Project Management

Game Theory in Management

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Modelling Business Decisions and their Consequences

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Our Own Version Of “Back To The Future”

The Two Biggest Anchors Slowing The Movement Towards A Project Economy

Talent + X = Success; Solve For X

“Hey, How Did You Get That Weird Scar On Your Forehead?”

How To Use A Ram To Rid Your Organization Of Poor Performers

Our Own Version Of “Back To The Future”

As we note the movement towards a project-based economy (ProjectManagement.com’s theme for July), I can’t help but recognize much of the scenery coming through the windows of our 1983 DeLorean. Is it just a fit of déjà vu, or has some serious scholarship already gone into such a trend, and would therefore be available to PMs now that the trend is accelerating?

Of course, it’s the latter.

David Cleland was the first writer I was aware of that tackled the difficult subject of organizational and macroeconomic changes inherent in shifting the business model towards producing goods and services in a way that satisfied the customers’ parameters of scope, cost and schedule – the very heart of Project Management. Indeed, Cleland has been called “the father of Project Management,” being, as he was, one of PMI®’s founding members. PMI® actually has an award named after him, the David I. Cleland Project Management Literature Award. I referenced him extensively in my own Master’s Degree thesis, based on his seminal work in (what was then called) Matrix Management. Dr. Cleland pointed out something we PM-types tend to take for granted now, but was actually rather novel in the 1980s, that organizations tend to focus on either their project portfolios at the expense of their resources (including personnel), or vice-versa, with the standard being to focus on the resources. This duality was called Matrix Management, owing to the recognition that PMs would pursue their customers’ objectives, whereas resource (or “line”) managers would focus on keeping their people paid, trained, and capable, and that these two goals were not entirely compatible. The former organizations were referred to as having a “strong” Matrix, with the latter categorized as a “weak” matrix.

So, what changes did occur in organizations that qualified as Project Management’s early adapters? One of Hatfield’s Incontrovertible Rules Of Management (I’ve lost track of the actual number) is a derivative of the Pareto Principal, and it goes like this:

The 80% best managers who have access to 20% of the information needed to obviate a given decision will be consistently out-performed by the 20% worst managers who have access to 80% of the information so needed.

This being the case, early PM theory adapters, by generating valid Work Breakdown Structures (WBSs), and using them to create Earned Value and Critical Path Management Systems would become the beneficiaries of critical information streams, vastly increasing the odds of their bringing in their projects on-time, on-budget. As “strong matrix” organizations began to out-perform their more traditionally-structured competitors, they could point to an ever-lengthening list of happy customers and successful outcomes, always helpful at bid evaluation time. Once the strong matrixed organizations won more project work, they had to get their resources from somewhere – usually, the most talented members of the losing weak-matrixed organizations.

There was, however, a dark side to this cycle (cue the sound of challenging bellows from Biff Tannen in the background), and it was this: a key component to being cost-competitive was to minimize overhead rates, meaning that an almost maniacal emphasis would be placed on employees being able to charge their time directly to a project. At one extremely strong-matrixed company where I worked, those workers who were 100% direct billable would command significantly higher salaries than those belonging to indirect-funded groups, while, paradoxically, the latter category were expected to put in far more than 40 hours per week, without charging for it. This kind of widespread but never articulated hierarchy brought with it some rather bizarre business model pathologies, such as the poor engineer who nevertheless had a knack for writing winning proposals being considered far more valuable to this organization then the more technically advanced engineer who failed to attract more work.

The company’s org chart was pretty useless. Very little or no effort would be made to smoothly transition personnel away from ramping-down projects, or any other employment-confirming action. If the new PM knew of available resources needed, he would hire them away directly, saving their targets from the oh-so-casual receipt of a pink slip. The only training that occurred was either offered in-house (unpaid overtime for both instructors and students), or else paid for directly by the external customer. Their view that the project portfolio was all-important came with a very dark corollary: despite the “our employees are our greatest asset” proclamations, the project teams were golden, while the line organizations were held in virtual contempt.

Granted, this strong-matrix organization was, in all probability, a badly-managed anomaly. They were, however, one of the top ten employers in my State at the time, so they were doing the PM-stuff effectively, if ruthlessly. I’m not saying that these trends will automatically afflict the management world as we move towards a project economy, but I do think it would be a good idea to keep an eye out for them, lest we find ourselves returning to a future where whole landscapes have been altered for the worse, and our DeLorean in critical need of repair.

