Game Theory in Management

As I’m sure most (if not all) of my regular readers know, many psychologists believe that, when we dream, we are experiencing our subconscious selves attempting to communicate with our conscious selves, but in a visual language which is difficult to understand in our waking existence. The images can be primordial, powerful in connotation, but irrational in delivery. And, when we experience recurring dreams – or, painfully enough, recurring nightmares – there’s a natural tendency to try to unravel the message and, potentially, act on it.

So, what are the most common project management nightmares? Well, clearly, there’s the over-budget, late-schedule, but not knowing about it until it’s too late one. Then there’s the customer-pushing-extra-scope variety, leading to the most common project performance killer, the dreaded scope creep. There are many others, and yet I must ask: what are these nightmares trying to tell us?

Consider our information streams. They are the real-world data feeds, what we see on the surface, and the information that leads us to act, to make decisions. As managers, the information we seek is analogous to what we see, hear, smell, and touch in our waking existences. When we seek irrelevant information, and get it, and then make decisions based on it, then the nightmares start to become realities. Why? Because there’s a project management reality out there, that’s not being perceived, and threatens to become an inescapable outcome … and management is oblivious to the imminent disaster looming. The information streams an organization chooses is a clear indicator of its true character, as well as its chances for success.

Take the organization that eschews earned value analysis. This is most often the case where our friends, the accountants, have successfully pushed the fraudulent idea that the general ledger can provide all relevant cost information to decision makers. But there are many instances where the organization elects to nix any EV system because they simply do not want to know how their projects are performing in cost performance space. Why would any organization not  want to know this? Because it’s directly tied to responsibility. Organizations that seek to obscure who or what was responsible for successes or failures, and, instead, substitute narratives bereft of facts, cannot abide even the most basic of earned value management systems. Organizations seeking to deflect responsibility will resist information streams that accurately reflect cost and schedule performance, and will repeatedly encounter the way-over-cost, way-past-schedule nightmare.

Risk management is another conceit, that the real world of project performance will attempt to penetrate with frightening feedback. Bad things happen on projects – it’s a fact of management life. How the project team responds is the difference between success and failure. So, what if a risk analyst predicted that a given bad thing might hit the project? Did it alter the team’s response at all? If yes, then, yeah, it was a good idea to spend that money on the risk analyst. However, in my experience, the risk people rarely – if ever – proscribe a course of action that wasn’t already on the project team’s roster. In other words, they accurately worried for you, Mr. /Ms. PM. And it bought you exactly nothing. The anti-PM nightmare talisman that you bought from the risk management types is literally worthless.  Sorry.

And what about those who attempt to “manage” their schedule via milestone lists? These invariably list project objectives (again, don’t tell me, right? In a spreadsheet?), and pull “status” by asking their principals if they anticipate that they will accomplish their milestones on-time, a little late, or very late/miss altogether. The answer is, invariably, that they will certainly meet their schedule dates … until they don’t. This is also reflective of an organization that has no intention of respecting responsibility for project performance and is, instead, situating itself for convenient scapegoating.

Are these a few of your PM recurring nightmares? The interpretation lies within identifying the business model pathologies that have wormed their way into your organization. And that exercise, dear readers, is never without pain.

Probably most people who took a challenging course in college have the recurring dream of becoming suddenly aware of having signed up for a course that should have been attended, but wasn’t, and finals week is upon them. I’ve had this dream fairly often – at least four times per year since finishing my undergraduate work – so you would think that whatever message my subconscious was trying to tell me would have been transmitted by now. But, no, I guess my id is just having too much fun giving my superego fits.

But project disasters also recur, and, often, for very basic reasons. One of the most basic has to do with the development of the Work Breakdown Structure, or WBS. Anybody who knows the first thing about project management has to know what a WBS is, which makes it so abused. The novice executive simply can’t admit to not knowing how to develop one, so they will take a stab at it, even if they have no idea how it ought to be developed. They’ll put in organizational breakdown structure elements, or functional breakdown structure elements, and double-dog dare the project team to tell them nay.

