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Game Theory in Management

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Modelling Business Decisions and their Consequences

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The Ultimate PM Technical Skills Acid Test

When Do We Apply The Leeches?

PM Technology Overcoming Us

Philanthropic Technology

Aligning Your PMO’s Strategy With Your PMO’s Personnel

The Ultimate PM Technical Skills Acid Test

Looking over the list of techniques, strategies, and technical skills associated with an advanced level of PM expertise can be rather daunting. The more I read on the topic of what constitutes cutting-edge Project Management the less I see any kind of consensus on what makes up the core, or foundation of the PM codex. The most advanced financiers, heads of accounting departments, and even tax attorneys can agree that their industries are predicated on double-entry bookkeeping (developed, incidentally, in Medieval times). Strategic Managers can agree with advertising agency owners and newspaper publishers that the ability to differentiate their customers/organizations’ products or services from competitors (and thereby making them more appealing and gaining in market share) is the basis for their empires. But what are the essential elements of PM? What makes it both unique and necessary? And, perhaps most critical, what’s the best approach to answering the previous two questions?

Attempting to resolve such weighty questions as posited above using a priori arguments and “experts” sitting around hotel ballroom conference tables comparing their curriculum vitae is a fool’s errand, in my opinion. It’s this strategy that so muddied the waters in the first place. What happens whenever any scholastic or management science field of endeavor expands at the rapid pace seen by Project Management is that what would otherwise be a clear distinction between core and peripheral areas of expertise becomes blurred, as such technique’s advocates vie for recognition, if not supremacy. One of the most extreme examples of this came from our friends, the risk managers, who at one time actually tried to define their purview as anything that might have an “impact” to any given project, negative or positive (the latter being re-defined as “opportunity,” and no, I am not making this up).

Okay, so if the last place we should seek an answer as to what makes up the essential elements of PM is the focus group/business school faculty lounges, what does that leave us? As counter-intuitive as this may sound, I believe that much insight can be derived from the opposite of such environs – that is, in the construction trailers and shop-floor cubicles of hard hat and safety goggle-wearing front-line PMs.

Back when I was chasing my MBA I was in a group of students evaluating the business practices of a clothing manufacturing plant in our home town. This was before I had earned my PMP®, but after I had spent considerable time performing project controls functions for United States Government contractors. These contractors were operating under the nascent PM techniques and business rules that required the delivery of cost and schedule reports derived from Earned Value Methodology analysis, including a standard reporting format known as the Cost Performance Report, or CPR. As I and my fellow graduate students were being shown the machines that would take new deliveries of cloth, cut them to specific sizes based on the style of garments (in this case, pants), transfer the cut-outs to various other stitching, riveting, button-holing, zipper-installing, etc. machines, I noticed a certain grey box with wires emanating from it had been installed on each machine. This module produced a report that monitored each step of the process. These reports showed the amount of material originally planned for the lot along with the estimated amount of time for the entire job (the time-phased budget), the amount of energy, labor, and machine time used for that particular step (the actual cost of work performed), and the actual progress being made (the Earned Value figure). Sure enough, these reports were almost identical to the Cost Performance Reports that I had been generating for projects ranging from U.S. Department of Defense radiation research work, all the way to U.S. Department of Energy environmental clean-up jobs. Amazed, I queried the manager escorting us around the manufacturing floor (who was actually wearing safety glasses).

“These reports – are they specific to this place?”

“No, they’re industry standard.”

“Right down to the calculated Estimate at Completion?”

“Sure. We need to know that to coordinate when the next lot can start, and have access to common machines or people.”

“Do these machines come with this automated report-generating capability?”

“Yeah. They all do.”

“Have you ever heard of the Cost/Schedule Control System Criterion, or the Project Management Institute®?” (Just for the record, I didn’t actually say “Project Management Institute, circle R.”)

“Nope.”

I realized then that certain aspects of PM were central to its overarching schema, and Earned Value was one of those. Given that the cause of so many project overruns and delays is scope creep, I’m willing to venture that Scope and Schedule Management (specifically, the Critical Path Methodology) are also core aspects of PM. Using our acid test, using techniques we would have been likely to discover in our front-line PMs’ toolboxes, I’m willing to venture that the following are candidates for exclusion from that core:

  • Risk
  • Communications
  • Quality (which is almost certainly a subset of Scope; however, to the extent it can be cleaved from Scope Management, it belongs on this list.)
  • Procurement

A quick note about those last two – I’m not saying that they’re not essential management elements per se. They clearly are. I’m just dubious about whether or not they necessarily belong in the Project Managers’ wheelhouse.

