Category Archives: decision making

Interesting Ideas For Managing Conflict

From Jason Fried’s article in Inc some interesting suggestions on dealing with “conflict” or more generally situations where people can’t agree.

Consider trading the decision. If it’s relatively small, consider saying “Ok you win this time, but I’ll take the next decision.”

Determine who wants it more. Let the person with greater passion behind their view take the decision. This is the difference between counting votes and weighing them.

Clearly, for larger decisions these tactics risk worsening the outcome, but for smaller issues, these aren’t bad approaches to finding consensus quickly.

Modelling Change Management

For such a complex process, change management can be modeled mathematically using basic and remarkably simple assumptions, or rules.  The Nobel prize winner, Thomas Schelling as done so.

The sequence below shows segregation occurring where each red and blue dot is a “person” and they each want to live next to at least 2 neighboring dots of the same color out of their 4 total neighbors, the result of the simple and apparently moderate rule is total segregation after a period of time. What’s fascinating is that an apparently minor rule or constraint leads to this level of change.

Number of neighbors that need to be of the same color:

  • 1 neighbor – no segregation
  • 2 neighbors – complete segregation
  • 3 neighbors – complete segregation
  • 4 neighbor – complete segregation

Fine. So what does this mean for change management? The lesson is that very small changes in people’s behaviors and preferences can drive enormous differences in outcome.

You can see the animated sequence here (note: if it doesn’t work you need to have Quicktime installed.)

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See the full article from Atlantic Magazine here.

The Winner’s Curse And How To Solve It

The winner’s curse comes out of economic theory, but is very relevant to any project manager outsourcing work to vendors.

Essentially if you are bidding out work where:

  1. The costs are uncertain
  2. You are going to pick the lowest bidder

Then there’s a good chance the vendor you pick won’t make any money out of the contract. This is because if the cost of the work is uncertain, all vendors are essentially guessing at the cost, and that’s fine. The problem is that in picking the cheapest vendor you are choosing the one who’s guessed lowest. However, based on the wisdom of crowds the most likely actual cost of the work is the average of all the bids you’ve received, but you’re not paying the average, you’re paying the lowest and the problem there is that the vendor is likely to lose money (the difference between the average of all bids and their bid),

Now, on the face of it that might sound like a good thing, but in practice, if you look at the delays that results on the Wembley Stadium project and Scottish Parliament project look can see that having a vendor who’s not making money working for you can cause problems for the overall project. It’s important to note that this outcome is a result of the structure of the bidding process, and is not because anyone is necessarily trying to rig the bidding.

So, how can this be solved, here are a few ideas (and thanks to the audience at a presentation I gave in Vancouver last year for helping out with these)

1. Declare in advance you will pick the second lowest bidder. This removes the incentive to come as the lowest and win the bid.

2. Ask for a detailed proposal, not just a price. Read the detailed proposals first, pick the best, then look at the price and see if your budget can cover it. If not, either move to the next best proposal, or ask for more funding.

17 Beliefs For Project Managers

Bob Sutton is a management professor at Stanford, and publishes a useful blog, he doesn’t publish often but it’s always high quality content and perhaps most importantly, his work is grounded in empirical, research based analysis. It’s oriented towards managers rather than project managers, but there’s obviously a lot of overlap in applicability. Below are his 17 beliefs, which link to the related posts in most cases:

1. Sometimes the best management is no management at all — first do no harm!

2. Indifference is as important as passion.

3. In organizational life, you can have influence over others or you can have freedom from others, but you can’t have both at the same time.

4. Saying smart things and giving smart answers are important. Learning to listen to others and to ask smart questions is more important.

5. You get what you expect from people. This is especially true when it comes to selfish behavior; unvarnished self-interest is a learned social norm, not an unwavering feature of human behavior.

6. Avoid pompous jerks whenever possible. They not only can make you feel bad about yourself, chances are that you will eventually start acting like them.

7. The best test of a person’s character is how he or she treats those with less power.

8. Err on the side of optimism and positive energy in all things.

9. It is good to ask yourself, do I have enough? Do you really need more money, power, prestige, or stuff?

10. Anyone can learn to be creative, it just takes a lot of practice and little confidence

11. “Whenever people agree with me I always feel I must be wrong.”

12. If you are an expert, seek-out novices or experts in other fields. If you are a novice, seek out experts.

13. Sutton’s Law: “If you think that you have a new idea, you are wrong. Someone else probably already had it. This idea isn’t original either; I stole it from someone else”

14. “Am I a success or a failure?” is not a very useful question

15. The world would be a better place if people slept more and took more naps

16. Strive for simplicity and competence, but embrace the confusion and messiness along the way.

17. Jimmy Maloney is right, work is an overrated activity.

Three myths of project management

“It ain’t what you don’t know that gets you into trouble. It’s
what you know for sure that just ain’t so.” Mark Twain

Here are three ‘truths’ of project management that need to be examined more carefully:

1. The triple constraint is a rule to live by.

No, the triple constraint has limitations and it breaks down at certain times. Adding more people can slow a project down because of training and network effects. Cutting scope isn’t linear, it’s binary, at some point scope is cut so much that the project can never succeed.

2. A delayed project is a bad project.

It’s critical not the miss the bigger picture, admittedly harder to measure than cost and budget but just as important, Wembley Stadium, The Scottish Parliament and Sydney Opera House were all late and over budget, but architecturally valuable. Most unimaginative structures get completed on time, but are they really more successful? Of course, the gold standard is a project such as the Guggenheim Bilbao that came in on time and received architectural awards.

