3-complexity - advanced engineering project management
DESCRIPTION
3-Complexity - Advanced Engineering Project ManagementTRANSCRIPT
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COMPLEXITY & Project
Management
Advanced Engineering Project
Management
Techniques for Avoiding Project
Failure
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The Approach
Forensic Project Management
Systems Thinking
Complexity
Leadership Traits for Project Success
Examples of Failure and the Root Causes
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The Sequence of the Beginning Traditional Project Management
Scope, Schedule & Budget
Common Characteristics of Troubled Projects
Forensic Project Management
Systems Thinking Concepts
Case Histories/StudiesSimple Case - Ras Tanura - Refinery Rebuild
Complicated Case - Industrial Coke Manufacturing Facility
Complexity Case - Highway Traffic Control System (Big Dig)
Joint Stars Aircraft Procurement and Modification
Saudi Arabian Air Defense System
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Traditional Project Managers Trained in Analysis
Trained to Utilize The Scientific Method of Inquiry Observation
Model or Analysis of the Problem
Prediction of Behavior Based on the Model
Trained to Utilize Models (Primavera Schedules, 3D-CADD)
Encouraged to Sub-Optimize (Parts of the Process)
Failure Modes and Effects Analysis
Project Models Fail Because Project Processes Are Non-Linear Self Organizing Processes and Reconfigure Their Interactions Based Upon Uncontrolled Feedback From the Last Set of Interactions
Not Aware of Systems Thinking Concepts
Provides Reactive Management Based Upon Recorded/Developing Data Analysis
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New Paradigms
Simple Project Context - Domain of Best Practices -PMBOK1 Known Knowns; Agreement on right solution to problems
Complicated Project Context Domain of Experts Known Unknowns; At least one right answer to problem
Complex Project Context Domain of Emergent Theories Unknown Unknowns
Chaotic Context - Unknowables1 Project Management Body of Knowledge
A Leaders Framework for Decision Makingby David J. Snowden & Mary E. Boone
Harvard Business Review - 11/2007
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The Modern Project Management Challenge
Contract Management
Scope Management
Schedule Management
Procurement Management
Cost Management
Integrate New Tools and Technology
Time is of the Essence
Project Close-out Negotiation
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Traditionally Why Many Projects Fail!
Flawed Assumptions
Project Environment Changes (External Factors)
Top Down Planning
Project Planning vs. Business Planning
Ambiguous Communications
Ambiguous Goals
Static Project vs. Dynamic Project Environments
Inability to Adapt to Changes
Uncoordinated Incentives for the Participants
Failure = either + or , 10% Cost and or Schedule
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Forensic Project Management
Project participants often relate the:
Symptoms
Analysis
Synthesis
Systems Thinking
The goal of the above investigation is to
determine the disease
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Forensic Project Management Tools
Analysis Planned vs. As-Built Comparisons
Schedule
Cost
Change Order Analysis
Documentation Review (Timelines)
Time Impact Analysis (TIA)
Damage Calculations
Systems Thinking Approach to Understanding Synthesis (Holistic)
Advanced Modeling Concepts
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Spectacular Project Failures
Advanced Automation System Air Traffic Control
Big Dig Boston Central Artery Tunnel Project
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Obit on AAS
Related Story
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The Power to Manage a Project
Derives from the Contract
Key Contract Clauses Scope Definition
Schedule
Price for the Work
Performance Requirements
Changes Clauses
Notice Provisions
Force Majeure
Disputes and Resolution
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Assumptions for the Work(Bidding and Planning)
Assumptions (Explicit or Implicit) More Important Than ForecastsManpower Availability
Materials availability
Environmental Influences
Commodity Pricing
Team Continuity
No Intervening Circumstances
Lack of Common Agendas (Incentives)
PM - Early Recognition of Flawed Assumptions
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Trouble at the Project Interaction Points(Friction at work Scope Boundaries)
Contractor Coordination
Engineering Deliverables
Long Lead Equipment
Mobilization (Getting Resources in Place)
Interfaces (Between Parts of the Project Team)
Interfaces (Between Defined Work Scopes)
Start-Up Testing/Commissioning
Initial Operation and Operator Training
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How do I load this new project management software into my crystal ball?
Are the new PM tools good enough?
