Zero Sum Game and Project Conflict

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!

6 Comments to Zero Sum Game and Project Conflict

  1. Zach Reed says:

    Indeed, conflict is ever-present, and usually without regard for the management approach that is being employed. I’m tempted to suggest that whenever people and money get involved, there is bound to be some form of conflict. Ultimately, the bottom line might be more about how to resolve conflict than eliminate or avoid it (which is near impossible). It comes down to the individual. Will one decide to perpetuate the conflict or approach the situation with a cool, measured response? I’m sure, however, that there are ways to help mitigate conflict through various management approaches; some better than others. One of the most valuable conflict-mitigating actions is communication. Communicate interest, priorities, values, etc., and that will make a big difference.

  2. Sue Backiel says:

    Conflict can be beneficial in the work place because it may bring about new ideas and procedures. However, too much conflict can cause delay and a hostile work environment.

  3. […] among the project players so intense. [Note: If this topic interests you, you might want to read "Zero Sum Game and Project Conflict," a blog I wrote for the Thinking Outside the Box blog site back in from September, […]

  4. daveddb says:

    I don’t entirely agree with the blog’s comments. For example, there are many things that can be viewed as a Zero Sum Game within the context of a project. Also conflict is a fact of life whether project related or not and there will always be some conflict and tension. That’s a fact of just living life regardless of project management.
    As the article states, “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.” A little conflict like a little stress can be beneficial. Projects have conflict because whenever people work together there’s going to be conflict and developing a new system or approach isn’t going to resolve or eliminate it, although less is better than more. Conflict is conflict and can be caused by a number of things and very likely comes in more than just two forms, which might be somewhat misleading.
    The PAGUSYS approach mentioned is a new and innovative Cognitive Construction Project Management approach that promises to reduce Extrinsic Conflict. 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. The article states that PAGUSYS alone will not entirely rid a Project of Conflict. It firmly addresses the systemic factors that cause Intrinsic Tension, only the Project Team can reduce Intrinsic Tension through a different management philosophy and approach.
    What is the approach? Has PAGUSYS ever been tested in the crucible of real life project management to determine if in fact it is as effective as touted?
    The comment re Project performance being measured against three barometers: Quality, Schedule, and Budget. While that may be true in the construction industry the three barometers typically used in my experience and referenced as the proverbial project golden triangle are scope, time and cost. Quality is one of the nine categories in Dominant project methodologies such as the PMI PM categories.
    I agree totally with the article comment about the schedule being 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.
    Project schedules now seem to be less dynamically used in some industries compared to others and often they’re nothing other than an initial cursory outline of what’s required by the project. They’re rarely used to their full potential and often tracking and recording project actions results is an afterthought rather than a scheduled occurrence.
    The suggestion of operating two different yet interdependent management systems to me will requires tremendous effort. It would be interesting to know on how many projects has PAGUSYS been used and how has it performed in improving team work and synergy? Team work and synergy can be accomplished without developing a new approach. Trust, openness, coordination, and collaboration can all be developed without developing a new PM discipline. Very often modeling the behavior that you want from others will accomplish wonders.
    Finally Parkinson’s Law can be attributed to many things, e.g. faulty estimates poor execution, unavoidable delays. Sometimes, it’s the result of the way a project is managed rather than the enactment of a social theory.
    I certainly can also agree that we need to change our attitude about a lot of things yet in all honesty I may be old and gray before it happens.

  5. Michael Neal says:

    [C] The last sentence says it all, change our attitude. Conflict is everywhare, at home, work and kids school. There is a book that i have read titled “The Energy Bus” by Jon Gordon. Its a simple easy read that needs a twice over. In short it you are the driver of the bus, which is your bus, which is your path in life. I read it to my children and discuss how the 10 Rules can change how they look at life. To get back on track with the blog, conflict on the project is not neccessarily a bad situation. If there were no conflicts then proper planning could not be done. The challange is to minimize the extrinsic conflicts and use conflicts to progress the project not hinder.

  6. Connie Bremer says:

    This blog was interesting in that it is amazing how we have all become so accustomed to accepting and even instigating conflict within the work environment. I didn’t really realize until reading this blog how apparent it all really is and that much of it can and should be avoided. All of the demands, responsibilities, and commitments are stressful enough without adding additional conflict.

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