Game Theory in Management

“So, what’s your sign?”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This probably reflects poorly on my character in certain circles, but one of the funniest YouTube videos I’ve ever seen is footage of a sieve, attached at four points by some sort of elastic cord (they may be bungees) and stretched taught, locked and triggered in place on a table in a back yard patio. Some squirrel bait is placed in or directly in front of the sieve, and when a unsuspecting squirrel hops on the table, the sieve is released, catapulting the squirrel into the neighbors’ foliage (their little arms and tails tend to flail about in a most comical manner).

Consider the central part of the squirrel catapult apparatus, the sieve. Most people use sieves to separate items from each other, such as separating dirt from lettuce by rinsing the lettuce in the sieve. The lettuce stays, the dirty water flows out. Or, they can be used the opposite way, as when your children’s marbles mysteriously appear in the flour container. The flour falls out, the marbles stay. And, as we have seen, with a little creative use of elastics, they can separate members of the suborder Sciuromorpha from a back yard patio, in dramatic (and hilarious) fashion. (Hey! I wonder if ancient man, upon discovering the characteristics of rubber tree sap, combined this knowledge with his basket-weaving ability, and indulged in the behavior that would end up evolving flying squirrels!)

Why do we use professional certifications? I believe they are used like sieves, to separate capable people from the incapable, the educated from the ignorant, or the willing-to-fork-over-thousands from those who, well, aren’t. (Full disclosure: I have three certs, the PMP®, the CCP®, and the EVP®. If you don’t know what these are, don’t bother asking.)  If your organization suddenly pushes a certification initiative, they are probably attempting to wash lettuce in the sieve; that is, they want to rinse the ignorance out of the existing staff. Or, they can separate the flour from the marbles, and arrange to have future job advertisements stipulate the desired certification as a pre-condition for candidate consideration. Or, they can launch squirrels, as in requiring a specific certification by a date certain and, if the desired cert is not attained by then, the unlucky employee is sent flying, arms, legs, and tail flailing. As with most management initiatives, some unintended consequences often accompany an emphasis on the attainment and retention of professional certifications, including the following.

I have previously discussed in this blog the four archetypes of workers described by Dr. Michael Maccoby in his book The Gamesman (Simon and Schuster, 1978): the Craftsman, the Company Man, the Gamesman, and the Jungle Fighter.  I have no idea if Dr. Maccoby did any research in professional certifications, but my experience tells me that the two archetypes most coveted by the organization – the Craftsman and the Gamesman – might not be all that interested in professional certifications. The Craftsman is mostly interested in doing his job right, the best even, and certifications wouldn’t interest him, unless he saw them as a means to the end of attaining higher performance. And the Gamesman tends to already have an advanced grasp of his job and its environs, and seeks out risky, entrepreneurial tactics to advance himself. It seems to me that professional certs would mostly appeal to the archetypes that are either organization-neutral – the Company Man – or the type to be avoided, the Jungle Fighter. I’ve seen the attainment of professional certifications work on Jungle Fighters like catnip. It fills them with an air of technical authority, legitimately or not, and they use it to help further their favorite tactics: maximizing their rivals’ shortfallings, while minimizing their own, and minimizing their rivals’ achievements, while maximizing their own.

Then there’s also the problem of what the specific cert actually means. For example, the granddaddy PM cert of them all, the PMP®, implies familiarity with (if not mastery of) the concepts laid out in PMI®s Guide to the Project Management Body of Knowledge®, or PMBOK Guide®. However, the PMBOK® has an entire section on risk management which, as my regular readers well know, I hold to be nothing more than an admonishment for worrying at the macro-organizational level, tripped out in statistical jargon and backed up by invalid management science theories. But, in order to attain the PMP®, the candidate must demonstrate familiarity/mastery of such alchemy (strikethrough) techniques. Does that seem right?

