Leadership | Life, Project Management, and Everything

Back to School Daze Blogging–DCMA Investigation on POGO, DDSTOP, $600 Ashtrays,and Epistemic Sunk Costs

Family summer visits and trips are in the rear view–as well as the simultaneous demands of balancing the responsibilities of a, you know, day job–and so it is time to take up blogging once again.

I will return to my running topic of Integrated Program and Project Management in short order, but a topic of more immediate interest concerns the article that appeared on the website for pogo.org last week entitled “Pentagon’s Contracting Gurus Mismanaged Their Own Contracts.” Such provocative headlines are part and parcel of organizations like POGO, which have an agenda that seems to cross the line between reasonable concern and unhinged outrage with a tinge conspiracy mongering. But the content of the article itself is accurate and well written, if also somewhat ripe with overstatement, so I think it useful to unpack what it says and what it means.

POGO and Its Sources

The source of the article comes from three sources regarding an internal Defense Contract Management Agency (DCMA) IT project known as the Integrated Workflow Management System (IWMS). These consist of a September 2017 preliminary investigative report, an April 2018 internal memo, and a draft of the final report.

POGO begins the article by stating that DCMA administers over $5 trillion in contracts for the Department of Defense. The article erroneously asserts that it also negotiates these contracts, apparently not understanding the process of contract oversight and administration. The cost of IWMS was apparently $46.6M and the investigation into the management and administration of the program was initiated by the then-Commander of DCMA, Lieutenant General Wendy Masiello, shortly before she retired from the government in May 2017.

The implication here, given the headline, seems to be that if there is a problem in internal management within the agency, then that would translate into questioning its administration of the $5 trillion in contract value. I view it differently, given that I understand that there are separate lines of responsibility in the agency that do not overlap, particularly in IT. Of the $46.6M there is a question of whether $17M in value was properly funded. More on this below, but note that, to put things in perspective, $46.6M is .000932% of DCMA’s oversight responsibility. This is aside from the fact that the comparison is not quite correct, given that the CIO had his own budget, which was somewhat smaller and unrelated to the $5 trillion figure. But I think it important to note that POGO’s headline and the introduction of figures, while sounding authoritative, are irrelevant to the findings of the internal investigation and draft report. This is a scare story using scare numbers, particularly given the lack of context. I had some direct experience in my military career with issues inspired by the POGO’s founders’ agenda that I will cover below.

In addition to the internal investigation on IWMS, there was also an inspector general (IG) investigation of thirteen IT services contracts that resulted in what can only be described as pedestrian procedural discrepancies that are easily correctable, despite the typically overblown language found in most IG reports. Thus, I will concentrate on this post on the more serious findings of the internal investigation.

My Own Experience with DCMA

A note at this point on full disclosure: I have done business with and continue to do business with DCMA, both as a paid supplier of software solutions, and have interacted with DCMA personnel at publicly attended professional forums and workshops. I have no direct connection, as far as I am aware, to the IWMS program, though given that the assessment is to the IT organization, it is possible that there was an indirect relationship. I have met Lieutenant General Masiello and dealt with some of her subordinates not only during her time at DCMA, but also in some of her previous assignments in Air Force. I always found her to be an honest and diligent officer and respect her judgment. Her distinguished career speaks for itself. I have talked on the telephone to some of the individuals mentioned in the article on unrelated matters, and was aware of their oversight of some of my own efforts. My familiarity with all of them was both businesslike and brief.

As a supplier to DCMA my own contracts and the personnel that administer them were, from time-to-time, affected by the fallout from what I now know to have occurred. Rumors have swirled in our industry regarding the alleged mismanagement of an IT program in DCMA, but until the POGO article, the reasons for things such as a temporary freeze and review of existing IT programs and other actions were viewed as part and parcel of managing a large organization. I guess the explanation is now clear.

The Findings of the Investigation

The issue at hand is largely surrounding the method of source selection, which may have constituted a conflict of interest, and the type of money that was used to fund the program. In reading the report I was reminded of what Glen Alleman recently wrote in his blog entitled “DDSTOP: The Saga Continues.” The acronym DDSTOP means: Don’t Do Stupid Things On Purpose.

There is actually an economic behavioral principle for DDSTOP that explains why people make and double down on bad decisions and irrational beliefs. It is called epistemic sunk cost. It is what causes people to double down in gambling (to the great benefit of the house), to persist in mistaken beliefs, and, as stated in the link above, to “persist with the option which they have already invested in and resist changing to another option that might be more suitable regarding the future requirements of the situation.” The findings seem to document a situation that fits this last description.

In going over the findings of the report, it appears that IWMS’s program violated the following:

a. Contractual efforts in the program that were appropriate for the use of Research, Development, Test and Evaluation (R,D,T & E) funds as opposed to those appropriate for O&M (Operations and Maintenance) funds. What the U.S. Department of Defense calls “color of money.”

b. Amounts that were expended on contract that exceeded the authorized funding documents, which is largely based on the findings regarding the appropriate color of money. This would constitute a serious violation known as an Anti-Deficiency Act violation which, in layman’s terms, is directed to punish public employees for the misappropriation of government funds.

c. Expended amounts of O&M that exceeded the authorized levels.

d. Poor or non-existent program management and cost performance management.

e. Inappropriate contracting vehicles that, taken together, sidestepped more stringent oversight, aside from the award of a software solutions contract to the same company that defined the agency’s requirements.

Some of these are procedural and some are serious, particularly the Anti-deficiency Act (ADA) violations, are serious. In the Contracting Officer’s rulebook, you can withstand pedestrian procedural and administrative findings that are part and parcel of running an intensive contracting organization that acquires a multitude of supplies and services under deadline. But an ADA violation is the deadly one, since it is a violation of statute.

