Speed does not kill--decision making in uncertain times
There is a common misconception that an organization must be deliberate in its decision making process to avoid hasty judgments and adverse effects from ill-conceived initiatives and business directions. This belief is furthered by an increasing rate of change in the business environment, creating uncertainty as to what action is required and when it needs to take place. In turn, this overall situation has given rise to a wide range of behaviors, ranging from a potentially devastating ‘wait and see’ position where fleeting opportunities are lost to the equally hazardous approach of ’shooting from the hip’ where a wrong direction or opportunity is pursued. In many cases, the perception has arisen that many organizations are moving at too fast a pace, needing to slow down and pace themselves. This presentation will take the position that it is not the speed of events that creates problems, but the manner in which they are addressed.
With specific regard to Project Management and Control, the decision making process falls on a spectrum represented by Project Management and Leadership (PM&L) on one end and Project Accounting and Control (PA&C) on the other. The former, PM&L, tends to be externally oriented and driven by action – it is dynamic and time sensitive by nature. The latter, PA&C, is generally based on an internal perspective and is characterized by a deliberate, analytical reaction to events – as such, it tends to be static in its application. Effective project management cannot be based solely on either extreme, but on a carefully determined blend based on a host of variables, ranging from external and organizational environments to the specific nature and requirements of the project being addressed.
The Starting Gate
Prior to speeding down the fast track of project management and decision making, it is appropriate to establish several principles, or boundaries, within which the following discussion will lie. First, organizations exist for a purpose, and decisions are required in the daily course of organizational conduct to achieve that purpose. In addition, it can be safely assumed that the typical organization is under some degree of pressure to perform in a manner that yields a positive return to its stakeholders. Last, it has become widely recognized and understood that change of all stripes, both internal and external, has become the norm in today’s organizational environment.
The last element of change in general, and its speed in particular, drives a significant amount of organizational activity. By its very nature, project management is largely responsible for this ongoing experience as it seeks to introduce and establish new products and processes. As shown in Exhibit 1, the environment faced, or fostered through project management, by an organization runs the gamut from relative certainty to relative uncertainty, where the former is normally far more ‘comfortable’ than the latter. Achievement of a desired level of comfort is why so much time and effort is devoted by a concerted movement to the left through the wilderness of risk. Organizations intuitively recognize this situation through the concept of risk. Stated differently, most organizations live in the middle ground of risk and are more apt to accept that risk if they can quantify and manage it. The underlying reason for this orientation is simple – risk and reward go hand-in-hand. Attainment of the stable goal of less risk, if not relative certainty, is normally achieved and characterized by a wide variety of media, ranging from standard operating procedures and practices to the more routine arena of manuals and regulations.
Exhibit 1 – Organizational Range of Environments
However, this state of perceived nirvana is often illusory and certainly not in congruence with the reality of the modern business environment where speed is often of the essence. When faced by the need to react to the relative uncertainty caused by speed and the need for effective decision making, organizations can be classified in one of four ways (Poscente, 2008).
- Zeppelins are characterized by sets of deliberate actions that require successive levels of review and approval, often resulting in a sloth-like pace. Speed is seen as a distinct risk that must be controlled.
- Balloons are in the envious position, normally indicated by niche markets with specialized skill sets, where they do not have to react to environmental speed. They do not resist speed, as do Zeppelins, as much as they avoid it.
- Bottle Rockets recognize speed through rapid motion and changes in direction. However, embracing speed does not necessarily mean success as their variable trajectories are often based on sheer energy, as opposed to an understanding of why they are going fast, nor where they are heading.
- Jets embrace speed and actively pursue it. They are the cognoscenti of those who can identify and achieve change and innovation through purpose, planning, and clear paths of action.
