Game Theory in Management

In last week’s blog, I made the argument that expanding and enhancing communications for its own sake is inherently dangerous, since there are going to be people in the organization who (a) are actually against you and your technical agenda advancing, and (b) will never willingly reveal themselves to be your adversaries. The actual structure I used to describe the members of the project team was:

1. Those who readily embrace the change you are attempting to implement,
2. Those who will eventually embrace the change you seek to implement, but only after they are convinced that it will benefit them directly,
3. Those who will resist until they are virtually forced to participate, and
4. Those who will be dead-set against you and your technical approach to the end.

That last category – the Ds – are analogous to one of the four archetypes described by the excellent Michael Maccoby in his book The Gamesman, the one he calls the Jungle Fighter.[i] The Jungle Fighters will use calumny, deceit, and other cloak-and-dagger tactics to get ahead, since they are generally untalented in the technical aspects of their jobs. They are, however, very good at hiding their true intent and the counterproductive nature of their favorite tactics.

How, then, can the astute PM learn to recognize the Jungle Fighters and Ds in the project team?

First, let’s deal with the organizational environment where they live. Just as it’s useful to know that a black widow spider has a red hourglass-shape on the abdomen, it’s also fairly useful to know that they like to live in places like wood piles, and that their webs are fairly chaotic in appearance. Similarly, Jungle Fighters/Ds prefer organizations with the following characteristics:

• Organizations that are truly merit-based in their hiring and promoting decisions are anathema to Jungle Fighters, since actual merit isn’t their long suit. Conversely, organizations that are infested with cronyism (or, under certain circumstances, nepotism) attract them by the boat load. If the most talented people are notably absent from upper management, the odds are pretty good that you are in the company of Ds.
• Are ex parte conversations allowed? If you need to spend any time worrying about what your peers are saying about you behind your back to your management, you may have a Jungle Fighter problem.
• Think back to a time where upper management addressed a significant problem, but their approach didn’t work. Were there any dissenters early on? If there weren’t, it could mean either that no one on the team recognized the soon-to-fail approach as weak, or else they did recognize it as sub-optimal, but didn’t want to risk speaking up. The stifling of communications from the rank-and-file upwards is an unmistakable sign of the presence of Ds.

As for identifying individual Jungle Fighters/Ds, here are a few sure tells:

• When stressed or frightened, does the suspected team member take on an aspect of angry condescension?
• Has the suspected team member attempted to gossip or engage in negative judgementalism about other employees?
• Develop objective measures for gauging each team member’s contribution towards achieving your scope on-time, on-budget, and observe their progress against those measures. Ds may not consistently be in the lowest quintile, but they’ll struggle mightily to stay in the upper half of performers.

Enhancing communications within a project team is nominally a good idea, since information is the life-blood of the organization. Just be careful of who shares in those communications – they may have either an hourglass shape, or the letter D, rendered in red on their abdomens.

[i] Maccoby, Michael, The Gamesman, Winning and Losing the Career Game, Bantam Books, 1978.

The brilliant economist and author Thomas Sowell is associated with (if not the originator of) the expression “There are no solutions, only trade-offs,” which I believe to be true in many realms of human existence, including Project Management. However, I’m also aware of a tendency of some PM practitioners to push certain business data analysis techniques as solutions, or answers to specific management problems that have to be resolved on an on-going basis (and yes, risk managers, instructors, and consultants often fall within this category). This month’s ProjectManagement.com theme, of communications and collaboration, encompasses a boatload of such practitioners, and some of their ideas represent the biggest, most inviting of targets for highly critical PM bloggers such as myself.

Take the collaboration piece. Much has been written about how wonderful the idea of collaboration is, a prime example being this quote from the renowned Simon Mainwaring, “Effectively, change is almost impossible without industry-wide collaboration, cooperation and consensus.”[i] Yes, everything is rainbows and unicorns covered in glitter when we all collaborate, no? But I was also struck by this quote, “We should seek by all means in our power to avoid war, by analyzing possible causes, by trying to remove them, by discussion in a spirit of collaboration and good will.”[ii]

That was from Neville Chamberlain.