As a result of these findings, the recommendation is for DCMA to lose acquisition authority over the DoD micro-contracting level ($10,000). Organizationally and procedurally, this is a significant and mission-disruptive recommendation.

The Role and Importance of DCMA

DCMA performs an important role in contract compliance and oversight to ensure that public monies are spent properly and for the intended purpose. They perform this role mostly on contracts that are negotiated and entered into by other agencies and the military services within the Department of Defense, where they are assigned contract administration duties. Thus, the fact that DCMA’s internal IT acquisition systems and procedures were problematic is embarrassing.

But some perspective is necessary because there is a drive by some more extreme elements in Congress and elsewhere that would like to see the elimination of the agency. I believe that this would be a grave mistake. As John F. Kennedy is quoted as having said: “You don’t tear your fences down unless you know why they were put up.”

For those of you who were not around prior to the formation of DCMA or its predecessor organization, the Defense Contract Management Command (DCMC), it is important to note that the formation of the agency is a result of acquisition reform. Prior to 1989 the contract administration services (CAS) capabilities of the military services and various DoD offices varied greatly in capability, experience, and oversight effectiveness.Some of these duties had been assigned to what is now the Defense Logistics Agency (DLA), but major acquisition contracts remained with the Services.

For example, when I was on active duty as a young Navy Supply Corps Officer as part of the first class that was to be the Navy Acquisition Corps, I was taught cradle-to-grave contracting. That is, I learned to perform customer requirements development, economic analysis, contract planning, development of a negotiating position, contract negotiation, and contract administration–soup to nuts. The expense involved in developing and maintaining the skill set required of personnel to maintain such a broad-based expertise is unsustainable. For analogy, it is as if every member of a baseball club must be able to play all nine positions at the same level of expertise; it is impossible.

Furthermore, for contract administration a defense contractor would have contractual obligations for oversight in San Diego, where I was stationed, that were different from contracts awarded in Long Beach or Norfolk or any of the other locations where a contracting office was located. Furthermore, the military services, having their own organizational cultures, provided additional variations that created a plethora of unique requirements that added cost, duplication, inconsistency, and inter-organizational conflict.

This assertion is more than anecdotal. A series of studies were commissioned in the 1980s (the findings of which were subsequently affirmed) to eliminate duplication and inconsistency in the administration of contracts, particularly major acquisition programs. Thus, DCMC was first established under DLA and subsequently became its own agency. Having inherited many of the contracting field office, the agency has struggled to consolidate operations so that CAS is administered in a consistent manner across contracts. Because contract negotiation and program management still resides in the military services, there is a natural point of conflict between the services and the agency.

In my view, this conflict is a healthy one, as all power in the hands of a single individual, such as a program manager, would lead to more fraud, waste, and abuse, not less. Internal checks and balances are necessary in proper public administration, where some efficiency is sacrificed to accountability. It is not just the goal of government to “make the trains run on time”, but to perform oversight of the public’s money so that there is accountability in its expenditure, and integrity in systems and procedures. In the case of CAS, it is to ensure that what is being procured actually gets delivered in conformance to the contract terms and conditions designed to reduce the inherent risk in complex acquisition programs.

In order to do its job effectively, DCMA requires innovative digital systems to allow it to perform its CAS function. As a result, the agency must also possess an acquisition capability. Given the size of the task at hand in performing CAS on over $5 trillion of contract effort, the data involved is quite large, and the number of personnel geographically distributed. The inevitable comparisons to private industry will arise, but few companies in the world have to perform this level of oversight on such a large economic scale, which includes contracts comprising every major supplier to the U.S. Department of Defense, involving detailed knowledge of the management control systems of those companies that receive the taxpayer’s money. Thus, this is a uniquely difficult job. When one understands that in private industry the standard failure rate of IT projects is more than 70% percent, then one cannot help but be unimpressed by these findings, given the challenge.

Assessing the Findings and Recommendations

There is a reason why internal oversight documents of this sort stay confidential–it is because these are preliminary/draft findings and there are two sides to every story which may lead to revisions. In addition, reading these findings without the appropriate supporting documentation can lead one to the wrong impression and conclusions. But it is important to note that this was an internally generated investigation. The checks and balances of management oversight that should occur, did occur. But let’s take a close look at what the reports indicate so that we can draw some lessons. I also need to mention here that POGO’s conflation of the specific issues in this program as a “poster child” for cost overruns and schedule slippage displays a vast ignorance of DoD procurement systems on the part of the article’s author.

Money, Money, Money

The core issue in the findings revolves around the proper color of money, which seems to hinge on the definition of Commercial-Off-The-Shelf (COTS) software and the effort that was expended using the two main types of money that apply to the core contract: RDT&E and O&M.

Let’s take the last point first. It appears that the IWMS effort consisted of a combination of COTS and custom software. This would require acquisition, software familiarization, and development work. It appears that the CIO was essentially running a proof-of-concept to see what would work, and then incrementally transitioned to developing the solution.

What is interesting is that there is currently an initiative in the Department of Defense to do exactly what the DCMA CIO did as part of his own initiative in introducing a new technological approach to create IWMS. It is called Other Transactional Authority (OTA). The concept didn’t exist and was not authorized until the 2016 NDAA and is given specific statutory authority under 10 U.S.C. 2371b. This doesn’t excuse the actions that led to the findings, but it is interesting that the CIO, in taking an incremental approach to finding a solution, also did exactly what was recommended in the 2016 GAO report that POGO references in their article.

