Looking At Scantily-Clad Business Models

 

Worry not, GTIM Nation. I’m not trying to influence our beloved PMI® away from serious academic discussions on the management sciences and towards the tawdry. But I do think that there are some insights into the aforementioned management sciences that can be gleaned if we engage in a specific type of reductionism, stripping away if you will some of the layers of rhetorical fluff that accompany each of the management types from Corner Cube theory fame.[i] These three types of management are:

• Asset Management, with its main objective being “maximize shareholder wealth,”
• Project Management, centered around delivering what the customer wants (Scope) within the constraints of Cost and Schedule, and
• Strategic Management, focused on maximizing the organization’s market share.

I think it’s important to note that these three are different by type, and not just degree. They seek very different outcomes, and use different Management Information Systems to attain those outcomes. I’m looking to demonstrate that both Asset and Strategic Management largely take PM for granted, along the lines of simply assuming that their organizations already produce a good or service for an already-existing customer base. For the sake of this mental exercise, let’s begin our reductionism by removing organizations from the analysis. Our examination will posit individual people interacting with other individuals, so that the nature of the management types will become plain.

So, a single Asset Management-type approaches a potential customer in a whatever setting – shopping mall, office building, sidewalk – it doesn’t matter. What does the Asset Management-type want? To “maximize shareholder wealth,” of course. College-level business courses will maintain that as the ultimate goal of all management, which has always struck me as both classical theoretical overreach and rather arrogant. How does our Asset Management-type accomplish this in such a one-on-one setting? They could rob the potential customer, but that’s against the law. They could try and trick the potential customer into voluntarily providing the shareholder wealth, but that’s frowned upon, and also potentially illegal. Hmmm. What else remains? Well, they could offer some sort of product or service for which the potential customer would voluntarily give them the sought-after shareholder wealth, but that would land them in the Project Management realm, would it not?

Now let’s take a look at our friends, the Strategic Managers. Back in their organizations they are tasked with maximizing market share, typically through advertising or other marketing initiatives, but it can include such extreme measures as conducting a hostile buy-out of a competitor. But here, in the mall/office building/sidewalk setting, they really have nothing to offer without a separate piece of scope, which again, belongs to PM. I mean, sure, they could hover around the potential customer to try and ensure that they don’t seek to obtain the whatever goods or services from someone other than them, but they, themselves, don’t create a stand-alone good or service that would entice the potential customer to voluntarily part with their shareholder wealth money. In those instances where the particular Strategic Manager follows the potential customer to prevent the choice towards another organization with something more than verbal pleadings, the result is known as coercion, which can also be illegal.

And so we arrive at the Project Manager. What would the PM-type do, interacting with a potential customer, one-on-one? The answer to this question is the same as to the first principle of PM: discover the Scope. What does the customer want (Scope Baseline)? How much are they willing to pay (Cost Baseline)? When do they want it (Schedule Baseline)? Such proffered service is what drives a free-market economy – not “maximizing shareholder wealth,” and not dominating a specific market, though those outcomes can be achieved once the PM objective is attained.

Also consider the results of the stripped-down management types. As noted above,

• Asset Management cannot attain its goals without providing a good or service.
• The same is true of Strategic Management.
• Project Management without Asset nor Strategic Management, turns into … volunteer work!

Think about it – providing a potential customer with a good or service that they want without it being monetized or influencing market share is literally volunteer work.

I want to be crystal clear here: Asset Management and Strategic Management are fully legitimate approaches to business, worthy of study and attained expertise. And yet it must be pointed out that they proceed from a proffered good or service, and the management of the creation of goods and services belongs in the Project Management domain.

So, yeah, let’s look at those scantily-clad business models. It’s okay to conclude that ours is the most attractive.

[i] Hatfield, M. A. (1995). Managing to the corner cube: three-dimensional management in a three-dimensional world. Project Management Journal, 26(1), 13–20.