Game Theory in Management

Yvonne Polmanteer’s comment on my previous blog started with the sentence “I see egos and politics becoming more and more of a stumbling block for projects,” and I think she’s spot-on. Like Gantthead contributors Kenneth Darter and Michael Wood, I have a few things to say about project politics, and I believe a little game theory can help. For the sake of this discussion, I’d like to define office or project politics as those acts performed by individuals that further their personal agendas at the expense of achieving the goals of either the project or the performing organization. Proceeding from this definition, I would like to discuss two similar creatures: Hawks, and Jungle Fighters.

As I discuss (Marlin Perkins alert!) in my newly released book, Game Theory in Management (http://www.ashgate.com/default.aspx?page=1751&calctitle=1&pageSubject=692&sort=title&pagecount=2&title_id=11616&edition_id=15149), a favorite game for evaluating, calculating, and predicting aggressive or passive behavior patterns is the Hawk-Dove game. Imagine two birds who share a common environment. If they act peaceably (like doves) towards each other, then they forage for food, and consume it. So their payoff for choosing a Dove strategy is the daily available food supply (V), divided by the two of them (V/2). Note that this strategy maximizes the payoff for the entire population of birds in the given environment. However, if the daily available food supply drops below the level to keep them both alive, then at least one of them must act aggressively (like a hawk) towards the other by taking part of its claim to the food supply if it is to avoid starvation. The Hawk’s payoff, then, becomes the entire food supply (V), minus the expense of actively taking the other bird’s food, or preventing them from foraging in the first place (C). Of course, the birds may elect a Hawk strategy even if starvation is not a threat.

Now, imagine a population of 100 birds. Again, the payoff for the entire population is maximized if they all select the Dove strategy. But, with the introduction of even one Hawk, the Nash Equilibrium – that point at which the individual game participants can not improve their payoffs by changing strategies – quickly works out to 25% Hawk, and 75% Dove. While this may manifest as 25% of the birds acting as hawks all of the time, the usual outcome is a given bird chooses to act aggressively one-quarter of the time, and like a dove the other times.

Industrial psychologist Michael Maccoby’s brilliant book The Gamesman (Simon and Schuster, 1976) posited four broad types of workers:

• Craftsmen, who don’t really care for whom they work, but care a good deal about the quality of their output;
• Company Men, who tend to adopt the persona of the organization for whom they work;
• Jungle Fighters, who indulge in calumny and deceit in order to get ahead, and
• Gamesmen, who view their participation in the workplace as a game, one they intend to win.

Of the Maccoby archetypes, the Jungle Fighters are clearly the most political. As they further their personal agendas (at the expense of the organization’s or project’s goals), they make it a point of minimizing the achievements of their perceived competitors on the team, while conveying and amplifying their mistakes. Like the Hawk-Dove game, the project team performs best when each of the participants pursue the team’s goals first and foremost; however, with the introduction of even one Jungle Fighter, the Nash Equilibrium for selecting Jungle Fighter strategies will be quickly realized, and it won’t stop or be confined to the existing number of Jungle Fighters on the team. Some members who would not ordinarily select Jungle Fighter strategies will soon find themselves in a position to either start, or have their standing and influence within the team severely eroded.

So, how does one counter?  Keeping in mind that the influence of office politics is widespread, powerful, and damaging, and that this blog’s title includes the term “101,” indicating beginning-level, I recommend the following tactics:

• Know that Jungle-Fighter-free project teams and organizations are extremely rare, and you will need to be able to identify the Jungle Fighters around you as early in the project as possible.
• Nullify their favorite tactic: the ex parte conversation. I once worked for a manager who inherited a highly political group. His first action was to announce that, if any employee came to him with a criticism or “concern” about another member of the team, he would immediately stop that conversation and call that other person into the office. The influence of the Jungle Fighters took an immediate and significant hit.
• Once they have been identified, and their favorite tactic removed as an option, if they continue to select Jungle Fighter (highly and negatively political) strategies, they must be eliminated from the project team or organization. Of course, if you are not a manager, this is difficult if not impossible.

Sadly, many organizations (a) don’t want to recognize that managing people in such a way as to deviate from a pure meritocracy is extremely damaging, and (b) recognize that politics is in play, but don’t want to do anything about it. Such organizations are vulnerable to a Jungle-Fighter-initiated tail spin, as more and more workers who would not normally engage in Jungle Fighter strategies come to believe that they must. These projects only end badly. So, the game then becomes one of recognizing when you are working for such an organization, and knowing when to leave a lost cause.

