Game Theory in Management

Most fictional stories, plays, and movies use conflict to advance their plots. However, movies are particularly dependent on conflict expressed as physical violence to attract audiences, and these incidents of silver screen violence are usually performed by characters who are supposed to be experts in their particular martial specialty. Bruce Lee, Jean-Claude Van Damme, and Chuck Norris are just a few of the martial arts specialists whose fighting exploits have represented significant parts of popular movies. I think, though, that it’s fairly easy to forget that what we are witnessing when we see martial arts experts engaged in violent conflict on-screen is not actually a violent conflict. It is, in fact, an acted-out representation of a violent conflict. When Darth Vader extends his hand towards an unfortunate Imperial Officer with his thumb and forefinger about one inch apart , that “officer” can, in reality, still breathe, his gasping and croaking notwithstanding.  When Bruce Lee took on multiple opponents in his movies, he didn’t win because of his superior training, because he was in better physical condition, or because of his characters’ inherent virtue or the goodness of his cause. He won because the script said he was going to win.

Meanwhile, back in the world of Project Management, we’re always grounded in reality, right? I mean, if a project out-performs its scope, cost, and schedule baselines, that’s ipso facto evidence of a superior project team, yes? Conversely, when a project fails to meet its objectives within the constraints of cost and schedule targets, that project team performed, shall we say, sub-optimally, and everyone knows it, amirite?

Well, not so fast.

Projects’ cost and schedule performance measurement systems perform two functions:

• Put into the hands of the project’s (or organization’s) decision-makers the information they need to make the best choices, and
• Provide supporting evidence for the creation of an audit trail, a narrative about how the project came about, was executed, and encountered the results that it did.

It’s this second function that tends to create mucho problemas, and where the work of consultants gets pulled back into the conversation. Few “analysis” techniques are easier than going through the records of a failed project, and pointing an accusatory finger at those whose decisions led to the project’s difficulties – unless, of course, the narrative has been manipulated to deflect blame from the real perps and towards either vague, inchoate sources, or (worse) against the innocent members of the project team.

So, how does this narrative get manipulated? Sadly, there are many opportunities to do so, as indicated in Table 1.

Table 1. Some Of The Ways Charlatans Change The Narrative

It’s as if you have a room full of script writers, all with their own hidden agenda, pretending to want to legitimately contribute, while they provide inconsistent (or even conttradictory) dialogue for the same film. And – wouldn’t you just know it? – the narrative never seems to reach a conclusion on precisely who provides such dopey project management as to be avoided in future major contract awards.

In my last blog, I showed how the utilization of fear as a motivation tactic has only limited effectiveness. But I will say this for the Galactic Empire: they do have a way of keeping profoundly inept players from returning to the game.

In last week’s blog, I pointed out the consistencies in the consultants’ approaches of Jon Taffer and Yoda. Alert reader Ken Bradshaw commented that, essentially, if Yoda’s approach to providing consulting services could be evaluated, what did that imply for other major characters in the Star Wars universe, specifically Darth Vader?  The short answer is, well, a lot.

Here’s the longer answer

The notion that an advancement in project management capability can be attained by leveraging organizational power is as old as PM itself. I actually had a rather heated e-mail exchange with a person who fancied himself a scheduling expert who took exception to a Variance Threshold piece I wrote back in the day which challenged the so-called Critical Chain theory. This person – who continues to make himself a spectacle in the PM writing world – went ballistic on me for asserting that schedule float, ummm, existed. I swear I am not making this up. His basic criticism boiled down to, if a manager told someone to execute an activity, then, by golly, that person had to obey. I suppose this fellow presumed that instantaneous obedience to managerial guidance completely negated the concept of float in Critical Path Methodology-based schedule networks, which is, of course, astonishingly ignorant.

Initially unwilling to believe that anyone who presents as an expert in project management in general, and scheduling in particular, could possibly be that uninformed, I assumed he meant that re-assigning resources to critical and near-critical activities within the network could shorten the overall schedule’s duration (the core of critical chain theory), and I responded to him in that vein. His counter-response doubled down on his original fallacy: the notion of schedule float was wrong, on the grounds that proper management could demand that the start of a given activity happen as-planned.

Like I said, it’s astonishingly ignorant.

But it’s not that far removed from the managerial approach to many organizations when it comes to advancing a capability in project management.

Meanwhile, Back At The Empire’s PMO…

Which brings us long, long ago and far, far away, to the scene where Darth Vader is striding on board the second Death Star, and uttering the line in the title to the immense space station’s overly stressed PM. If memory serves, the PM responds that he is doing all he can, and that he needs more men. Vader replies that the emperor himself, who apparently has an even worse sense of humor than Vader, is due to arrive, implying that some extremely bad things will happen to the PM’s ability to breathe should the emperor have to read a Variance Analysis Report that indicates any significant schedule slippage (as an aside, would the Corrective Action paragraph of such a VAR include “Use the force to choke the PM to death, and then find someone to take over this high-profile project, and restore the schedule while keeping this person either unaware of the possibility or unafraid of being choked to death by the Force.”).

