Game Theory in Management

A quick internet search on the topic of quotes about attitude returns hundreds of examples, the majority by famous people, including:

• Milton Berle
• Maya Angelou
• Oscar Wilde
• Benjamin Disraeli
• Albert Einstein
• Johann Wolfgang von Goethe
• Epictetus
• Confucius
• Antoine de Saint-Exupery
• Bruce Lee
• Abraham Lincoln
• Mark Twain
• George Bernard Shaw
• Sylvester Stallone
• Leo Tolstoy

…among many others[i]. Virtually without exception their common thread is the idea that the value of a good attitude is widely under-appreciated, particularly when it comes to achieving a desired goal. My favorite, one that seems to encapsulate the others rather nicely, was from W.C. Fields, who said “Attitude is more important than the past, than education, than money, than circumstances, than what people do or say. It is more important than appearance, giftedness, or skill.”[ii] This quote of his replaces my previous favorite one from him, “Always carry a flagon of whiskey in case of snakebite and furthermore always carry a small snake.”[iii]

Circling back to ProjectManagement.com’s theme for August, Career Development, I can’t help but to wonder if the difficulties we PM-types are experiencing at the macro level – frustrations in advancing Project Management maturity and lack of widespread acceptance of its precepts as fundamental to business models – aren’t being caused (or at least abetted) by problems at the micro level, namely, how newly minted PM-types develop their careers. So, if there were one extraordinary scalable causal element common to both these problems, what would it be? I’m thinking it’s attitude.

Meanwhile, Back In The PM Seminar World…

Plucking two of the pieces from the W.C. Fields quote above, consider: “Attitude is more important than … education, …or skill.” Besides the extremely valuable opportunities for networking among attendees, isn’t the primary purpose of professional seminars to advance education, or skill among practitioners? Even the exhibitors’ hall is full of people who, yes, want to sell a product, but do so by educating passer-by on how their product or service can help them in their pursuits. And yet, if we are to take W.C. Fields’ quote at face value (or the myriad other similar celebrities’ or famous thinkers’ assertions), almost all of the paper presenters, all of the vendors in the exhibit hall, all of the time and effort spent in developing specific learning or coursework tracks, all of them ought to be considered subordinate to attitude.

This may be where the general thrust of common PM advancement initiatives could use a dose of perspective. I’ve related previously the story of a young Earned Value Management System auditor, who complained that the EV system in use did not calculate the Budgeted Cost of Work Performed (BCWP) by dividing cumulative actual costs by cumulative budget. The system admin stated flatly “That’s because that’s not the way you calculate Earned Value.” The auditor exploded. “Do you know PMI®? I’m a PMP®!”, as if that was supposed to stop all conversation that held to the contrary. This episode showcases a tendency for at least a few of those who become highly educated in certain aspects of Project Management to assume an attitude of superiority towards other management practitioners, and to proceed as if that command over the PM codex imparts a certain value to them over and above other members of the organization. I believe that, to the PMs who have been assigned their projects by virtue of being subject matter experts in the area of the pursued scope, this kind of attitude can be highly off-putting, and can easily have a dampening effect on the acceptance of both the PM techniques and the person hired to execute them. Just to be clear: I’m not saying this tendency is by any means germane to the Project Management industry. The disconnect between academics and real-world practitioners within the same subject, the so-called Ivory Tower effect, afflicts virtually all courses taught at the University level, save perhaps the hard sciences.

I’m thinking that the counterproductive aspects of the toxic PM practitioner’s attitude have to do with the perception that they are in command of special, exclusive knowledge, and ought to be both respected and paid well to pass this knowledge along to the project teams (or seminar attendees) who seek it. I’m also thinking that, for the sake of the widespread acceptance of PM theory and the advancement of new practitioners’ specific careers, the opposite attitude, that of enthusiastically using PM techniques to advance the project teams’ goals, regardless of their level of appreciation, is not only appropriate, but sorely needed.

Now, if GTIM Nation will excuse me, my small snake (“Malfoy”) seems to have escaped his carrying pouch…

[i] Retrieved from http://wisdomquotes.com/attitude-quotes/ on August 11, 2019, 11:27 MDT.

[ii] Ibid.