My Book Report on the Project Management Institute® Practice Standard for Earned Value Management

Exposure Working Draft, Preface, Chapters 1 & 2

Way back when I was firmly ensconced in the Project Management Institute’s (PMI®’s) stable of contributors and writers, I was asked to help write the Practice Standard for Earned Value Management. The team had some of the most brilliant minds in project management, including Gary Humphries and James Wrisley, and working with them was a blast. However, some of the others on the team made the overall project very frustrating for me, and, when I was asked to review the Exposure Working Draft’s Preface and first two chapters, it showed.

Many of the issues I took on would, I discovered later, manifest in other parts of PMI®’s codex, which made several parts of the PMBOK Guide® easy pickings for (Marlin Perkins alert!) my new book, Game Theory in Management (http://www.ashgate.com/default.aspx?page=1751&pageSubject=312&calcTitle=1&priorityone=1&title_id=11616&edition_id=15149). But when I swerved across my long-ago book report, I discovered it was illustrative of some of the reasons why PMI® has, in my opinion, abandoned the role of thought leader in the field of project management. So, without further ado, here’s my critique:

There was a comfortable finality in the way the old C/SCSC documents were written.  DoD 7000.02, 7000.10, and DOE 2250.1D laid down the law, and that was that.  One gets the impression that the authors of those works did not care in the least if the practitioners of Earned Value Management wanted to debate the categorization of EV measurement techniques or whether or not Project Management was “primarily a matter of” planning, doing, checking, blah, blah, blah.  They simply stated what they expected of anybody wanting to do project work for them and, whaddayaknow, it worked.

Now, flash forward about 35 years, and the PMI® is trying to assemble a Practice Standard for Earned Value.  After reviewing the Exposure Working Draft, I realized that this document suffers from an ironic malady – its scope was insufficiently defined.

I have been involved since the early days, when (a leader in the EV community) was put in charge of the original outline, and we all had input pertaining to this document’s purpose.  My suggestion was that this document be written so that an amateur EV practitioner could use it to set up a valid EVMS.  Others wanted it to promote their version of “best practices,” while still others wanted it to be so broadly applicable that third-world engineers could put every last word to maximum use.  Each of these agendas was pushed to the exclusion of the others so that, by the time the first meetings on actual verbiage were held, these meetings quickly degenerated into contentious bickering bonanzas.  I was the only author to have actually generated serious output, but this output was under enormous pressure to be watered down to the point that everybody agreed with it.  With all of the competing agendas, that was impossible.

(Another key leader of the project) then elected to employ a “ghost writer” to do the entire document, and the Exposure Working Draft is that document.  However, it’s plain to me that we still have not settled the question of purpose.  Why are we doing this?  The impression I get from reading the Exposure Working Draft is that we are still mired in the mode of writing to avoid the maximum amount of criticism and, if that’s the case, it is going to be impossible to produce a product that meets my expectations.

For example, the tone of the syntax is in instant MEGO flavor (P.J. O’Rourke coined that acronym, for “My Eyes Glaze Over”).  Most of the sentences are in the weak passive voice and, even when this document musters enough energy to strongly assert anything, it only rises to the level of eat-your-peas hectoring.  Paragraph 1.2 commits the error of “showing machinery,” which would get the author an “F” grade if it were part of a sophomore English paper at UNM.  But the “showing machinery” error does reveal an interesting influence:  the author(s) anticipated a tsunami of criticisms, and wrote in such a way as to attempt to internally self-justify.  That explains why you get such constructions as “Project Management is primarily a matter of …” all over the document (emphasis mine).

This brings us to the matter of conceptualization.  In the version that I wrote, I stated directly that Project Management and Asset Management were different, how they were different, and what tools applied to each.  I also stated rather directly that Project Control is to Project Management what bookkeeping is to accounting – in short, I furthered a highly structured conceptual model, and described what EV did within that framework.  No such framework appears in this Exposure Working Draft.  As such, EV appears to meander from being the answer to questions about project performance to being a resource management tool (it isn’t).  The lack of a structured conceptual design is best revealed by this author’s predilection for driving the story by asking rhetorical questions, and then asserting that EV is the answer to these questions.

I’ll stop being a curmudgeon long enough to address your original question, on which strategy to use in this process.  I like (the senior management team) way too much to just throw up my hands and say “It’s a bad document, and I’m sick of trying to make it better.”  On the other hand, I am getting tired of trying to weed out the personal agendas of some of the people who appear to have a lot of influence over this document.  At this point, I think we’d be lucky to get rid of some of the more egregious assertions in the Practice Standard (page 7, 3^rd paragraph – EVM does NOT “require” a basis of estimate with resources at the line-item level.  It can be performed with time-phased straight dollars) and replace them with the right answer.  If we get enough comments from the others on the team, and they all appear to head in the same direction, we could probably make a case for a little more broad modifications.

But I doubt we will ever be able to introduce the elements that would make this a truly usable document – and that’s a shame.