Returning to Exhibit 1, the argument could be made that Zeppelins and Balloons tend to cluster around the area of Relative Certainty, but can be victims of the unforeseen winds of change. Conversely, Bottle Rockets and Jets are oriented toward Relative Uncertainty, but the path of Jets is determined more by a planned path. Further, it would appear that being a Jet is a preferred approach in an environment characterized by speed as Zeppelins and Balloons run the risk of becoming obsolete through inaction or misguided bliss, and Bottle Rockets tend to take random courses and burn out over time. As suggested above, there is every indication that organizations require an alignment of actions with purpose, supplemented by a distinct need to know what is important as well as those things that distract from that purpose. They commonly need to make decisions and exhibit forward motion, but in a coherent manner. They need to be jet-like but with a known flight plan to follow.
The Fast Track
But, being a Jet and aligned with shifting environmental change and organizational goals is easier said than done as old organizational habits can be exceedingly difficult to break, if only because leaders have so much invested in them and rely on them for continuance of their roles and authority. There has to be a compelling reason for a change to make it worthwhile for those currently in power to alter established roles and procedures. To further complicate matters, change, especially rapid change, can be a prickly affair because of the scope and rapidity of decisions that are often required to effectively take advantage of the organizational transformations that change creates. In other words, as suggested by Exhibit 1, the need for speed in decision making is often correlated with risk at best and uncertainty at worst. As such, it is viewed with a marked degree of caution.
Consider, for example, the classic concept of the relationships between the ‘Iron Triangle’ of project management, Scope-Schedule-Cost (and overarching Quality), where a change in any one element is often thought to have an impact, often negative, on the others. This time honored view may be correct in many instances, but it can also overlook the advantages offered by various technologies providing avenues that can lead to greater effectiveness and efficiency. More to the point, this view implies a certain balance of forces that would be disrupted by change and a corresponding need for speed in decision making. The need for adaptation and agility is often overwhelmed by a fear, or at least a distrust, of the unknown (aka risk and uncertainty), often to the detriment of the organization.
This can be a significant force in organizations, requiring a complete change in orientation if the change engendered by projects can be re-directed from stable, time-worn processes to rapidity in effective decision making. This need for speed and corresponding change in organizational values can be summarized as follows (Johansen, 2007).
Exhibit 2 – Organizational Change in Orientation Caused by Change and Speed of Decision Making
So, what does a ‘fast track’ orientation mean to an organization? Boiled down to its essentials, change and speed in decision making require a shift in perspective and value structure from an orientation based on static, status quo conditions and outlook to one of dynamic movement, from resistance to change to an embrace of innovation, and from a reactive stance to a proactive attitude. Admittedly, this can be an overwhelming challenge to the organization, requiring a change agent of force and pervasiveness. But, virtually every organization already has such a change agent already in place – enter the compelling instrument of projects and their management through a PMO.
Program Management Office: Solution or Problem?
Program Management Offices (PMOs) have been widely touted as organizational saviors and the harbingers of a new world order based on the effective implementation of organizational change and associated decision making with regard to project priorities, resources, visibility, and control. Properly designed and implemented, PMOs are intended to change the way information flows and decisions are made in an organization – from an ad hoc, data-centric, bottom-up, individualistic process to a strategic, information-driven, top-down, organizational practice. However, it is important to distinguish between PMOs that merely reflect their parent organization’s orientation and those that attempt to lead the organization. In short, the real challenge is how PMOs add value to an organization through their orientation, guidance, and actions. (Innotas, 2008).
The fundamental dilemma facing a PMO and its impact on organizational decision making involves the balance between control and freedom. Too much control can lead to micro-management, while too much freedom can lead to random chaos. (Innotas, 2008) The former can easily impede decision making; the latter often leads to rapid, but ineffective, management. Given this dilemma, it is appropriate to consider the range of behavioral options that can be adopted by a PMO through reference to A Guide to the Project Management Body of Knowledge (PMBOK® Guide) (PMI, 2004) in general and the time-proven theories of Douglas McGregor and Cutcher-Gershenfeld (2005) and Frederick Herzberg (1968) in particular.
