The innovators' lament ....

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Recently heard: this lament from IT innovation workers:

[We] encounter ironclad corporate hierarchies and resistance to change, a paradox in [our] industry that thrives on innovation and risk-taking.

"They" want things in a particular order; they want case studies and past experience. IT doesn't work like that. There is no past experience. We have to reinvent ourselves every day.

As reported by Joseph Coleman

Golly! I think the corporate masters must have missed the Agile memo. 

They may also have missed some principles of risk management in the context of 'new to the world' development, to wit: 

Some things never work out; some things are a home run. Setting artful limits to the balance sheet is the key skill if you aren't willing to bet the business.

On the other hand .....

There's a case to made for a business case, even in the context of Agile methods. 

Unless you are spending your own money, you have an obligation to the financier to show some respect and responsibility for the funds they are providing, even if you keep overrunning and going back for more. In effect, "innovation" never met a budget it couldn't bust!

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Teamwork: managing the whitespace

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One of the big differences between a team and a group is cohesiveness around the goal:

There's no success individually unless there is success collectively

Don't let idle ruin cohesiveness

Inevitably, keeping the team together to promote cohesiveness raises the question: 

How to keep everyone busy all the time -- other than 'painting rocks' (which is the way the Army used to do it)?

In theory it's simple: keeping everyone productively busy means actively managing their downtime, aka the 'white space', between and amongst their planned activities.

White space and the matrix

In organizations that are aggressively matrix managed, one approach to 'white space' management is to reassign people to another project with the intention of just a short assignment to 'keep them off the overhead' and always on 'billable hours'.  Of course, such practice breaks up the team for a short time so it kind of flies in the face of cohesiveness, team accomplishment, and team metrics.

And, aggressive matrix management assumes the F.W. Taylor model of management science: jobs can be filled by anyone qualified for the job description... interchangeable parts, as it were. In the era of team work where teams recruit their members, Taylorism is an anathema. Thus, aggressive matrix management is likewise seen as anti-team.

Backlog and whitespace

That all brings us to another approach -- more popular these days -- which is: manage the white space by managing the team backlog.

• Make sure that the backlog has all the technical debt and low priority requirements present and accounted for so that they can be fit to the white space opportunity.
• Develop and maintain a "parking lot" for off-baseline opportunities that might fit in the white space
• So also bring in mock testing, special event prototyping, and, of course, that bane of all:
• Maintenance of team records.

Running cost of teams

One big advantage of managing by teams: the cost is relatively fixed. Each team has a running cost, and so the total cost closely approximates the sum of the number of teams x the running cost of each. 

Of course, many PMs are NOT comfortable with the project staff being a fixed cost. They would much rather have more granular control. I get it, but the here's the main point about cost:

The cost of a project is not its value; in a "good project", value as judged by users and customers greatly exceeds cost

Here's the memo: Manage for value! (Oh!, did I say I wrote the book?)

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Are you accountable?

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Are you accountable?

Most of us want to answer 'yes, of course!'; how could it be otherwise? 

Most of us would endorse these ideas:

I'm always accountable for what I do. 

I'm accountable for that which I am responsible.

(Subtext: this can only be true if my personal integrity does not allow me to push blame on to others for failures and missteps, or claim false credit for what others actually did)

Accountability attaches credit and blame.

In popular culture, it seems to be more about attaching blame: A common refrain: "Who's to be held accountable for this!?"

Actually, being accountable means accepting blame or consequences when valid, but also stepping up and accepting accolades when earned.

I like this from Henry Evans, the author of Winning with Accountability, who says accountability is “clear commitments that in the eyes of others have been kept.”

Evans has set the frame: the final judgment about accountability is with others. 

In this sense, the concept of personal accountability is somewhat of an "earned value" idea: 

• You have a 'planned' set of responsibilities to get things done.
• You 'earn' accolades or consequences as you account for your actions
• Others judge the earnings and apply the credit or debit

Thus, in all schemes of accountability, you have a part to play: It's on you to commit to your responsibilities. So, even though Evans' statement is not explicit about being responsible, the holistic idea of accountability stemming from commitment embraces responsibility.

