Game Theory in Management

In previous posts I’ve discussed the unfortunate but very real phenomena of having a portion of the project team opposed to success, if success means that you, the PM, will benefit personally. Imagine your organization depicted by a bell curve. The split looks like this:

• Category A is more than one standard deviation to the left side of the curve, and represents the so-called early adapters. These people are attracted by the novel, and were probably among the ones who purchased Beta-Max format VCRs (and, if you don’t know what a Beta-Max VCR is, I don’t want to hear from you). Since your project is probably creating something that’s not been done before, at least in some context, these people tend to be your natural allies.
• Category B people range from the median or mode, and consume that part of the curve to the left up to where the Category A-ers are. These people can be counted on to become allies eventually, but need to be shown or convinced that cooperation with your project’s agenda will benefit them.
• Category C people are to the right of the median or mode, extending (generally speaking) one sigma to the right. They are not allies – at best they can be described as unwilling participants. They only end up contributing when it is made painfully obvious (and, yes, I do mean “painfully”) that to fail to do so will result in unacceptable consequences for them. They almost literally have to be forced to do their jobs. It’s unfortunate, but these people are real.
• Category D people are on the tail-end of the curve to the right, and will oppose you, no matter what. Even when it becomes clear that further resistance to your technical approaches or strategies is futile, they will find a way to oppose you, through the “slow-roll” or “silent veto” tactics, or else via calumny, rumor, or out-and-out slander. I know it’s highly disconcerting to consider that such people are on your team, but they invariably are, and it’s dangerous to pretend they aren’t.

Don’t believe me? Consider the story of Joe Rochefort.

U.S. Navy Officer Joe Rochefort was the cryptologist who led the team that cracked the Japanese Imperial Navy’s JN25 code in the early months of the Pacific Theater of World War II. From the American entry into the war through early June of 1942, the Japanese Navy experienced one success after another, and the situation was dire for the Allies. After breaking parts of the Imperial Navy’s top-secret code, Rochefort became convinced that the next major attack would come against Midway Island, in the northern Pacific, but almost all of his colleagues disagreed. One ally in OP-20-G suggested a ruse, to announce in an open transmission that Midway was short of drinking water. The Japanese took the bait, and transmitted in their JN25 Code that their next target was low on drinking water. Rochefort was right.

With this knowledge, OP-20-G would render to the Midway Force’s commanding officer, Raymond Spruance, virtually the entire Imperial Navy order of battle for their attack on Midway, intelligence with a value that cannot be overestimated. The Americans were out-numbered, both in ships and planes, and the IJN personnel were better trained and more experienced. They were, in fact, outclassed in every single way but one: the USN had the Japanese order of battle, thanks to Rochefort. The Japanese weren’t even aware that the United States Navy had a presence in the area until well after the battle had been joined.

The result of the ensuing battle has been accurately described as the turning point of the Pacific War. The Japanese lost four front-line aircraft carriers, dozens of planes with irreplaceable crews, and the initiative in the Pacific. The Americans lost one already-damaged carrier, the Yorktown, a minority of the aircraft committed, and a handful of support vessels. If ever the margin of victory in a major battle could be attributed to a single individual, the result of the Battle of Midway being materially brought about by Joe Rochefort’s cryptology breakthrough has to qualify as a leading candidate. So, Rochefort was recognized, rewarded, promoted, right?

Unfortunately, no. Apparently, Rochefort didn’t suffer fools gladly, and had several encounters with one on a previous assignment aboard the battleship Pennsylvania. This particular fool ended up on Ernest King’s (then Commander in Chief of the Navy) staff. This person disliked Rochefort personally, and strongly advised against him receiving any recognition for his work. Keep in mind that Rochefort had just contributed mightily to changing the course of the Pacific War and, by extension, the future of Western Civilization. No matter. He had made an enemy, and this enemy would have his revenge. Rochefort ended up receiving the Legion of Merit, Navy Distinguished Service Medal, the Presidential Medal of Freedom, and was inducted into the National Security Agency’s Central Security Service Hall of Fame; however, only the Legion of Merit was awarded to him while he was alive. All of the other awards where given posthumously.

