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?
Hopefully not, as
they are capable of
adapting to
changing conditions
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
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
Organizational Principles Quantitative Methods
• Iterative decision- • Continuous
making: make quantitative
choices based on analysis: multi-model
learning from the analysis and
hypothesis testing
outcomes of previous
• Measurement of
decisions
actual performance
• Strategic flexibility:
avoid irreversible
decisions
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
Except one
creature
This creature is
the project
manager
Why? - Human psychology
Tendency to Be Consistent
People tend to resist any
inconsistencies for
themselves and others
A police interrogation
The ability to change technique is based on
direction based on external an attempt to find
input is an important skill for inconsistency in the
project managers. statements.
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
X-33 investment: $912 million concluded that the benefits of
testing the X-33 in flight did not
NASA overcame the sunk cost justify the cost.
effect: a cost incurred in the past
that affects present or future Bad example
decisions. Sunk costs should
Concord project
be ignored.
“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
Tra ditiona l Approa ch
PMBOK@ Guide
Re e va lua tion if S tra te gy Fa ile d
P roje ct P roje ct P roje ct
P roje ct P roje ct
P la nning a nd Monitoring a nd Eva lua tion a nd
S tra te gy Exe cution
S che duling Control Re vie w
P a s s ive Ada ptive Ma na ge me nt
Ada ptive Le a rning
Agile Approach
Ite ra tion Ite ra tion Ite ra tion
Ite ra tion Ite ra tion
P la nning a nd Monitoring a nd Eva lua tion a nd
S tra te gy Exe cution
S che duling Control Re vie w
Active Ada ptive Ma na ge me nt
Ada ptive Le a rning
Mode ling Exe cution
Ite ra tion Ite ra tion
Ite ra tion Hypothe s is
Mode ling Monitoring a nd Eva lua tion a nd
S tra te gy Ge ne ra tion
Control Re vie w
Mode ling Exe cution
Hypothe s is te s ting
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
• 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
• 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
Ada ptive Le a rning
Mode ling Exe cution
Ite ra tion Ite ra tion
Ite ra tion Hypothe s is
Mode ling Monitoring a nd Eva lua tion a nd
S tra te gy Ge ne ra tion
Control Re vie w
Mode ling Exe cution
Hypothe s is te s ting
Project Metrics are
used as part of active
learning and
hypothesis testing
Quantitative Analysis: Practical Example
Project schedule
What will happen with this
schedule if certain risks
occur?
Risk Breakdown Structure
Identify risks with
probabilities and
impacts
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
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
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
Risk
20%
Risk
20%
Scenario 1
Risk
20%
Risk
60%
Scenario 2
Monte Carlo risk analysis can be performed in Agile projects
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
A small test will help determine the
“adaptive management maturity” in
your organization.
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
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
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
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”
• 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
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.
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
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
Questions?
