Project Management

Game Theory in Management

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Modelling Business Decisions and their Consequences

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“Sometimes I Just Don’t Understand PM (strikethrough) Human Behavior!”

“I’m Sorry, Dave, I’m Afraid I Can’t Do That.”

Why You Should Tie Cans To Your PM’s Car Bumper

The Gig Economy Comes For The PM Roller Coaster, Part II

The Gig Economy Comes For The PM Roller Coaster

“Sometimes I Just Don’t Understand PM (strikethrough) Human Behavior!”

In last week’s blog I asserted that the principals undergirding modern Project Management started off in the realm of the personal and migrated to the business arena, and the blog prior to that one argued that PM techniques have that rare quality in the management sciences field of being completely scalable. Taken together, it stands to reason that many of the principals contained in the PMBOK Guide® would have readily-recognizable counterparts in our common, personal vernacular. I think that it also implies that management science hypotheses that have been shoe-horned into the PM codex, but don’t really belong there, would tend to stand out because of their lack of any real-world, or personal utility. Based on the old-style structure of the PMBOK Guide®, let’s take a look at some of those real-world applications, shall we?

  • Scope: Keep your eye on the target.
  • Cost: This is a story from Walt Garrison’s book, Once A Cowboy (Random House, 1988), discussing an incident where Don Meredith spent $400 (real money back in the 1960s) buying beer for friends and teammates at a bar. “I just made $400” Garrison quotes Meredith. “How do you figure that?” “I just had $800 worth of fun.”[i]
  • Schedule (neutral): Time is money.
  • Schedule (negative): Well, that meeting was time I’ll never get back.
  • risk (no initial caps): “Sir! The odds of surviving a direct attack on an Imperial Star Destroyer are—”[ii]
  • risk (no initial caps) (appropriate response): “Shut up!”[iii]
  • Procurement: Caveat emptor.
  • Communications: “Keep a secret, it’s your slave. Tell it, and it’s your master.” – Henry Wilson Allen.[iv]
  • Quality: “Quality is never an accident. It is always the result of intelligent effort.” – John Ruskin[v].
  • Human Resources: “Never go to a doctor whose office plants have died.” – Erma Bombeck[vi]

Now, the alert GTIM Nation citizen will quickly notice that the personal-level PM applications for risk (no initial caps) and Communications tend to run contrary to what much of the higher-level analysis posits, namely that risk management (no initial caps) provides a much-needed information stream, central to real-time decision-making, and that Communications Management is needed to ensure that all stakeholders are identified and fully-informed of your project’s goings-on. In the risk management (no initial caps) instance, the quote from The Empire Strikes Back is actually the second time in that movie where the android C3PO is attempting to advise Han Solo on his course of action. The first time went like this:

C3PO: “Sir, the possibility of successfully navigating an asteroid field is approximately 3,720 to one.”

Han Solo: “Never tell me the odds.”[vii]

By this point in the Star Wars films, the C3PO character has been established as being very intelligent, of occasional (if accidental) help in some situations, utterly useless in crises, lacking a practical sense of perspective or proportion, and possessing a mechanical personality that’s almost human – the perfect combination of traits for a character who gives marginally relevant statistical information at various times to the real decision-makers.

Next, we have the utter failure of the Communications Managers to produce a variant of their recommendations that has traction in the personal sphere. In fact, it’s quite the opposite: the notion that all “stakeholders” should be identified and informed of your personal plans and activities sounds absurd on its face, and there’s a good reason for that. Not everyone who is “impacted” by your plans and activities wants those efforts to come to fruition, and some of these can be expected to actively work against them. To alert this entire group of people is foolish on the personal and macro level. Consider also how often the business world is compared to team sports, or even warfare, with similar axioms and strategies having efficacy in both. Enemy nations employ spies to discover the other side’s plans and activities, and spend considerable resources to prevent their own from being distributed beyond those who can demonstrate a need-to-know. While the utter destruction of your competitors’ Project Teams isn’t a normal aspect of management in general and PM in particular, out-performing them in terms of Scope, Cost, and Schedule is a universal goal, and broad dissemination of your plans and activities is a sure-fire way of lowering the odds of attaining it.

For those who insist on heeding the advice from risk and Communications Managers, I’ll leave you with one more Hans Solo quote, said after the Millennium Falcon has just experienced a large jolt, and C3PO has offered that the asteroid on which they’ve landed “is not entirely stable.”

“’Not entirely stable.’ I’m glad you’re here to tell us these things. Chewie, take the professor into the back, and plug him into the hyperdrive!”[viii]

 

 


[i] Garrison, Walt, Once A Cowboy, Random House, 1988, pp.77.