I think any manager, but especially Project Managers, need to keep in mind that, in those instances where you have achieved notable success, anybody within your organization who had opposed you, your ideas, or the scope you pursued stands to lose status as their opposition is revealed to be misguided at best, and treacherous at worst. And, if they fall under Category D above, you know they are perfectly capable of using calumny or slander to mitigate the damage to their status via throwing shade on your accomplishments.

Have you experienced a high-profile success recently? Good for you.

Now watch your back.

I know, I know, I’ve written quite a bit about how certain science fiction franchises, specifically Star Wars and Star Trek, appear to have some parallels with the Project Management universe, but this particular parallel is so strong that I can’t resist connecting the dots. Some fans of Star Trek: The Original Series began writing stories around the characters and settings of that television series since its cancellation in 1969 (if not before), and many of these stories made their way into “zines” (short for “magazines,” zines are amateur-published/posted periodicals). Unfortunately, most (if not the vast majority) of these contributors weren’t professional writers, or even particularly gifted amateurs, and it reflected in their prose in a variety of ways (poor character development, lack of respect for the pre-existing canon, wretched plot structure). One particular writing pathology that became noticeable as a trend was the introduction of extraordinarily young and talented characters whose exceptionalism strained credulity. Usually female, these characters came to be seen as little more than the authors’ projection of an idealized version of themselves into the Star Trek canon, and gained the nickname “Mary Sue.”[i]

Mary Sues tend to have the following characteristics in common:

• They are young (often “the youngest to ever graduate Star Fleet Academy”),
• attractive females, usually with some striking or unusual feature, like violet eyes or blazing red hair.
• They have some sort of pre-existing relationship with one of the three main ST:TOS characters (Kirk, Spock, McCoy),
• and are capable in the extreme, in their scholastic achievement, martial arts prowess, or technical insights.

While the existence of Mary Sues in a given story would invariably render that narrative less believable and the plot, well, amateurish, their preponderance actually led to a backlash due to the perceived damage they were doing to the existing Star Trek canon, challenging previously-accepted tenets of who the already-established characters were, and how they interacted with each other and their fictionalized, futuristic world.

Meanwhile, Back In The Project Management World…

I’ve noticed that the fare in PM-themed periodicals and seminars can be largely categorized in one of three ways:

• genuine advancements in management science (which are golden but not as common as they should be),
• yet another re-telling of the basics, almost always of Earned Value Management techniques, but also including Critical Path Methodology, scope management, or risk analysis,
• a story about how a particular project was ground-breaking, high-profile, technically advanced, and, of course, completed successfully.

It’s this last category that tended to bore me the most, until I realized we in the Project Management world were experiencing our own version of the Mary Sue effect in Star Trek fan literature. Then this type of story moved from the merely boring and into the realm of positively irksome, and thence on to potentially damaging to the existing PM canon.

Think about it: when was the last time you read or saw any kind of presentation that detailed exactly how and why a project disaster occurred, and who specifically was to blame? I never have. In fact, I’ve attended a presentation (at a project management-themed conference, no less) that discussed one of the largest overrun and delayed projects in history, and the presenter only wanted to talk about how swell the concepts of Earned Value and Critical Path were.

Conversely, in presentations that address notable successful projects, it seems that many people were solely responsible for its victories, particularly the presenter. Could it be that we have our very own version of the Mary Sue effect in play? Consider the following table:

In Star Trek fan literature, the backlash against stories that contain Mary Sues has become so widespread that many authors that indulge in that genre will avoid introducing any female character, for fear of having such an introduction tagged with the “Mary Sue” label, and automatically repelling potential consumers of the work. While this may be a bit extreme, it was, nevertheless, probably necessary to ensure that this particularly cheesy character device be avoided in the future. Similarly, I would be happy to initiate an analogous backlash against those specific-project presentations that employ a similar device to the Mary Sue. They don’t advance project management science much, if at all, while providing an avenue for the project teams’ (or individual presenters’) own aggrandizement.

And that, my friends, strains credulity, and ultimately damages the pre-existing canon. Particularly if said presenter has violet eyes, or blazing red hair.

[i] Retrieved from https://fanlore.org/wiki/Mary_Sue, 17 December 2017, 10:40 MST.