But what I don't like about Evans' statement is that it could be interpreted as requiring 'achievement' (in the sense of a commitment kept) when, of course successful achievement is not a requirement for accountability. Only a commitment to execute responsibly is.

And so in the context I've laid out it's common to encounter these questions:

• What is accountability, or what is it to be accountable?
• Can there be accountability without responsibility?
• Can there be responsibility without accountability?
• Are you given accountability, or do you grab it and take it on?
• Is the apex of the pyramid always accountable for anything down in the pyramid? (See: Captain of the ship is accountable ..... )

I don't want to dig too much more deeply into the psychology of 'accountability', and realistically that would be a fools' errand because project and business culture drive a lot of the answers to the questions above.

So, without making a big thing out of the answers, I'll offer my thinking here:

• As Evans puts it, accountability is about taking personal responsibility for outcomes: "I got this!" "I'm the one you can count on to get it done" "I will be there to see it through". All statements of commitment.
  And with Tom Petty in mind: "I won't back down!".
  
  
• The accountability/responsibility questions are ageless; they've been around since forever! The usual answer is: 'If you want me to be accountable for outcomes, then give me the responsibility for plans and resources. If you crater my plan and matrix out my resources, then you're accountable and not me!
  
  
• If you're not the apex (most senior executive) of the pyramid, you might be 'assigned' accountability: 'This is your mission and no one else's;  go get it done, and tell me when you're finished'.
  
  Actually, if you're low to mid in the pyramid, there's probably a backup to you. If it's a big pyramid, you may be an interchangeable cog in the mechanism. Nonetheless, grab it and go!
  
  
• Most of time, 'seniors' are always happy to have accountability 'grabbers' in the mix. It makes it easier to allocate the mission requirements. And, you may quickly earn and retain the leadership label.
  
  But the 'grabbers' are sometimes seen as more interested in climbing the ladder than actually advancing the mission. So, some balance of eagerness and opportunity is required.
  
  
• Traditionally, the 'apex' is accountable for the performance of everything done in the name of the pyramid. This is accountability without personal responsibility for outcomes. The "commitment" embedded in the concept of accountability is interpreted as 'committed to ensuring a responsible person is found, assigned, and expectations for outcomes established".
  
  In the military particularly, and certainly on ships at sea, this idea is deep culture.
  
  But, that idea often gets lost. One chief executive famously said that success has many fathers, but a failure is an orphan.
  
  Worse is the chief executive who denies accountability for all but successes. That is morally corrupt and a morale killer.

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How many ways to say "Cost"?

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How many ways are there to say "Cost"?

Certainly, more than one!

When "they" ask: 'How do YOU manage cost?", your answer is: 'It's complicated' because there are so many varieties of 'cost'.

Project managers certainly have at least this list:

• Estimated cost (of course, an estimate has to be made in the context of a plan: scope and schedule and resource plans)
• Baseline cost (estimated cost at the beginning of a planned period)
• Re-baseline (Sunk cost, plus a "new" estimate for the ensuing period)
• Cost variance (the difference or departure of actual cost from the baseline)
  
  
• Planned value (baseline cost input to the project, over time, allocated to planned functional or feature achievement)
• Earned value (as a proportion of Planned Value actually completed)
• Cost performance Index (as a 'cost efficiency' measure of how well cost input earns value)
  
  
• Actual cost (measured at a point in time, regardless of achievement)
• Sunk cost (aka actual cost incurred)
• Direct cost (costs attributed to this project, and this project only)
• Indirect or overhead cost (common costs shared across many projects, proportionally)
  
  
• Labor cost (a component of direct cost; does not include overhead labor)
• Standard cost (used by service organizations and Time & Materials proposals to 'fix' or standardize the "labor cost by category" to a single dollar figure within a range of costs for that labor category. *)
• Material and contracted services cost
  
  
• Throughput cost (only that part of direct cost required to actually construct value outcomes; often used in combination with Standard Cost)
• Construction cost (aka Throughput cost, but sometimes also total of direct costs)
  
  
• Incentive cost (paid as direct payments to individuals and contractors for specific performance achievements)

Finance, accounting, and business management have a few more:

• General and Administrative cost (G&A), mostly for "top-level headquarters" expenses
• Marginal cost (cost of one more item that does not require more of 'something else' to enable)
• Cost margin (difference between cost of sales and revenue associated with those costs)
  
  
• Discounted cost (cost after a reserve for risk, usually calculated over time)
• Depreciated cost (cost accumulated over time, as different from cost in the moment)
• Cost of sales (direct cost to generate sales)
  
  
• Activity Based Costing [ABC] Overhead costs allocated to specific activity, plus direct costs of the activity.