Furthermore, as a career Navy Supply Corps Officer, I have often gotten into esoteric discussions in contracts regarding the proper color of money. Despite the assertion of the investigation, there is a lot of room for interpretation in the DoD guidance, not to mention a stark contrast in interpreting the proper role of RDT&E and O&M in the procurement of business software solutions.

When I was on the NAVAIR staff and at OSD I ran into the difference in military service culture where what Air Force financial managers often specified for RDT&E would never be approved by Navy financial managers where, in the latter case, they specified that only O&M dollars applied, despite whether development took place. Given that there was an Air Force flavor to the internal investigation, I would be interested to know whether the opinion of the investigators in making an ADA determination would withstand objective scrutiny among a panel of government comptrollers.

I am certain that, given the differing mix of military and civil service cultures at DCMA–and the mixed colors of money that applied to the effort–that the legal review that was sought to resolve the issue. One of the principles of law is that when you rely upon legal advice to take an action that you have a defense, unless your state of mind and the corollary actions that you took indicates that you manipulated the system to obtain a result that shows that you intended to violate the law. I just do not see that here, based on what has been presented in the materials.

It is very well possible that an inadvertent ADA violation occurred by default because of an improper interpretation of the use of the monies involved. This does not rise to the level of a scandal. But going back to the confusion that I have faced from my own experiences on active duty, I certainly hope that this investigation is not used as a precedent to review all contracts under the approach of accepting a post-hoc alternative interpretation by another individual who just happens to be an inspector long after a reasonable legal determination was made, regardless of how erroneous the new expert finds the opinion. This is not an argument against accountability, but absent corruption or criminal intent, a legal finding is a valid defense and should stand as the final determination for that case.

In addition, this interpretation of RDT&E vs. O&M relies upon an interpretation of COTS. I daresay that even those who throw that term around and who are familiar with the FAR fully understand what constitutes COTS when the line between adaptability and point solutions is being blurred by new technology.

Where the criticism is very much warranted are those areas where the budget authority would have been exceeded in any event–and it is here that the ADA determination is most damning. It is one thing to disagree on the color of money that applies to different contract line items, but it is another to completely lack financial control.

Part of the reason for lack of financial control was the absence of good contracting practices and the imposition of program management.

Contracts 101

While I note that the CIO took an incremental approach to IWMS–what a prudent manager would seem to do–what was lacking was a cohesive vision and a well-informed culture of compliance to acquisition policy that would avoid even the appearance of impropriety and favoritism. Under the OTA authority that I reference above as a new aspect of acquisition reform, the successful implementation of a proof-of-concept does not guarantee the incumbent provider continued business–salient characteristics for the solution are publicized and the opportunity advertised under free and open competition.

After all, everyone has their favorite applications and, even inadvertently, an individual can act improperly because of selection bias. The procurement procedures are established to prevent abuse and favoritism. As a solution provider I have fumed quite often where a selection was made without competition based on market surveys or use of a non-mandatory GSA contract, which usually turn out to be a smokescreen for pre-selection.

There are two areas of fault on IMWS from the perspective of acquisition practice, and another in relation to program management.

These are the initial selection of Apprio, which had laid out the initial requirements and subsequently failed to have the required integration functionality, and then, the selection of Discover Technologies under a non-mandatory GSA Blanket Purchase Agreement (BPA) contract under a sole source action. Furthermore, the contract type was not appropriate to the task at hand, and the arbitrary selection of Discover precluded the agency finding a better solution more fit to its needs.

The use of the GSA BPA allowed managers, however, to essentially spit the requirements to stay below more stringent management guidelines–an obvious violation of acquisition regulation that will get you removed from your position. This leads us to what I think is the root cause of all of these clearly avoidable errors in judgment.

Program Management 101

Personnel in the agency familiar with the requirements to replace the aging procurement management system understood from the outset that the total cost would probably fall somewhere between $20M and $40M. Yet all effort was made to reduce the risk by splitting requirements and failing to apply a programmatic approach to a clearly complex undertaking.

This would have required the agency to take the steps to establish an acquisition strategy, open the requirement based on a clear performance work statement to free and open competition, and then to establish a program management office to manage the effort and to allow oversight of progress and assessment of risks in a formalized environment.

The establishment of a program management organization would have prevented the lack of financial control, and would have put in place sufficient oversight by senior management to ensure progress and achievement of organizational goals. In a word, a good deal of the decision-making was based on doing stupid things on purpose.

The Recommendations

In reviewing the recommendations of the internal investigation, I think my own personal involvement in a very similar issue from 1985 will establish a baseline for comparison.

As I indicated earlier, in the early 1980s, as a young Navy commissioned officer, I was part of the first class of what was to be the Navy Acquisition Corps, stationed at the Supply Center in San Diego, California. I had served as a contracting intern and, after extensive education through the University of Virginia Darden School of Business, the extended Federal Acquisition Regulation (FAR) courses that were given at the time at Fort Lee, Virginia, and coursework provided by other federal acquisition organizations and colleges, I attained my warrant as a contracting officer. I also worked on acquisition reform issues, some of which were eventually adopted by the Navy and DoD.

During this time NAS Miramar was the home of Top Gun. In 1984 Congressman Duncan Hunter (the elder not the currently indicted junior of the same name, though from the same San Diego district), inspired by news of $7,600 coffee maker and a $435 hammer publicized by the founders of POGO, was given documents by a disgruntled employee at the base regarding the acquisition of replacement E-2C ashtrays that had a cost of $300. He presented them to the Base Commander, which launched an investigation.