So, for all you Project Management technique advocates out there, anxious to alert the rest of the PM world of the efficacy of your particular practice, ask yourselves this: if you were to pitch your idea to any manager who routinely wears safety goggles, ear plugs, and a hard hat to work, would you have a reasonable expectation that they would buy what you’re selling?

Lagniappe…

Brace yourselves, GTIM Nation: I have a management science world-changing announcement. This blog has actually discovered a key reason to do risk management! Crazy, right? And that reason is…

Look at that! Out of pixel ink for this week. Tune in next Monday for the dramatic reversal GTIM has for our friends, the risk managers!

Posted on: January 20, 2020 08:58 PM | Permalink | Comments (2)

When Do We Apply The Leeches?

As long-time members of GTIM Nation are aware, when evaluating technology in PM I like to compare and contrast it to the uneven but dramatic changes in computer science, cosmology, or even medicine. As for the latter, I think it’s fascinating to consider that in 100 years the things being taught in schools of medicine will appear to be as backward as medical technology from 1920 does to us in the here and now. To be fair, though, I readily concede that, had today’s medical tech been described to doctors 100 years ago, they would never believe it. In 1920, Vitamin D had not yet been discovered, penicillin was still eight years away, and the first kidney transplant was 34 years distant.[i] Even though X-Ray technology had been around since 1897, it was only this year that it became a routine part of diagnosing fractures in most hospitals. MRIs are 57 years away, as is angioplasty. Performing an internet search on strange medical practices in history is to review a series of deeds that would be considered torture in 2020.

Meanwhile, Back In The Project Management World…

Circling back to ProjectManagement.com’s theme for January, PM Technical Skills, I can’t help but wonder which PM technical skills will be considered bizarre or incomprehensively backwards by practitioners in the year 2120. But here’s where the analogy to medical science breaks down: Project Management is clearly not a hard science. It deals with the unknown. Yes, much of current PM theory is highly formulated – developing a Work Breakdown Structure, for example (although, even here, I wish I had a dime for every Organizational Breakdown Structure element I’ve found in WBSs supposedly developed by people advanced in Project Management), but it’s undeniable that what real PMs do in the real world is largely dominated by dealing with the unexpected.

“Not so!” I can hear my nominal nemeses, the risk managers, say. They have built an empire on the notion that advances in Project Management technology have provided a window into what is likely to happen to a given project, should the particular management team have the insight to invest in a rigorous risk analysis. My response: really? Let’s take a look at this window into the future, provided by our friends, the risk managers, and see if it’s not analogous to what medical practitioners from 1920 believed was technically advanced.

Read a typical risk analysis report. What you will see is a series of speculations about alternatives to the planned activities in the scope, cost, and schedule baselines, expressed in terms of odds of occurrence and cost and schedule impacts, usually pessimistic. Where do these speculations come from? Almost always from members of your project team whom the risk analysts have identified as subject matter experts – in other words, your Cost Account Managers (CAMs). If you are the Project Manager, ask yourself these questions: do you ever communicate with your CAMs? Do you have meetings with them? Do they not tell you what their concerns are, especially in the near term?

To ask these questions is to answer them. The implication, of course, is that your typical risk analyst does little more than interview your very own CAMs, write down their concerns, ask them to speculate (and let’s be clear here – when these CAMs are asked to “estimate” the odds of something bad happening to their Work Packages AND the cost and schedule impact, that’s what they’re doing: merely speculating) on some parameters, and then re-state these data points in Gaussian curve jargon. Do I have to state it (again)? This is openly fraudulent management science, and I find it hard to believe that it will be well received in the decades to come.

But, for the sake of argument, and out of a sense of humility that I really have no reason to suppose that my points of view will withstand the tests of history, let’s take a moment to assume that the “information” stream emanating from the risk analysts’ reports are valid and usable. What will the future PM do with them, exactly? Let’s say that, in the most recent project meeting, you have a CAM who tells you that she’s concerned that a certain subcontractor won’t be able to deliver on-time, and any delay may impact other activities. Your Critical Path Methodology expert (scheduler) can tell you which activities are dependent on an on-time delivery, and whether or not the task in question has any float to use. What can the risk analyst tell you? That the odds of the delay were originally estimated at X percent? Or that, should the feared delay actually take place, that it could have additional speculation-derived impacts? Does this “information” really help anybody?