This approach flat doesn’t work, generally speaking. Oh, you will have the occasional project team amp up their production based on short-term fear, but as a standard approach, leveraging organizational power to advance a capability is a sure loser. That’s not to say that rank doesn’t have its role – it absolutely does. It’s just that using rank to lean on a project team to execute a given technical agenda is profoundly susceptible to the tactic of the Silent Veto, or, as the brilliant and irreplaceable Bud Baker puts it, the Slow Roll. This is where the cooperation of the members of the project team is verbally agreed to, but doesn’t seem to materialize in the event, or at least not in time for the successful execution of the technical agenda being pursued. Another symptom of having been Slow-Rolled or Silent Vetoed is that it’s nearly impossible to pinpoint the exact person responsible for, or moment of, technical agenda roll-out failure. And by the time you’re falling down thousands of feet of power coupling shaft, it’s really irrelevant if it’s specifically due to your main go-to guy having pangs of regret for the heavy-handed style he’s been forced to use all this time, or a failure to appreciate the martial abilities of a bunch of teddy bears.

The bottom line (which also happens to be Hatfield’s Rule of Management #1) is this: You cannot advance a capability by leveraging organizational power. If that’s the approach your consultant is recommending, check to see if their eyes glow orange.

I really like Jon Taffer’s style.

Star of the Spike Network television show Bar Rescue, Taffer is an expert at converting bars on the verge of bankruptcy and ruin into vibrant, successful enterprises. If you are wondering why the work of PM consultants rarely involves the kind of drama that could serve as the basis for a television series, at least part of the reason involves Taffer’s approach to his consulting business. I’ve seen several episodes of Bar Rescue, and in each the following aspects of Taffer’s approach manifest:

• He’s obviously a subject matter expert,
• And is crystal clear in his analysis, even to the point of enraging his clients.
• On those occasions where his clients are sustaining some sort of managerial pathology, and attempt to defend it and state their intentions of keeping such poor strategies in place, I have never seen Taffer back down, and acquiesce to the client…
• …even if it means that he’s released from performing the consulting work.

Conversely, I have never seen a project management consultant consistently engage those tactics. On the contrary,

• I have seen many a consultant insist on implementing some strange information system “remedies,” including comparing line items in the basis of estimate (BOE) to line items in the actual costs listing from the General Ledger,
• But will couch their analyses in terms that allow them to soft-sell their assertions should the client become visibly upset, much less enraged.
• These same consultants will immediately back off as soon as their customers begin to defend the very practices that are clearly leading to their problems.
• Especially if the consultants think they may be released from the job.

Another consultant whose style I admire is the fictional character Yoda, from the Star Wars films (specifically, I through III, and V through VI). Consider how his approach is similar to Jon Taffer’s:

• He’s obviously a subject matter expert, as evidenced by his abilities with a light saber, even given his diminutive stature,
• And is clear where he stands with respect to the issues, if you get past his odd syntactical style.
• On those occasions where he encounters those who are either weak in the ways of The Force, or else are committed to the Dark Side, he is unequivocal in his position, even if the last hope for that galaxy far, far away is at the point of exhaustion and doubt,
• And does not change, even if the rest of that same galaxy is arrayed against him.

Is everyone here seeing a pattern? The problem, as I see it, is that profoundly vapid management techniques are being introduced into the popular PM codex because some truly goofy PM-types will hire some truly renowned consultants to throw their weight behind some truly vacuous techniques, and those techniques suddenly become mainstreamed. It’s analogous to a situation where Manhattan bar managers suddenly decide to replace olives with avocado pits in the drinks that would normally be served with olives, and other bar owners across the country followed suit, without even asking for the evidence that that’s a good idea. Or, if youths showing an early capacity for channeling The Force were to spontaneously decide that the ability to play ping pong was a critical skill to acquire, and began devoting energy and time to that end. The external witnesses to this might scoff at its absurdity, but I can guar-an-tee that many of the PM practitioners reading this blog are completely okay with the notion that project management, done “properly,” must needs include a Monte Carlo analysis for the risk portion of their major projects.

So, in addition to last week’s blog’s criterion for real consultants versus the pretenders, we can add one more: like Jon Taffer and Yoda, the real deal never backs down from what they know to be the right way of doing things. That means that there’s only one question you consultants need to ask yourselves:

Are you so sure of your technical approach to PM problem-solving that you’re willing to be exiled to a swamp planet if your ideas are rejected by the galaxy around you?

Lagniappe

I will be presenting some of the ideas from my third book, The Unavoidable Hierarchy, at the dinner meeting of PMI's Rio Grande Chapter this Thursday, in Albuquerque, NM. The meeting is held at the Sandia Resort, starting at 6:00 MDT, with the presentation at 7:00.