In the 1972 Olympics Men’s Basketball final, the team from the U.S.S.R. was awarded the victory by the officials, even though they did not legitimately win the ball game. With three seconds left in the game, and with the U.S.A. team leading 50-49, the Soviets needed three different rulings from the referees to score the winning goal, to wit:

• The clock ran out due to the Soviets mis-handling the communications to indicate if and when they wanted a time out, so the referees put three seconds back.
• Even if they had appropriately requested and received a time out, they would not have been able to substitute players, or take the time needed to strategize on a play, both of which were allowed to happen.
• After in-bounding once, and exhausting the remaining three seconds without scoring, they were given another three seconds and another opportunity, since the clock hadn’t been properly reset.

There were other irregularities, any of which would have also prevented the gold medals from going to the Soviets (including blatantly improper interference in an on-going game by Renato Jones, secretary general of the FIBA at the time), but you see the point. The only way that the Soviets could be considered successful is if it’s okay to change the rules in the middle of the game. And, just for the record, a sure sign that either the game is rigged or the authorities aren’t really experts is that the rules keep changing.

A few months back I was blogging about how some PM aficionados, whom I named “processors,” were more concerned that what they saw as correct, proper procedures should be followed during project execution than whether or not the project itself was successful. Their (sane) counterparts, who were more concerned with actual project performance, I dubbed “producers,” and complained about how the processors were doing little more than making the producers’ professional life more difficult.

I stressed in last week’s blog that the oft-overlooked, but obvious central point about Project Management is that the projects’ scope needs to actually be executed, the best way the project team knows how. In short, the “rules” for the producers can be reduced to two: (1) finish the project on-time, and (2) on-budget. These two rules do not change in the world of the producers. Conversely, the processors seem to change the rules all the time. They do so in the cavalcade of presentations, webinars, and guidance documents being generated -- and I stand by my assertion about what's going on when the rules seem to be constantly changing.

I have made pointed criticisms of Tom Peters’ work, but I have to hand it to him: his approach on In Search of Excellence was insightful and inspired. Rather than sit around his University office and speculate how organizations could improve performance based on abstract data or theories, he sought out high-performing organizations, and asked them what they were doing differently from their competitors. He was rewarded with a best-selling book, as he should have been. This is much, much closer to performing real management science than most (if not all) of what the processors do, in that Peters observed which organizations were verifiably performing better than their competitors, and then sought out the dependent variables. Compare and contrast this to, say, the communications managers (yes, the risk guys are an easier target here, but I pick on them so regularly I thought, just this week, I’d give them a break). When was the last time you heard a seminar paper, or webinar, presented by the communications specialists, where they did something similar to what Tom Peters did, i.e., seek out success, and interview those associated with it how they did it? I never have. Rather, it seems they are always prattling on about how, by following their rules for proper PM (recently updated, don’t you know), which requires performing the kinds of analyses and techniques they promote, you are “doing” PM “correctly.” In reality, the best they could hope to do in real PM space is to assert that a preponderance of projects that do perform their techniques come in on-time and on-budget, but even here they would have an almost impossible task of establishing the communications program as the proximate cause, or even a material cause of the project’s success. None of them would ever say that their project came in on-time, on-budget due solely to their enhanced communications plan. It just never seems to work out that way.

Unless, of course, you are attempting to assert that the reason for your blatant lack of success is because the scorer’s table failed to recognize your communicated desire for a time out in the final seconds of an Olympic championship game. In that case, you just might get away with it.

According to a history of architecture website named Quatr.us, in the twelfth century

Somebody (nobody knows who) invented the flying buttress. Instead of the buttress being stuck to the side of the building, it would form an arch leading away from the building.

The flying buttress would start from the places at the top of the wall where the groin vaults were directing the weight of the roof. From there, the flying buttresses would carry the weight of the roof away from the building and down a column of stone to the ground. It wouldn’t matter what the walls were made of anymore, because they wouldn’t be carrying the weight of the roof.[i]

Other examples of flying buttresses in building interiors appear as an unsupported column top, with its load-bearing utility not being intuitively obvious. Essentially, the flying buttress allowed the weight of the structure to be diverted away from the walls.