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The Miracle
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CostInfluence
Ability to Influence Project Costs Over Time
Time
Cumulative
Cost
Relative
Influence
Data Source: Construction Industry Institute
Influence of Decision Making on
Cost over Time
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Case Studies
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Refinery Renovation and Expansion
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Refinery Renovation and Expansion
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Refinery Renovation and Expansion
EPC contractor bids on a LSTK renovation and expansion project in Saudi Arabia
$113 million contract Basic engineering by owner (flow diagrams and P & IDs)
Detailed engineering by EPC contractor
As-built data for existing underground by owner
Operational site
EPC retains a construction sub-contractor that has experience with both owner and EPC contractor
Sub-contractor mobilizes to refinery site and begins site excavation
EPC completes design for pipe rack system and begins steel procurement
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Refinery Renovation and Expansion
Sub-contractor reports obstructions at each of the first 100 excavation locations
Kobe earthquake strikes Japan
Owner directs EPC contractor to design around the obstructions
World supply of steel disappears overnight as Japanese production is halted and Japan becomes and importer of
steel
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Refinery Renovation and Expansion
EPC contractor discovers errors in Heat and Material balances provided as part of the basic engineering by
owner (Flow Diagrams and P & IDs must be redesigned)
Owner promises action on proposed change orders
EPC redesigns the pipe rack system to utilize the available steel which can be procured (mixture of English
and Metric sizes)
EPC designs new foundation locations due to unavoidable underground conditions
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Refinery Renovation and Expansion
Sub-contractor submits a $ 18 million claim for delay
Owner demands a recovery schedule to overcome the delays caused by the EPC contractor
Recovery schedule accepted by the owner eliminates the predecessor/successor relationship between engineering
and construction
Owner rejects the design of the tank farm instrumentation and piping system and institutes an on-line blending/mixing
system for diesel, gasoline etc.
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Refinery Renovation and Expansion
18 months of chaos elapse on-site
EPC engineers are blaming their own construction staff for the problems and vice versa.
Sub-contractor submits a $ 60 million claim for additional work
EPC contractor submits a $ 110 million claim for all costs incurred to complete the work
EPC achieves substantial completion
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Industrial Coke Manufacturing Facility
Proprietary Process for Coke Ovens, in operation in Virginia
EPC Contractor selected to build a larger facility in Indiana
Site is adjacent to Lake Michigan and old disposal site for blast furnace slag and steel making slag
Project is completed six months late and $ 30 million over budget
EPC Contractor files claim to recover additional cost
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Industrial Coke Manufacturing Facility
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Industrial Coke Manufacturing Facility
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Industrial Coke Manufacturing Facility
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EPC Contractor alleges unknown site conditions caused cost and schedule delay
Owner counterclaims for defective design Draft from the furnace
Ground Swelling and settlement
Lost Profit
Site Dewatering Issues
Draft deficiency
Ground swelling and settlement
Industrial Coke Manufacturing Facility
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Industrial Coke Manufacturing Facility
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Industrial Coke Manufacturing Facility
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Industrial Coke Manufacturing Facility
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Industrial Coke Manufacturing Facility
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Pic 2-5.jpg
Industrial Coke Manufacturing Facility
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Industrial Coke Manufacturing Facility
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Industrial Coke Manufacturing Facility
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Industrial Coke Manufacturing Facility
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Central Artery TunnelAutomation and Monitoring System (Contract C22A2)
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Contract Value - $ 100 Million
Two Years Late
$ 90 Million over budget
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Incomplete work on C22A1
System Architecture
Delayed highway construction
Obsolescence
Construction Schedule Confusion
Recoverable costs @ about $ 25 Million
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Central Artery TunnelAutomation and Monitoring System (Contract C22A2)
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Central Artery TunnelAutomation and Monitoring System (Contract C22A2)
Central Processing
Fibre Optic Loop
Custom Software interfaces
Off the Shelf Software Interactions control system operability
Barrier to upgrading systems software
Hardware changes restricted by custom software
8 bit technology in central processing computer
IPCS Architecture
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Central Artery TunnelAutomation and Monitoring System (Contract C22A2)
HTSI properly bid the work
CA/T knowingly or unknowingly provided defective data and information
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Central Artery TunnelAutomation and Monitoring System (Contract C22A2)
Rapid changes 1992 to 2003
Memory, Bandwidth, Storage
Exhibit 6
Requirement to upgrade to current
Requirement to be expandable
Piecemeal upgrades required by CA/T
Sequential upgrades from 8 to 16 to 32 bit technology
Technological change
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User Expectations
I saw a really neat GUI
Graphic displays of computer games
Gaming technology driving industrial applications
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Traffic Control System Project Failure
Due to:
Poor computer System Design Architecture
Cascade of Changes
Flawed Assumptions
Incomplete Testing of Phase One
Bad Scope Definition
Technology Creep
Obsolescence
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Conclusions
1. The HTSI C22A2 bid was consistent with the understanding
of all the parties at bid time, based upon the information
contained in the bid documents and other information
supplied by the CA/T at the time of bidding.