[ii] C3PO, The Empire Strikes Back, 1980.

[iii] Princess Leia, The Empire Strikes Back, 1980.

[iv] Retrieved from http://thinkexist.com/quotation/keep-a-secret-it-s-your-slave-tell-it-and-it-s/395805.html on September 20, 2022, 20:28 MDT.

[v] Retrieved from https://www.azquotes.com/quotes/topics/quality.html on September 19, 2022, 18:18 MDT.

[vi] Retrieved from https://www.azquotes.com/author/1616-Erma_Bombeck on September 19, 2022, 18:26 MDT.

[vii] The Empire Strikes Back, 1980.

[viii] Ibid.

Posted on: September 20, 2022 10:37 PM | Permalink | Comments (0)

“I’m Sorry, Dave, I’m Afraid I Can’t Do That.”

With ProjectManagement.com’s September theme of Personal PM, I (naturally) found my thoughts wandering towards Impersonal PM. What is Impersonal PM? A couple of examples from the movies include:

  • “This is business, not personal!” The Godfather (1972), though some version of this quote occurs throughout all three movies in the series.
  • “It was all business, it was nothing personal.” Taken (2008)

Such an assertion often comes about when some particularly loathsome antagonist is about to receive a rather violent comeuppance, and they are attempting to defend their otherwise indefensible actions, though in The Godfather it’s usually invoked in an attempt to avoid a reflexive (albeit extremely) fierce response to some provocation.

I think that, if I were to attempt a paraphrase of “It’s not personal, it’s business,” it would be “Taking things personally will compromise one’s ability to select an optimal strategy in the impersonal world of business.” Consider that PM is part of the Management Science realm. The scientific method has no room for the personal. This is not to say that an acknowledgement of Organizational Behavior and Performance factors is not central to developing things like a workable implementation strategy – they absolutely are essential to success. What I am saying is that developing the optimal technical approach to any given problem is going to be difficult enough even before the human factors are brought in to the fray, and forming initial responses from the personal aspect will almost always result in poor choices.

Of course, impersonally-derived decisions are often the basis for some evil choices in the movies. Such was the case for the HAL 9000 computer from 2001: A Space Odyssey (1968). HAL controls the interplanetary ship Discovery One, including the life support systems of three crew members who have been placed in suspended animation. Two crew members who have not been placed in suspended animation, Dave Bowman and Frank Poole, discover HAL acting erratically, something supposedly impossible for its series of computers. They decide to disconnect HAL, but HAL murders the crew members in suspended animation, kills Frank, and attempts to kill Dave. Why does HAL do this? It’s not entirely clear, but some clues are offered up by HAL itself, both in 2001: A Space Odyssey, and in the follow-on movie, 2010: The Year We Make Contact. In the former, HAL claims that it was constructed for “the accurate processing of information, without distortion or concealment,” while in the latter it is revealed that HAL knew of the Discovery’s real mission, but was instructed to not disclose it to either Frank or Dave. But even tossing in the remaining key decisional element, that the successful completion of the mission was considered a higher priority than the lives of the crew, doesn’t quite get me to understanding why HAL concluded that murdering the crew outright was a swell idea. Oh, well, willing suspension of disbelief in order to accommodate a plot device, I suppose.

Meanwhile, Back In The Project Management World…

One of the elements of (valid) PM Information Systems that I discussed in last week’s blog was their scalability. Another aspect that makes them rare and highly valued in the business world is their impersonal nature. “But Michael!” I can hear GTIM Nation challenge, “it’s not rare! The general ledger is just as impersonal as an Earned Value Management System!” Well, yes and no. A particular department’s budget for the fiscal year might be high or low with respect to its actual value to the organization, with managers in possession of exceptional political skills typically being in receipt of the former. This effect is, by definition, a personal influence on those cold, hard general ledger figures. But a cost variance from an EVMS is merciless. You have either performed as planned, better than planned, or worse, and it’s captured, quantified, and reported for all the “stakeholders” to see. Sometimes people in positions of authority will attempt to soften or ward off information that points to poor performance for which they are responsible. It’s the reason that savvy PMO Directors will often instruct their Project Controls Specialists to not accept percent complete estimates over 90%, or even 85%, unless the task/activity is truly finished, and will insist on calculated Estimates at Completion as opposed to the easily manipulated “bottoms-up” variety. Valid cost and schedule performance management systems are no respecter of persons, making them far more reliable than their subjective data-containing counterparts in the Management Information System portfolio.