3. For good estimates you need experts.

No, reference class forecasting is the answer. Using historical data is much better than using experts. Of course, if historical data isn’t available, then using experts can be a second best approach.

Conversations With Your Future Self

Two perspectives on dealing with the future, one more time management oriented, the other a little more creative.

Follow Up Then

Follow Up Then (thanks Marc) is a site that enables you to set time based reminder on email. It’s a clever idea and covers for times when you expect a response, but don’t get one, or simply want to send an email away for a while to deal with it later. The ingenuity of the system is that it all works from the address line of whatever email tool you use.

Future Me

Future Me which is much an art project as a tool also has an accompanying book. Has been used by people to write over a million letters to their future selves, about exam results, break ups, job searches etc. In addition to writing to yourself in the future, you can also read what others have written, here are some of the better ones.

5 Things Project Managers Can Learn From Netflix

Netflix, the US movie subscription service posted this deck on Slideshare, which describes its creative approach to culture, people, process and incentives.

1. Inspire with context setting, rather than managing details

“If you want to build a ship, don’t drum up the people to gather the wood, divide the work and give orders. Instead, teach them to yearn for the endless sea.”

Antoine De St-Exupery

2. Culture is not rules, but behaviors

Enron had an impressive list of values, but evidently didn’t practice them. Culture is not about what behavior gets talked about, but gets rewarded.

3. The best can be 2-10x as productive as the rest

In processes, the best people can be 2x as productive, in creative roles, the best can be 10x as good as the average person. Work hard to recruit and keep the best people on your projects, because they are disproportionately effective contributors.

4. Hard work doesn’t matter

It’s about results, working long hours isn’t relevant as long as results are achieved.

5. Too much process is counter-productive, encourage freedom.

Process will tend to frustrate high performers and drive them out. Maintaining process will often take more time/effort in creative industries than the cost of fixing a mistake. The goal therefore is rapid recovery, not perfect process. For example, spending under a fixed budget each quarter (high degree of freedom) is a better process than fixed approval for every $5k of expenditure (high degree of process).

Netflix also has no vacation policy, employees chose how to manage their vacation in a way that sense for them as long as they get their goals accomplished.

It’s an interesting model, they admit it’s not suited for nuclear power plants or open heart surgery where a checklist might be a better approach, but for a creative project, Netflix offers some interesting ideas to consider.

A Major Trap In Gathering Requirements

Interesting post from Professor Tim Calkins on the Pepsi Refresh Project. The goal was to move dollars from advertising to supporting the community, in reality sales tanked…

“Be careful what people tell you. I suspect the team at PepsiCo did a lot of research on the Pepsi Refresh Project and heard from consumers that this was just a terrific idea. Indeed, I bet people said that more companies should do exactly this sort of thing, cutting self-serving advertising and instead investing in making the world a better place.

The problem is that there is a big difference between what people say they will do and what they actually do. Confusing these two things is a consumer research trap.”

Clearly, market research isn’t quite the same a gathering requirements, but there are parallels. Just because people tell you they’ll act one way, doesn’t necessarily mean they will.

Think about that the next time your stakeholders are asking for something so complex you worry it won’t be easy to use. Or delivery so fast with a budget so low, you worry it won’t meet the quality bar.

Book Review – Brain Rules

Brain Rules attempts to explain the complexity of the human brain in simple terms. Not an easy task, given that consciousness is far from fully understood, but the rule based framework leads to a clear book.

Unexpectedly, the book helps with delivering better presentations, a lot of the rules regarding attention span, memory and visual input will be very useful to those who give presentations frequently.

Another key takeaway for me was how unique everyone’s brains are, we don’t all store the same things in the same place and the uniqueness of brain layouts can explain differences between people.

If you have any interest in psychology, then Brain Rules is a useful book to further your understanding of the subject.

Winning The Lottery And Speed Skating – Outcomes vs. Process

It’s important, but hard, to separate good process from good outcomes. Often it’s assumed that any good outcome, must reflect a good process and vice versa. But in risky situations this approach could lead you to make major mistakes. Assume you win the lottery. Now, you now have a very large amount of money, but that does not change the fact that lotteries are, as Adam Smith said, “a tax on idiots” and the expected return on any lottery ticket is negative – there are much better ways to spend your money. So just because people win the lottery each week does not mean playing lottery is a good idea (unless you like losing money). So playing the lottery is a bad process, but there’s a chance you hit a good outcome. In fact, it happens every week.

I’m just using the lottery as an example to show that in many cases closer to home, we might be making the same mistake. For example, your project finished ahead of schedule, but how much of that is due to good process that can be repeated? And how much is due to luck? The answer comes down to how good your process is.

Of course, there’s a more positive side to this too, just because you didn’t get the outcome you wanted didn’t mean the process was bad. Speed skating at the Winter Olympics is a good example of this, it takes many years of dedicated training to enter the Olympics, but in a speed skating race you can easily get pushed over by a competitor, and it might be totally out of your control. It doesn’t mean you shouldn’t have won gold, but it means you didn’t win goal. Good process, bad outcome.

So what to do in situations where risk means that outcome and process aren’t totally tied together?

Two things can help:

  • Repetition – over time processes and outcomes will converge where risk is present. You might get lucky on one project, but across ten it’s far less likely. Look for multiple instances of a situation before forming a judgment.
  • Analysis – good process can be supported by analysis. If something went wrong or poorly look at why it happened. Luck can often be identified with logical analysis – a good process should make sense and be robust.
Bad Outcome Good Outcome
Good Process Changes could make things worse Ideal situation
Bad Process Process improvement needed Unsustainable luck