What’s the consequence? Since OBS or FBS elements in the WBS cannot be objectively measured as to percent complete, they negate any attempts at capturing cost or schedule performance through either earned value or critical path methodologies. The core of these methodologies relies on the estimate of percent complete as of the end of a given reporting period. Quick! What’s your percent complete on the design team? On the reporting team? Can’t offer it up? It’s because there are non-scope-based elements in your WBS, so you are pretty much helpless when it comes to assessing cost and schedule performance. And, when you are flying blind in cost/schedule performance space, that’s the stuff of managerial nightmares.

Consider also the almost aristocratic trend away from “doing” the aforementioned earned value or critical path analysis. Oh, sure, our friends, the accountants, have convinced you that they can provide cost performance information, based on analysis derived from the general ledger. Such assertions are complete equine droppings, but, for whatever reason, seem to gain credibility in boardrooms. With the supine whisperings of the asset managers lulling project leaders into a false sense of security, projects leap into nightmare space, with chilling regularity. 

And what of the milestone watchers? They eschew actual activities, with schedule logic, in favor of putting project objectives – don’t tell me, let me guess: they’re in a spreadsheet, right? – into some report, where the milestones are assessed with one of three status colors:

·         Green, we’re gonna hit this on-time.

·         Yellow, not so confident.

·         Red, yeah, we’re gonna blow it.

Problem here is, everything is green, until it isn’t. Absolutely no ability to forewarn execs in time for them to correct what would have been easily fixable, had they just been notified in a timely manner.

Can risk managers fulfill the role of Sigmund Freud, and alleviate your project nightmares? Um, no, and for one simple reason: the future cannot be quantified. The RM-types can push all the statistical – what was my term before? Oh, yeah, equine droppings – they want, but they can’t eliminate the recurring PM nightmares.

What can provide relief to such nightmares? It’s simple – return to the basics.

Almost everyone on Earth knows the fate of the passenger liner Titanic: she struck an iceberg on her maiden voyage and sank with heavy loss of life in the icy northern Atlantic on April 15, 1912. I think part of the continuing fascination with this otherwise open-and-shut case lies in the forensic analysis of the contributing causal factors. Whenever there’s a disaster, it seems, there’s always dozens, hundreds, thousands of narratives that attempt to connect the dots of the factors that led to it.

Take the aforementioned Titanic. The proximate cause of her sinking was the hole torn open in her hull from colliding with the iceberg. The material causes, however, are myriad (for those less familiar with causal analysis, in order for something to qualify as a material cause , it must pass the if-not-for test, as in “if not for Titanic’s rudder being too small, it would have missed the iceberg, and, therefore, not have sunk.”). For example, let’s start asking “why” a few times to see if we can’t isolate a material cause or two. Why did the ship hit the ‘berg? Because her crew recognized the danger too late to turn the ship away. Why did they recognize the danger so late? One possible reason is that the lookouts were not equipped with binoculars. Why not? Because the ship’s purser had been relieved of his duties back in Liverpool, prior to the ship sailing, and took his locker keys with him. The binoculars were in the lockers, but nobody had the keys, so that’s where they remained (and may very well be there to this day). Also contributing to the ship’s inability to navigate around the iceberg was the fact that the sea was extremely calm, and an iceberg is far easier to see at night if there are waves breaking against its base. Additionally, the Titanic was – informally, at least – attempting to break a speed record in her Atlantic crossing, and ships turn more slowly the faster they are going.

Given these facts, can the following be reasonably asserted?

·         If not for the purser being fired prior to the voyage, the lookouts would have had access to binoculars, warned the bridge in time to turn the ship, and the Titanic would not have sunk.

·         If not for the new purser being reluctant to break open the lockers holding the binoculars, the Titanic would not have sunk.

·         If not for the lookouts watching Leonardo DiCaprio and Kate Winslet kissing on the foredeck, the Titanic would not have sunk (I just made that up, but there seemed to be at least a hint of this in the movie).

·         If the sea had not been so calm, the Titanic would not have sunk.

·         If the ship could turn sharper at higher speeds, the Titanic would not have sunk.

·         If the ship was not involved in an attempt at record-setting, the Titanic would not have sunk.