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(*) Standard Cost: As an example, for Labor Category 1, the salaries may range from $1 to $10, but the Standard Cost for this category may be $7 because most in this category have salaries toward the upper end. Standard Cost is not necessarily an arithmetic average within the category; it is a weighted average

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Utility maximalist

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Is your instinct to be a 'utility maximalist'?

If so, you are someone who wants to ring every dollar of functional effectiveness out of every dollar spent.

And why not?

Is the alternative just a waste of money?

About Utility

Utility, for this discussion, is the value placed on a functionality or feature or outcome compared to its actual cost input. 

Ideally, you would want more utility value than cost input, or at worst, 1:1. But sometimes, it goes wrong, and you get way less out than you put in. (*)

Show me the money

Here's the rub: Utility value is not always monetized, and not always monetized in conventional ways, though the cost input certainly is. So because utility usually has subjective components ... in the  eye of the beholder, as it were .... utility value often comes down to what someone is willing to pay.

As a PM, you can certainly budget for cost input

But you may have to take in a lot from marketing, sales, architects, and stylists about how to spread that cost to maximize utility and thereby maximize the business value of each input dollar spent. 

Kano is instructive

If you are a utility maximalist, you may find yourself pushing back on spending project dollars on "frills" and "style".

 

If so, there is something to be learned by by grabing a "Kano Chart" and looking at the curves. They are utility curves. They range from a utility of "1" (cost input and value output are equal) to something approaching an exponential of value over cost. 

The point is: investing in the "ah-hah!" by investing in the utility of a feature or a function will pay business benefits.

Art, beauty, and other stuff

Utility brings in art, beauty, and non-functionality in architecture, appearance, and appeal. Some call it "value in the large sense", or perhaps "quality in the large sense".

But utility also brings in personality, tolerance, and other human factors considerations

Utility maximalist leadership

It's not all about style, feature, and function.

Some leadership styles are "utility maximalist"

• Short meetings
• No PowerPoint
• Bullets (like these!) over prose
• Short paragraphs; one page
• Impersonal communications (social media, email, text)
• No 'water cooler' chat

Wow! Where's the 'art' in that list? Not much collegiality there. How do innovation and radical ideas break through?

How effective can that culture be across and down the organization (yes, some organizations have hierarchy)

On the other hand ....

• Tough decisions with significant personnel and business impacts may be more effectively made with high utility
• High utility does not rule out an effective leader soliciting and accepting alternatives. 
• High utility does not mean bubble isolation; that's more about insecurity. 

But high utility in management does mean that you give (or receive) broad directives, strategic goals, resources commensurate with value, and authority. The rest is all tactics. Get on with it! 

 

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(*) The classic illustration of utility is the comparison of the poor person and the wealthy person. Both have $10 in their pocket. The utility of $10 is much greater for the poorer person. In other words, the value of $10 is not a constant. Its value is situational. There are mostly no linear equations in a system of utility value.

And for the 'earned value' enthusiast, utility is not a measure of EV. In the EV system, all $ values have a utility of 1; value is a constant. And all equations are linear. 

For instance, the cost performance index, CPI, is a monetized ratio of the intended (planned) cost input and the actual cost realized, where "value" is held constant. 

EV is that part of the value to be obtained by the intended cost that can be considered completed or achieved at the point of examination.

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Nobody follows the plan!

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It's so damn frustrating!

You spend a lot of time planning, coordinating, evaluating ....

And then it's D-Day, circumstances intervene, and nobody follows the plan 😮 

(Well, they follow bits and pieces, but the plan as such is almost unrecognizable)

That's a few sentences to say what we all know:

No plan survives the first touch with reality

So, if this is all too obvious, what is it you do?