Posted on: July 13, 2020 10:20 PM | Permalink | Comments (1)

The Two Biggest Anchors Slowing The Movement Towards A Project Economy

The discussions swirling around the topic of the macroeconomic trend towards a “project economy” tend to skirt past a question: if we’re moving towards a “project economy,” where are we now? Where have we been all this time? GTIM Nation regulars are aware of my high-level distinction between the three types of management: Asset, Project, and Strategic Management. For newbies, my working definitions are:

  • Asset Management concentrates internally on the organization’s assets, and seeks to “maximize shareholder wealth.” Its main source of usable information is the general ledger.
  • Project Management looks outside the organization to its customers, and seeks to deliver goods and services on-time, on-budget, fulfilling all of the conditions of the customer-specified/expected scope. Its main source of usable information comes from the output of Earned Value and Critical Path methodologies.
  • Strategic Management is all about market share. These guys couldn’t care less if the organization is leasing or purchasing equipment, or processing record-low Baseline Change Proposals. They do care very much about how the organization is doing in relation to its competitors.

As I’ve been pointing out for some time (hey, when I’m right, I’m right) the fundamental principles of business and management taught at the college level are firmly rooted in the Asset Managers’ domain. Virtually all of them still teach the easily-disproved drivel about how the point of all management is to “maximize shareholder wealth,” and its adherents have been known to actually disparage anyone who disagrees with that notion.

But the wheels have been coming off of that epistemological vehicle for some time now. In the 1980s it was the Strategic Managers’ insights running counter to the Asset Managers’ that led to the business world phenomena of the hostile takeover, which by itself should have overturned the “maximize shareholder wealth” mantra. Previously, the (rather simple) formula for deciding whether or not a company should stop doing business was based on the idea that (from Investopedia):

…a firm should never produce whenever it cannot cover all of its production and distribution costs in the long run. In the short run, a firm's willingness to produce should continue up until the point where its marginal cost curve is no longer above average variable costs.[i]

Notice how each of the parameters listed above are both (a) internal to the organization, and (b) derived from the general ledger. It’s as if those who created the classical models for deciding whether or not a given company should continue doing business could never dream of a scenario where a competitor was willing to take a short term loss in order to buy up a controlling share of the target company, and force them into bankruptcy, with no thought whatsoever of the target’s variable costs, marginal cost curve, or any other factor other than its market share. (As an aside, right there is another hint that the Asset Managers don’t have a handle on the ”point” of “all management.” Market share is obviously very valuable, and yet never appears in the asset side of the ledger.)

Meanwhile, Back In The Project Management World…

To the extent that those aspects of the PM codex that mildly challenged (or even out-and-out overturned) the long-standing Asset Managers’ take were adopted by project-centered organizations, those organizations began to (generally speaking) out-perform those that didn’t. In classical survival-of-the-fittest style, the companies whose business strategies were entirely enmired in the maximize-shareholder-wealth model began to lose out to the ones with a greater customer-focus, who were willing to sacrifice asset performance if it meant greater customer satisfaction on a broad basis. I can just imagine the reaction that an early-adapter of PM would receive the first time she said out loud in a board meeting “I don’t care if it reduces shareholder wealth! We’ve got to do something about delivering our product/service on-time, on-budget, or we’re toast!”  In this sense we have been moving towards a Project Economy since the time PMI® came on the scene and began to codify and publish these strategies, in 1969.

Okay, but what about that anchor business?

The one anchor that’s been holding back the natural macroeconomic move towards a Project Economy is the whole maximize-shareholder-wealth business that I’ve been ranting about for literally my entire business-writing career. The other one is far more subtle, but almost as difficult: the notion of economies of scale.

PMI® President and CEO Sunil Prashara discusses some key factors in the move towards a Project Economy in this YouTube video, including workers’ ability to perform more than a single or limited number of functions. While this is undeniably true, it does raise the question, How did we get to a broadly-adopted model predicated on a narrow set of functions for each worker? I believe its material (if not proximate) cause was the American industrial revolution, with its centerpiece being the introduction of the conveyer-belt method of manufacturing, which took full advantage of economies of scale.  Prior to Henry Ford’s remarkable innovation, more broadly and highly skilled workers would produce fewer automobiles, and at a greater cost. The conveyer belt allowed Ford to dramatically out-perform his competitors, but the tradeoff was that the consumer had to accept whatever Ford was willing to produce within that price range. When Henry Ford himself famously said that he wouldn’t even offer any color other than black for the Model T, I don’t think he had accommodating the customers’ varied stylistic tastes in mind.