2. The contract documents issued by the CA/T did not
accurately depict either the true state of the work of the
C22A1 contractor or the CA/Ts intended scope of work for the C22A2 contract.
3. The basic system design concept architecture was fatally
flawed in that it was neither easily expandable nor
upgradeable without major modification as contrasted to how
it was described in the contract bid documents.
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Conclusions
4. The installation schedule for the IPCS issued by the CA/T
was not achievable nor did it accurately reflect the state of
completion of the general civil construction portions of the
project when the C22A2 contract was bid.
5. During the course of the project since the C22A2 contract
was awarded, the CA/T was advised of the existence of
conditions 2, 3, and 4 above but either ignored them or
directed HTSI to ignore them. This failure of CA/T to ensure
that the necessary predecessor work was completed and
properly documented was a major initial contributing factor to
HTSIs schedule and cost overruns.
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Conclusions
6. Changes in technology since the C22A2 project was originally
designed (1992-93), updated (1997-98), and bid (1999) have
made the implementation of the project as it was bid no
longer either practical or possible.
7. Given that (a) there was no material error in HTSIs part in initially bidding the C22A2 project (No. 1 above), that (b) HTSI
was fundamentally misled (knowingly or unknowingly) during
the course of its attempts to execute the work of the contract
(No. 2, 3, and 4 above), and that (c) changes in technology
over time have rendered the original design commercially
impracticable or technically infeasible (No. 6 above), MDC
has concluded that the C22A2 contract should be converted
from a fixed price to cost reimbursable type of contract.
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Conclusions8. The CA/T Master Project Schedules do not contain the
necessary information to adequately status and manage the C22A1 and C22A2 contracts or to coordinate these contracts with the work of other contractors upon which they are dependent.
9. The CA/T Master Project Schedules are not useful to either understanding or managing the CA/T project as a whole or providing a basis for analysis and quantification of HTSIs damages.
10. Systems testing was disrupted, delayed and became iterative in nature due to the same system interaction issues driving the software and field installation work.
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Joint StarsAircraft Procurement and Modification
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New application of Side Looking Airborne Radar
Grumman develops the Radar and software
Boeing Military Aircraft procures and militarizes two used 707 aircraft
Aircraft are delayed in initial procurement and modification
Oil price declines to $ 9.00 per barrel
Aircraft procured are in poor condition
Actual quantity of repair and new parts for the aircraft are 10 times the bid estimate by Boeing
Joint Stars
Aircraft Procurement and Modification
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Boeing submits claim for cost impact $ 100 million
Boeing asserts cost increases due to requirements changing for Radar power and mounting
Boeing utilizes parametric estimating methods to justify its claim
Aircraft flight delays impact Radar testing
Grumman rejects Boeing claims after technical and schedule analysis
Joint Stars
Aircraft Procurement and Modification
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Why did Boeing need so many parts?
Why did Boeing procure/manufacture new parts and then rework all the parts for both aircraft?
Joint StarsAircraft Procurement and Modification
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Future Implications for Projects & Project Managers
Why do Systems Fail?Large Complex Systems are Beyond Human Capacity
to Evaluate
In general, we can say that the larger the system becomes, the more the parts interact, the more difficult it is to understand environmental constraints, the more obscure becomes the problem of what resources should be made available, and deepest of all, the more difficult becomes the problem of the legitimate values of the system
Source: C. W. Churchman
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Future Implications for Projects & Project Managers
Emergence
Complex dynamic feedback gives rise to an emergent entity that is qualitatively different from that of its elements. Sand dunes are far different from grains of sand, both in scale and in behavior.
A marketplace based upon money rather than barter is qualitatively different because easily communicable prices emerge that create relationships between all goods and services. More specialized goods and services can participate on an equal footing with everyday commodities.
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And, the emergent behavior called the Web is dramatically different from communities that swap files
by FTP even though the technical differences between
FTP and HTTP are relatively minor.
How big does a system have to be before feedback loops become nearly inevitable? It turns out that it
depends upon how complex their interactions are the simpler the elements and their interactions, the more of
them are needed to give a high probability of
emergence.
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Future Implications for Projects & Project Managers
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Saudi Air Defense System
US Air Force Management
Hardware, Software and Ground Facilities
Five Year Software Development Project
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Saudi Air Defense System
At year five, Boeing predicts five more years for development
Boeing was required by CDRL to utilize software planning tool COCOMO
Boeing monthly reports from year two onward predict software slip due to code growth
New Threat Assessments
New response criteria
More sophisticated software routines
Boeing Contract is terminated
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Saudi Air Defense System
Northrop hired to complete the project
Northrop completes at year ten
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Complexity
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New Approaches for Dealing with Complexity
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Expanded Capacity1.Systems Thinking2. PMBOK
3. Action Learning
4. Advanced Project
Management Capability
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Complexity as a Condition
What is interactive complexity
and why should you care?