- Based on McGregor’s “The Human Side of Enterprise,” (2005) two opposing views of human behavior can be posited. A Theory X orientation believes that the average human being has an inherent dislike of work and will avoid it if he can. Based on this attitude, the manager believes that –
- Because of their dislike for work, most people must be controlled and threatened before they will work hard enough.
- The average human prefers to be directed, dislikes responsibility, is unambiguous, and desires security above everything.
- In contrast, a Theory Y perspective is considered to be a more enlightened approach where –
- The expenditure of physical and mental effort in work is viewed as natural as play or rest.
- Control and punishment are not the only ways to make people work – man will direct himself if he is committed to and aligned with the aims of the organization.
- If a job is satisfying, then the result will be commitment to the organization.
- The average man learns, under proper conditions, not only to accept but to seek responsibility.
- Imagination, creativity, and ingenuity can be used to solve work problems by an employee.
- Herzberg’s classic paper on human motivation argues that there are also two basic views of job design and management. On one end of the spectrum, there is an expansion of more work of the same nature, which is termed “job enlargement” and can be generally correlated to McGregor’s Theory X orientation. The opposing view, more closely aligned with a Theory Y perspective, is that changing the nature of work so that the employee determines what and how the task should be performed is termed “job enrichment”.
These are critical viewpoints as they determine the manner in which an organization and its projects are managed and decisions made. It can be argued that a PMO that leans toward a Theory X/Job Enlargement orientation is essentially aligning itself with the Zeppelins of the world and basing its operations on relative certainty and stability of operations. Decision making is deliberate and centralized. Conversely, it can be asserted that a Theory Y/Job Enrichment PMO is situated at the other end of the spectrum described by relative uncertainty, where a decentralized Jet perspective is required to handle the speed of decision making required to effectively manage the myriad changes in the organization’s environments, both internal and external.
More generally, this distinction between PMO outlooks drives its overall approach to its operations. As shown by Exhibit 3, there can be a clear dichotomy in basic PMO approaches to project management and decision making. On one end of the spectrum, there is an emphasis on Project Accounting and Control (PA&C), where project tracking and reporting reign supreme. For a parent organization characterized by relative certainty and stability, this focus on internal processes may be an appropriate solution, but could cause a distinct problem in an arena of relative uncertainty and the need for speed in decision making. In this instance, the emphasis should be on Project Management and Leadership (PM&L) where external interactions are stressed.
Exhibit 3 – Impact of PMO Approaches and Practices
The impact of a PA&C versus PM&L orientation is also indicated in Exhibit 3, where the bottom half of the exhibit is represented by skewed ‘tennis courts’. Because of its de facto reliance on a Theory X/Job Enlargement foundation, PA&C management tends to reserve decision making to itself through successive layers of review. The impact on the staff (for example, a project team) is a squeezing of initiative and innovation through reduced freedom of action. With the ball largely in the management side of the court, there can be a distinct tendency to restrict the range of actions available to the staff through (at least implicitly) an emphasis on risk of failure as represented by the successive reviews of project team actions, which are essentially restricted to addressing and achieving tasks. To encourage its staff, management may assign more tasks for accomplishment, but they tend to be closely prescribed by standardized procedures and are still closely monitored and measured – the classic application of job enlargement. And, as discussed above, the role of decision making is constrained by a relative stranglehold of this key activity by centralized management, commonly resulting in a very measured pace of activity.
A PM&L approach, however, has a distinctly different spin. Based on a Theory Y/Job Enrichment approach, the staff is expected to cover more ground and assume greater responsibilities in all areas, including decision making. This approach frees successive levels of management of the drudgery of having to review every activity, and permits them to more effectively focus on larger, strategic issues. (Note, however, that management rightfully retains the responsibility of ensuring staff actions support organizational objectives and strategies. The question is to what detail that responsibility is executed.) The expanded range of staff motivation and activity shown by the right side of Exhibit 3 emphasizes a process orientation and recognition of success. And, it normally results in an enhanced speed of decision making through decentralization of this key function to those closer to the problem and challenge. Note that this approach does not mean that management has abdicated its responsibilities – rather, it is showing trust in its staff by providing it the opportunity to grow and perform at a higher level of accountability.