I think that last rhetorical question is key. Much as one would think that someone would eventually inquire if the medieval medical practice of bloodletting actually helped patients – or even a single patient – the question has to be asked: how many projects can point to their risk analyses as the proximate cause (or even material cause) of coming in on-time, on-budget? Here in 2020, we can roll our eyes at the known invalid practices of PMs from one hundred years ago, like attempting to derive project cost performance by comparing budgets to actuals. As I have outlined above, I’m pretty confident that I know what current PM practices will cause similar eye-rolls in 2120, and I’ll be interested to see what GTIM Nation thinks will qualify under this category in the comment section.

But I’m not ruling out the possibility that risk management will be in, and management blogs will be considered passé.

 


[i] Retrieved from https://www.infoplease.com/math-science/health/medical-advances-timeline on 11 January 2020, 21:46 MST.

Posted on: January 13, 2020 10:23 PM | Permalink | Comments (3)

PM Technology Overcoming Us

ProjectManagement.com’s January theme of PM Technical Skills got me to thinking about the sheer number of movies and science fiction novels predicated on the notion that mankind will develop technology that ends up destroying us, or reducing us to near-slavery conditions. A brief list includes:

  • “HAL” from 2001, A Space Odyssey
  • The entire Terminator franchise (6 movies, a television series, among others)
  • Colossus: The Forbin Project (1970 movie)
  • I, Robot (both the Asimov series and the movie)
  • Omega Man
  • I Am Legend
  • Too many Star Trek franchise episodes to count

… among many others. Except for the bio-technology-wiping-us-out stories, almost all of them include computers and advancements in artificial intelligence (AI). As I pointed out in last week’s blog, advancements in PM software, while profound, are often given to pursuing irrelevant information streams, meaning we PM-types have a little more time before PM technology either wipes us out, or reduces us to near-slavery conditions (probably).

Consider: ENIAC, the world’s first electronic general-purpose computer, was put into service in December 1945[i]. By 1995 its entire capacity could be replaced by a single chip, slightly larger than a dime, even though the original device required 1,800 square feet.[ii] So, within fifty years the original had been overtaken by advances in technology to an extent almost inconceivable to its developers, and that dramatic difference was 25 years ago. Why is this relevant, you ask? PMI® was founded 50 years ago (well, technically, in 1969), and its growth has also been rather impressive. And yet, nobody seems to be concerned, or even aware, of the possibility that PMI®’s growth represents a threat to the dominant narrative in the business schools. So, as usual, it’s up to me to ask the question, and explore the possibilities.

If PMI® were to take over the business world, what would that look like? I would imagine that would depend on its “hook,” or that attribute which made it attractive to the business world writ large from its inception. I would argue that PMI®’s hook has been to make available the techniques and information streams that enable organizations to execute project work better, cheaper, and faster. This reminds me of the old joke, where two friends camping in the woods together have their camp invaded by a grizzly bear. One of the friends begins putting on his running shoes when the other admonishes “Why are you bothering to do that? You can’t outrun that bear!” To which the friend replies, “I don’t have to outrun him, I only have to outrun you!”

Meanwhile, Back In The Project Management World…

Similarly, those organizations who initially subscribed to the nascent PMI®’s worldview didn’t have to “do” PM perfectly – they only needed to do it better than the other organizations in the field in order to gain a competitive advantage, increasing the odds that said competition would fare more poorly in those projects that they executed. Now here’s where PMI® taking over the world becomes a possibility: by the laws of survival of the fittest, those organizations performing project work who eschewed the technical skills made available by PMI® were more likely to fail, meaning they would drop out of their specific market. Unless such organizations were absurdly lucky, such a winnowing process probably didn’t take much time – almost certainly less than, say, fifty years. Which implies that, as PMI®’s particular blend of academic research and real-world testing continues to push the frontiers of best practice identification (I’m excluding that part of the codex premised on a priori assertions: check my previous blog “When Did A Priori Become A Priority?”), those organizations and PMs failing to keep up risk finding themselves at a competitive disadvantage, soon to be identified and devoured by the aforementioned laws of survival of the fittest. Make no mistake – such laws are as cold-hearted and indiscriminate as the most fearsome take-over-the-world movie monster; and, like the “Colossus” computer, they’re invisible to the vast majority of those whose lives they disrupt.