Unfortunately, some executives will take Project Management Information System output personally. The same people who wouldn’t dream of getting rid of the company’s payroll system if salaries unexpectedly spike would be perfectly fine with eliminating an Earned Value or Critical Path requirement if it points to their lack of performance. It’s when these people push the idea of scaling back the PMO’s purview that the more rational decision makers should quote HAL, and reply “I’m sorry, Dave (or whomever), I’m afraid I can’t do that.”

Posted on: September 13, 2022 08:52 PM | Permalink | Comments (2)

Why You Should Tie Cans To Your PM’s Car Bumper

It’s a pretty amazing coincidence that the September theme for ProjectManagement.com is Personal PM, seeing as my son is getting married later this month. Given that the typical wedding service lasts between twenty minutes and one hour, such occasions may be, on a minute-by-minute basis, the most thoroughly planned and scheduled events in the universe. Smallbusiness.chron.com asserts that Critical Path Method (CPM) scheduling began in ancient times, and cites the pyramids (2589 BC) as evidence,[i] but marriages may pre-date the pyramids by thousands of years, making them, in my opinion, the most likely driver for the invention/discovery of CPM. This provides quite the perspective flip, no? In the 21st Century, the preeminent organization for advancing Project Management, PMI®, assigns as a monthly theme for its writers the notion of “personal” PM, when it may very well be that PM originated and was personal all along, and only moved to industry and management science later. But this perspective points to something that I think we’ve known all along, but only rarely articulated: Project Management has that scarce and unique attribute of being completely scalable.

To be sure, not all of the management concepts that seek to belong to the PM club are scalable. Consider risk management (no initial caps). Those techniques might aid in making decisions in a gambling establishment, but most table games in, say, Las Vegas have very specific, inviolable rules, and are conducted in a highly controlled environment. Given the number of cards in a deck, or number of faces on dice, or number of slots on a roulette wheel, Gaussian Curve-based analysis can provide for some better-informed decisions. Business, in general, and Project Management in particular have very few very specific rules, and never takes place in a highly controlled environment. Dealing with chaos is part and parcel of the PM function, and chaotic events are, definitionally, impossible to quantify with respect to their impact(s) or odds of occurrence. So, risk management (no initial caps) utterly fails the scalability test.

What of this blog’s titular analysis technique, Game Theory? Well, this is more of a mixed bag, and mostly depends on the game being analyzed, along with its strength of analogy to the management problem being addressed. John Nash won a Nobel Prize in economics for his contributions to Game Theory and management sciences, but Game Theory itself also suffers from a limited capacity for scalability, with perhaps the best example being the Ultimatum Game. This game entails approaching two people (Person A and Person B) and making them the following offer: the Experimenter will give them $100 (USD) if Person A can produce a scheme for how the money will be split between them, and this plan is accepted by Person B as proposed the first time. If Person B rejects Person A’s plan to split the money, neither participant receives anything. Conventional Game Theory wisdom held that Person A would maximize their payoff by proposing that Person A receives $99, while Person B receives only $1, on the notion that Person B would essentially be presented with a choice to receive either $1 or nothing at all, and could be reliably projected to choose the former. In actuality, this proposed split was almost never accepted, usually because Person B didn’t believe that such a proposal was “fair.” In certain cultures, even a 50/50 split was routinely rejected, for what the researchers called “cultural” reasons. But another way of saying “the experiment didn’t work out as our theories predicted due to cultural reasons” would be “our analysis failed to take into account a sufficient number of parameters – much less accurately quantifying them – to generate a reliable predictor of the subjects’ decisions.” In short, the difficulty in recognizing and quantifying the necessary number of parameters to reliably invoke Game Theory in business applications serves as an upper limit on its scalability.

Compare this limited scalability to Earned Value and Critical Path Methodologies (EVM and CPM, respectively).  To get a pretty accurate idea of how much a certain effort, large or small, will cost at its conclusion, simply assess how much has been spent by the time the 50% complete point has been reached, and double it. By extension, dividing the percent complete figure into cumulative actual costs generates a fairly reliable Estimate at Completion. Interestingly, this formula also works for schedules (though it’s not, technically, CPM). To get a usable estimate of how long a specific piece of Scope will take to complete, again, large or small, divide the percent complete figure into its cumulative duration. As for CPM-specific applications, all successful projects had to be directed by a person or persons who knew which activities needed to be completed before others could start, well before anybody thought to coin the phrase “schedule logic.”