I served on the JAG investigation under the authority of the Wing Commander regarding the acquisitions and then, upon the firing of virtually the entire chain of command at NAS Miramar, which included the Wing Commander himself, became the Officer-in-Charge of Supply Center San Diego Detachment NAS Miramar. Under Navy Secretary Lehman’s direction I was charged with determining the root cause of the acquisition abuses and given 60-90 days to take immediate corrective action and clear all possible discrepancies.

I am not certain who initiated the firings of the chain of command. From talking with contemporaneous senior personnel at the time it appeared to have been instigated in a fit of pique by the sometimes volcanic Secretary of Defense Caspar Weinberger. While I am sure that Secretary Weinberger experienced some emotional release through that action, placed in perspective, his blanket firing of the chain of command, in my opinion, was poorly advised and counterproductive. It was also grossly unfair, given what my team and I found as the root cause.

First of all, the ashtray was misrepresented in the press as a $600 ashtray because during the JAG I had sent a sample ashtray to the Navy industrial activity at North Island with a request to tell me what the fabrication of one ashtray would cost and to provide the industrial production curve that would reduce the unit price to a reasonable level. The figure of $600 was to fabricate one. A “whistleblower” at North Island took this slice of information out of context and leaked it to the press. So the $300 ashtray, which was bad enough, became the $600 ashtray.

Second, the disgruntled employee who gave the files to Congressman Hunter had been laterally assigned out of her position as a contracting officer by the Supply Officer because of the very reason that the pricing of the ashtray was not reasonable, among other unsatisfactory performance measures that indicated that she was not fit to perform those duties.

Third, there was a systemic issue in the acquisition of odd parts. For some reason there was an ashtray in the cockpit of the E-2C. These aircraft were able to stay in the air an extended period of time. A pilot had actually decided to light up during a local mission and, his attention diverted, lost control of the aircraft and crashed. Secretary Lehman ordered corrective action. The corrective action taken by the squadron at NAS Miramar was to remove the ashtray from the cockpit and store them in a hangar locker.

Four, there was an issue of fraud. During inspection the spare ashtrays were removed and deposited in the scrap metal dumpster on base. The tech rep for the DoD supplier on base retrieved the ashtrays and sold them back to the government for the price to fabricate one, given that the supply system had not experienced enough demand to keep them in stock.

Fifth, back to the systemic issue. When an aircraft is to be readied for deployment there can be no holes representing missing items in the cockpit. A deploying aircraft with this condition is then grounded and a high priority “casuality report” or CASREP is generated. The CASREP was referred to purchasing which then paid $300 for each ashtray. The contracting officer, however, feeling under pressure by the high priority requisition, did not do due diligence in questioning the supplier on the cost of the ashtray. In addition, given that several aircraft deploy, there were a number of these requisitions that should have led the contracting officer to look into the matter more closely to determine price reasonableness.

Furthermore, I found that buying personnel were not properly trained, that systems and procedures were not established or enforced, that the knowledge of the FAR was spotty, and that procurements did not go through multiple stages of review to ensure compliance with acquisition law, proper documentation, and administrative procedure.

Note that in the end this “scandal” was born by a combination of systemic issues, poor decision-making, lack of training, employee discontent, and incompetence.

I successfully corrected the issues at NAS Miramar during the prescribed time set by the Secretary of the Navy, worked with the media to instill public confidence in the system, built up morale, established better customer service, reduced procurement acquisition lead times (PALT), recommended necessary disciplinary action where it seemed appropriate, particularly in relation to the problematic employee, recovered monies from the supplier, referred the fraud issues to Navy legal, and turned over duties to a new chain of command.

NAS Miramar procurement continued to do its necessary job and is still there.

What the higher chain of command did not do was to take away the procurement authority of NAS Miramar. It did not eliminate or reduce the organization. It did not close NAS Miramar.

It requires leadership and focus to take effective corrective action to not only fix a broken system, but to make it better while the corrective actions are being taken. As I outlined above, DCMA performs an essential mission. As it transitions to a data-driven approach and works to reduce redundancy and inefficiency in its systems, it will require more powerful technologies to support its CAS function, and the ability to acquire those technologies to support that function.

Ground Control from Major Tom — Breaking Radio Silence: New Perspectives on Project Management

Since I began this blog I have used it as a means of testing out and sharing ideas about project management, information systems, as well to cover occasional thoughts about music, the arts, and the meaning of wisdom.

My latest hiatus from writing was due to the fact that I was otherwise engaged in a different sort of writing–tech writing–and in exploring some mathematical explorations related to my chosen vocation, aside from running a business and–you know–living life. There are only so many hours in the day. Furthermore, when one writes over time about any one topic it seems that one tends to repeat oneself. I needed to break that cycle so that I could concentrate on bringing something new to the table. After all, it is not as if this blog attracts a massive audience–and purposely so. The topics on which I write are highly specialized and the members of the community that tend to follow this blog and send comments tend to be specialized as well. I air out thoughts here that are sometimes only vaguely conceived so that they can be further refined.

Now that that is out of the way, radio silence is ending until, well, the next contemplation or massive workload that turns into radio silence.