Like stand-up comedians who spend too much time ridiculing television commercials, I don’t want to fall into the trap of making fun of consultants too often. True, they’ve been known to be wrong.

And can be arrogant towards the existing project team members.

And usually waaayyyyy overpriced.

And, if they stick around too long, become ipso facto evidence of executive ineptitude.

Some also have the unfortunate tendency to describe their time with your project team as one of their saving a woefully backward organization from ruination, due to their timely expertise, don’t you know.

But other than that…

Now that I’ve written the previous paragraph out, I’m not so reluctant to fall into the making-fun-of-consultants-too-often trap.

I’m not really worried that my friends who make their livings as consultants will be upset with me. They generally do not read this blog – they’re too busy consuming guidance-themed drivel that can be translated into eat-your-peas-style hectoring, on those occasions where they deign to stay current with PM literature at all. That’s how they make their money, generally speaking. I’ll explain.

Of course there are real value-added consultants, but there’s also the mock-worthy variety. How do you tell the difference? Check the following table:

Also consider the function your consultants fulfill. Anybody can sit around and offer up criticisms of the management decisions that have gone before. Hindsight is, as they say, twenty-twenty. It’s so easy, in fact, that people outside the project team should have to pay the PM for the luxury of doing so while everybody else pretends to listen to what they have to say.

But the ultimate consultant acid test will reveal the real deal, if you have one. Recall Hatfield’s Incontrovertible Rule of Management #11: the 80^th-percentile best managers who have access to 20% of the information they need to obviate a given decision will be consistently out-performed by the 20^th-percentile worst managers who have access to 80% of the information they need. This being the case, the consultants worth their weight in budget underruns will seek to set up and maintain such systems, without an iota of excess cost or difficulty.

And that’s how you tell the pros from the consultants.

When we left our hero last week, the secret conference room full of PAIN operatives had just erupted in a sound that can be best described as what would happen if somebody told a really funny joke at a Darth Vader impersonators’ convention. In the middle of the laughter, a man disguised as a waiter leaned over to my side.

“What are you doing here?” he whispered.

I looked up into the eyes of Cameron McGaughy, ProjectManagement.com’s managing editor.

“Cameron?! What are YOU doing here?”

“ProjectManagement.com has its ears open to these kinds of things. Anyway, the theme for March was supposed to be global communications. So, let me ask again – what are you doing here?”

“Well…” I whispered, “This kind of guidance issuance has an impact on how PM techniques are transmitted around the world, so there’s that.”

“You’re on pretty thin ice here, Raspberry, but carry on. We’ll see how this ends.”

As the laughter died down, the chairman continued.

“As we continue to insist on these line-item comparisons between budgets and actuals, the original baselines will be turned to rubber, engendering endless debate about supremacy of policy preferences. The confusion emanating from these debates will cloud the issue for years!”

I held up my hand.

“Do any of these documents you’re issuing actually add to the practical use of Earned Value techniques?”

Gasps again erupted from the participants, this time moving enough air to disturb some of the papers on the table before them.

“Why would you ask that, Max? Aren’t you on board with our true purpose?”

“Oh, yeah, sure I am. It’s just that I was told that we had to maintain some sort of veneer of valid management science advancement.”

Again the room began murmuring, with an occasional “Oh, yeah” and “he’s right, darn it” becoming audible.

“That’s true” the chairman responded, “but highlighting the divide between practical application and what we’re presenting as true goes too far.”

He continued “So we are on an acceptable pace to attain our final goal.”

I hoped someone would pipe us and ask “That being?”, but nobody did. However, another attendee did ask “Okay, boss. But once we’ve attained that goal, who’s going to maintain the ‘you’re doing it right’ versus the ‘you’re doing it wrong’ ledger? Our friends over in software development blew up our previous attempts when they came up with that incredibly practical ‘agile’ and ‘scrum’ business, and it’s taken this long to get back to where we are now.”

That’s when it hit me: the purpose of this little council was to create a codex of project management rules and regulations that would provide these so-called experts with the ability to demand adherence to process, and eschew practicality in application.  If it worked out, they would be empowered to forever say “you’re doing it wrong,” and point to some part of this codex to back them up.

In short, they wanted to entrench process over actual performance as the key to “proper” PM.

Along about this time I felt a small gap in-between my upper lip and fake mustache. Fearing that my disguise was beginning to fail, I decided to speak up one last time.

“We should arrange for Monolithic Corporation to make that determination.”

“We all agreed to not mention any company names” began the poorly-shaven fellow next to me. “Hey! What’s this?”

He then grabbed my fake mustache, and pulled it off my face. This time, the attendees gasped so loudly that loose papers leapt off of the table and were plastered onto their faces.

“Raspberry! Get him!”

In the time it took for the attendees to get their loose papers off of their faces, I sprinted down the hall and up the secret staircase. Charlie Gumshoe was waiting in the car just outside.

“Did you get it? Do you understand what they’re up to?”

“Yes, and yes. And you’re never gonna believe this…”