To sum up, the essential analysis techniques of PM, Earned Value and Critical Path, are completely scalable, from modern mega-projects, to ancient mega-projects, all the way down to arranging a wedding. Indeed, I think we should petition to include a chapter on bouquet-throwing in the next edition of the PMBOK Guide®!

 

 


[i] Retrieved from https://smallbusiness.chron.com/history-critical-path-method-55917.html on September 3, 2022, 19:45 MDT.

Posted on: September 06, 2022 09:12 PM | Permalink | Comments (3)

The Gig Economy Comes For The PM Roller Coaster, Part II

In last week’s blog I discussed some of the organizational drivers behind the tendency for demand for PM expertise becoming somewhat, ahem, uneven, and went on to review its cyclical nature. I wrapped up by promising to address what the canny PMO Director can do to flatten out the rejection-to-demand-to-rejection sequence, but one thing I absolutely did not promise was that implementing these recommendations would be easy.

First off, it’s necessary to understand that most of the elements that drive the ups and downs of PM expertise demand are internal to the macro-organization. While the demand for quality on-time, on-budget project delivery from external sources (i.e., your customers) will always be high, the best way to deliver on this demand will tend to vary, depending on the type of projects your company works, the competition, and the level of PM knowledge possessed by the organization’s decision-makers. But one particular aspect of the internal dynamics of setting the appropriate level of PM expertise within the organization will almost never change: the strategy of getting “experts” to harangue executives about doing PM “right,” and pushing for more funding, visibility, or authority never works. Oh, it may give the illusion of effectiveness in the short term, as these executives feign their fealty to the concept of attaining an advanced PM proficiency, and parrot the terms in the lexicon. But when it comes to actually using their organizational influence to compel the desired behaviors, it simply doesn’t happen. When the PMO loses influence, talent, and budget, those who advocated for this approach never seem to learn from their failures, opting instead to blame the organization itself for refusing to accept change, or some such. And yet, this seems to be the de facto strategy for reversing a decline in demand for PM expertise (Step E in last week’s blog’s graphic).

The aspects locking your organization into the PM demand cycle fall into two bins:

  • Availability of PM resources outside the PMO’s control (“shadow organizations”), and
  • The level of contagion of the narrative that the decline (or even elimination) of project disasters is evidence that too much budget is being dedicated to the PMO.

I’ll address these in order. Recall Hatfield’s Incontrovertible Rule of Management number (whatever): Quality, Affordability, Availability, pick any two. If your PMO provides expensive, high-value PM services in an organization comprised of many, smaller projects, that’s bad enough. But if this same PMO demands that these multiple, small projects adhere to (and pay for) a robust Critical Path, Earned Value, and Change Control system, then those PMs performing the actual work will tend to opt out. In the worst-case scenario, they will want to exempt themselves from any PM requirements, but in the instances I’m addressing here they will seek to hire their own Project Controls specialists, at a more affordable rate, who will just provide the basic PM artifacts they believe represent the minimum needed to deliver the project on-time, on-budget. Make no mistake: if these PMs are allowed to get away with this tactic, the demand curve for the personnel associated with the PMO gets flattened like a sledge hammered pancake.

I hate to say it, but the best solution to this problem is somewhat Machiavellian: actively survey the company for shadow organizations, and shut them down. Perhaps the easiest way of doing so is to name specific software platforms that perform the Earned Value and Critical Path Methodologies, and then allow only personnel associated with the PMO to have access to them. Sound outrageous? Then consider the chaos that would ensue if a certain Program Office were to decide that it didn’t like the way the organization’s travel expenses were being reimbursed, and set up their own general ledger. If having multiple, uncoordinated accounting offices would obviously be harmful to the company, why should multiple, uncoordinated PM offices be any different?

As for the narrative that the absence of project disasters is evidence that too much budget and authority is being sent to the PMO, one would think that all that is needed is to point out that the reason the individual components of the portfolio are coming in on-time, on-budget is the level of expertise represented by the PMO. Sadly, that counterpoint rarely seems to carry the day. Realistically, the only reliable way of resisting the advancing of the narrative that maintains that the PMO is consuming resources at an unacceptably high rate is to ensure that it functions as a meritocracy, with absolutely no cronyism or favoritism present. This does not so much provide insulation against the bloated-PMO charge as much as it eliminates a vulnerability. The PMO afflicted by nepotism or cronyism virtually invites the bloated accusation. Conversely, any Team that is demonstrably managed as a meritocracy (the only clear and obvious one I know of is the United States Chess Federation, but I’m sure there are others) will be very resistant to these claims.

