The amount of Conflict experienced on most construction projects today might be greatly reduced if only the Project Team would have the willingness to understand the sources of such Conflict and the resolve to take corrective steps. Project Conflict comes in two forms: Intrinsic Tension and Extrinsic Tension.
Intrinsic Tension: Is borne out of the very nature of contractual relationships and is exacerbated by unavoidably conflicting organizational priorities. Intrinsic Tension exists on every project and can never be entirely eliminated.
Extrinsic Tension: In large part, is a byproduct of the very Project Management methodologies and approaches that were initially designed, developed, and implemented to “manage” Intrinsic Tension. Fortunately, most Extrinsic Tension is entirely avoidable.
Introducing ICS-Global’s PAGUSYS™
PAGUSYS is an acronym that stands for Project Administration and Guidance System. PAGUSYS, the brainchild of ICS-Research, is a vibrant, innovative, and new Construction Project Management approach that promises to greatly reduce, or possibly even eliminate, Extrinsic Conflict. Where the current Project Management Model champions Compliance, Control, and Competition, PAGUSYS promotes Collaboration, Teamwork, Synergy, and Harmony.
But PAGUSYS alone will not entirely rid a Project of Conflict. While PAGUSYS firmly addresses the systemic factors that cause Intrinsic Tension, only the Project Team can reduce Intrinsic Tension through a different management philosophy and approach.
Project performance is measured against three barometers: Quality, Schedule, and Budget. These three variables are always in inversely-proportional tension with one another. For example, the tradeoff for a lower-cost Project is usually one that will take longer and/or contain lesser quality. Likewise, a higher-quality Project will typically take longer and/or cost more. Similarly, the fastest Project can be predicted to sacrifice quality and possibly cost more.
Understanding Intrinsic Tension
Intrinsic Tension sprouts from two primary sources: Conflict of Interest and Conflict of Priorities.
- Conflict of Interest: A familiar Conflict of Interest scenario: for most Contractors money is quite often the highest priority, while designers are conceptual, visionary, aesthetic people for whom quality is quite often the highest priority. Meanwhile, for most Owners, time is quite often the highest priority.
- Conflict of Priorities: Conflict of Priorities however refers to the Owner’s inability to declare, even internally, how it ranks these three priorities. The Owner’s failure to rank its Priorities confounds Project Management performance thresholds. Nowhere is this dichotomy more obvious or extreme than in the Project Schedule, where the Parties formalize their intentions.
Owners can significantly reduce Intrinsic Tension on their Projects by (a) ranking project priorities, (b) selecting the Project Team based on their alignment with those Priorities, and (c) adopting a Project Management Model that is commensurate with the Owner’s Priorities.
The Project Schedule Was Commandeered
Because Intrinsic Tension has plagued Projects for decades, over time Management attempted to combat Intrinsic Tension through a variety of artificial devices, most significantly the Contract. The Schedule evolved as the ultimate validation tool, converting the General Contractor’s contractual promises into a verifiable course of action. Given its immense power, the Schedule was gradually commandeered by other Project Management interests, as it was cost-loaded, resource-loaded, risk-loaded, quality-loaded, and more. The final nail in the Schedule’s coffin was when it became the weapon of choice in claims battles.
Dabbled with by too many cooks, the Schedule soon lost its effectiveness as it struggled to be too much to too many. It was asked to provide multiple, conflicting uses including: Planning, Coordination, Communication, Work Organization, Resource Management, Performance Measurement, Outcome Forecasting, Reporting Tool, Contract Administration, Cost Control, Marketing, Financial Planning, Record-Keeping, and Dispute Resolution.
Understanding Extrinsic Tension
A major contributor to the existence of Extrinsic Tension, we expect the Schedule to guide the work, yet we also asked it to serve as a barometer against which to measure work performance. And in a contractual environment, however, measurement is never without consequence. It is between these two adverse uses, measurement and guidance, that we arrive at the heart of Extrinsic Tension.
There can be only one logical solution to the problem. Operate two different, separate yet interdependent, management systems to address the competing informational needs of Project Administration and Project Guidance. PAGUSYS is more than just an innovation in Project Time Management, by facilitating a fundamental paradigm shift in Project Management from one of opposition and distrust to one of teamwork and synergy.
To appreciate how PAGUSYS can accomplish this, we must identify two primary Objectives of Project Management and, as a result, three primary Project Management Functions expected to be supported by the Project Schedule.