Finally, at one time the PMP® could have been used as a rather effective differentiator among project management candidates; but, with over 460,000 having been issued, its ability to distinguish among truly talented managers and those less so can’t help but be dramatically reduced.

I don’t know if that particular certification, at this point, could even catapult a squirrel.

Since my ProjectManagement.com colleagues are hard at work researching, analyzing, and writing about effectively working with and implanting project requirements, it naturally falls to me to do the exact opposite: make the case for abandoning requirements. But I am not doing so simply to indulge a contrarian impulse – there really are times when requirements need to be ignored if they stand in the way of attaining project goals, specifically in implementation projects that seek to advance a capability within the organization.

An anonymous commenter posed a question on last week’s blog, asking how to get the organization out of the habit of comparing budgets to actual costs as a way of performing cost performance analysis, when the organization didn’t even plan very well in the first place.  When I read the comment I was reminded of a certain program director who was in charge of over thirty (!) project leaders, each of whom was responsible for a small project, but had no cost or schedule reporting capability. None at all. The organization had no PM requirements and, even if they did, the PLs would not have respected, much less obeyed them. I was assigned to assist this program manager along with an associate from my organization, whom I’ll call Ed. Ed was on fire to write up a series of requirements, attain the necessary approvals, and set out in implement them. Fortunately, I outranked Ed.

At our first meeting with the program manager I brought examples of every type of cost and schedule performance report formats I could find, and asked the PM to select his favorite. He chose what we would end up calling a Bullseye Chart, essentially an XY graph that showed each project’s Cost Performance Index (on the X axis) and Schedule Performance Index (Y axis), with the size of the bubble indicating the size of the total budget. To make it easier to read this already highly-intuitive format, we placed text boxes in each of the four quadrants: positive cost and positive schedule (“Great!”), positive cost and negative schedule (“Get on the gas!”), negative cost and positive schedule (“Get on the brakes!”), and negative cost and schedule (“Trouble!”). As we left the meeting with the PM, I went to work on Ed. I pointed out that, when it came down to it, we only needed four pieces of data from each project to get that report into the PD’s hands:

·         Total budget,

·         Actual costs,

·         Budget by month,

·         Estimated percent complete as of the end of each month.

I further pointed out that the first two elements were already available, the third, if not available, could be guessed (level-load the total budget across the period of performance), leaving one measly data point needed on a recurring basis. Ed was having nothing of it.

“What about the requirements? What about ANSI 748 (the standard for Earned Value Management Systems)? We have to verify the basis of estimate! We have to capture their scope in a work package, and establish control accounts! Then we have to issue our own requirements that direct them to use the proper method for collecting their Earned Value! You can’t just collect the data and start reporting the cost performance!”

“Watch me.”

We informed the PD of the approach we wanted to take to get him his Bullseye Charts, and then communicated the same to all of his project leaders.  At the end of the month, we collected our percent complete data (or tried to, at least), generated our reports, and prepared for the project review meeting. What happened next was fascinating.

At the beginning of the meeting we projected the Bullseye Chart for the first set of projects onto the screen, with one added data set: a list of the projects that were not reporting. The program manager spoke to those first.

“Why is your project listed in that category?” the program manager demanded of the uncooperative project lead.

“The data requirement was difficult, and I was really busy at the end of the month.”

“They only asked you for one extremely easy-to-estimate figure, and you couldn’t accommodate that?”

“No, I guess I could. I’ll make sure I get it in next month.”

“See that you do. (Looking at the PL for the next project in the list) Why is your project on that list?”

The next uncooperative PL already saw the futility of claiming difficulty in compliance with the requirements and, like all of the others on the list, apologized and promised the data would be available for the next project review. Sure enough, at the next project review, not only were the Projects Not Reporting boxes empty, but the PLs were talking about their projects’ performance like seasoned PMs. It was a remarkable turn-around – the Program Director was getting his critical performance information, and the quality of that information, as well as the management itself, continued to improve throughout the life of the program. Even Ed was impressed.