Another act of diversion, this one pertaining to human behavior, has to do with the oft-used cliché, that success has many parents, but failure is an orphan. I know when I hear that phrase cited my first notion of its meaning has to do with a somewhat jaded view of human nature, that we’re imminently susceptible to crafting or altering a narrative to make ourselves appear to be a vital part of a winning team, but hardly involved at all if the same (in this case, project) team crashes and burns.

But taken together with another axiom, this one a quote from Charles Kettering, “99 percent of success is built on failure,”[ii] and a larger insight emerges. It goes without saying that, if we don’t own our mistakes, we never learn from them. But what happens when we glom on to successes where we did not provide the material cause, much less the proximate cause, of the favorable outcome? I think we see this very outcome on-display at so many PM-themed conferences, seminars, podcasts and guidance documents, that of attribution of success to some very questionable management science hypotheses.

Meanwhile, Back In The Project Management World…

Take, for example, the practice of time-phasing an Estimate to Complete (ETC). This rather silly practice has the full-throated approval of that guidance-generating-organization-that-must-not-be-named. It assumes several premises, including:

• The ETC is derived from re-estimating remaining work (on a line-item level, no less) on an already-started project, instead of using the simple, accurate formula ETC = Estimate at Completion (EAC) – cumulative actuals;
• Useful or relevant information can be gleaned from comparing budgets to actuals, and
• Staffing decisions are based on differences between budgets and actual costs, rather than the nature of the remaining scope on the project.

These assumptions are suspect at best, and completely fraudulent at worst, being, as they are, poorly (or completely un-) supported by repeatable observations in a setting that would allow isolation of the dependent variables upon which the assertion depends. In other words, there is absolutely no evidence, not even a single instance, of a project owing its success to its ability to time-phase its ETC. These assertions are simply arrived at by a bunch of self-anointed experts, who publish their findings opinions with vague but impassioned support phrases such as “Doing X is key to project success.”  Really? Can we see the data that supports that assertion? Even a single example of how X is “key” to a specific project’s success?

And the time-phased ETC example is but one of many. Enhanced analysis techniques in risk management, communications management, quality management … the list goes on and on, with no hard data supporting the assertions, but with the ubiquitous “…is necessary (or “key,” “essential,” or “central”) to project success” contained in a nearby paragraph. It’s maddening, really.

Here’s the painfully-obvious-to-the-most-casual-observer essential element of project success: execute the scope. All of the analysis techniques inherent in Project Management have the singular function of reflecting the project teams’ performance as they execute the scope. Some of those analysis techniques are truly “key,” with Earned Value and Critical Path methodologies popping to mind. But many of these others are not, and not only that, they actually divert time and energy away from that load-bearing component of project success, executing the scope. And, to that end, they represent the very opposite of the things that are “essential” to project success.

I kind of like comparing those pushing these unsupported and unsupportable assertions about what is “key” to project success to flying buttresses. It sounds like I’m calling them a juvenile and semi-profane name, when I am, in fact, referring to them as an architectural feature. So, it is in that spirit that I can say to these “experts,” metaphorically speaking, of course, and sincerely: stop being flying buttresses.

[i] Retrieved from https://quatr.us/architecture/flying-buttress-history-architecture.htm on December 3, 2017, 9:55 MST.

[ii] Retrieved from https://www.huffingtonpost.com/mitch-ditkoff/innovation-quotations_b_1971546.html on December 3, 2017, 8:12 MST.

A basic characteristic of Project Management which is often given short-shrift is the aspect of being particularly applicable to unique work. By definition, projects are unique, and have a definitive beginning and end, which occurs when the documented scope has been attained to the customers’ satisfaction. But new software, buildings, and devices are being created all the time, right? And, in most cases, these projects deliver an improvement or advancement over the thousands of software packages, buildings, and devices already in existence, while still sharing many (if not most) of their predecessors’ characteristics. So, yeah, the project is unique in many ways, but it’s also very much like hundreds, if not thousands, of projects that went before, which is where the performance goals of such work tend to be derived. And this is where a lot of government PMs get really frustrated.

