Tradeoffs and the Project Management Triangle

A critical stage in our process is “structuring” preferences.  What does this mean and why is it critical?  We like to express preferences in the form of fundamental objectives.  These are aspirational statements that emerge from an initial, problem-specific, consultation with your community.1  A fundamental objective typically consists of a directional verb plus an outcome. So, for example, in a particular public works context, fundamental objectives may be to "minimize lifecycle cost", "maximize water quality", and so on.  Fundamental objectives are different from MVV (mission, vision, values) in that objectives are more specific to the decision problem at hand and thus provide more practical guidance.  And, as discussed elsewhere, fundamental objectives are different from means objectives and attributes (specific performance measures).

Eliciting fundamental objectives from a community is difficult. Structuring the objectives to sort out entailment is even more difficult. "Entail" is a ten-dollar word used in formal logic to describe the deductive implications of a statement. We use it here to capture interdependencies between objectives. Put simply, the achievement of any objective has consequences, and the consequences might work in favor or against other objectives.  For example, one of my personal fundamental objectives might be to “minimize my environmental footprint”. I can work towards achievement of this objective by changing my choices and routines.  However, another of my fundamental objectives might be to “maximize my professional impact”.  These two fundamental objectives are not independent.  Indeed, they are partially incompatible because for me, professional impact entails resource usage (communication, computation, travel, and so on). Entailment arises from many sources, including the law of physics, fundamental economic relationships, or just the way things seem to be.

Here’s the catch: say I sit down with a cup of coffee and attempt to articulate my personal fundamental objectives (a difficult but worthwhile exercise) and I come up with these two: ”minimize my environmental footprint” and “maximize my professional impact”, I am still in no position to make specific choices.  I cannot achieve both these objectives due to entailment. I am forced to work out an appropriate balance between the two before deciding on anything.2

Structuring becomes more complex when we have more than two fundamental objectives.  The example above—environmental footprint versus professional impact—is a straightforward dilemma.  Things get more interesting when we encounter trilemmas.  A well-known trilemma is the Project Management Triangle.  Assume we have three fundamental objectives in any project:

  1. Deliver the project on time
  2. Deliver the project on budget
  3. Deliver the project with high quality (or, in some versions of the triangle, full functionality)

Achievement of each of these objectives entails consequences for the others. For example, quality/functionality typically requires time and/or money. Hence the fatalistic conclusion that, in project management, you can achieve any two of the objectives, but not all three:  This is often shown as a Venn diagram with three feasible outcomes and an unobtainable center region:

  1. Expensive: a project that is on time and of high quality (or full functionality) will be over budget
  2. Slow: a project that is on budget and has high quality (or full functionality) will be late
  3. Low quality: a project that is on time and on budget will lack high quality (or full functionality)

“Structuring” in project management involves recognizing the underlying trilemma entailed by the objectives. And making operational decisions in the face of the trilemma requires explicit tradeoffs.  You cannot be an effective project manager unless you know which of these outcomes—expensive, slow, or low quality—is most acceptable to your organization.

Too often in public consultation, we come up with an unstructured laundry list of fundamental objectives.  This is a good first step, but it is insufficient as a foundation for informed decision making because we can never deliver on the whole list.  Dilemmas, trilemmas, and worse, are everywhere in local government.  Thus, decision makers need to know how different sub-populations of citizens and other stakeholders value these interactions and tradeoffs. Without this information, the people tasked to design solutions are in the dark.

1 The classic reference for this value-focused approach is, not surprisingly, Keeney’s “Value-Focused Thinking” (e.g. here), which was published a generation ago.  However, a very similar approach—OKR (Objectives and Key Results)—emerged from Silicon Valley and is currently popular within technology firms, such as Google (e.g., see here).

2 Different people have different fundamental objectives and entailments depending on their situations.  If I were a professional environmentalist, like David Suzuki, this example would be very different since my “professional impact” would entail reducing global environmental impacts.  Thus, it makes little sense for David Suzuki, or anyone in his line of work, to have “minimize personal environmental impact” as a fundamental objective—he needs to think more globally.  This has implications: if David Suzuki’s fundamental objectives are “minimize global environmental footprint” and “maximize professional impact”, then his fundamental objectives are complementary, rather than antagonistic.  When people criticize professional environmental advocates for their personal environmental footprint—flying to conferences, for example—they are not accounting for this tradeoff.3

3 Yes, a footnote to a footnote is very poor form, but to clarify: This is not necessarily intended as an endorsement of David Suzuki, who I do not know.  I did once hear Dr. Suzuki say he walked out of an introductory economics class when the professor introduced the idea of an externality (a factor outside the model), which he took to be the most important critical part of the decision process.  Fair enough: things like unintended consequences of industrial production are important.  But, had he hung around the class long enough, or moved on to more advanced courses in economics, he would see that his is a cartoon view.  Much of economics (e.g., public goods, common pool problems, market failure) is focused on precisely the problems that caused Dr. Suzuki to abandon the field.  But alas, this ground is well-covered.