The Roman Approach to Contract Risk Management

An interesting paper in the September edition of the Project Management Journal co-authored by a colleague, Derek Walker contrasts the delivery of public projects in the Roman era with modern project management. The primary conclusion is that nothing much has changed; the Romans outsourced most of their major works to contractors, with both public accountability and a legal framework as key governance constraints.

What’s significantly different, is the consequences of failure! If a project went badly wrong in Roman times, the responsible public official would suffer a major career limiting event that could affect the prospects of his descendants for generations to come. Whilst the retribution applied to the contractor could be even more serious including death as well as retribution for generations to come.

Applying the Roman approach could give a whole new meaning to the ‘pain share’ bit of an Alliance contract…… as well as removing by execution many of the worst performing contractors. Rome was not built in a day but their empire did last for close to 1000 years.

This history contrasts with several recent studies that clearly demonstrate the ineffectiveness of penalty clauses as a mechanism for managing client risk two relevant papers are:
CIOB; Managing the Risk of Delayed Completion in the 21st Century
Blake Dawson; Scope of Improvement

It would seem the sanctions offered under today’s laws are insufficient to make penalties really effective (and in modern contracts they only work one way rather than the two-way effect of the Roman sanctions). Therefore the only option is proactive management.

The unacceptable alternative is to hope the problem goes away…… but burying your head in the sand leaves a very tempting target for someone’s boot.

If you are interested in the history of project management, my papers offer a good starting point, starting with The Origins of Modern Project Management at: http://www.mosaicprojects.com.au/Resources_Papers_050.html

For more in-depth coverage see: http://www.lessons-from-history.com and of course: Frontinus – A Project Manager from the Roman Empire Era by Walker & Dart (Project Management Journal Vol.42, No.5, 4-16)

The Origins of Project Management

Based on Lynda’s analysis of ‘stakeholder’ using the new Google Ngram Viewer (see: Lynda’s post), I thought I would compare ‘stakeholder’ with ‘Project Management’.

Lynda’s Stakeholder graph:

The Ngram for Stakeholder

My graph of Project Management to the same dimensions:

The Ngram for Project Management

Comparing the two charts suggests ‘stakeholder management’ is a growing social phenomenon whereas ‘project management’ has reached a plateau, possibly suggesting it is a mature business function. Comparing the raw numbers, ‘stakeholder management’ has a very long way to go to catch up with ‘project management’ in terms of the amount of writing about the subject suggesting it will be an expanding area of interest for many years to come.

Interestingly, the start of the steady rise in interest in ‘project management’ from around 1960 fully supports the hypothesis in my paper The Origins of Modern Project Management that the spread of project management was directly linked to the development of CPM scheduling. The original work on CPM was done in 1957!

To explore the Ngram Viewer yourself, see: http://books.google.com/ngrams/

Project Planning and Scheduling

The Guide to Good Practice in the Management of Time in Complex Projects (The Guide)  will be published at the end of this year. One of he key messages in The Guide is the need to separate planning from scheduling.

Project planning focuses on creating the project development strategy. It requires experience, vocabulary, communication and imagination and, at its highest level, provides the formula for the logistic strategy for the project construction. Project planning involves decisions concerning:

• the overall strategy of how the work process is to be broken down for control;
• how the control is to be managed;
• what methods are to be used for design, procurement and delivery;
• the strategy for subcontracting and procurement;
• the interface between the various participants;
• the zones of operation and their interface;
• maximising efficiency of the project strategy with respect to cost and time;
• risk and opportunity management;
• the design for the schedule and its reports/communication plan.

Scheduling is a mixture of art and science to create the project manager’s time-allocation tool within the chosen software. It involves the interpretation of the results of project planning to ascertain, amongst other things, the start and finish dates of activities, their sequence and the required resources.

It is not good practice to plan the work whilst attempting to schedule it. Starting to develop the schedule before planning the project is unlikely to produce a satisfactory project-planning solution or an effective schedule.

This is not a new idea! James Kelley and Morgan Walker, the inventors of the Critical Path Method of scheduling in the very first paper published on the subject had the following to say:

A characteristic of contemporary project scheduling is the over-simplification which stems from the inability of unaided human beings to cope with sheer complexity. Even though we know that a detailed plan is necessary, we also know that management need only act when deviations from the plan occur. To resolve this situation we undertook to develop a technique that would be very simple but yet rigorous in application. One of the difficulties in the traditional approach is that planning and scheduling are carried on simultaneously. Our first step was to separate the functions of planning from scheduling.

This is an extract from the paper entitled Critical Path Planning and Scheduling delivered to the Eastern Joint Computer Conference in March 1959, by Kelley and Walker less then 2 years after they had invented CPM. Why is it 50 years later so many planners continue to ignore the wisdom learned from past projects and focus on entering data into computers before they have worked out the optimum way to deliver the project?

For more on the history of scheduling and an abstract of the Kelley and Walker paper see: A Brief History of Scheduling

PM History papers updated

Working on my paper for PMOZ 2010, Seeing the Road Ahead – the challenge of communicating schedule data  has required me to re-visit two key papers and augment them with new information and materials discovered in the last few years.

A Brief History of Scheduling – Back to the Future has had quite a lot of new materials incorporated. I am now confident this paper accurately lays out the development of scheduling and in particular, the origins of PERT and CPM.

The Origins of Modern Project Management  has had a few new footnotes included an links the development of modern project management to its roots the the spread of scheduling in the early 1960s.

Both updated papers are available for downloading and I have most of the reference materials available for anyone interested in further research into these topics.

The PMOZ paper will be available after publication in a couple of weeks. For more on the PMOZ conference see: http://www.pmoz.com.au/