[iii] Retrieved from https://www.brainyquote.com/quotes/w_c_fields_102057 on August 11, 2019, 11:39 MDT.

Many, if not most (or all) large organizations that perform a significant amount of project work will have some group or team that’s supposedly in charge of the institution’s Project Management capability. Sometimes it will bear the formal title of Project Management Office, or PMO; other times, it won’t, but will still fulfill the same basic function. These organizations will typically pursue a wide variety of techniques or capability advancements traditionally associated with PM, including:

• Procedure or policy-writing,
• Training,
• The selection of the preferred Critical Path Methodology software,
• The selection of the preferred Earned Value Management software (I do wish people would stop referring to the EVM software as the “cost processer.” That’s not what an EVM system does.)
• The development of templates (often in a word processer package) for the basic PM baseline documents, such as Work Packages, Variance Analysis Reports, or Control Accounts,
• Endless process diagrams, indicating how the overall system is supposed to function,

…among others. And, to be fair, these are the obvious ways that the PMO will seek to expand its influence, and bring the organization’s Project Management capability to a point where most (if not all) projects can be reasonably expected to come in on-time, on-budget, and without claims against for failure to deliver the contracted scope.

But is this the way it’s supposed to happen?

Clues That You May Be Doing It Wrong…

Here are some signs that the PMO is doing the whole strategy implementation game wrong:

1. You still have a significant number or magnitude of overruns or late completing projects.
2. Medium-sized projects’ managers put significant effort into avoiding compliance with the organization’s guidance on PM, especially the ones that prescribe a certain level of robustness.
3. Small projects have their costs “managed” by information that comes solely from the general ledger.
4. This one is key: the existence of “shadow organizations,” or small teams of PMs or project controls professionals who do not belong to the PMO, or institutional PM organization.

Any of these conditions should be taken as ipso facto evidence that your PMO’s strategy is failing, and in need of immediate correction. But where to begin to assess the errors in the existing strategy?

…And How To Get It Right

Fortunately, GTIM Nation has the inside track on this. Recall an axiom I often return to, that for any organization that’s providing a good or service, Quality, Affordability, Availability: pick any two. In other words,

1. A quality service that’s affordable will usually require a wait in line;
2. A quality service that’s available right now isn’t going to be cheap, and
3. An affordable service that’s available right now isn’t going to be advanced, or robust.

It’s been my experience that those setting up or revamping an existing PMO will almost never consider this axiom. They blast ahead, confident in their ability to fulfill all three aspects. When confronted with any (or all) of the numbered phenomenon, they invariably attribute it to recalcitrance on the part of the organization, rather then their own selection of a non-viable PM advancement strategy.

However, if you, as head of the institutional PMO, encounter one or more of the numbered symptoms listed above, it’s almost always attributable to an unmet demand for PM information systems or services that are not predicated on the institution’s notions of what constitutes “quality.” The PMs are seeking an approach based on Strategy C above – at least from the institution’s perspective. Not to get back on an all-too-familiar soap box here, but there are numerous aspects of Project Management that are associated with a more robust capability that are, in fact, not only failing to advance PM, but are often guilty of detracting from it. Examples include:

• Quality Management, particularly at the “Six Sigma” level;
• Communications Management, especially the whole bit about “engaging all stakeholders,”
• The notion that the PMO must be able to prove a positive return on investment (ROI) in order to establish its worth or viability, since (a) ROI as applied to PM is an irrelevant metric, (b) it’s impossible to accurately capture the needed parameters, and (c) the very effort of pursuing that figure is evidence that the people running the PMO don’t understand what it’s for, and…
• …of course, risk management.

The remedy? Make available a simple Earned Value Management System, shorn of the extraneous attributes (among others) above, with a minimum of data collection needs. Put it in place, and quietly provide its critical cost and schedule information to the projects’ decision-makers. Don’t breathe a word about what the PMO or institution believes the system should do, or contain. Let the PM dictate every last characteristic.

Then step back and, with a little patience, watch the surprise overruns and shadow organizations simply fade away.