Over the past couple of months I’ve done quite a bit of traveling, and so have some new perspectives that and trends that I noted and would like to share, and which will be the basis (in all likelihood) of future, more in depth posts. But here is a list that I have compiled:

a. The time of niche analytical “tools” as acceptable solutions among forward-leaning businesses and enterprises is quickly drawing to a close. Instead, more comprehensive solutions that integrate data across domains are taking the market and disrupting even large players that have not adapted to this new reality. The economics are too strong to stay with the status quo. In the past the barrier to integration of more diverse and larger sets of data was the high cost of traditional BI with its armies of data engineers and analysts providing marginal value that did not always square with the cost. Now virtually any data can be accessed and visualized. The best solutions, providing pre-built domain knowledge for targeted verticals, are the best and will lead and win the day.

b. Along these same lines, apps and services designed around the bureaucratic end-of-month chart submission process are running into the new paradigm among project management leaders that this cycle is inadequate, inefficient, and ineffective. The incentives are changing to reward actual project management in lieu of project administration. The core fallacy of apps that provide standard charts based solely on user’s perceptions of looking at data is that they assume that the PM domain knows what it needs to see. The new paradigm is instead to provide a range of options based on the knowledge that can be derived from data. Thus, while the options in the new solutions provide the standard charts and reports that have always informed management, KDD (knowledge discovery in database) principles are opening up new perspectives in understanding project dynamics and behavior.

c. Earned value is *not* the nexus of Integrated Project Management (IPM). I’m sure many of my colleagues in the community will find this statement to be provocative, only because it is what they are thinking but have been hesitant to voice. A big part of their hesitation is that the methodology is always under attack by those who wish to avoid accountability for program performance. Thus, let me make a point about Earned Value Management (EVM) for clarity–it is an essential methodology in assessing project performance and the probability of meeting the constraints of the project budget. It also contributes data essential to project predictive analytics. What the data shows from a series of DoD studies (currently sadly unpublished), however, is that it is planning (via a Integrated Master Plan) and scheduling (via an Integrated Master Schedule) that first ties together the essential elements of the project, and will record the baking in of risk within the project. Risk manifested in poorly tying contract requirements, technical performance measures, and milestones to the plan, and then manifested in poor execution will first be recorded in schedule (time-based) performance. This is especially true for firms that apply resource-loading in their schedules. By the time this risk translates and is recorded in EVM metrics, the project management team is performing risk handling and mitigation to blunt the impact on the performance management baseline (the money). So this still raises the question: what is IPM? I have a few ideas and will share those in other posts.

d. Along these lines, there is a need for a Schedule (IMS) Gold Card that provides the essential basis of measurement of programmatic risk during project execution. I am currently constructing one with collaboration and will put out a few ideas.

e. Finally, there is still room for a lot of improvement in project management. For all of the gurus, methodologies, consultants, body shops, and tools that are out there, according to PMI, more than a third of projects fail to meet project goals, almost half to meet budget expectations, less than half finished on time, and almost half experienced scope creep, which, I suspect, probably caused “failure” to be redefined and under-reported in their figures. The assessment for IT projects is also consistent with this report, with CIO.com reporting that more than half of IT projects fail in terms of meeting performance, cost, and schedule goals. From my own experience and those of my colleagues, the need to solve the standard 20-30% slippage in schedule and similar overrun in costs is an old refrain. So too is the frustration that it need take 23 years to deploy a new aircraft. A .5 CPI and SPI (to use EVM terminology) is not an indicator of success. What this indicates, instead, is that there need to be some adjustments and improvements in how we do business. The first would be to adjust incentives to encourage and reward the identification of risk in project performance. The second is to deploy solutions that effectively access and provide information to the project team that enable them to address risk. As with all of the points noted in this post, I have some other ideas in this area that I will share in future posts.

Onward and upward.

Over at AITS.org — Failure is not Optional

My latest is at this link at AITS.org with the provocative title: “Failure is not Optional: Why Project Failure is OK.” The theme and specifics of the post, however, are not that simple and I continue with a sidebar on Grant’s conduct of the Overland Campaign entitled “How Grant Leveraged Failure in the Civil War.” A little elaboration is in place once you read the entire post.

I think what we deal with in project management are shades of failure. It is important to understand this because we rely too often on projections of performance that oftentimes turn out to be unrealistic within the framing assumptions of project management. In this context our definition of what defines success turns out to be fluid.

To provide a simplistic example of other games of failure, let’s take the game of American baseball. A batter who hits safely more than 30% of the time is deemed to be skilled in the art of hitting a baseball. A success. Yet, when looked at it from a total perspective what this says is that 70% failure is acceptable. A pitcher who gives up between 2 and 4 earned runs a game is considered to be skilled in the art of pitching. Yet, this provides a range of acceptable failure under the goal of giving up zero runs. Furthermore, if your team wins 9-4 you’re considered to be a winning pitcher. If you lose 1-0 you are a losing pitcher, and there are numerous examples of talented pitchers who were considered skilled in their craft who had losing records because of lack of run production by his team. Should the perception of success and failure be adjusted based on whether one pitched for the 1927 or 1936 or 1998 Yankees, or the 1963 Dodgers, or 1969 Mets? The latter two examples were teams built on just enough offense to provide the winning advantage, with the majority of pressure placed on the pitching staff. Would Tom Seaver be classified as less extraordinary in his skill if he averaged giving up half a run more? Probably.

Thus, when we look at the universe of project management and see that the overwhelming majority of IT projects fail, or that the average R&D contract realizes a 20% overrun in cost and a significant slip in schedule, what are we measuring? We are measuring risk in the context of games of failure. We handle risk to absorb just enough failure and noise in our systems to both push the envelope on development without sacrificing the entire project effort. To know the difference between transient and existential failure, between learning and wasted effort, and between intermediate progress and strategic position requires a skillset that is essential to ultimate achievement of the goal, whether it be deployment of a new state-of-the-art aircraft, or a game-changing software platform. The noise must pass what I have called the “so-what?” test.

I have listed a set of skills necessary to the understanding these differences in the article that you may find useful. I have also provided some ammunition for puncturing the cult of “being green.”