Of course, I’m not predicting the exact future, where a failure to read The Project Management Journal cover-to-cover will automatically lead to economic disaster for you and your company, any more than the most extreme alarmists predict that the next advancement in artificial intelligence or microprocessor technology will automatically lead to all mankind becoming servants to the computers that run our refrigerators.

Still, I’m not letting my PMNetwork subscription lapse…

 

 

 

 


[i] Wikipedia contributors. (2019, December 17). ENIAC. In Wikipedia, The Free Encyclopedia. Retrieved 04:46, January 4, 2020, from https://en.wikipedia.org/w/index.php?title=ENIAC&oldid=931194208

 

[ii] Ibid.

Posted on: January 06, 2020 09:29 PM | Permalink | Comments (1)

Philanthropic Technology

I once had the unhappy experience of working as a project controller for a woman who had a very poor concept of good management in general and Project Management in particular. Among her sillier quirks was her oft-stated opinion on the optimal answer to the common job interview question “Where do you expect to be in five years?”, or its derivative, “What do you hope to accomplish in this position, should it be offered you?” This wonderful answer she had in mind, that would instantly impress any interviewer? It was “I want to be in your job.” I suppose she thought it was the perfect combination of audacity and ambition-signaling, but I found it kind of puckishly threatening, should I ever hear it in the capacity of interviewer. Sure enough, that exact response showed up in an e-mailed list of “stupid interview answers” that I received years later.

I bring this up in order to examine the implications of PM-oriented software continuing to advance in both sophistication and ease of use. Though I have often decried what I’ve tagged the “black box syndrome,” where project controllers or PMs input certain data elements into either Critical Path or Earned Value Methodologies (CPM/EVM) software packages and expect the “right” answer to simply pop out in one of the available report formats, the hard truth here is that those analysis techniques that used to require an experienced/highly educated hand to process and deliver is now do-able by more medium-to-entry-level practitioners using the right Management Information System(s). Some of these implications include:

  • By the inescapable rules of supply and demand, what was previously considered advanced skill in PM information production and analysis is now becoming more commonplace, and will tend to erode the salaries that it had previously commanded…
  • …meaning that, if a given PM or PM Analyst wishes to be paid wages previously experienced, they need to get better at what they do.
  • However, it also means that the software developers creating these more and more advanced tools will need to understand the epistemological challenges in front of the PM community writ large, and avoid chasing down useless information products.

Though the first two bullets look like bad news, the third one is, in my opinion, clearly good news, because I have seen precious little indication that recent improvements in the software tools in the PM realm represent an advanced grasp of these challenges. They seem to be stuck in re-inventing that which is already in existence, with an occasional foray into sniping a bit of information that actually belongs in the Asset Managers’ realm (specifically, the general ledger). And it is this aspect where our friends, the PM Guidance-producers have, ironically, helped those who tend to be stagnant in their PM capabilities. I’ll explain.

Certain PM Guidance-producing tracts advocate for information streams that add no real value to the PM’s toolbox. Consider the following pieces of information that some PM packages offer:

  • Comparisons of original budgets to actual costs, at the line-item level.
  • Analyzing the percentage of activities that have start-to-start relationships in the schedule network.
  • Forecast odds of a specific task being impacted by a so-called “risk event.”
  • Identification of a given project’s “stakeholders,” who must be “engaged,” usually without serious analysis of their status as friend, foe, or neutral.
  • The generation of Ishikawa, or fishbone diagrams, that have no clear guidance on what constitutes a proximate, or even a material, cause.
  • There’s actually at least one CPM program that allows you to check a box on any particular activity’s detail sheet that forces it onto the critical path, regardless of the schedule logic.
  • …among many others just as dopey.

If these initiatives are the ones the PM-generating software engineers are pursuing, then they are wasting their time, and the day that software-assisted entry-level practitioners can displace the more experienced PMs gets pushed further into the future. In a very real sense, the software companies creating such tools are being very philanthropic – they’re virtually guaranteeing continued demand for those PMs experienced enough to not waste time on such information streams.

And, for those experienced PM-types who do think that comparing budgets to actuals is a swell idea, you should keep volunteering for those various guidance-generating organizations that agree with you. For the reasons I’ve outlined above, you’ll be doing real PMs a huge favor, as you both take your viewpoints out of the real world of Project Management, and continue to mis-direct the software companies that would otherwise reduce the demand for true PM expertise.