For you whippersnappers who believe Agile and Scrum represent a natural progression of traditional project management, you need to know about one Marlin Perkins. Marlin was the host of the television show Mutual of Omaha’s Wild Kingdom. As the title suggests, it was a show about animals in the wild, sponsored by an insurance company. As the show would prepare to break for commercials, Marlin would perform a transitional vignette, where he would make a connection between the action on the Serengeti and the need to purchase insurance, along the lines of “"Just as the mother lion protects her cubs, you can protect your children with an insurance policy from Mutual of Omaha." Now, the more cynical amongst us would like to exaggerate Marlin’s already-tortured segues, along the lines of “Just as the cobra lies in wait for the rat, so, too, do other insurance company’s lawyers wait to inject venom through their fangs into the vulnerable, innocent veins of their customers…”

Okay, you’re saying, where’s Hatfield going with this? Well, I just wrote a book, Game Theory in Management (http://www.gowerpublishing.com/default.aspx?page=641&calcTitle=1&isbn=9781409442417&lang=cy-gb), and I’m going to be somewhat blatant in references to it throughout this blog, hoping that everybody follows the link and buys (at least) one copy. Along those lines…

A lot – and I mean, a lot a lot, of project management technical approaches tend to be highly formulaic. Once an “experienced” PM gets it in her head that certain techniques and strategies are absolutely essential for project success, there’s no dissuading her that they may not be the most appropriate in the current situation. But prattling on in management science space on this point is not nearly as illustrative as comparing Harry Potter and Luke Skywalker. Consider that Luke and Harry:

·         Are both orphans from infancy

·         with at least one parent having an advanced power

·         and mothers renowned for their beauty.

·         They are both pursued by evil forces from birth,

·         but are saved by being brought up by an Aunt and Uncle who live in an out-of-the-way place.

·         Their foster parents know of their charge’s innate power, but don’t like it, and hope that Luke/Harry do not grow up like their fathers.

·         Both grow up not knowing about their special innate abilities,

·         nor the details of what happened to their fathers, and why they hold a special place in the overall conflict,

·         until contacted by mentors who knew their fathers, and the boys’ special place in the macro conflict, and fill in the backstory, piecemeal.

·         These mentors remove Luke/Harry from the place where they had been growing up,

·         and teach them how to use their innate powers, but are killed before Luke/Harry become masters of those powers.

·         As the backstories are filled in, it becomes apparent that if the stories’ antagonists’ succeed, it will mean the entire world/universe will be plunged into misery and darkness, and Luke/Harry are uniquely qualified to stop the antagonists from realizing their goals.

·         Each have friends, but their primary allies are one woman and one man.

·         Very early in the series, it appears that Luke/Harry will have a romantic relationship with their main female friend(s), but this possibility is eliminated fairly soon, as these female friends develop romantic relationships with the main male friend(s). Epilogues and story extensions establish that these friends’ romances result in marriage and children.

The bad guys:

·         Both Tom Riddle and Anakin Skywalker begin as prodigies with their innate powers, but don’t know what the nature of those powers are,

·         Until mentors from schools happen upon them, recognize their abilities, and recruit them.

·         Both Tom and Anakin are fatherless

·         And assume dark names upon their choosing the evil path.

·         Neither has a normal appearance, having been on the losing end of a great conflict earlier in the stories.

·         They both dress in black, head-to-foot,

·         and have the unfortunate tendency to taunt while engaged in one-on-one combat.

·         Both have killed subordinates who disappointed them, and in a most casual manner.

·         Both Voldemort and Vader engage in combat with Luke/Harry’s mentors, and lose, but manage to get away to continue the fight,

·         and kill the mentors the second time around (although Voldemort does this indirectly, via Snape [see below]).

·         Both Voldemort and Vader make the efforts to track down Harry/Luke a priority, knowing that the boys are somehow predestined to be the antagonists’ ultimate road block.

·         Luke/Harry engage in the final fight with Vader/Voldemort in a one-on-one confrontation while the balance of their allies fight a much wider conflict in the background.

·         And, if you expand the set of antagonists to include Snape and Emperor Palpatine, their ends are virtually identical: the ultimate bad guys (Voldemort and the Emperor) come to very bad ends, while their main lieutenants (Snape and Vader) are revealed to be good guys after all, who, although they die, experience some sort of last-minute revelation of their goodness stemming from an act of betraying the ultimate bad guys.

I think I’ve swerved into a consistent structure, a formulaic approach, if you will.  It’s said that there are only 28 distinct plots in all of literature, and the same may very well be true of projects. But, unless you’re willing to assert that Harry Potter and Star Wars ought to be THE model for all of film and literature, the inescapable conclusion must be:

Don’t trust experience.