Let the Journey Begin — Mentoring a Better Project Manager

I have been involved in discussions lately regarding mentoring in the project management and IT business management field. The question is: what does it take to build a better project manager given the rapidly changing paradigm defining the profession?

Having mentored many younger people over the course of a 22 year plus career in the United States Navy–and then afterward in private business–I have given this line of thought a great deal of consideration. Over the years I have been applying personnel development and growth strategies as one assigned to lead both men and women among the uniformed military, civil service, and contractor communities. Some of these efforts were notable for their successes. In a few cases I failed to inspire or motivate.

Thus, I have kept a catalogue of lessons learned in helping me identify key elements in keeping people motivated in seeking a specialty or career. Among these are the opportunity for growth, greater responsibility, and recognition of achievement. Note that I do not mention compensation. What I have found is that compensation, while important to one’s quality of life, is not a significant issue if that factor is viewed as equitable and commensurate to the effort involved.

In most cases, where financial rewards were considered inadequate compared to the job at hand, it was a negative factor in employee retention which, after all, is the key factor in developing someone to be a project manager or to eventually take any kind of senior responsibility. In very few cases was it a net positive or a significant motivator, except in sales. Young people tend to accept lower levels of compensation if they can see a path to advancement and greater rewards within a reasonable amount of time. Firms that fail to provide this path, or that are not loyal to their employees in the manner of crafting career-focused compensation, can expect no loyalty in return.

The Foundation

Education, obviously, is the antecedent factor. But one must view life as an educational journey in order to be effective in all of the phases of growth and responsibility. The most common basic credential in proving one’s ability to learn is the Baccalaureate degree. This is not a necessary condition. I have known many brilliant people who were self-taught in any number of subjects. But given that project management involves, in most cases, some technical knowledge and expertise, it is essential that the individual at least be exposed to that knowledge and demonstrate proficiency in the basics that underlie the area of competency.

But we can take this too far. For example, in my experience, there are too many people that are extremely good in the technical aspects of what they are developing who make very poor project managers. The reason for this is that a project is not an end item. It is a social system consisting of people. The people in the project management office are already proven to have a level of proficiency at their jobs. If they do not, then that is where the greatest value lies in having a project manager, who must select the team, manage the team, coach the team, and lead the team. The project is given resources, a scope, a project charter, and it is the project team that develops the plan and will execute against that plan. A project manager that feels that they are the only technically competent member of the team will soon burn out.

Thus, the best project managers–the best managers of any kind–generally should have a multi-disciplinary education. This education can be formal or informal, through accredited institutions, but also augmented by technical training and education, and perhaps graduate education. I have often said that I would prefer to have someone with a strong liberal arts education in lieu of the dedicated specialist. I can mold someone with a broad outlook and teach them to know what they need to know through a dedicated plan of adult learning, job assignment, and development. It is also easier to explain concepts to someone at least exposed to information management, English usage and literature, history, human psychology, organizational behavior, mathematics, statistics, applied and theoretical science, and all of the other areas of knowledge which at one time or another must be referenced in running an organization in a technical field in the real world. It is very difficult to teach someone to unlearn preconceived or bad habits, or an individual who has a doctrinaire attitude, or someone totally clueless about human motivations, emotions, and needs. This is aside from winnowing out the run of the mill sociopath.

Proficiency in language and communication is also essential. What is written is a direct reflection of one’s quality of thought. Thus, when I find that a young individual does not have the verbal acuity necessary to be understood clearly, that is the first area of remediation that I undertake. Writing a cohesive and logical sentence–or expressing oneself verbally in a clear and logical manner–is essential to one’s personal growth and the ability to work with others.

Step One — Beginnings

The first assignment for the individual slated for project management should be at the most basic level of proficiency, within one of the project management competencies. This could be to work with project schedulers, systems engineers, cost managers, technical personnel, risk management, logistics, procurement, or any of the other areas necessary to support the organization’s projects. But rather than developing a specialist who will then rise through that specialty to a senior position, the individual should be laterally transferred on a regular schedule from one specialty to another, given the appropriate skillset and expertise.

This method of variety in work assignment over time in the early stages of the individual’s career will lay the foundation for an appreciation of all aspects of the business. It also establishes the culture of the learning organization, maintaining the interest of the individual through variety and personal growth. The point of this method is to get the individual to a stage gate in assessing their capabilities and potential for further growth.

If the individual demonstrates the ability to adapt to different environments and challenges, to obtain new skillsets, and to thrive across multiple job assignments, they can then be advanced to the next level toward greater responsibility, perhaps involving supervisory or management duties.

For others, their limitations will also identify how they can best contribute to the organization. Perhaps one specific specialty appeals to them. Advancement and opportunities for these individuals may be more limited, depending on the size of the organization, but that is not necessarily the case. Subject matter experts (SMEs) are essential to the success of the project team, otherwise there would be no team. In these cases, investment in further education and training in the area of expertise is essential to employee development and retention. The experience that they garner from working in other areas of the business also increases their value to the organization since they do not have to learn the basics on the job.

Step Two — Intermediate Development

In the development of military officers the Services first focus on that knowledge necessary to the tactical level of the organization. As the individual rises in rank and continues to prove their competency, they are first transitioned to the operational level–which is the area that bridges the intersection between smaller units, junior staff, and medium sized units involving a great deal of responsibility. This may involve junior command of some sort. The final step in this process is to teach the officer about the strategic level, which involves duties related to senior command or senior staff.