As we wrap up ProjectManagement.com’s theme for July, Strategy Implementation, I would like to reference a couple of things for this week’s blog: last week’s blog, where I discussed the optimal technical approach for implementing a given strategy, and my favorite go-to structure for organizational behavior and performance issues within the project team, the one presented in Michael Maccoby’s brilliant book The Gamesmen (Simon and Schuster, 1976). A quick refresher of the worker archetypes Maccoby posits:

• The Craftsman cares a great deal about his output, but not so much for whom he works.
• The Company Man tends to assume the persona of the team around him.
• The Jungle Fighter gets ahead through calumny and deceit, avoiding blame for his errors while taking the credit for the successes of those around him.
• The Gamesman (after whom the book is titled, obviously) doesn’t see his paycheck as the roof over his head or food on the table; rather, he sees it (and other perks) as analogous to prize pieces in some grand game he’s playing. Because of this, this type tends to be more comfortable taking risks, while becoming masters in the industry in which their “game” is being played. Due to these two characteristics, this type tends to be the most successful.

From last week’s blog, I passed along some lessons from Game Theory, that to advance a capability (in our cases, Project Management) the approach must have the following elements to maximize the odds of success:

• The new capability must be falling-off-a-log simple for the project team members to perform.
• If you are counting on active participation from the project team to make your advancement happen, you must be in a position to recognize and respond to any participant who’s not, well, participating.
• If the team members from whom you need participation are feeding you poor data, they’re still golden. Better quality data can be taught – participation can’t.

Finally, Hatfield’s three critical elements of managerial leadership will come in to play:

• The manager/leader must have the optimal technical approach to resolving the project team’s problem.
• The manager/leader must care about each and every member of her project team. If you don’t care about them, how can they be expected to care about you, or your technical agenda?
• The manager/leader must be willing to execute the selected strategy, alone if necessary. The image I like to use is that of U.S. General George S. Patton. If he were to be dropped into the middle of Europe in 1942 without the rest of the American Third Army, he could be counted on to attack Nazis single-handedly. In business, the manager who half-heartedly pursues a selected strategy will be immediately found out, and the project team will match his enthusiasm.

Meanwhile, Back In Middle-Earth…

In J.R.R. Tolkien’s classic series on the goings-on in middle earth, the character Gollum plays a major role, from being introduced in The Hobbit, all the way through to his death in The Return of the King. Gollum holds The Ring at the time of its introduction into the story line, and has become rather addicted to its powers, to the point that he refers to it as “the precious,” and becomes incredibly obsessed with re-possessing it.

From the Maccoby archetypes, it’s easy to see the Jungle Fighters as a nest of Gollums, physically unattractive and intensely obsessed with only their own self-advancement, somewhat obvious in their machinations to detract from project performance. But that’s not reality: any of the Maccoby Archetypes can be turned into detractors. From my three critical elements, the first, that of selecting the optimal technical approach, is key, for if the PM selects a sub-optimal (or even poor) strategy in pursuing the project’s scope, then:

• Craftsmen will be frustrated, since they seek high-quality output, and the sub-optimal approach won’t deliver that.
• Gamesmen will be turned from contributors to neutrals (or even detractors) for similar reasons,
• …and Company Men will tend to mirror the persona of the previous two archetypes,

…all while the Gollums Jungle Fighters will “perform” as they are wont to do. Drawing from the three Game Theory lessons from last week’s blog, it will prove virtually impossible to execute an implementation strategy that’s so easy that none of the members of the Project Team will be in a position to enact the counter-strategies of the Silent Veto or Slow Roll, should the original technical approach be seen as a poor one.

Four Maccoby Archetypes, three implementation strategy guidelines derived from Game Theory, and three Hatfield Rules of Managerial Leadership, and all have as their linchpin the need for an optimal implementation strategy, or technical approach. That’s the One Ring To Bind Them All, the “precious,” the indispensable element of strategy implementation. If you don’t have it, get it.

And if you do have it, don’t let creepy, glowy-eyed trolls thwart you by biting off your finger.

Among Game Theorists a favorite game for analyzing cooperation or defection among non-related biological units in a common environment is The Prisoner’s Dilemma. The basic version of the game goes like this: you are a prisoner, and your jailer comes to you and says that he will cut your sentence if you rat out your cellmate. The dilemma comes about when you realize that your cellmate will receive the exact same offer. There are four possible outcomes:

• You both inform on the other, and each receive three years sentence.
• Neither of you informs on the other, and you each get one year.
• You rat out your cellmate, but he does not inform on you: you walk free, while he gets 5 years.
• Your cellmate rats you out, but you don’t inform on him – he walks free, while you get five years (this is known as the “Suckers’ Payoff”).