This list could go on and on (e.g., let’s say the purser was fired for a trivial reason. If not for the purser’s boss having cold coffee at breakfast, he would have been in a better mood, not fired the purser for trivial reasons, meaning the lookouts would have had access to binoculars, etc., etc. The assertion then becomes, if not for a cook giving the purser’s boss cold coffee, the Titanic would not have sunk.).

When we conduct a forensic analysis of what happened in a project nightmare (finally! Michael’s turning to the October theme!) there’s a distinct danger of swerving away from a legitimate causal analysis, and towards competing narratives. Whenever you hear the expression “historians disagree” about anything, then you are seeing just such an instance of competing narratives, and I have to ask, “why?” Aren’t the facts known? Haven’t the assertions that don’t meet the criterion for being evaluated as facts been tossed out? What are those guys doing hanging around the grassy knoll with their silly-assed pamphlets, then?

Don’t think the exact same thing doesn’t happen whenever a project goes south. People with only the barest grasp of causality analysis, the rules of evidence, or the rules of logic will leap to the forefront with their particular narratives, narratives that serve their own particular interests. The whole “lessons learned” effort then becomes a bitter competition among narratives, dramatically reducing the odds that the true causal factors of any given project disaster become known, much less avoided in the future.

Which is why Jack Dawson and Rose DeWitt Bukater, single-handedly, sank the Titanic.

“So, what’s your sign?”

Long considered the classic bad pick-up line, the above quotation immediately transmitted the following information to perspective available women:

·         The person speaking has a belief structure so bereft of logic that they actually believe that a person’s zodiac sign has anything to do with their personality type,

·         And that they believe that, should they have an allegedly complimentary sun sign, then it would be appropriate to pursue a relationship,

·         And, finally, that you are also stupid enough to believe the previous two bullets.

Now consider the parallels between singles mixing in a lounge with corporate recruiters seeking to hire managers. Through a combination of facts, half-truths, and out-and-out deceptions, each party seeks to assess what the other is truly about without divulging the poorer aspects of their own selves. It’s quite a dance, too, because, whereas the lounge scene has to do with the eventual attainment of love or sex, the latter has to do with the acquisition of the talent needed to generate profits, i.e., money.

When I was doing the research for my recently-release, must-have book, I came across another interesting parallel, between the worker archetypes that Michael Maccoby describes in his book The Gamesman (Simon and Schuster, 1978) and those of participants in massive multi-player on-line role-playing games (MMORPG), such as World of Warcraft®. In a 1996 paper by Richard Bartle, he posited that MMORPG players tend to behave in a manner consistent with one of four types, symbolized by the suits in a deck of cards:

·         Achievers, symbolized by diamonds, seek to achieve the stated goals of the game.

·         Explorers, represented by spades because they tend to dig around a lot, like to explore the environs of the game as seek out its secrets.

·         Socializers, or “hearts,” enjoy interacting with the other players, and

·         Killers (“clubs”) enjoy direct combat with the other players, even more so than their scripted adversaries.

I immediately recognized the consistency of the Bartle archetypes with those of Maccoby, who theorized four types of workers:

·         Craftsmen, who don’t really care whom they work for, but do care very much about the quality of their output. I believe these to be the equivalent of the Achievers, since the Craftsmen also seek to produce the best they can within their understood parameters.

·         Gamesmen don’t view their paychecks as food on the table or a roof over their heads – they hold their compensation to be some sort of token in an elaborate game, a game they intend to master. I think these are analogous to the Explorers, who also seek to ferret out the whole of the game parameters without necessarily obeying the rules of the particular quests.

·         Company men, who tend to take on the persona of the organization around them, are obviously the equivalent of the Socializers, and

·         Killers are similar to Jungle Fighters, who seek to eliminate their competitors (virtually everyone around them) through less-than-scrutable means.

That Maccoby and Bartle should arrive at such similar conclusions completely independently of each other indicated to me that they were on to something – if it really is the case that both workers and MMORPG participants tend to manifest behaviors consistent with these archetypes, could a given person’s most likely archetype be determined prior to their hiring? Or, if the particular person is already on-board, is there a way of determining their archetype in the event of extensive future interactions?