The rationale is that one must walk before they can be expected to run. In the area of project management this will involve assignments over time serving in various competencies in support of projects of increasing dollar value and complexity. Thus, for example, we may assign a junior individual to be a project manager with a small staff involving limited funds for the development and deployment of a system of fairly short duration–one to two years. As they continue to develop over time we will assign them to roles that are a natural progression commensurate with their skills and track record.

As with employee development in step one, the purpose of step two (which may involve subsequent lateral assignments as the individual rises in the organization) is to get them to a stage gate to assess whether they will eventually be able to handle the most complex project assignments, involving the greatest risk to the organization.

Step Three — Professional Competency

A few years ago there was a famous bit of pop psychology running through the professional business community asserting that 10,000 hours of practice is required to turn someone into an expert. It turns out that this assertion is not supported by the science. There are a number of factors that contribute to one’s competency in a subject and it could be as simple as emotional affinity–or involve any number of factors such as socio-economic background and upbringing, education and training, the ability to concentrate, the structure of the mind, neonatal development, among others. This is beyond the odd child prodigy that burns brightly before the age of 10 and then fails to maintain their advantage into adulthood.

But given that the individuals we have mentored have thrived under our adult pedagogic approach, as well as having survived under real life conditions as they were brought along in a progressive manner commensurate with their ability to grow and learn, their areas of competency should be readily apparent. This should be the last step in the mentoring effort.

The challenge for project management today is to break down the traditional barriers constructed by line and staff, and division of labor thinking. Project management now demands a cross-disciplinary skillset. With our information systems able to provide a cohesive and integrated view of the condition of the project in ways that were impossible just five years ago, we need to develop a cadre of individuals who can not only understand the information, but who possess the critical skills, maturity, knowledge, education, judgment, and context to use that information in an effective manner.

Taking Chances — Elements Needed in a Good Project Manager

Completed the quarterly meeting of the NDIA Integrated Program Management Division, among other commitments the past couple of weeks (hence sparse blogging except on AITS.org), and was most impressed by a presentation given by Ed Miyashiro, Vice President of the Raytheon Company Evaluation Team (RCET). I would say that these are the characteristics, which are those identified as essential in a successful project manager, are needed regardless of area of expertise, taking into account differences of scale.

Master Strategist – Ensures program survival and future growth

Disciplined Manager – Executes contracts under cost, ahead of schedule with technical excellence

Shrewd Business Person – Maximized financial objectives and minimized risk

Engaged Leader – Leads for success up, down and outside the organization

Relationship Cultivator – Maintains and grows relationships across the broad global customer business communities

The third element describes “minimized risk.” This is different than risk aversion or risk avoidance. All human efforts involve risk. I believe that the key is to take educated risks, knowing the probable opportunities.

Anchors Aweigh — Naval Leadership: Veteran’s Day Edition from “The Naval Officer’s Guide” 1943

As a young Navy Lieutenant Junior Grade I often consulted the Wardroom Library to find reading material, especially during the rare slack periods when the ship was undergoing upgrades and repair work in a shipyard. One day I picked up two volumes that informed me for the remainder of my career. One was entitled The Naval Officer’s Guide. It was originally written by Commander (later Rear Admiral) Arthur Ageton. Another was Naval Leadership by Rear Admiral J. L. Holloway Jr.. The first was a revised edition that expanded on some of the points made below. The latter was from 1949 when Admiral Holloway was Superintendent of the Naval Academy. It is this Admiral Holloway, by the way, who implemented the Holloway Plan that expanded the source of Navy officers to include undergraduate universities via Naval Reserve Officer Training Corps (NROTC) and Officer Candidate School (OCS). If it had not been for Admiral Holloway my own pathway to a commission from the enlisted ranks almost 30 years later would have been much harder.

“There is scarcely anything more disheartening, more destructive of discipline or loyalty than the (leader)* whose philosophy of life is based on the principle of ‘Don’t do as I do; do as I say.” — Rear Admiral Randall Jacobs

For all of my extensive and varied education, these two volumes–despite the significant differences in time, human generations, society, and Naval organization–had and have provided me with more practical advice regarding leadership than any other sources. I believe that the reason why this is the case is that the advice contained in the volumes was forged under the most demanding and dangerous conditions, certainly more than I could imagine during the relatively high tech Naval era of the latter Cold War against the Soviet Union and the one-sided conflict that was the First Gulf War. We certainly did not have to worry about an enemy of equal or greater strength in battle at sea, we did not need to worry about Kamikaze or submarine attack, nor any of the other dangers in war that could lead to an instant entry into oblivion that was experienced by that earlier generation.

What we shared in common, however, spoke to me across time; one sea service officer to another. We had more in common than one would imagine. After all, the sea itself had not become any less dangerous over that time, the inherent dangers of operating a ship had certainly not lessened despite modern modes of navigation and ship control and–most importantly–the demands on people under stress operating under hazardous and arduous conditions had not changed. In fact, with greater reliance on technical expertise and new technology, the stresses and pressures on the average sailor had probably increased in ways unimagined by either of those two leaders and, thus, magnified the importance of leadership. Our war games were not “make believe” operations performed under controlled conditions–we operated as if at war in all phases of operations–and so the inherent dangers were real. When conflict did call as in Desert Storm/Desert Shield, the Navy was ready because it had already performed under the same conditions. In the words of the Chief of Naval Operations who had addressed a change of command which I had attended in 1981: “the United States Navy has been at war continuously since December 7th 1941. We will never again allow ourselves to be surprised.” On more than one occasion during Cold War operations we confronted our adversary in dangerous games of cat-and-mouse, and in one significant operation–had cooler heads, that is effective leadership, not prevailed–we could have been at the front line of the start of World War III.