And all we had to do was abandon the unnecessary requirements.

As I have stated (on multiple occasions) in this blog, the worst 20% of managers who are in possession of 80% of the information they need to obviate the best decision in any given circumstance will outperform the top 80^th percentile of managers who only have 20% of the information they need to illuminate the circumstances of the decisions before them. It follows, then, that any discussion on IT project requirements must include some sort of analysis that answers the question, which information?

I once worked with a VP who had a Ph.D. in statistics, and simply loved combing through page after page of the actual costs the projects were incurring, by line item, and comparing this data to the basis of estimate that made up that project’s cost baseline. Any deviation, of course, demanded an investigation. I tried to reason with him.

“David, consider the scenario where a $100K project baseline had $25K in labor costs, and $75K in heavy machinery. At the end of the project, the actual costs were $75K in labor costs, and only $20K in heavy machinery. By your analysis technique, a major problem has occurred, when, in reality, the project came in under budget.” But he refused to budge.

He wasn’t very successful.

I am, however, not without sympathy. As I discuss in my recently-released, must-have book, advocates of specific management information streams will push their products way, way past their epistemological limits, promising that, should the manager adapt their narrative, the path to perfectly informed management decisions will be there for the taking. This is not how management science theories are tested and validated – it’s how products are sold. And, when salesmanship and marketeering are allowed to trump legitimate management science research, organizational chaos ensues. Here’s a short list of a few of the pseudo-management science techniques that have wormed their way into Project Management Offices everywhere, and yet are, without question, invalid.

The Bottoms-Up Estimate at Completion (EAC). This is the PM technique of re-estimating the remaining work on a project, adding this figure to the cumulative actuals, and, shazaam!, you have a valid EAC. Except that you don’t.  According to AACEI, a “detailed” estimate, generated by a professional estimator using off-the-shelf estimating software, can only reliably provide an estimate accurate to within 15%, best case. As I have previously noted, using the formula EAC = Total Budget / Cost Performance Index gets you to within 10% on a consistent basis, and is far, far easier an analysis to perform. And yet, the “bottoms-up” aficionados have this insipid little technique firmly entrenched in many U.S. Government procedures, orders, and policies. It’s really just make-work for the organization’s estimators once the cost baselines have been approved.

Comparing Budgets to Actuals. As I pointed out in the previous story, this technique is not only invalid, but it returns misleading information. However, since our friends the accountants like to pretend that the general ledger must be THE source and residence of any and all management information that has to do with costs, this silly technique remains in all unenlightened managers’ tool kits. It’s so intuitive, though, isn’t it? Of course, the valid (and infinitely superior) way of relaying a cost variance is to compare the cumulative Earned Value (% complete * total budget) to cumulative actual costs, but the invalid version will never really go away. This information stream is just make-work for the accountants, when they’re not out nagging others about other irrelevancies.

Calculating the Cost Baseline’s 80% Confidence Interval. Of course, the risk management types as well as the statisticians just love performing this analysis, but it’s as useless as a sundial in Seattle. All of the assumptions about alternatives that go into either a Monte Carlo or a Decision-Tree analysis are nothing more than guesses by the project team. And quantifying and processing data based on guesses yields an information stream that is simply over-processed and over-thought guesses. I would normally wrap up this paragraph by saying that this technique is just make work for the risk analysts, but virtually everything these guys do is make-work, so why just pick on the 80% confidence interval?

If your customer accuses your project of failing due to one of these metrics, or, worse still, if performance against these techniques is called out in your requirements, then the good news is that your customer isn’t very advanced in valid PM techniques. But if your project team is doing this to themselves, then the bad news is … your team isn’t very advanced in PM techniques, and your odds of succeeding just dropped.

Do not ask me the exact percentage of how the odds of success have dropped. That piece of irrelevant information can be pulled out of thin air (strikethrough) generated by your risk analysts.