In my second book, I discuss the makeup of personnel in large project teams, and divide them into four categories:

1. Those who readily embrace the change you are attempting to implement,
2. Those who will eventually embrace the change you seek to implement, but only after they are convinced that it will benefit them directly,
3. Those who will resist until they are virtually forced to participate, and
4. Those who will be dead-set against you and your technical approach to the end.

There are two things that PMs need to know about that last category, the “D”s: they are quite intransigent, and they definitely exist in your medium-to-large project team. Oh, yeah, one more thing about them: to ignore them, or pretend they aren’t in your team, is a great way to ruin your project. And yet, there are those PM practitioners who will insist that obtaining everybody’s buy-in, Ds included, is not only helpful to your chances of bringing in your project on-time, on-budget, but is probably a prerequisite to that outcome.

I contend that’s nonsensical, and all but the most careful of collaborations is, in all probability, harmful to your project and/or your project team.

Know that the Ds will never step up and reveal themselves as the ultimate opponents of your project. They’re far too subtle for that. Instead, they’ll lie in wait for the opportunity to use the Silent Veto, Slow Roll, or other tactics intended to thwart your initiatives (if those tactics are unfamiliar to you, check out Things Your PMO Is Doing Wrong). Or, they could simply take advantage of any initiatives their PMs take in the direction of amping up their collaboration quotient, because some well-meaninged advisor told the PM that it was the right thing to do.

Simply put, any initiative to advance collaboration within your project team is a trade-off, not a solution. Yes, you may glean previously untapped insights into some of the problems facing your project team. You may also be inviting in the opinions of those who do not wish your project to succeed. How to discern among them? Well, the first step is to…

Look at that! Out of blogging space, again! I guess I’ll have to take this up next week.

[i] Mainwaring, Simon, in BrainyQuote.com, http://www.brainyquote.com/quotes/keywords/collaboration.html, retrieved on 5 March 2016, 19:17 MST.

[ii] Chamberlain, Neville, in BrainyQuote.com, http://www.brainyquote.com/quotes/keywords/collaboration.html, retrieved on 5 March 2016, 19:20 MST.

Before we exit February and ProjectManagement.com’s theme of ethics, I wanted to touch on a somewhat counterintuitive aspect of project management ethics: those times that your customer behaves in an unethical manner.

I happened to see lots of bad customer behavior when I was working my way through my undergraduate degree, first as a waiter at a family restaurant attached to a huge shopping mall, and then later as a salesman in a department store at another huge shopping mall. In the project management world one rarely sees the transparent grubbiness of those mall shoppers who seek to exploit weaknesses in retail business models or the personnel executing those models, but some patterns do emerge that I believe carry over to our world.

Two characteristics are particularly noteworthy:

• The unethical customer will assume an attitude of superiority. We’re not talking your garden variety client/contractor relationship here – it’s far more imperial. For example, failure to honor a coupon well past its expiration date is guaranteed to bring about massive amounts of condescension from customers who simply assume you are too stupid to understand that they should be covered under the coupon’s terms anyway. These also tend to become rather aggressive when the hapless salesperson points out the obvious.
• The unethical customer is also supremely confident that they will eventually get their way if they demand to see higher and higher levels of management (and in many cases, unfortunately, they were right in this assumption). At some point a high enough strata of manager will realize that the cost of having some obnoxious person tie up their time and the energy of all the layers of employees who have been negotiating with them to this point simply isn’t worth it, and acquiesce to their unreasonable demands.

While restaurant and retail environs tend to bring out extreme instances of these behaviors, I believe they also exist in far more sophisticated project dealings – they’re just better camouflaged.

The two aforementioned characteristics will usually retain some giveaway phrases. For the first characteristic of the unethical customer, that of assuming an attitude of superiority, the reveal is the word “just,” as in “just perform a simple risk analysis.” If a risk analysis was called out in your project’s Statement of Work (SOW), then you pretty much have to do it (though the person who negotiated it might need a good talking-to). But if none of that risk management stuff shows up in the SOW, the nominal reaction of the PM would be to say “no.” Ahh, but there’s that word, “just.” Somehow the customer’s use of that four-letter word conveys that performing such an analysis is no big deal, trivial, even. Well, it’s not, connotative assertions to the contrary notwithstanding. But a further meaning being transmitted here is that “just” performing the analysis would be easy, if only the reluctant contractor wasn’t so incapable, don’t you know. If the contractor wasn’t so inferior, then the requested risk analysis would be easy. In fact, in order for the contractor to establish that he’s not a complete rube, the only option here is to perform the out-of-scope analysis – or so goes the insinuation of the unethical customer.