In the 1980s, Robert Axelrod sponsored a tournament of computer programs playing multiple iterations of the Prisoner’s Dilemma against each other. Both conventional wisdom and the Nash Equilibrium had informed that the optimal strategy would be to always defect, since the player would never want to be on the receiving end of the Suckers’ Payoff, and always defecting was the only way to guarantee that. However, in the event, the winning program, named “Tit for Tat,” did not enact that strategy. Instead, it initially did not inform. Thereafter, it did whatever the opposing program did on the previous iteration. After the competition, some analysts looked in to why Tit for Tat’s strategy was successful. To that end, they developed some variants to compete against the original. One defected on the first iteration, and then did the Tit-for-Tat strategy; another cooperated the first five iterations, and then performed the Tit-for-Tat strategy, among others. All of the variants failed. The analysts concluded that Tit for Tat succeeded due to three factors:

• It was originally nice. It cooperated.
• It retaliated immediately for defection.
• It forgave immediately and completely for cooperation.

I Would Normally Write “Meanwhile, Back In The Project Management World…” At This Point, But I’ve Been Talking PM This Whole Time…

For some time I had been struggling mightily with which broad-based PM implementation strategy could be considered optimal as I was doing research for my first book, Things Your PMO Is Doing Wrong (PMI® Publishing, 2008) when it hit me: make the implementation strategy incorporate Tit-for-Tat’s three factors! Consider:

• When rolling out the new PM initiative, program, structure, whatever, make it “nice,” as in falling-off-a-log simple for the target organization to plug-and-play. From last week’s blog, the resistance tactic of claiming difficulty in advancing the PM capability is effectively blocked.
• “Retaliate” is a bit strong. However, if you are counting on participation from some elements of the organization, and that participation isn’t forthcoming, you can’t let that slide. You MUST respond, and effectively. Again from last week’s blog, this factor will negate the “Slow Roll” or “Silent Veto” counter-strategies.
• If you are receiving cooperation, but the data is of poor quality, then the participants are golden. Data quality can be improved, but deliberate non-participation cannot.

I would like to call GTIM Nation’s attention to the first factor of the Optimal Strategy, that of making the advancement in capability extremely easy to implement, since it does contradict much of what passes for insight on what needs to be included in a PM advancement effort. Conventional wisdom holds that, in order to implement a valid, or quality, or advanced, or authentic (choose your superlative) Project Management Information System, the person directing the effort must include such things as a robust risk management system, or a quality program, or a communications management plan, or a comprehensive set of procedures, or training, or, or, or.  The list is as long as the number of self-styled experts who have latched on to some aspect of PM that lies outside the mainstream ideas of Scope, Cost, and Schedule, muddying the waters of a clearly articulatable approach to a common management problem.

And here’s the infuriating part: once all of the ancillary “experts” have larded up the implementation strategy so that it’s anything but simple to roll out, they will turn around and claim that any system that actually is easy to install simply must be invalid. To be fair, it’s basic human nature to reflexively reject the notion that complex problems could have a simple solution. But the cynic in me can’t help but believe that another factor is that, should the experts’ pet analysis technique become ensconced in the PM codex as being a key or critical component of a truly valid PMIS, then those experts’ area of expertise will see an increase in demand, making them and their like-minded comrades more valuable to organizations struggling with the best way of advancing PM.

I have incorporated these three factors in the implementation strategy for small organizations, all the way up to very large portfolios, and it has always delivered an effective PMIS in an unexpectedly brief amount of time, all while demonstrably advancing PM maturity. GTIM Nation knows that I’m no ringer for the Game Theory crowd – I have often called out deficiencies in their approach, usually for failure to take into account sufficient parameters to provide a strongly analogous “game.”

But not this time. This time, Game Theory has painted a great big epistemological arrow for we PM-types to see what the optimal general implementation strategy ought to include. The fact that it happens to exclude risk managers is just icing on the cake.