So, where does this leave us in 2020? Yes, we’re headed toward a Project Economy, but the progress is slower than it would otherwise be, weighed down by two management axioms taken from the Asset Managers’ narrative, and at odds with the PM version. We PM-types have been fighting the ideological battle since 1969, but perhaps we don’t have to do that any longer. The macro-economy, with its (somewhat merciless) tendency to separate winners from losers based on the validity of their business models, will do this for us as we inexorably move towards the Project Economy.

It would still be fun to see how much faster we’d get there if we cut those anchors loose.


[i] Retrieved from Investopedia, https://www.investopedia.com/ask/answers/062415/what-factors-go-determining-businesss-shutdown-point.asp, July 5, 2020, 15:16 MDT.

Posted on: July 06, 2020 10:46 PM | Permalink | Comments (1)

Talent + X = Success; Solve For X

In last week’s blog I pointed out some elements that might put a downer on the PM who is successfully attracting talent to her Project Team, along the lines of the high-aptitude additions detracting from team cohesion, unless they also just happened to be humble. Such team members have the unfortunate habit of hijacking some of the functions of the PM, such as setting the technical agenda, or trying to decide the optimal way of responding to unexpected events or circumstances. In pathologically extreme cases, should the gifted addition also happen to be a narcissist, they will invariably pressure the PM to establish some sort of hierarchy of the value added by each member of the Project Team, and steer rewards accordingly. The “value added” parameter, of course, is always highly influenced (if not out-and-out determined) by the narcissist (GTIM Nation is aware of my fondness for quoting Michael Maccoby. Maccoby actually wrote two books on the topic of narcissist in managerial leadership positions[i].).  And, like the Jungle Fighter archetype, the highly-talented narcissist will never self-identify, or provide some other easily-observable characteristic that would give the PM a clue about their intentions or deviant tactics. But there is a way of handling this type, and the GTIM Nation member will want to know it for all those times when they find themselves the head of a high-performance team. It’ rarely easy – even in those teams blessedly bereft of narcissist, some organizational behavior and performance pathologies can be expected to creep in, and the PM would be well-served to know how to identify them.

But first, the narcissist. They will present as the most coveted of Maccoby archetypes, The Gamesman – experts in the field, willing to take risks, true leader material. However, what’s really going on is, like I mentioned earlier, an attempt to create and enforce a kind of pecking order, or hierarchy, upon which whatever benefits are available to the PM to dole out are predicated. Close or pure meritocracies simply will not do. And – wouldn’t you just know it? – the most “deserving” are always (in this order) (1) the narcissist, (2) those whose contributions are so obvious that they can’t be overcome through calumny, who happen to be on the narcissist’s good side, (3) those whose contributions are so obvious that they can’t be overcome through calumny, who aren’t on the narcissist’s good side, (4) so-so contributors, (5) detractors, and (6) the narcissist’s enemies, regardless of their contribution.

To establish this hierarchy the narcissist(s) will engage in extensive ex parte conversations with the PM. In legal environs, these types of discussions are strictly verboten, as they represent a grotesquely unfair tactic where only one side of an argument or position is presented, meaning that the decision-maker(s) is likely to be influenced towards a bad call. The ex parte conversation, however, is the narcissist’s bread-and-butter, their go-to strategy. To block this tactic, the PM must never allow any ex parte conversations in their presence. If any employee – regardless of perceived Maccoby archetype – attempts to have a private discussion about any aspect of the Project Team that involves other members, stop the conversation immediately, and invite the referred-to parties to join in. Soon the narcissists will get the message, and they will be deprived of their favorite tactic.

Meanwhile, Back To The Answer To The Equation In The Title World…

The answer to the equation in the title is, of course, axiomatic. Talent plus hard work leads to success, almost automatically. The problem here deals with how easy the truly talented make what they do appear, even in the absence of a narcissist attempting to spin the actual events unfolding within the project. To deal with extremes in the interest of illustration, a highly-talented Project Team member will accomplish the same amount of scope that an averagely-abled team member could do, but in much less time. If the highly talented team member goes on to chase down and perform more work, it will tend to provide an example to the other team members, and they can be expected to mirror this behavior. If, however, the highly talented team member does not make an overt show of taking on more responsibility, then the message that sends is one of small effort becoming equated with impressive results, which is organizational poison. This is particularly true if the Project Team member in question joins the team after it has already experienced considerable success. Surrounded by achievements on every side, why should they have to put maximum effort into something that’s already destined to accomplish its goals? Essentially, high-performing project teams are vulnerable to a very specific organizational behavior and performance pathology, one that will invariably remove them from the “high performing” bracket should it permeate the Team even moderately, and that is the belief that hard work isn’t as essential to success as talent.

So, sure, PMs should work hard (get it?) to attract talent, and be glad when they are successful at doing so. Just remember – there’s still another parameter in the equation.