Then there’s the “all I want is” gambit. Nobody begins a request for a kajillion dollars or a marriage proposal with the phrase “all I want is.” This expression always precedes a request that the speaker views as simple and easy to fulfill, as if any reasonable person would agree – particularly and especially if that “reasonable person” happens to be the PM’s superior. By engaging such terms as “just” and “all I want is,” the unethical customer is attempting to get the PM to agree to scope creep, the most lethal of all project management pathologies.

Now, I’m fully aware that questions of ethics among customers and contractors is a two-way street, and am routinely condescended to by coffee baristas, just like everyone else. But, like I said, two things struck me about this particular two-way street, (1) unethical customer behavior doesn’t go away just because we’ve entered the realm of Project Management, and (2) the words “just” and “all I want is” tend to accompany the communications that precede such behaviors.

Of course, there’s a distinct possibility that the formulaic use of the terms “just” and “all I want is…” is perfectly innocent. That being the case, at this point all I want is to have my comment section flooded with praise for this blog. Can my readers just do that?

In ProjectManagement.com’s February discussion of ethics, I believe an important distinction should be made: while many discussions of ethics center on individuals’ choices and behaviors, ethical distinctions and boundaries can (and often are) transgressed by entire organizations. How do entire organizations become unethical? The same way, I believe, most individuals do: they embrace a narrative that is inconsistent with the facts of the environment in which they exist, and exert effort at insulating that narrative from events or people who would otherwise overturn it. It follows, then, that when an organization turns away from an ethical approach to conducting their business, the first casualty is the truth.

Examples abound, but the one I wish to focus on has to do with Arlo Guthrie’s popular song/narrative Alice’s Restaurant. Released in 1967, the song parts of the recording frame a spoken story about how the narrator and a friend visited Alice, her husband Ray, and Facha, the dog, who lived in the bell tower portion of a deconsecrated church. Since they lived in the bell tower, they left their garbage in the lower part of the church, and had been doing so for some time when the visit occurred. As a favor, the narrator and his friend describe how they collected the garbage and took it to the city dump, only to find the dump was closed for the Thanksgiving holiday. After driving around with the trash for a little while, they noticed another pile of trash that had been dumped off the side of the road. Figuring that one large pile of trash is better than two smaller piles, they dumped Alice and Ray’s trash on the previous pile, and returned to the former church. The story’s narrator is awakened by a phone call the next morning from the local police, who eventually charge and bring him and his friend to trial. After some shenanigans concerning the visual nature of the evidence collected and the fact that the judge was blind, the two are convicted and sentenced to picking up the trash they left, and paying a small fine. The incident comes back up later when the story’s narrator is being evaluated by his draft board, which declines to induct him for service in the Vietnam War due to his having a criminal record. Nice, happy ending, right? The song/story Alice’s Restaurant would become something of a 1960s-era anti-war anthem, supporting the narrative of intelligent young people giving “The Man” his comeuppance (for a thorough definition of who “The Man” is, I suggest a viewing of the Jack Black movie School of Rock).

But is that narrative consistent with the facts as related by the narrator? Consider the evidence:

• Alice and Ray use the main area of a former church as a personal garbage dump.
• Unless Alice and Ray live above the Arctic Circle (they didn’t – the backstory as related in Wikipedia indicates that Alice and Ray’s former church residence is in Massachusetts[i]), it would not take long for even a relatively small accumulation of garbage to:
  • Develop a strong, unpleasant odor,
  • Attract roaches, mice, and rats, among other vermin,
  • Incubate a wide variety of pathogens, and
  • Reduce the value of both Alice and Ray’s residence and the homes around them.
• I am aware of no style of church architecture where the area of the building reserved for the congregation isn’t significantly larger than the square footage of the bell tower. In other words, the dump area was likely much larger than the “living” quarters in this facility.
• The narrative does not assert nor imply that Alice and Ray were involuntarily compelled to live under these arrangements. They were apparently unaware of the dangers of such an un-hygienic living circumstance, or, knowing, would not exert the effort to correct it on a consistent basis.
• Alice owned a restaurant. Would you go to a restaurant where you knew the owner dumped her garbage, over a long period of time, in a room inside her own home?
• The story’s narrator never uses this language, but he essentially pollutes a hillside. A key aspect of the narrative embraced by the 1960s youth movement was that they revered the environment, and aggressively opposed all polluters, but it looks like that wasn’t the case here.