September’s theme is supposed to be on certifications, right? Well, here might be the ultimate utility of professional certifications: they are most attractive to one of the more coveted Maccoby archetypes, the Craftsman. The Craftsman, remember, seeks to be the best at what he does, and putting in the extra effort to master the craft and be recognized for it is very appealing. If a Company Man is mixed in with a group of Craftsman, then he will be interested, as well. However, it occurs to me that the only way the least attractive project team member archetype – the Jungle Fighter – would be interested in attaining a professional certification would be if such a certification might lead to a superior strategic position to belittle others, and, if such reasons exist, they are less than intuitive, outside of faculty lounges.

So, now the ultimate PM recruiting question becomes … what’s your deck-of-cards suit?

Yes, I know the title of this blog is highly counter-intuitive. And, yes, I know it’s in direct contradiction with what the awarders of these certificates have to say about their value. According to Recruiter.com, the PMP® boosts yearly earnings by $6,000 to $10,000 USD, though their research methods are not shown on the page I saw. Still, I have seen first-hand a few ways that having professional certifications can actually have a detrimental impact to a given career trajectory.

At the most elemental level of the grounds for a hiring decision, the presence of a professional certificate touches on one of the most primordial conflicts in the hiring and retention arena of ideas: is your organization a meritocracy? And, before you reflexively answer in the affirmative, consider that a true meritocracy is a virtual impossibility, for a variety of reasons.

First off, a true meritocracy represents a dramatic limitation of the hiring managers’ latitude in decision-making. If the qualifications for a given position could be clearly quantified and articulated, then a simple arithmetic evaluation would indicate the best candidate, every time. The evidence that this is not the case lies in the myriad articles and blogs offering advice to candidates on how to handle their prospective interviews. Yahoo!® is particularly bad about this (or am I bad for reading their stuff?), but their getting-hired advice almost never includes things like “Get a professional certification!”  Instead it goes on and on about what not to say, wear, think, ask … in general, the conventional advice almost always seems to center on presenting as if you can get along with the rest of the team on a social interaction basis, then you’re in. It’s almost as if the technical capabilities are a given – which, in the case of the > 450,000 PMPs® awarded, may very well be the case. In short, if you are the only candidate for the job without a PMP®, but you were also the only one without food stains on his shirt, or who did not ask about time off policy, or who did not bad-mouth their previous managers, then you will also probably be the only candidate with an actual offer.

The front of the meritocracy-versus-managerial latitude conflict is often played out between the organizations’ human resources department and the hiring managers. If the hiring manager puts a premium on professional certifications, then, great! However, if the hiring manager doesn’t think that a certification is that big a deal, but is compelled to require it in the job ad by the HR department, we see an instance where the hiring manager may perceive that his organization’s bureaucracy is infringing on his latitude of decision-making, and may very well bristle against it.

Also consider the plight of the workaday PM who is frustrated at her perceived lack of upward mobility. She goes through the time, effort, and expense to get her CCP®, and then … what? If her owning organization doesn’t give her a promotion or raise, she will then not fail to understand that the organizational fix is in, and instantly becomes a flight risk.

Finally, there are the political considerations to take into account. The person who, again, goes through the time, effort, and expense of attaining a professional certification should be commended. It’s not easy, and it clearly shows that such a one has a serious attitude about becoming more capable in their field of expertise. More serious, perhaps, then their certification-less colleagues, or even … so-called superiors. Once these colleagues and alleged superiors begin to see the certified ones as threats, especially and particularly the Maccoby-archetype Jungle Fighters amongst them, then the certified ones have a virtual target painted on their backsides. And, from my personal experience, add in a couple of books, keynote speeches, and hundreds of articles and blogs, and the interviewing process instantly takes on the look and feel of that iconic scene in the intro to the television program Kung Fu, where the unfortunate martial arts practitioner is being tested by having a series of javelins thrown at his head.

So, yeah, pursue certifications. Just know that your associates are poised to throw javelins at your head in your very next interaction.