 


[i] Maccoby, Michael. Narcissistic Leaders: Who Succeeds and Who Fails. Boston: Harvard Business School Press, 2007.

Maccoby, Michael. The Productive Narcissist, the Promise and Peril of Visionary Leadership. New York: Broadway Books, 2003.

Wikipedia contributors. (2020, April 17). Michael Maccoby. In Wikipedia, The Free Encyclopedia. Retrieved 01:18, June 28, 2020, from https://en.wikipedia.org/w/index.php?title=Michael_Maccoby&oldid=951527900

Posted on: June 29, 2020 09:49 PM | Permalink | Comments (7)

“Hey, How Did You Get That Weird Scar On Your Forehead?”

When discussing attracting and managing talent (ProjectManagement.com’s theme for June), the obvious take would be that (a) talent is a good thing to have on a Project Team, and (b) we should be doing all we can do to attract it. Of course, me being me, I’ve got to take exception to these assertions, and I wish to do so by using the example of the character Harry Potter. In the series of books by J.K. Rowling, Harry, of course, is extremely talented in the magical world, but is generally not recognized as such by his muggle family, the Dursleys, nor (at first) by the other students in his class.

Meanwhile, Back In The Project Management World…

First off, what definition should we use for “talent?” Truly advanced Project Managers deliver their projects on-time, on-budget. Non-talented PMs have excuses, or blame deflection strategies. If this isn’t the litmus test being employed, then what’s being attracted or retained may not be very talented at all.

Next, the introduction of highly talented personnel into the Project Team carries with it the possibility of disrupting the team’s cohesion, and therefore its ability to perform. How can you know if the desperately attracted “talent” will add to, rather than detract from, the Team’s performance? I actually address this question at length in my third book, The Unavoidable Hierarchy, (Routledge, 2016) but a (much) shorter answer relates to the archetype to which the “talent” belongs. GTIM Nation regulars know of my tendency to use Michael Maccoby’s archetypes from The Gamesman (Simon and Schuster, 1976), but for this analysis I’m going to use a few of my own. My idea is that, when evaluating talent, what’s also important is to get a sense of what other aspects of the persona can make the evaluate-ee a real contributor, or potential poison, and simply outing the Jungle Fighter types (from Maccoby) isn’t sufficient. Consider one definition of the term “talent,” that of the genuine value added to the team by the individual, separate from what others think of her, or even what she thinks of herself. Whether it’s intelligence, an ability to connect with customers, familiarity with mathematical concepts, or raw speed in a sprint (if you happen to own a sports franchise), this contribution to the teams’ objectives offers a usable definition of the term “talent.” Now, what about those other things, like what others think of her, or what she thinks of herself? These aspects of the persona are huge, and I can tell you why.

Let’s use as an example the individual who can effectively and quickly advance the team’s ability to accomplish their goals, but thinks very highly of themselves, and knows that others hold them in high esteem as well. Such an individual is an Alpha, a leader, more used to giving direction than receiving it. When Dumbledore meets a young Tom Riddle for the first time, he realizes that young Tom is gifted, but fails to appreciate the danger inherent in a powerful wizard who also thinks a great deal of himself. Bring this type of person on to your Project Team, and you may very well get to the finish line more expediently – but you may also see your technical agenda hijacked right out from beneath you, along with Team loyalty.

The Alpha’s near cousin, the Beta, may not be much better (in the common vernacular, “Beta” refers to a passive, effete member of the pack. This is incorrect. The passive, effete member is the “Omega.” The Beta is next in line to the leadership position, ready to assume it the moment the Alpha falters.). The Beta is talented – he brings a lot to the team – and those around think highly of him as well. He doesn’t think of himself as highly as the Alpha, but, again, he doesn’t think little of himself. He’s ready to take the lead role the moment the current PM falters. Bring this person on, but be aware that your actions may be receiving a level of scrutiny that you haven’t experienced previously.

In fact, the only highly talented archetype that’s completely safe to bring on board is the one whom others don’t recognize for their contributions, and are themselves at least somewhat humble about their role(s). Think Harry Potter himself, or Luke Skywalker. The term I appropriated for these types is “Cinderella,” but you get the idea. The ones who are actually very magical filled / imbued with the Force talented and capable of advancing the Project Team’s agenda, and yet, for whatever reasons, go unnoticed are rare, and, being rare, extremely valuable. Further complicating the issue is that they won’t have a distinguishing characteristic for quick identification, such as a lightning-shaped scar on their forehead.

