Calculating variances, indexes, and forecasts would seem to make the decisions e

Question

Calculating variances, indexes, and forecasts would seem to make the decisions easy, but we know that the numbers don't manage the project. We do. We accept that we have to make new projections based on how the project is performing and then decide what we will do to make it meet the requirements in the end. So how will you as the project manager use this information to ensure project success at completion? Will you be successful? What might get in your way? Does it matter where you are in the project timeline?

Explanation / Answer

Dynamic Management is simply management that expects the goal system (i.e. goals and the way alternative futures are valued) to change, though not necessarily in a predictable way. It "expects" change in both senses: change to the goal system is anticipated, which in most real-life situations is a correct assumption; and change to the goal system is seen as desirable, because goal systems that are static for a long time suggest that nothing more has been learned. Dynamic Management is applicable to both operations and projects, since changing goal systems occur in both. It is also applicable at every level, from a large organisation down to individuals within it, and individuals in their private lives. Here are some examples of changing goal systems: Example: Changed reason for existence. Franklin D Roosevelt suffered a crippling condition as a result of polio. In 1938, at the height of his own popularity and the seriousness of the polio problem, he founded the National Foundation for Infantile Paralysis to fight polio. The organisation quickly grew into a successful fund raiser. In less than 20 years polio had largely been defeated thanks to the Salk and Sabine vaccines. The Foundation was left with a choice: find a new goal or close down. They decided to find a new goal and concentrate on "other crippling diseases" with a particular emphasis on birth defects. Example: Project level change. In the late 1990s British Telecommunications (BT) began a project to create an internal market by which its divisions could trade with each other. The idea was to give senior managers responsibility for profit making organisations and give them more meaningful management accounts, as well as encourage more parts of the vast company to behave in a commercial way and be competitive. As the telecom gold rush reached its height, a reorganisation was announced which involved taking this idea much more seriously. Now the intention was to create separable businesses that could be floated separately though still as part of the group, making the true value of the BT group clearer to investors and analysts in the city. As separation gathered momentum it became clear that just offering a minority of the shares in its most exciting divisions was not going to be enough. Investors wanted completely separate businesses to be created. The mobile communications division was floated and demerged, with other divisions making preparations. Then the telecom bubble burst and BT's top team changed. Further flotations were abandoned and divisions were encouraged to act together instead of straining to go their separate ways. Example: A life change. Most people find that becoming a parent is a life changing event, upturning priorities and plans dramatically. Some people adapt faster than others. In my own case, I went from working to have a career for myself to working to get money for my family in about a month. Dynamic management is a natural evolution of what is normally called "risk management". The progression from assuming a stable, known world to Dynamic Management goes something like this: Management in a predictable world: We know what's going to happen in future and lay our plans accordingly. Risk Management: We have goals that do not change and a plan, but accept that things might go unexpectedly wrong so we have to manage those risks by making them less likely and reducing the impact if they occur. We assume we can easily determine everything about the future except for whether certain outcomes will occur or not, and even there we know the probabilities of these risk events. Uncertainty Management: We have goals that do not change and a plan but accept that some things might happen that are different from our expectations. Some of those unexpected outcomes are worse than our expectation but some are better (i.e. they are opportunities). Furthermore, we often have uncertainty that could be reduced by more research but this could be costly. Managing uncertainty involves reducing negative impacts, increasing positive impacts, altering the odds to make good things more likely and bad things less, and doing research or monitoring to reduce uncertainty. Dynamic Management: The same as for Uncertainty Management except that our goals are themselves something about which there is some uncertainty. They may be vague now and change in the future.

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