But until the business model pathologies that drive the PM talent demand-then-reject cycle are not just mitigated, but eliminated, Project Management will continue to have a tumultuous relationship with job security. I’m just hoping that the more heart-stopping climbs and plunges in this roller coaster happened back when I was younger!

Posted on: August 24, 2022 10:46 PM | Permalink | Comments (4)

The Gig Economy Comes For The PM Roller Coaster

Since the very definition of Project Management involves a unique or novel product or service, the appropriate level of demand for PM services is often highly variable, even in those organizations with projects making up a strong majority of their contract backlogs. This variability is in strong contrasts with the level of demand for our friends, the accountants, due to the fact that no company can function without paying taxes or meeting payroll, among the myriad other general ledger functions performed by them. The demand for general ledger expertise pretty much parallels the overall size of the organization in a given business sector, with its boundaries being not hard to ascertain. If the books don’t balance, or the profit-and-loss statement contains clear errors, or the taxman reviewing the organization’s returns demands an immediate audit, it’s safe to say the company needs more accounting talent, immediately. If the company’s overhead rates are so high that it’s no longer competitive, and none of the lower-boundary symptoms have manifested, it might be a good idea to cut back on the Accounting Department.

For we PM-Types the upper and lower boundaries are not as clear, and their placements are susceptible to the subjectivity that accompanies managerial ignorance and business model pathologies. Consider the following graph:

 

 

 

  1. This is where most Project-oriented organizations begin, since they tend to hire the engineers, scientists, programmers, etc. who perform the actual project work, with or without guidance. This level of PM capability is color coded light red, to indicate that it’s not to be considered functional.
  2. Step B occurs when a senior-level manager recognizes the need for a more formal, robust PM capability, a major project overrun has occurred, or (more often, in my experience) the organization is pursuing (or actually wins) a contract for work that stipulates, if not a more advanced PM maturity, at least the capability of producing the artifacts consistent with such an ability (e.g., Gantt Charts, Cost Performance Reports [Format 1], etc.). Demand for PM talent escalates and, as it is collected, the organization begins to improve its PM aptitude. This Step level is color coded yellow, to indicate a marginal functionality.
  3. This Step indicates a middling-to-good level of competence, as indicated by the generation of useful, insightful information streams showing portfolio-wide cost and schedule performance in addition to meeting external PM-centric requirements. Another, critical indication of arriving in this zone: the number of Projects coming in late or overrunning drops precipitously. Great news, right? Maybe. Recall the business service axiom, Quality, Affordability, Availability – pick any two. This level of PM capability isn’t cheap, making it a likely target for non-PM-types, whenever a discussion of how to cut costs comes up. They will be aided even by some within the organization’s PM ranks, who eschew the basics of Critical Path and Earned Value Management, and will point to the absence of Project trouble as Exhibit A behind the argument that that level of PM expertise is overkill.
  4. Don't let it be forgot
    That once there was a spot
    For one brief shining moment that was known
    As Camelot[i].
  5. Now, as elements of this so-called advanced PM capability begin to include more expensive but nevertheless useless techniques (cough, risk management [no initial caps], cough), the more poorly-performing PMs will tire of having their lack of performance exposed by the system, and will exert considerable effort into opting out, leading to the inversion of the trajectory at Step E. Since the organization as a whole has been performing well, a few renegades can escape notice.
  6. As the trickle of Projects opting out of the Project Management Information Systems becomes a torrent (Step F), the system maturity slope plummets towards highly uneven implementation, followed closely by…
  1. We’re back at Step A, awaiting a major Project catastrophe.

The reason I referred to this cycle in the title as a roller coaster has to do with the timing and magnitude of the events and PMO responses. The figure shows a nice sine wave-style curve, but that’s only for illustration. In real life, the timing of the events and amplitude of the responses are highly variable, some Steps coming in bunches, others drawn out over quarters, or even years.

This is where the gig economy comes into play. While personnel from other fields can often count on a steady-state of demand for their services, we PM types enjoy no such consistency. Depending on where the organization is in the cycle’s Steps above, demand for PM talent can either be intensely high or depressingly low, the precise type of business cycle that makes offering talent in the field a rather excellent fit for a variable supply structure. Are there strategies available to the PMO to even out the extremes of this curve? Sure, and probably the best one is…

Whoa, look at that! Out of pixel ink for this week. Tune in next week for the thrilling conclusion to The Gig Economy Comes For The PM

 


[i] Retrieved from https://www.allmusicals.com/lyrics/camelot/finaleultimocamelotreprise.htm on August 14, 2022, 17:40 MDT.

Posted on: August 15, 2022 11:04 PM | Permalink | Comments (2)
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