adaptive project management
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Adaptive Management
Intaver Institute Inc.303, 6707, Elbow Drive S.W, Calgary, AB, CanadaTel: +1(403)692-2252Fax: +1(403)459-4533www.intaver.com
Power of Adaptation
Will Polar Bears Be Extinct Because of Global Warming?
Hopefully not, as they are capable of adapting to changing conditions
Adaptive Management
Adaptive management is a structured and systematic process for continually improving decisions, management policies, and practices by learning from the outcomes of previous decisions.
Proposed by ecologists C.S. Holling and Carl J. Walters as a framework for managing ecological problems
Adaptive management of fish stocks
Agile Project Management
We are uncovering better ways of developing software by doing it and helping others do it. Through this work we have come to value:
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan
From the Agile Manifesto:
Main Principles of Adaptive Management
• Iterative decision-making: make choices based on learning from the outcomes of previous decisions
• Strategic flexibility: avoid irreversible decisions
• Continuous quantitative analysis: multi-model analysis and hypothesis testing
• Measurement of actual performance
Organizational Principles Quantitative Methods
PMBOK® Guide About Adaptive Management
The PMBOK® Guide (Project Management Institute, 2004) does not explicitly use the term adaptive management.
However, you will find important information related to adaptive management in two process groups: project execution and project monitoring and controlling.
• Monitor and control project work
• Integrated change control
• Quality Control
• Risk Monitoring and Control
The project monitoring and controlling process group includes the following project management processes:
Most Living Organisms Are Able to Adapt
Except one creature
This creature is the project manager
Why? - Human psychology
Tendency to Be Consistent
People tend to resist any inconsistencies for themselves and others
The ability to change direction based on external input is an important skill for project managers.
A police interrogation technique is based on an attempt to find inconsistency in the statements.
Sunk Cost Effect
X-33’s composite liquid hydrogen fuel tank failed during testing in November 1999.
Lockheed Martin proposed to complete the development of the X-33 by replacing its two composite liquid hydrogen tanks with aluminum tanks. But NASA concluded that the benefits of testing the X-33 in flight did not justify the cost.
X-33 investment: $912 million
NASA overcame the sunk cost effect: a cost incurred in the past that affects present or future decisions. Sunk costs should be ignored.
Good example
Bad example
Concord project
“Guilt of Indecisiveness”
Organizations expect managers to make decisions, even if managers do not have enough reliable information required to make these decisions.
Decisiveness is a clear plan that: outlines when, where, and how to collect missing information, and when and how to make decisions.
Active and Passive Adaptive Management
ProjectStrategy
ProjectExecution
ProjectMonitoring andControl
ProjectEvaluation andReview
ProjectPlanning andScheduling
Reevaluation if Strategy Failed
Adaptive Learning
IterationPlanning andScheduling
IterationStrategy Execution
Iteration
ReviewEvaluation andIteration
Monitoring andControl
Iteration
StrategyIteration Hypothesis
Generation
Modeling
Modeling
Modeling
Execution
Execution
IterationMonitoring andControl
IterationEvaluation andReview
Adaptive Learning
Hypothesis testing
Traditional Approach
Passive Adaptive Management
Active Adaptive Management
PMBOK@ Guide
Agile Approach
Should she kill her cow?
1
2
3
$2/lb
$3/lb
$5/lb
Or how people make irreversible decisions
Three irreversible decisions
Avoiding Irreversible Decisions
• Rule # 1: Always consider alternatives• Rule #2: Try to postpone the most important
decisions for as long as possible, so as to be able to collect new information
• Rule #3: Try to minimize the cost of decision reversals
Continuous Quantitative Analysis
• Use multiple models (project schedules) to plan and analyze the project
• Always perform project performance measurement; use reality checks at each project milestone
• Perform quantitative risk analysis to generate actual forecasts at each project milestone
Role of Project Metrics
Hypothesis testing
Adaptive Learning
ReviewEvaluation andIteration
ControlMonitoring andIteration
Execution
Execution
Modeling
Modeling
Modeling
GenerationHypothesisIteration
Strategy
Project Metrics are used as part of active learning and hypothesis testing
Quantitative Analysis: Practical ExampleProject schedule
What will happen with this schedule if certain
risks occur?
Risk Breakdown StructureIdentify risks with probabilities and
impacts
Track Actual Project PerformanceSome tasks are 100% complete
Other tasks are partially complete
or incomplete
What will happen if the project schedule is based on information about actual performance?
Adjust Your Forecast Based on Actual Data
Original (baseline) project duration Project is partially
done (actual data)
Forecast: Low, Most likely, and High estimates
Analyze and Forecast Your Cost With Risks and Uncertainties
Cost forecast (with risks)
Original cost estimate
Actual cash flow
Quantitative Analysis of Iterative Development Process
Risk20%
Risk20%
Risk20%
Risk60%
Scenario 1
Scenario 2
Why You Should Mitigate Risk As Soon As Possible
Is Your Company Ready for Adaptive Management?
The Role of the Business Environment
A small test will help determine the “adaptive management maturity” in your organization.
Test Question 1
• Dismiss the idea on the spot – 0 pts• Promise, but never actually perform a review – 1 pts• Conduct a detailed and serious review immediately – 4 pts
A young engineer comes to the senior manager with a proposal to save $10 million on a $50 million project. According to his plan, the project will be completed on time, but 20% of the work will need to be redone.
How would the manager respond?
Test Question 2
• The failure occurred because of weather, contractors, bad materials, Lord Voldemort, aliens, etc. – 0 pts
• Due to unpredictable and unexpected circumstances our team had some issues - 1 pts
• We screwed up badly, but we know how to fix it - 4 pts
A project manager and his team fail badly on a project. The project manager must explain what happened to senior management. Senior management does not understand the scope of the project. How would the project manager explain the situation?
Test Question 3When did your organization or team last have a meaningful project review or evaluation?
• During the last ice age or earlier – 0 pts• When something exploded, someone killed, etc. - 1 pts• When we completed our last project - 4 pts
Test Question 4Do you use an iterative project development process in your organization?
• What is an iterative project development process? – 0 pts• For some projects, if necessary - 1 pts• This is how we manage complex projects - 4 pts
Adaptive Management “Maturity Assessment”
• 0 – 8 – Your projects will benefit from adaptive management practices as soon as they are established in your organization
• 8 – 12 – Your organizational culture supports adaptive management, but there is opportunity for improvement
• 12 – 16 – You probably don’t need to be at this presentation: your organization already has good adaptive management processes.
Recommendations
1. Whenever possible, do not define a detailed project plan upfront, instead use an iterative project management approach.
2. Always identify multiple project alternatives or hypotheses; model these alternatives; and if it is deemed beneficial, start implementing a few alternatives at the same time.
3. Use quantitative risk analysis at each phase and iteration of the project.
Recommendations4. Integrate original assumptions and new learnings when planning next project iterations.
5. Try to minimize the cost of decision reversals; minimize risk by keeping the option to change project direction available.
6. Ensure that adaptive management is implemented within a creative business environment, which is characterized by a collaborative structure for stakeholder participation and learning.
Future Reading
Lev Virine and Michael Trumper
Project Decisions:
The Art and Science
Management Concepts, Vienna, VA, 2007
Questions?
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