I finally completed reading Nassim Taleb's book Skin in the Game which I had written about in a recent article.
In that piece I had applied his principles when comparing the benefits of a product-centric orientation to the project-centric model which is still found in many organizations. But after finishing the book, I realized that there is a much more compelling example of the challenges experienced with risk asymmetry in many large organizations, namely with those staff who are responsible for developing the policies, standards and methods used by teams for delivering projects or products.
In small companies, how a product gets developed and delivered is usually defined by a "Big Brain" (e.g. a solution owner or similar role) or developed collaboratively by those actually building the solution. But as the size of the organization increases and stakes get higher, control partners emerge to influence not only what but how production occurs.
Where things get difficult is when these control partners do not experience first-hand the downside of their decisions.
For example, in some companies, project management standards are set by a centralized department such as a PMO. While some delivery roles such as program or project managers might report in to the same PMO, there are staff whose sole focus will be to define and maintain standards. As those staff are not in a project delivery role, even if they possess years of practical experience, as they won't themselves have to use the templates and tools which they have developed, they don't have true skin in the game. Delivery staff may complain to control partners about how onerous or non-value add specific practices are, but there is little direct impact to them.
There are a couple of ways to rectify this situation:
Method makers and framework formulators - practice what you preach!
The quote attributed to Thomas Edison of “Vision without execution being hallucination” is one side of the coin. As Roger Martin wrote in a 2015 HBR article, execution without vision is mindless.
A good analogy I’ve used to express how tightly integrated the two need to be comes from organized sports.
Head coaches usually have the vision of taking their team to the playoffs or even winning the overall championship. The first failure occurs if that vision can’t be translated into strategies adopted by the management & coaching team including how they will get the right players, how those players will be forged into a cohesive, efficient team and which plays are likely to stymy their opponents. A subsequent failure may happen when they try to execute those initiatives. In either case, the head coach may end up looking for a new gig come the end of the season.
Pre-school soccer presents the opposite problem.
Small children have unlimited energy and lots of enthusiasm, and when they are able to make contact with the ball they can usually deliver a solid kick. Unfortunately, they possess limited attention spans, get easily distracted and require frequent gratification. Their rudimentary execution skills are good, but they are just as likely to kick the ball into their own net as they are to score on their opposition.
While most executives I know would not like the comparison to pre-schoolers, in the absence of an overall vision for a company or division, and without that vision being distilled into strategy, the compass guiding the decisions for those executives usually points to either their own ambitions or their assumptions on what is best for the organization.
Pet projects flourish within such environments.
Here are some of the warning signs which indicate your organization may be suffering from mindless execution.
My favorite expression from the Daleks of the popular television show Doctor Who, is what they’d say when their eye stalk was damaged: “My vision is impaired, I cannot see!“. This was usually followed by the Dalek in question being destroyed. If your company’s vision is impaired it might be your company that is Exterminate-d!
(Note: this article was envisioned and executed in March 2015 on my personal blog, kbondale.wordpress.com)
For those of us who have worked most of our careers in companies with functional or matrix power structures, project-oriented organizations can appear very attractive in comparison.
This is understandable given the many challenges project managers can face when their roles are poorly defined or when they have no little authority over team members or decision making. I can recall countless cases of project managers escalating concerns over individual team member behavior to people managers only to be told that perhaps the project managers themselves are the problem.
Support for project managers can also be limited.
If they are lucky, they might report into a PMO which provides professional development opportunities and they can benefit from the support of their peers but unless the company is at a higher level of organizational project management maturity, the role of the project manager might still be a thankless one at times.
In a project-oriented company, the role of the project manager is well defined, they usually possess formal authority (including hiring and firing power) over their team members, and they are likely to have greater decision making authority than in matrix or functional organizations.
Seems like Nirvana, right? Unfortunately, formal authority is not all it’s cracked up to be.
Just because you have the ability to directly impact someone’s performance evaluation, annual bonus or even their job, doesn’t mean that will automatically motivate them to give you their best efforts. Possessing formal authority over team members can be a curse – you have to work twice as hard to capture the hearts and minds of your team members through vision, influence and persuasion as it is all too easy to fall into the habit of saying “It’s my way or the highway!”. In functional or matrix organizations, that approach isn’t even possible, but in project-oriented organizations, team members will listen because they fear the consequences of not doing so, but you will get their support at the cost of true engagement and commitment.
In project-oriented organizations, the project manager can also bear the brunt of negative project outcomes. They possess the authority, but with that comes the risk that if the project fails or the customer is unhappy, they are more likely to be impacted than in a functional or matrix organization where decision making authority and accountability is diffused.