• The first thing is to have a communication plan in hand before the execution begins so you can touch everyone you need to reliably and quickly. And this part of the plan should be bullet proof
• The second thing is to know in advance where all the decision makers are going to be and how they are to be reached; and what authorities they have.
  
  
• The third thing is to have supervision or tactical deciders in place where the work is being done to make the minute-to-minute decisions that might save the day. In other words, some decentralization of authority
• Another thing is to have redundancy built in, as well as time or cost buffers, to be able to override, or fill-in the low spots. In other words, a plan with no margin is really not viable from the git go. 
  
  
• If "it" fails this time, know when you are going to try again. Obviously, "failure" has to be obvious, measurable, without ambiguity, etc.
• And if "it" fails, have a lessons-learned exercise ready to go.
   
  
• The principle of "calculated risk" should be built-in: "When all matters are considered and weighted by value, the benefit of taking a risk should be (at least) strategically beneficial, even if not tactically beneficial (the battle was lost, but the engagement won the war)

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Influence and discriminating factors

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When it's OPM -- other people's money -- the client gets to make the priority judgments.
I call them "influencers and discriminators" In this table, you'll find commentary that defines or explains the five influencers.

Influencer	Commentary
Resources	Money, staff, infrastructure, intellectual property or access Real, virtual, remote, dedicated or shared
Time	Calendar, duration, milestones, value-add points
Scope	Client deliverables; business deliverables; project debris Agile CUD: create, update, delete agility
Quality	Fitness to use; fitness to standards; fitness to “best value”
Risk	Risk to the client; risk to the business. Impact and likelihood. Black swan effects Anti-fragile

A typical priority set might be as shown below. Best use of resources and attention to quality rank highest in this example. But there are other situations. Read on to the next charts

So, here's how this might look if schedule were all important. Sometimes, if you miss a milestone, you've missed the entire reason-for-being of the project. In that case, schedule has to stand out above all others.

Or, maybe it's cost management. If you're in the public sector spending the taxpayers' money, then it is often the case that resource management rises to the top, as in the chart below.

From a contracting perspective, you open the envelope and pick the "least cost that's technically acceptable". Sometimes that's a bit harsh because long-standing relationships might get tossed, but when cost is the standout, and all proposals are otherwise acceptable, then pick the lowest cost.

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Avoid 'this' scheduling mistake

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'The mistake' to avoid in scheduling is to construct a milestone-success situation that strictly depends upon two or more tasks scheduled (planned) to finish at the same time.

So, what's the big error here?

• First, as regards milestone success, each of the tasks leading into the milestone is a risk to success (success means: it is achieved on time)
• Second, total risk is the product of all the input risks (as seen by the milestone) . 
• So, whereas each task coming into the milestone may not be too risky, say by example 90/10 (*), three tasks of 90/10 each would present a risk to the milestone such that success is reduced to about 73/27 (**)

What are you going to do about this?

Bring on the time buffers! (***)

• You might be able to add a buffer on one or more of the input tasks to raise the success of that task to 99/01, or so
• You might be able to add a buffer following the milestone, such that any late success is absorbed by the buffer (This tactic is called "shift right" by schedule architects)

Reconsider the schedule architecture

• You might be able to reorganize the schedule to eliminate this milestone
• You might be able to shift resources, activities, or other criteria to change the properties of the milestone

What if there are common vulnerabilities among the tasks?

• Common vulnerabilities means the tasks are really not independent; there are couplings between them.
• The "math" of independent events, as given in the footnote below, is less accurate.
• Generally, the 'tail' situations are more prominent, meaning the central tendency around the most probable finish time "smears" out a bit, and thus possibilities further from the central figure are more prominent.

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(*) 90 successes out of 100, or 90% chance the task will finish on time, or early.

(**) Here's a footnote to those estimates: It's assumed the two tasks are independent, meaning:

• They don't share resources
• They don't have the same vulnerabilities to a common risk
• The progress, or not, in one does not affect progress in the other

(***) A scheduled event of zero scope, but a specific amount of time, aka: a zero-scope time box.

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