Project Management

Why Project Management Is The Only REAL Management

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

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Before GTIM Nation accuses me of indulging in PM fan-boy-ism, allow me to point out that the supporters of virtually every management strategy or new business model never seem to be able to articulate those strategies’ or models’ upper limit of efficacy. One hundred and ten percent scalability seems to be baked into every single one of these cakes. Perhaps the most dramatic example of this comes from the world of psychology. B. F. Skinner, through his books Walden Two and Beyond Freedom and Dignity, essentially went from Pavlov observing that his dogs salivated when they heard the dinner bell all the way to asserting a basis for ordering all of human society. And, for the record, I have on several occasions pointed out that PM techniques are utterly ill-suited for Asset Management, or handling functions.

But to prove the assertion in the title, let’s engage in a couple of mental exercises. What kinds of cooperative efforts require “management”? I would argue that those would be the efforts where there are a lot of unknown parameters that have/will have bearing on the optimal decisions and strategies. For example, driving to work in the morning doesn’t require much in the area of management, since (for most of us) it’s down to a routine. Conversely, the act of driving the family across several States for a vacation does require some level of planning and on-the-spot changes to those plans, both with respect to one’s own behavior and the behavior of others – the very definition of management. What we have here is a sort of scale, where the routine and rarely-changes-from-the-baseline efforts are on one end, and the entirely novel, never-been-attempted (while requiring some level of resources) scope is on the other.

Recall one of the most common definitions of a “Project” as the creation of something novel (e.g., there’s only one Hoover Dam). Referring back to our scale, Project Management clearly belongs on the “entirely novel” side, but I want to argue something further. As the novelty of an effort moves towards the routine, so does the need for any kind of management. The manager overseeing an assembly line, where each of the workers know exactly what to do, will typically encounter malfunctioning machines, or workers not being able to show up to the facility, or upper management inflicting changes in requirements – things of that nature. The Project Manager, in addition to the types of problems encountered by her assembly line counterpart, can also expect to encounter far less foreseeable issues, often impossible to anticipate. There’s a reason why risk managers (no initial caps) seem to gravitate towards PM much more than they do to basic manufacturing. And, when they do weigh in on matters PM, they carry with them the whole other category of “unknown unknowns,” events that are utterly capricious in nature. I think the mere existence of “unknown unknowns” as a category of unforeseeable events that are still within the purview of the project’s scope is a tacit recognition of the whole lots-more-weird-stuff-happens-to-us effect.

Let’s take a look at the more routine side of this scale by posing a question about basic management science: is there a particular field or arena of business that’s home to a vast array of formulaic approaches to management? If you answered “yeah, that would be Asset Management,” go to the head of the class. The codex covering Asset Management – including Generally Accepted Accounting Principles – is so vast that universities grant graduate degrees in it. To even credibly engage in performing its basic functions requires an extremely-difficult-to-attain certification (the CPA). Almost by definition, Accountants rarely (if ever) encounter a genuinely novel situation or circumstance that has no precedent in either GAAP or tax law. Again, this codex is certainly vast, but my point is that it’s not set up to handle the unexpected. It very specifically spells out, step by step, what to do for a given situation or circumstance. Indeed, the Asset Managers’ cliched assertion that the point of all management is to “maximize shareholder wealth” points to the fact that they truly believe that every single decision made in the business world can be quantifiably reduced to an entry in a profit and loss statement which, in my mind, is clearly absurd. For those who would disagree with the previous sentence, consider the scenario where the Project Team has delivered on-time, on-budget, while overcoming a series of technical, labor, supplier, and even environmental problems unforeseen at the time of the freezing of the baseline. The customer sees this, recognizes the managerial acumen, and resolves to send all future, similar scope to this contractor. Here’s the million-dollar question: how does any of this get captured or quantified as an entry into the general ledger?

In the world of management, the rote is pretend management, and the new, never-before-tried is the real deal. One last request: remind me which end of this spectrum is dominated by PM?


Posted on: August 07, 2022 09:23 PM | Permalink

Comments (1)

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I'm sure Operations Managers would disagree with your argument. I, for one, agree that project managers are basically uncertainty managers.

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