Performance Measurement Is Because…

 

Here in March 2021, the one-year anniversary of the imposition of pandemic-avoiding regulations, it’s somewhat natural to reflect back on what we’ve experienced and what we’ve learned during this time. In any discussion of the management sciences, though, the question of what we’ve learned from any given history must come with the acknowledgement that we’re never dealing with a purely experimental setting. There are simply too many parameters involved whenever we attempt to draw a usable inference of the causal elements that went into any particular management strategy.

The Covid-19 pandemic, however, represented a large-scale, broad-based condition on the macro economy. In other words, as negative as it was and is, it had some level of impact on virtually everybody, and on the way everybody conducted business. Along the way the past year has shown some rather obvious problems with several previously-widely accepted theories, such as the ones I addressed in last week’s blog, but it has also shown a light on some management strategies that were perhaps given short-shrift prior to 2020. For example, once the restrictions on business began to loosen, what were those business’ main concern? Were they associated with “maximizing shareholder wealth,” or were they oriented towards getting their customers back? And, before anybody tries to assert that the former encompasses the latter, let me be more specific: in the various stages of businesses being allowed to re-open, did anybody really care about the return-on-investment figures for purchasing or leasing the new copier?

While the Asset Managers’ (read: accountants’) main concern is, well, the performance of the organizations’ assets, the ability to deliver for customers belongs to the PM world. None of the information streams that inform management of the organization’s progress towards accomplishing the customers’ expectations for achieving scope, cost, or schedule performance can be relayed via the general ledger (and don’t get me started on the output from risk management [no initial caps] “analysis”). That’s simply a fact. The only reason that the belief that a project can be successfully managed without those pesky PM artifacts like the Work Breakdown Structure or Earned Value Management System advances is that projects that never had anything go wrong with them on occasion relied exclusively on the general ledger to inform their decisions, so it follows (erroneously) that all successful projects don’t need those things.

But what happens when something does go wrong with the project? As I pointed out in the previous paragraph, what’s needed is a Management Information System (MIS) that can answer a whole bunch of questions, and the general ledger isn’t that system. What questions? Well, ones like:

• Is the project really performing poorly (I mean, past my vague feeling)?
• If so, is its performance lacking in cost, schedule, or both?
• How big is the problem?
• Where, specifically, is the problem? What part of the project is experiencing it?
• What are the implications long-term? In other words, what is going to happen if the problem isn’t addressed, or isn’t addressed fully or appropriately?
• What’s causing this problem?

While the general ledger can only marginally or tangentially answer any of these questions, an Earned Value Management System, based on a valid WBS, can answer all of them, with excellent precision. Throw in a Critical Path Methodology capability, and the resulting information stream becomes all the more powerful. Allow me to point out again that such information streams only become vital when something goes wrong. A perfectly healthy patient does not need an X-ray, and could probably spend his whole life not knowing which nearby medical facilities have a machine capable of performing such imaging without issue. That all changes real fast if such a person breaks an arm.

This all has the effect of placing much of the motivation for initiating and maintaining Project Management Information Systems in an organization to those analogous to purchasing insurance. If someone is supremely confident that they will never get sick or break an arm, they may tell themselves that it’s a waste of money to buy insurance. Similarly, if a (so-called) PM is confident that they “manage” so well that they don’t really need a performance measurement system to inform their decisions, they may forgo the cost of setting up such a system. All of which brings us back to the title of this blog, the famous PM saying that the reason project teams detest performance measurement systems is that they vividly show their lack of performance.

Even if the downturn in performance was caused by a global pandemic.