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Adaptive Management. Intaver Institute Inc. 303, 6707, Elbow Drive S.W, Calgary, AB, Canada Tel: +1(403)692-2252 Fax: +1(403)459-4533 www.intaver.com. Power of Adaptation. Will Polar Bears Be Extinct Because of Global Warming?.

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Adaptive Management

Intaver Institute Inc.

303, 6707, Elbow Drive S.W, Calgary, AB, Canada

Tel: +1(403)692-2252

Fax: +1(403)459-4533

www.intaver.com

power of adaptation
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

Proposed by ecologists C.S. Holling and Carl J. Walters as a framework for managing ecological problems

Adaptive management of fish stocks

Adaptive management is a structured and systematic process for continually improving decisions, management policies, and practices by learning from the outcomes of previous decisions.

agile project management
Agile Project Management

From the Agile Manifesto:

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

main principles of adaptive management
Main Principles of Adaptive Management

Organizational Principles

Quantitative Methods

  • 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
pmbok guide about adaptive management
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.

The project monitoring and controlling process group includes the following project management processes:

  • Monitor and control project work
  • Integrated change control
  • Quality Control
  • Risk Monitoring and Control
most living organisms are able to adapt
Most Living Organisms Are Able to Adapt

Except one creature

This creature is the project manager

Why? - Human psychology

tendency to be consistent
Tendency to Be Consistent

People tend to resist any inconsistencies for themselves and others

A police interrogation technique is based on an attempt to find inconsistency in the statements.

The ability to change direction based on external input is an important skill for project managers.

sunk cost effect
Sunk Cost Effect

Good example

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.

Bad example

Concord project

guilt of indecisiveness
“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 vs passive adaptive management
Active vs. Passive Adaptive Management

PMBOK@ Guide

Agile Approach

should she kill her cow
Should she kill her cow?

Or how people make irreversible decisions

1

$2/lb

2

$3/lb

Three irreversible decisions

3

$5/lb

avoiding 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
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
Role of Project Metrics

Project Metrics are used as part of active learning and hypothesis testing

quantitative analysis practical example
Quantitative Analysis: Practical Example

Project schedule

What will happen with this schedule if certain risks occur?

risk breakdown structure
Risk Breakdown Structure

Identify risks with probabilities and impacts

track actual project performance
Track Actual Project Performance

Some 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
Adjust Your Forecast Based on Actual Data

Forecast: Low, Most likely, and High estimates

Original (baseline) project duration

Project is partially done (actual data)

analyze and forecast costs with risks and uncertainties
Analyze and Forecast Costs With Risks and Uncertainties

Cost forecast (with risks)

Actual cash flow

Original cost estimate

Monte Carlo cost risk analysis provides insight into validity of current cost estimates

quantitative analysis of iterative development process
Quantitative Analysis of Iterative Development Process

Monte Carlo risk analysis can be performed in Agile projects

why you should mitigate risk as soon as possible
Why You Should Mitigate Risk As Soon As Possible

When a risk occurs can drastically affect your project outcomes

is your company ready for adaptive management the role of the business environment
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
Test Question 1

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?

  • 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
test question 2
Test Question 2

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?

  • 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
test question 3
Test Question 3

When 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 4
Test Question 4

Do 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
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
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.

recommendations1
Recommendations

4. 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
Future Reading

Lev Virine and Michael Trumper

Project Decisions:

The Art and Science

Management Concepts, Vienna, VA, 2007

Lev Virine and Michael Trumper

Project Think:

Why Good Managers Make Poor Project Choices

Gower, 2013