I came across Ageton’s book again recently and revisited it. The language in the volume is from its time, and so one must read the text in a manner to take into account the differences between the mores and language found in it compared to that of a more modern era. If you wish substitute “people” for “men” when you read the excerpts. Back then the Navy–as American society as a whole–was a male dominated organization of Anglo-Saxon descent. The main leadership of the Navy came almost exclusively from the U.S. Naval Academy in Annapolis and so its structure–mirroring its 18th century British roots–was structured around a neo-aristocratic commissioned officer class who ruled over its enlisted men, though the experience of war, chronicled in the new science of naval leadership–soon revealed the weaknesses in this system and helped engineer its de facto and then de jure fall. At its worst the Navy at the time was hidebound, hierarchical, and too overly concerned with tradition. Its punishments, when judiciously meted out, would be considered relatively barbaric by today’s U.S. Navy standards. It had many positive characteristics as well. Developing strong, independently minded, ethical, disciplined, and imaginative leaders was one of them. That is the concern of the contributors in the book regarding leadership–the ability to overcome and discard one’s ego to bring together the collective effort of others in a common purpose by instilling confidence, justice, and mutual respect, while acknowledging individual contributions in that effort and effectively checking the efforts of others to undermine that common purpose. Thus, the authors were the first of a vanguard in the liberal tradition of overcoming previous hierarchies and social prejudices to forge a new means of approaching the world through the application of knowledge gained through hard experience.

The advice below applies to any organization, from the smallest to the largest, but most especially to business and government in our own time, despite the distance of time.

“Leadership is that character…which instills loyalty in subordinates and at the same time displays loyalty to superiors. Loyalty is the basis of the morale so necessary to the successful prosecution of…objectives….If there is one thing to be learned from naval history, it is that men rather than ships are the major factor in determining victory….leadership…is the responsibility of the American naval officer. Naval officers have the benefit of naval regulations, and the customs of the service….Naval officers will never be leaders as long as their men give only the measure of obedience required by naval regulations. They will be leaders only when their men look to them with confidence and are eager to win their praise….How is this to be done? Primarily by setting the example, by practicing what is preached. American(s)…are not accustomed to discipline. As civilians, they resent orders of any kind. They have a strong sense of equality which has both advantages and disadvantages. Its advantages enable…(them)…to show initiative, quickness of understanding, and cooperation. Its disadvantages require effective leadership in the maintenance of order and discipline. When…identified their own interests with those of their officers, there is released a reservoir of initiative, energy, and devotion, which produces surprising results. A well-coached football team demonstrates what eleven men can do under such circumstances. Aboard ship the same teamwork must be developed….The officer who knows how to stimulate and utilize the potentialities…will bring out their best and will win their loyalty and respect….Officers can guide, influence, and mold men. But their greatest success will depend on the example they set….There is scarcely anything more disheartening, more destructive of discipline or loyalty than the (leader)* whose philosophy of life is based on the principle of ‘Don’t do as I do; do as I say.” — Rear Admiral Randall Jacobs, USN, in “Chapter XXIII: Leadership and the American Bluejacket,” The Naval Officer’s Guide by Commander Arthur Ageton, USN, 1943, pp. 496-498.

“True discipline is intelligent obedience of each for the consequent effectiveness of all. It is willing obedience to attain the greatest good by the greatest number. It means laying aside, for the time being, of ordinary, everyday, go-as-you-please and do-what-you-like. It means one for all and all for one–teamwork….To sum up: Machines are nothing without men. Men are nothing without morale.” — Admiral Ernest J. King

“We must also realize that men are not effective, individually or collectively, unless they are imbued with high morale. Morale may be defined as a state of mind wherein there is confidence, courage, and zeal among men united together in a common effort. In brief, it may be considered mental teamwork….The means of building, and maintaining, high morale and the consequent effective teamwork can be summed up in one word–discipline–a word very much misunderstood and very much abused. True discipline is intelligent obedience of each for the consequent effectiveness of all. It is willing obedience to attain the greatest good by the greatest number. It means laying aside, for the time being, of ordinary, everyday, go-as-you-please and do-what-you-like. It means one for all and all for one–teamwork….To sum up: Machines are nothing without men. Men are nothing without morale….I take leave to commend to your individual consideration three pieces of what may be called ‘philosophy’ which I have found helpful. The first is ‘Do the best you can with what you’ve got’–that is, don’t expect perfection in men or in tools. The second is a modern version of ‘Don’t worry about water that is already gone over the dam’ but, rather, pattern your thoughts and deeds on ‘Where do we go from here?’ The third is, so to speak, interlocked with the other two; it is this: ”Difficulties’ is the name given to things it is our business to overcome.'” — Admiral Ernest J. King, USN, in “Chapter XXIV: The Responsibilities of Leadership,” The Naval Officer’s Guide by Commander Arthur Ageton, USN, 1943, pp. 499-502.

“I take leave to commend to your individual consideration three pieces of what may be called ‘philosophy’ which I have found helpful. The first is ‘Do the best you can with what you’ve got’–that is, don’t expect perfection in men or in tools. The second is a modern version of ‘Don’t worry about water that is already gone over the dam’ but, rather, pattern your thoughts and deeds on ‘Where do we go from here?’ The third is, so to speak, interlocked with the other two; it is this: ”Difficulties’ is the name given to things it is our business to overcome.’” — Admiral Ernest J. King

*Substitution mine. In the text he uses the word “officer.” I use “leader” to modernize and emphasize his points.

Note: I have changed the title of the post to reflect the fact that I used, in actuality, the 1943 edition of the Guide.