In short, the proffered narrative of free-spirited young people surviving harassment from their local government, and actually turning the whole incident into an anti-war positive, can only be considered viable by the most blinkered of listeners. Given the facts, my interpretation is that lazy, un-hygienic polluters failed to receive their comeuppance from the ultimately righteous local constabelry.

Anyway, that’s how I interpret the proffered facts, and hold them to be at odds with the conclusions within the story. Given that the truth is usually the first casualty when an organization begins to behave unethically, ask yourselves this question: are there any narratives  -- no matter how charming, or oft-repeated – within your organization that are inconsistent with available facts?

[i] Alice's Restaurant. (2016, February 18). In Wikipedia, The Free Encyclopedia. Retrieved 02:35, February 21, 2016, from https://en.wikipedia.org/w/index.php?title=Alice%27s_Restaurant&oldid=705556686

In last week’s blog I likened the efforts to maintain an ethical workplace or project team to the Hawk/Dove Game, and the fact that once a member of the population has selected a counter-productive strategy (“Hawk”), more and more players will do so until the Nash Equilibrium has been reached, which, in Hawk/Dove, is 25% Hawk, 75% Dove. This is true even though the total population’s payoff is maximized if all members maintain Dove strategy. To the extent that members of a project team selecting strategies consistent with the Jungle Fighter archetype from Michael Maccoby’s classic book The Gamesman (Simon and Schuster, 1976) are analogous to Hawk/Dove players selecting Hawk Strategies, there are managerial actions available which can help prevent a downward spiral that results in a thoroughly unethical workplace.

Let’s begin our analysis with a question: what is it that Jungle Fighters do that puts them at an advantage over the other Maccoby archetypes (Craftsman, Company Man, and Gamesman)? It’s been my experience that this type primarily uses three tactics:

• Calumny,
• Exaggerating their own accomplishments and rivals’ shortcomings, and
• Minimizing their own errors and rivals’ accomplishments.

And when I use the term “rivals,” to the Jungle Fighter that’s pretty much everyone else inside the organization, even the superiors to whom they appear to be unctuously supporting.

What do these three tactics have in common? They all involve communicating with other members of the project team, either to those members who are equal to or below the rank of the offending Jungle Fighter in order to establish a consensus narrative, or else to superiors in order to establish their preferred script more directly. All well and good, but, since inter-project team member communications are impossible to control, and difficult in the extreme to even influence, what’s a project manager to do?

Virtually every project manager can dramatically increase the odds that their project teams will behave in an ethical, mutually supportive manner by communicating two key points about the way the team will be managed. Point 1: to the extent the PM is in a position to dole out promotions or other benefits, the basis for doing so will be exclusively based on objectively measured progress towards project goals. Purely tangential or incidental evidence of merit, such as number of hours of free overtime worked, will not enter in to the personnel evaluation process (incidentally, if you belong to an organization where significant amounts of “free” overtime are expected or demanded, it’s too late: such organizations are already chocked-full of Jungle Fighters). Point 2: At the initiation of any conversation among one team member and the PM that involves another member of the team, the discussion will be paused, and that third team member will be called in to participate. There will be no ex parte conversations about other members of the project team, period.

By communicating these two points, the PM will make it clear to each member of the project team, not that they are suspected of being Jungle Fighters, but that the use of the Jungle Fighters’ main tactics will be futile should they ever be employed. By conjoining the terms for the team’s success with that of the success criterion for its individual members, the game has thus been redefined in such a way to dramatically dissuade any part of the population to behave in such a way as to detract from the team’s overall objectives.

Not to sound like a hard-bitten cynic, but it’s been my experience that attempts to improve the level of ethical behavior within a project team by engaging in eat-your-peas-style hectoring is ineffective. The superior approach is to remove the incentive for poor behavior, and the way to do that is to employ a little bit of game theory, as we have done here. There are many other instances where a little game theory can go a long way towards helping PMs attain better results.

Hence the title of this blog and my second book.