In the 1933 film The Invisible Man, Claude Rains plays Dr. Jack Griffin, who has discovered a potion that renders him invisible. He plots (what else?) world domination, and either kills or materially causes the deaths of a lot of people before he is, himself, killed by police, who can detect his whereabouts by the footprints Dr. Griffin leaves in the snow. And now, for what has to be a record for the earliest introduction of my trademark segue,

Meanwhile, Back In The Project Management World…

I believe that a whole bunch of projects have failed due to one causal element, and it has to do with one of the most enduring, yet invisible PM pathologies: the ineffectual implementation of a desired strategy. It’s evident in the literature, the paper presentations, the tone of PM educators – they know the right answer, but nobody’s heeding them. To live out their careers as latter-day Cassandras appears to be their fate.

Of course, it doesn’t have to be that way. After stepping on the Implementation rake hundreds of times, you’d think that everyone who crashed a project due to this would start to wise up. But, no: just check out some of the lower-level PM-themed conferences, and you will find them chock-full of eat-your-peas-style hectoring, especially in the Critical Path scheduling and Earned Value analysis sessions. Back when I was a regular attendee at such conferences, I found that I could expect pretty much the same presentation on the basics of Earned Value Management, with the addition of some extraordinarily tiresome scoldings to those organizations that weren’t doing it already. I have absolutely no idea how or why those paper presentation proposals kept getting approved. Invariably, at the next conference I would attend, some variant of this same presentation would be on the syllabus, without a scintilla of original research or experimental results, as if scolding by itself was an appropriate way of implementing a program.

However, as I pointed out in my first book, Things Your PMO Is Doing Wrong (PMI® Publishing, 2008), you can’t advance a capability maturity by leveraging organizational power. In other words, you can’t make your team get better at what they’re doing. They have to be led there, certainly; provided the right tools, no question. But any attempt at forcing a capability advancement will be inevitably blown to smithereens by one or more of the following land mines:

• The Silent Veto. This is where some members of your team present as ready and willing to step up and commit to the level of intellectual and energy investment needed to implement your strategy, and then … they kind of disappear. The actual performance isn’t forthcoming, and they always have a really good excuse as to why they missed certain deadlines.
• The Slow Roll. When I was writing the aforementioned PMI® - published book, I was in contact with my old PMNetwork columnist colleague, the brilliant Bud Baker, who was (at the time) a professor at Wright State University. Bud told me that, in his days in the military, their version of the Silent Veto was the Slow Roll, which is where the team actually does participate in the rolling out of the new capability or strategy, but just not quite enough to make it a success. The Slow Rollers seem to have an innate sense of how much energy is behind the impetus to implement the new scheme, and will make an excellent show of advancing the cause – just not quite enough to really make it happen.
• The “it’s too hard” objection. I once inherited a team that included an Administrative Assistant who was clearly less than thrilled that I was being brought on-board. She would work out her frustration by asking for detailed instructions for any task she would be assigned. It got rather comical (though I wasn’t laughing at the time) when I had to provide her with step-by-step directions for doing basic filing. It finally dawned on me that she knew all too well how to do the job – she was just pretending that any task sent her way was too difficult, or dramatically outside the range of activities that she would nominally be asked to do. It was easier to either assign someone else, or do the task myself.

Managers used to a highly hierarchical organizational structure, such as that which exists in the military, will have a greater tendency to be agitated by these implementation-wrecking tactics by the Project Team, and will often resist understanding and working with or around them. As far as these managers are concerned, once the technical agenda has been set, and the specific tasks communicated and assigned to the staff, that should be enough; and, if it isn’t, well, that’s just a sign of some organizational behavior and performance pathology (laziness, incompetence, insubordination, etc.) that can be addressed through disciplinary actions. They seem to never stop to consider that the reason that their projects fail is due to a poor (or even non-existent) implementation strategy, as if the very need for an implementation strategy has been negated due to their advanced placement within the organization. They are the Project Managers, dontchaknow, and their insights and instructions must be followed! Or else! But the real world of Project Management is no respecter of persons. You are either effective at leading the Team to on-time, on-budget completion of the scope, or you are not.

“So!” I can hear GTIM Nation say, “If you’re so smart, how would you overcome the invisible man those implementation strategy landmines?” First, you…

Look at that! Out of pixel ink for this week. But, like The Invisible Man, GTIM Nation can expect a sequel.