Finally, what happens when your project ends and there is no more work? Project managers in functional or matrix organizations might lose their jobs if they are unable to find a lateral role. In a project-oriented organization, lack of new projects could mean that not only the project manager, but their team members could also be negatively impacted, and the project managers will have to bear the resulting emotional stress.
Can project-oriented organizations be better than functional or matrix ones? They can, but caveat emptor!
(Note: this functional article was originally published on kbondale.wordpress.com in February 2015)
Many of the companies I’ve worked with have invested significant effort in developing and implementing consistent project intake processes, often supported by fairly costly project portfolio management systems.
While these changes can reduce the occurrence of pet projects, they still won’t make a meaningful difference in portfolio value realization. Yes, increased effort may be spent in creating business cases than before and those business cases may get challenged by different levels of governance committees, but that doesn’t mean benefits will be realized as expected. Unless the requested funding is tremendous, the level of scrutiny the business case will experience is likely to be restricted to a quick review of assumptions, validation of SWOT analysis and other such sanity checks. To really validate the realism of the benefits model would require an investment of a similar (if not greater) level of effort which was spent on creating the original business case.
Most sponsors tend to display a strong optimism bias – if they didn’t, they’d be unlikely to sponsor transformational projects. However, this optimism bias can result in inflated expected benefits and the underestimation of the one-time or ongoing costs or the impact of external factors which could reduce benefits.
Without some sort of benefits management framework that insists on objective representation of expected benefits when baselines are committed and then regularly re-checks the likelihood of realizing those benefits, risky project investment decisions could still be made. And once a project is over, even if no benefits were realized, few organizations will hold the sponsor accountable for poor outcomes. While chronic offenders likely deserve some punitive action, I’m not a fan of tying compensation to benefits realization – while that creates “skin in the game”, it also might generate an overly conservative culture which could result in competitive disadvantage for a company.
This made me think about credit ratings – independently established metrics providing an objective method of evaluating the credit risk of an individual, organization or country. Could this approach not be adapted for assessing the benefits realization reliability of a given sponsor?
Similar to a credit rating, new sponsors would start out with a modest reliability rating. As they request project investment decisions and the benefits are realized (or not), their rating would increase or decrease. These ratings could then be used as an input into project intake reviews. Sponsors with good reliability ratings would be subjected to less scrutiny and have access to higher levels of project funding. Those with lower reliability ratings would have their business cases challenged more rigorously and could have more funding disbursement gates.
So who would calculate and publish such reliability ratings? This could be a job for your friendly, neighborhood PMO.
(Note: I checked the credit rating of this article when it was originally published in March 2015 on my personal blog, kbondale.wordpress.com)
There was an important point made on page two of the PMBOK Guide (Fifth Edition): the organization and/or project management team is responsible for determining what is appropriate for any given project.
This advice is not provided to encourage a free-for-all whereby each project team does as they please. Some practices consistency is crucial when one needs to evaluate a portfolio of projects, and it can also help to reduce ramp up time when staff are assigned to projects.
The guidance is there to remind us that we need to assess a project to determine which practices can be used as is, which need to be tailored to fit, and which are simply not applicable.
So what’s the problem with not hitting the “sweet spot”?
If insufficient practices are applied, or if the practices are diluted too much, there is an increased risk of partial or total project failure.
On the other hand, if teams are applying a “one size fits all” approach, the risk of project failure is reduced, but is replaced by increased cost of project delivery and frustration with project management in general. Over time, this frustration will translate into teams following project management practices just to pass a delivery gate instead of applying them to improve their odds of success.
For companies which have assigned an individual or a team (e.g. a PMO) to be responsible for assessing and improving project management capabilities, ongoing feedback from project teams can be a good way to progressively develop a knowledge base to help practitioners with adapting practices to the needs of specific projects.
Going a step further, in companies with strong internal policies or regulatory requirements, an independent (internal) consultant might be engaged to provide such assistance. Their responsibility could include the review and approval of the compliance of the adapted practices with the overall philosophy and intent of the organization’s project management policies.
Unfortunately, for those companies which have not centralized the responsibility for project management practices, the onus for doing this falls solely on project teams.
In such situations, project managers may need to develop a “play book”. Such play books could include the following details for each key project management practice:
The benefit of such a play book is that it can facilitate a structured discussion with the team at the start of a project. It can help to educate team members as to the necessity of certain practices whose rationale might not be intuitive and it can also demonstrate that the project manager is taking a right-sized approach to the project.
A well written practices play book could be the project management equivalent of this knife which you COULD bring to a gunfight!