- Two Project Management Objectives: Project Administration and Project Guidance
- Three Project Management Functions: Forecasting, Evaluation, and Coordination
The Project Administration Objective is achieved through two primary Project Management Functions. The Forecasting Function uses the Schedule to forecast project outcomes. The Evaluation Function uses the Schedule to establish, measure, monitor, and evaluate performance and conditions, typically in support of progress payment validation; change order processing, dispute resolution, and so forth. The Project Guidance Objective uses the Schedule to strategize, optimize, direct, and facilitate work prosecution through a Coordination Function.
While the importance of the three Functions may be equal, their effect on each other and on Extrinsic Tension is different.
- Outcome Forecasting is a consequential action that has no effect on future outcomes.
- The Evaluation Function can have an indirect effect on future outcomes.
- The Coordination Function has a direct effect on future outcomes.
It is useful to note that the Evaluation and Coordination Functions adopt opposite attitudes which virtually guarantee human conflict. Specifically, the Evaluation Function is all about commitment, performance, accountability, and consequences, whereas the Coordination Function revolves around trust, empowerment, synergy, partnership, and opportunity.
Extrinsic Tension and Zero Sum Game
The Dominant Project Management model creates conditions under which the Project Team has no choice but to behave the way they do. The antidote to Extrinsic Tension, then, is to change the system.
Construction projects are a perfect example of the Zero Sum Game theory. Zero-Sum describes a situation in which one participant’s gains or losses is exactly balanced by the losses or gains of the other participant(s). For instance, in order for the Contractor to make a greater profit, the Owner must take more out of his pocket. Likewise, in the Schedule, if an upstream player consumes available Total Float, that Float is no longer available to any downstream players.
In the construction industry, the Zero Sum Game is all about “extras.” It starts with an Owner who establishes an unrealistically short schedule and low budget. Bidders, reluctant to tell the emperor he is naked, bid short and low, hoping to win the award. The Ultimate Footrace, toward “extras,” is on!
In this crucial tug-of-war between Owner and Contractor the Schedule is the rope. On one end of the rope the Owner tugs repeatedly, seeking reliable Outcome Forecasts. On the other end of the rope the Construction Manager pulls forcefully, tightening the cord more and more in an effort to Evaluate Performance and Conditions. Precariously walking across the tightrope is the Contractor, who tries to coordinate the Work, to get from one end of the Project to the other.
Over the decades that this game has been played out, Owners and Contractors alike have learned that they can maximize their gains and minimize their losses through Schedule manipulation. To convert as many “extras” as possible into time and budget extensions, the Schedule is constantly “engineered” to support claims. Maybe, if we were completely honest, we would acknowledge that the abbreviation C.P.M. perhaps more accurately stands for Critical Path Manipulation.
It May All Come Down to the Owner’s Attitude
If what we are saying is true, then a good part of Extrinsic Tension comes from an Owner attitude that views the Contractor with immense distrust and disrespect.
Contract Itself: The very existence of a contract establishes something less than complete trust.
Float Ownership: But worse are the clauses inserted in the Contract that systematically stack the deck against the Contractor. A glaring example of this concerns Float Ownership, which the Owner insists it should have access to. That this is entirely immoral and unfair matters not to the Owner. In the end, the Contractor, who has millions of dollars riding on his ability to complete the project in a timely manner, is required to give the Owner this time buffer “free of charge.”
Changes to Schedule: The Owner insists on having the final word on the Contractor’s proposed Project Execution Strategy. Worse, once adopted as the Baseline Schedule, the Contractor is not allowed to change its Execution Strategy without getting Owner permission to do so!
Project Controls: The Owner implements tight “Project Controls” which are designed to monitor and throw floodlights on any deviations between what was planned, and what is actually taking place on the project. At this point, the Owner is attempting to harass, if not also micro-manage, the Contractor.
There can be only one justification for such intense intervention by the Owner into the daily affairs of the Contractor: a general distrust that the Contractor will perform responsibly, and a general disrespect for their abilities. Again, we are back to negative assessments of “willingness and ability.” Both reduce to a poisonous Owner attitude.
Some amount of Zero Sum Game is unavoidable; such as the conditions that epitomize Intrinsic Conflict. But then there are other Zero Sum Game conditions that are entirely avoidable, all of which fall within the realm of Extrinsic Conflict. Owners are a key (though hardly the only) source of such Extrinsic Conflict.
It is this realization that sets Cognitive Project Management apart from Dominant Project Management, which promotes notions of distrust and disrespect. As just one closing example, consider a central premise that underlies the increasingly popular Critical Chain Project Management ideology: Parkinson’s Law.
Parkinson’s Law states that work expands to fill the time allotted for its completion. It is also known as the college homework syndrome. Now, go ahead and Google on “critical chain parkinson” and notice the hits! My point is that when “Management” adopts a foundational attitude that the worker’s primary inclination is work avoidance, the project is lost before it begins!
We need to change our attitudes, folks!