Consider some of history’s greatest and truly unique projects, like the Manhattan Project, or the Apollo space missions. Yes, bombs, and rockets that could carry people into space, already existed, but these were different. No explosive had ever harnessed the power of the atom, and no space vehicle had ever come close to allowing an occupant to step foot on another heavenly body. Past the attainment of the primary scope, what could be used to evaluate these projects’ performance?

The unfortunate tendency here is for those outside the PM structure to invoke performance parameters from the asset managers’ realm, i.e., the accountants, with the Return on Investment (ROI) being prime. There is a rather funny story about a time when Manhattan Project scientists were creating a device that needed large amounts of copper, then in short supply due to the war effort. However, silver had similar electrical characteristics, so the scientists asked Undersecretary of the Treasury Daniel W. Bell for 6,000 tons of silver bullion. Bell responded “Young man, you may think of silver in tons, but the Treasury will always think of silver in troy ounces!”[i] A quick calculation later, and the request was amended to 430,000,000 troy ounces of silver, whereupon it was granted.

Now, put yourself in the shoes of a government oversight manager. Could you even begin to calculate the ROI of 6,000 tons of silver being diverted to industrial purposes? Even if you had the security clearance to know the precise nature of the science behind the request, it would be quite impossible to capture the value of contributing to the radical altering of the balance of geopolitical power that would result from the successful development of atomic weapons.

Something similar happened within the Apollo Program. Pushing mass into outer space is very expensive, and the need to miniaturize and lighten the electronics needed to reach the moon became a priority. The solution came in the form of the integrated circuit. As put by Sharon Gaudin at the Computerworld website,

The development of that integrated circuit, the forbearer to the microchip, basically is a miniaturized electronic circuit that did away with the manual assembly of separate transistors and capacitors. Revolutionizing electronics, used in nearly all electronic equipment today. While Robert Noyce, co-founder of Fairchild Semiconductor and then Intel Corp. is credited with co-founding the microchip, Jack Kilby of Texas Instruments demonstrated the first working integrated circuit that was built for the U.S. Department of Defense and NASA.[ii]

The total cost of the Apollo Program was reported to the United States Congress in 1973 at $24.5B (USD). Since integrated circuits, and their progeny the microchip, are used in virtually all computers today, what can be said of their ultimate “value”? Microsoft is worth $483B[iii], Google is worth $101.8B[iv], and Amazon is worth $430B[v], and these are just three examples of prominent computer-based enterprises. None of these organizations would be in existence if not for widespread use of personal computers, personal computers which would not be in existence if not for the technology that brought us integrated circuits and microchips. The government program to put a man on the moon in the 1960s would radically alter the world’s economies, to the point that the United States’ $24.5B investment—as hefty as it must have been perceived in 1973 – has to be seen as comically small in terms of the economic benefits it eventually wrought. Just the three companies cited above represent a 745% return, adjusted for inflation. But just 10 years after Apollo 11 landed on the moon, a Gallup survey indicated that only 41% of Americans thought the benefit of landing on the moon outweighed its cost.[vi] Really.

So, what is it that government PMs really do not want? They don’t want their truly unique projects’ performance to be evaluated unfairly. All things fail by irrelevant comparisons, and newly discovered technologies, by definition, are, at least to some degree, incomparable.

If nothing else, can we at least stop pretending that the Return on Investment figure has a place in evaluating project performance?

[i] Manhattan Project. (2017, November 20). In Wikipedia, The Free Encyclopedia. Retrieved 04:46, November 26, 2017, from https://en.wikipedia.org/w/index.php?title=Manhattan_Project&oldid=811268990

[ii] Retrieved from https://www.computerworld.com/article/2525898/app-development/nasa-s-apollo-technology-has-changed-history.html, 20:05 MST, 25 November 2017.

[iii] Retrieved from https://www.quora.com/How-much-is-Microsoft-worth, 20:12 MST 5 November 2017

[iv] Retrieved from http://metro.co.uk/2017/11/24/how-much-money-is-google-worth-7106408/, 20:14 MST, 25 November 2017

[v] Retrieved from http://money.cnn.com/2017/04/04/investing/amazon-stock-900-alltime-high/index.html, 20:17 MST 25 November 2017.

[vi] Retrieved from http://news.gallup.com/poll/3712/landing-man-moon-publics-view.aspx, 18:19 MST, 26 November 2017.