This discussion, though, does not quite answer the question of whether a PMO is a problem or solution to the need for effective and speedy decision making in an organization. Consider, for example, a PA&C orientation that focuses on the previously discussed ‘Iron Triangle’. A focus on the internal project relationships represented by Scope-Schedule-Cost runs the distinct risk of being relatively unaware of external project and organizational interfaces and the opportunities they may provide. In addition, concentrating solely on project benefits can be ultimately self-limiting by ignoring project interactions with other projects and parts of the organization. Conversely, while a PM&L approach recognizes the importance of the data gathering and analysis that comprises accounting and control, it is also inclined toward the execution for change and forward movement commonly associated with decision making in a dynamic environment.
What this discussion does indicate, however, is that a PMO has to decide whether to mirror or lead its parent organization and its environment. If it chooses to be a mirror, it can exacerbate a problem; if it decides to take the lead, it can provide an avenue for a solution. Regardless, a PMO and its parent organization are comprised of individuals and the impact of organizational orientation and focus needs to be explicitly considered with regard to individual behavior in general and decision making in particular.
Individual Compliance vs. Commitment
When all is said and done, organizational performance and decision making revolve around individuals. There may be a host of pressures on a group or team, but, ultimately, decision making is a personal task – or achievement. It is the truest example of “the buck stops here.” To assist the individual in this lonely task, organizations and PMOs have to decide if they want to manage processes from the rear or lead people from the front. The former is reflective of a PA&C orientation through its reliance on data gathering and analysis; the latter represents a PM&L approach with its focus on dynamic action. This distinction can be further refined by noting that individuals in a PA&C situation tend to comply with rules and regulations, but do not necessarily feel any real need to assume personal responsibility for the outcomes of prescribed procedures. Instead, they are inclined to work to meet their own goals and objectives. For an organization in a stable environment characterized by relative certainty, this behavior pattern may be sufficient – not necessarily desirable, but adequate.
However, for those organizations and PMOs that are in a more dynamic setting, where the speed and effectiveness of decision making takes on considerably more importance, a PM&L role is almost certainly far more desirable, if not mandatory. In this situation, individuals routinely exhibit commitment to their roles and take responsibility for their actions. Under these conditions, individuals are much more likely to work to meet not only their own, but also organizational, goals and objectives. This level of congruency also indicates that individuals will voluntarily exhibit personal initiative to examine and eliminate alternatives, a precursor to decision making.
In sum, the outcome of environmental forces and resulting organizational and PMO orientations are crucial elements in the determination of individual behavior and the manner and speed in which decisions are made. More specifically, they determine a key parameter of organizational and decision making effectiveness – agility.
The Road to Speed
As discussed, the threats and opportunities confronting an organization arise from myriad sources and are increasing at an exponential rate. Consider, for example, the forces of technology and innovation, globalization, physical environmental changes, increasing regulations... the list is virtually endless. To meet these forces, it is imperative that organizations, PMOs, and individuals be able to detect and understand trends, then react effectively to take advantage or reduce the impact of them. In short, the key has become, more than ever before, organizational and individual flexibility and agility to permit rapid action in response to change and organizational performance.
In turn, the key to flexibility and agility is to determine what is important for a team or individual to address and what can be delegated to others. As already discussed, a PA&C orientation will find this difficult to handle due to its relative fixation with data analysis and multiple levels of review to reach a decision. However, simply latching on to a PM&L approach, although a clear step in the right direction, will probably not be insufficient. Such a move must be accompanied by supporting actions that provide a solid base for sustained speed of decision making.