PM philanthropy indeed, without even knowing it.

Posted on: December 30, 2019 10:23 PM | Permalink | Comments (1)

Aligning Your PMO’s Strategy With Your PMO’s Personnel

Since the name of this blog is Game Theory In Management, and we game theorists can only go so long without a good payoff grid, I think at least some portion of GTIM Nation is expecting one. I’ll oblige, not just to get my payoff grid fix, but because using one will really help illustrate this week’s point (honest!). Previously I’ve written about how typical Project Management Offices (PMOs) will tend to establish themselves, hire talent, issue guidance, and expect the macro organization to, well, start “doing” Project Management. I’ve also pointed out that, as common as this approach is, it’s almost always doomed to fail. A more complete analysis of poor PMO tactics appears in my first book, Things Your PMO Is Doing Wrong (PMI Publishing, 2008), but this blog will address an issue from the proverbial 35,000-foot perspective.

Recall my previously asserted structure, that, when providing virtually any good or service, the providing organization should recognize the axiom “Quality, affordability, availability – pick any two.” Briefly,

  • A quality product available now is likely to be expensive.
  • A quality product that isn’t expensive is likely to have a queue waiting to procure it.
  • If it’s affordable and available right now, it’s not likely to be of high quality.

I strongly believe that this axiom holds sway in the creation and perpetration of the PMO, and the advanced PMO Director will recognize it and plan accordingly. Of course, the newcomers to PMO theory will insist that all three aspects are attainable, and that’s okay. As I will show later in this blog, I’ve been disagreed with before, and they’ve been wrong before.

So, now to my favorite part, the payoff grid. Consider:

 

 

Available

Affordable

High Quality

Scenario A

No

Yes

Yes

Scenario B

Yes

No

Yes

Scenario C

Yes

Yes

No

Scenario Whippersnapper

Yes

Yes

Yes

 

Scenario A’s PMO strategy is appropriate for those organizations that have a sufficiently robust RFP – to – Proposal – to – Contract Initiation tracking program, so as to give the PMO Director sufficient time to attract or retain the PM talent needed to support the portfolio. When this strategy is implemented without such a capability, the results can be cringe-worthy, as personnel are frantically sought out and just as quickly laid off, leading to frustration on the part of the PMs in the organization as well as mistrust among the PMO’s team members themselves. Infighting ensues, and it doesn’t end well.

Scenario B is common in organizations with a captured clientele. If its PMs cannot resort to hiring outside PM support, or set up shadow PM organizations within the company, they must engage the institutional PMO, and pay whatever rates established. Interestingly, it’s this scenario’s strategy that’s most likely to generate true advancements in the art and science of Project Management, since they retain an advanced capability in something of a secure management environment. Alas, relatively few competitive organizations are set up as to allow this kind of strategy, since contracts tend to be awarded to the lowest bidder.

Scenario C, while appearing to invite scorn from more advanced PM practitioners, is actually quite viable. To those who turn up their noses at the idea that compromise in matters of Project Management is unacceptable, I would like to ask: when was the last time you had fast food? Did you demand Wagyu beef in your drive-through burger? Why not?

Okay, you see my point. There’s a world of projects out there that don’t need a Baseline Change Control Board, or Variance Analysis Thresholds documented in a Project Management Plan. And, of course, I would maintain that there are no projects needing a Risk Management Plan. In organizations that have a large percentage of their project portfolio comprising these kinds of projects, the PMO that can deliver a simple Earned Value Management System, free of the ridiculous “requirements” slathered onto it by those nefarious guidance-generating organizations, will succeed, and in dramatic fashion.

For the Whippersnapper Scenario, where a belief that a quality PM service can be provided immediately and affordably, if only the adequate level of “leadership” (read: fear and intimidation) is used, I have a question: what do you believe you are doing differently? These scenarios will naturally occur from time to time, but never last. Underpaid talent won’t take long to find greener pastures, and a robust training program that introduces fresh replacement talent into the pool isn’t itself cheap.

I’d like to leave GTIM Nation with this thought for the week: take a realistic view of which two of the three elements your PMO seeks to deliver, and work on those strengths while preparing for criticism for the aspect you have made a conscious decision to de-emphasize. Your team will thank you for it. Don’t look back; but, if you are tempted to do so, just set up a quick payoff grid…

Posted on: December 16, 2019 10:24 PM | Permalink | Comments (2)
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