So, of course, seek out talent, and try to add those possessing it to your team. But, if they don’t have a funky scar on their forehead, be aware of some of the baggage they tend to carry with them.

Posted on: June 22, 2020 11:09 PM | Permalink | Comments (5)

How To Use A Ram To Rid Your Organization Of Poor Performers

As tribal societies that used planned and organized agriculture to help ensure a steady supply of foodstuffs moved farther and farther into Northern Europe, the ability to precisely time specific farming tasks became more relevant as the available growing season shortened. Plant too soon, and the young seedlings might be killed off by a late frost; plant too late, and the almost-ready-to-harvest crops would suffer the same fate. To help maximize the odds of timing these activities optimally, early farmers observed calendars, the phases of the moon, and…

…animal behavior. It was widely believed in ancient times that animals, being “closer” to nature and all, had an instinctive way of knowing when the last frost had happened, or when the first one of the season was about to begin. The modern practice of dressing up in formal attire and yanking a Pennsylvania groundhog out of his burrow on February 2nd each year to see if we will have six more weeks of winter is a derivative of this belief.

Meanwhile, Back In The Project Management World…

GTIM Nation veterans are aware of my respect for the Michael Maccoby book The Gamesman: The New Corporate Leaders (Simon and Schuster, 1976), and its description of four types of workers:

  • The Craftsman doesn’t really care about the organization, but cares deeply about his output.
  • The Company Man tends to take on the persona of the organization around him.
  • The Jungle Fighter gets ahead through deceit and calumny, deflecting blame for failure and attempting to glom on to successful endeavors.
  • The Gamesman doesn’t see success as analogous to food on the table and a roof over the head. Rather, he sees these artifacts of success as tokens in some grand game he’s playing. For this reason The Gamesman tends to both master the techniques and particulars of his business interests and take more risks.

I would like to propose that we combine Maccoby’s insights with those of animal instincts (nevermind that Punxsutawney Phil’s accuracy rate is only between 35 and 40%), and arrange to have a male bighorn sheep, otherwise known as a ram, help rid our organizations of the Jungle Fighters that infest our Project Teams. Of course, these Jungle Fighters aren’t going to self-identify, so there must be a more direct way of finding them out. My recommendation is that we pick a Project Team at random, one that has a minimum of 20 people in it so that it probably includes at least one Jungle Fighter. We should then take a male bighorn sheep, and introduce him into a corral where various feeding troughs filled with grasses and clover are located. Each of these troughs has the name of a Project Team member attached. Based on his intuitive sense of potential in-herd adversaries, whichever trough the ram instinctively eats from (or even strikes with his horns!) may bear the name of the Jungle Fighter, and this person should receive higher scrutiny, if not reassigned altogether. Does this sound ridiculous? More so than – I swear I am not making this up – having a marmota monax speak in “goundhogese” to the President of the “Inner Circle,” who can understand this language due to his possession of an ancient wood cane? In comparison, the ram-picking-a-trough exercise is positively reasonable.

Just kidding. That’s not how rams can help you get a better percentage of high performers in your team.

Meanwhile, Back In The Real Project Management World…

The real way it can work is through the other type of ram, the Responsibility Accountability Matrix. Projects with even a rudimentary Earned Value Management System can easily differentiate projects that are doing well from those that aren’t, and, by drilling down through the Work Breakdown Structure (WBS) a more precise level of granularity can be attained. The standard model for this is Projects made of up Control Accounts (CAs), and Control Accounts made up of Work Packages (WPs). Theoretically, Work Packages should be assigned to specific groups or teams documented in the Organizational Breakdown Structure (OBS), which has a similar hierarchy, only with the Org Chart as its map. All that’s needed is to identify those Work Packages that consistently perform worse than others, and then find out which Organizational Breakdown Elements (read: lower-level organizations, such as team or groups, usually based on a common function or purpose) these low-performing WPs have in common. Those are the teams that will tend to be home to a higher percentage of Jungle Fighters than the others. Remember, Jungle Fighters usually do not directly contribute to the attainment of the Project Teams’ scope, on-time and on-budget. They are participating in your project in order to advance their own agendas, and will usually do so by deflecting blame and intercepting credit, in-between engaging in extensive gossip and treachery. They may (and often do) use such tactics to their advantage, but this tactic can’t keep their Work Packages from poor execution forever. Sooner or later such strategies will have an effect on performance, and, when it does, even the most basic EVMS can be cross-connected via the RAM to the OBS, and thence to the drivers of the poor functioning.

At which point a male big horn sheep may very well come up and eat from their trough.

Posted on: June 15, 2020 10:05 PM | Permalink | Comments (5)
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