While any list of supporting actions is essentially a continuum of minor to major events and procedures, ranging from the organizational to the individual, several overriding principles can be established as general guides.
- Reduction of Multi-Tasking – This is universally recognized as an impediment to decision making in that it fragments one’s attention span, almost always leading to distractions and delays. It is highly unlikely that it can be totally eliminated, but it can, and should, be reduced through a focus on what is singular and important, as opposed to the routine and relatively insignificant to the problem (or opportunity) at hand.
- Removal of Clutter – Closely related to the minimization of multi-tasking, the key here is to recognize what is relevant and what is extraneous to a decision.
- Alignment of Purpose – Organizational and individual decisions should always keep the end goals and objectives in mind, leading to consistency in thought and congruency in action.
- Forecasting vs. Prediction – Recognize that a forecast is a plausible, internally consistent view of what might happen and is meant to be provocative to generate insight and action. A forecast is not a prediction of the future per se in that it need not be accurate to be useful. (Johansen, 2007) The significance of this point is that there are limits to the return on investment from endless data gathering and analyses for estimation and forecasting. Forecasting is meant to support decision making, not be the decision itself.
Note, however, that these and related actions do not guarantee correct decisions – only that they will facilitate decisions to be made in an expeditious manner. Stated more directly, nothing replaces organizational and individual knowledge, judgment, and execution. This is where the behavioral aspects of a PM&L approach, where people take responsibility for their actions, become so important.
The Final Destination
As stated at the beginning of this paper, organizational change is going to occur – the only question is how the organization will react to it given its particular environment. However, the increasing complexity of organizational operations argues strongly that a hierarchical structure will be challenged in its ability to handle this complexity and the speed at which decisions will have to be made. To meet this ‘opportunity’, the organizational form of the (very near) future will be more like a network than a hierarchy. There will be no single center in the overall network organization, but as many centers as there are intersecting nodes. (Johansen, 2007) Such an arrangement will require a significant degree of flexibility and agility at all levels to meet the increasing needs of communication and coordination between nodes. In turn, this setting and requirement add support to the need for a PM&L orientation that is designed, through its emphasis on team and individual commitment and ability to take direct action, for agility and speed through a trusted decentralization for decision making.
The thesis of the foregoing discussion has been straightforward – speed, to one extent or another, is undeniably a fact of modern environments. To succeed, organizations and individuals need to control the speed of their operations and decision making instead of being a victim to them. In turn, the first step in controlling speed lies in recognition of an organization’s environment to permit it to develop an overall orientation that leads to the style of decision making appropriate for its desired level of performance and progress. Fundamentally, the challenge facing organizations, their institutions, and the individual is to be sufficiently open and flexible to recognize the opportunities offered by change, then to establish the methods and instruments by which to implement them. Speed does not kill – it is the failure to use speed as an asset in decision making and matching it to organizational needs that can become fatal.
Herzberg, F. (1968, January/February) One More Time: How Do You Motivate Employees?, Harvard Business Review46(1), 53-62.
Innotas. The PMO Conflict. Retrieved on June 9, 2008 from http://www.innotas.com/publication/
Johansen, B. (2007) Get There Early. San Francisco, CA: Berrett-Koehler.
McGregor, D. & Cutcher-Gershenfeld, J. (2005) Human Side of Enterprise New York, NY: McGraw-Hill Companies
Poscente, V. (2007) The Age of Speed. Austin, TX: Bard Press.
Project Management Institute (2004) A Guide to the Project Management Body of Knowledge (PMBOK®Guide). Newtown Square, PA: Project Management Institute.
Note: The view points set forth in this paper are the view points of the author and are not endorsed or accepted in whole or in part by NCCI Holdings, Inc.
©2009 Michael E. Thorn
Originally published as part of Proceedings PMI Global Congress 2008 – Denver, Colorado