Project Management

“Enter Rumor, painted full of tongues.” Henry IV, Part II, Induction

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Modelling Business Decisions and their Consequences

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For those members of GTIM Nation who aren’t into Shakespeare in general or the history plays in particular, the quote in this blog’s title comes from the very beginning of Henry IV, Part II. At the end of Part I, King Henry and his son, the “madcap” Prince of Wales, have put down a rebellion by the powerful Percy family, led by Henry Percy, nicknamed Hotspur. At the beginning of Part II, the Earl of Northumberland, Hotspur’s father, awaits the news of what happened at the Battle of Shrewsbury. The first news he hears is all good – but it isn’t delivered by someone who witnessed the battle. Similarly, the second messenger to arrive wasn’t at the battle, but did encounter a horseman who (apparently) was. The horseman’s version is somewhat cryptic: that “young Harry Percy’s spur was cold.[i]” As the Earl and the two early messengers contemplate what that reference could mean, the third messenger, who was an eyewitness to the battle arrives, and tells of the true fate of the rebellion, which is, of course, the exact opposite of the earlier reports. In essence, Northumberland knew what he wanted to hear, and the first two messengers he encounters knew what he wanted to hear, so…

Meanwhile, Back In The Project Management World…

If Communications (ProjectManagement.com’s theme for February) as an arena of Project Management theory is to be subjected to a truly difficult stress test, I believe it would have to be in the theater of the Project Review. And what do we hear in Project Reviews? The cost and schedule performance of all the work in the portfolio, of course, especially and particularly the answer to the overriding question: Will each of the projects come in on-time, on-budget? The individual PMs know what the Program/Portfolio managers want to hear, and that’s that everything is going swimmingly – which is also the exact thing that the PMs themselves wish to report. Consider the following payoff grid:

 

 

Report that things are going POORLY

Report that things are going WELL

Things are actually going WELL

A: Who would do this?

B: Accurate

Things are actually going POORLY

C: Accurate

D: Problems multiply exponentially

 

Since Scenarios B and C represent accurate assessments of what’s going on in the Project presenting at the review, no inherent conflict in the information stream itself is indicated. We’ll also dispense with Scenario A, since no rational PM would report the Project in difficulty if it was, in fact, performing just fine, barring some ulterior motive. This leaves us with Scenario D, where the Project is in difficulty, but the PM would rather not report that, at least not at that time. The summary in the payoff grid indicates that their problems will multiply exponentially. This is due to the fact that any assets in reserve that would otherwise go to the Projects in trouble will be sent to those Projects that report that they are in trouble (Scenario C), not to those that fail to report as such. With whatever factors leading to the poorly-performing Project not addressed, or even recognized, they will continue to manifest at the very least, until they simply cannot be ignored.

Why would this happen? A variety of reasons, including the notion that whatever problems have arisen can be dealt with before they have an at-completion impact and, even if they can’t, the last thing the PM needs is a bunch of execs looking over the shoulder and kibbitzing on what strategies or techniques should be employed. If the negative consequences of being in charge of a poorly-performing Project are basically the same if those problems are brought to light early, or closer to that Project’s baseline finish date, what would be the motive for the PM to disclose those difficulties before it’s absolutely necessary?

Of course, a properly functioning Earned Value Management System (EVMS) would make this sort of legerdemain very difficult. Even that most basic of Estimate at Completion (EAC) formula, dividing the percent complete into cumulative actual costs, will yield a reliable (typically within ten points once the work is past the 20% complete point) figure rendering Scenario D highly problematic to the less-than-upfront PM. This fact may be the foundation for the calculated EAC’s unpopularity in the Project Review venue. It’s just so, well, inconvenient. Much easier to bamboozle with the so-called bottoms-up EAC (cumulative actual costs plus re-estimated remaining budget) or, better yet, call in the risk managers (no initial caps), who can muddy the epistemological waters like no others.

Who can capture the magnitude of this sort of misdirection? I’ll leave it to The Bard.

From Rumor’s tongues
They bring smooth comforts false, worse than
true wrongs.[ii]


[i] Shakespeare, William, Henry IV, Part II, Act I, Scene I.

[ii] Ibid.


Posted on: February 06, 2023 10:07 PM | Permalink

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Stéphane Parent Self Employed / Semi-retired| Leader Maker Prince Edward Island, Canada
"While you live, tell truth and shame the devil!"

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