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How to Think About Complexity
A large number of elements
Many interactions
Attributes are not predetermined
Interaction is loosely organized and probabilistic in behavior
The system evolves over time
Sub-systems are purposeful and generate their own goals
The system is largely open to the environment
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Complexity
It is the number of parts and the ways in which they interact that define the
complexity of a given system
Two different kinds of complexity Structural complexity
Interactive complexity
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Structural Complexity
Based on the number of parts in a system
A system can have many parts, but no interactive complexity
Machines function this way
Such systems demonstrate:
linearity
proportionality
replication
additive
demonstrable cause and effect
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Interactive Complexity
Determined by the behavior of the parts and the resulting interactions
Attributes of Interactive Complexity unpredictable
non-linear
non-additive
the link between cause and effect is ambiguous
unstable, irregular, and inconsistent
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The New Worldview of Complexity
No certainty
A lack of predictability
A dynamic condition that is to a large degree unknowable
A change in worldview or mindset is fundamental to engaging with interactive complexity
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What does this mean to Project Managers?
A very different set of competencies is required
Complexity cannot be successfully decomposed
Detailed long-term planning is impossible
Rigid structures and elaborate control rules are counterproductive
Traditional PMBOK will drive the complex project towards failure faster
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The Project Managers Challenge!How do you recognize and deal effectively
with emergent conditions of interactive
complexity?
Success depends more on ones philosophy or "world view" than on ones mastery of science and technology
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The Difficulty of Shifting
Ones World View
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The Worldview Shift..
From a mechanistic worldview..
.to a systemic worldview
The mistake of science is to pretend everything is a clock when the world is more like a cloud.
- Jonah Lehrer
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Traditional Project Management
Project Management Body of Knowledge (PMBOK) Fundamentals
Trained in Analysis
Trained to Utilize The Scientific Method of Inquiry
Observation
Model or analysis of the problem
Prediction of behavior based on the Model
Trained to Utilize Models (Primavera Schedules) (CADD Models)
Encouraged to Sub-Optimize (parts of the process)
Failure Modes and Effects Analysis (Cause and Effect)
Not Aware of Systems Thinking Concepts74
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.Complexity requires a more holistic
leadership perspective
Concerning Toyota:This is not a crisis of faulty brakes and accelerators, but a
leadership crisis. William George, Harvard Business School
In fact, the recent criticism of Toyotademonstrates how leadership holds the keys to success, and failure, to organizational transformation.
Alan Pang, Director, Aon Consulting Global Research Center.
It really is a question of Leadership.
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How to Deal with Complexity
From To
Management Leadership
Predict and Forecast Anticipate
Analyze Data Recognize Patterns
Simplify KISS See and Deal With The Whole
Pay Attention To Details Pay Attention To Relationships
Rational Thinking Intuitive Thinking
Learn a Skill Training Nurture Cognitive abilities
Think Algorithmically Think Heuristically
Analytical Thinking (scientific,
based on induction and deduction
thinking)
Design Thinking (based on
abduction thinking)
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Leadership Attributes
Self-control
Cognitive fitness
Ability to distribute attention over many factors
Ability to perceive dynamic relationships
A contemplative turn of mind
A high level of intellectual development
Ability to think concretely
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A powerful memory for the project vision
Powers of synthetic thinking and imagination
Pattern recognition
A disciplined will
Potentiating
A highly active intellect
Disciplined emotions
Self-confidence
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Leadership Attributes
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When PMBOX Fails
A Model for Understanding
Complexity
How do you recognize complexity and
why does PMBOK fail?
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The Cynefin Framework
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Why Many Projects Fail!
Flawed Assumptions
Project Environment Changes (External Factors)
Top Down Planning & Project Planning vs. Business Planning
Ambiguous Communications
Ambiguous Goals
Static Project vs. Dynamic Project Environments
Inability to Adapt to Changes
Uncoordinated Incentives for the Participants
Failure = Greater than either +10% Cost and/or Schedule overrun
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Trouble at the Project Interaction Points
Parts vs. Whole Contractor Coordination Engineering Deliverables Long Lead Equipment Mobilization (Getting resources in place) Interfaces (Between parts of the project
team)
Interfaces (between defined work scopes) Start-Up Testing/ Commissioning Initial Operation and Operator Training
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Snowdens Decision Making Context
Simple: The Domain of Best Practice
Complicated: The Domain of Experts
Complex: The Domain of Emergence
Chaotic: The Domain of Rapid Response
Source: David J. Snowden, Mary E. Boone, A Leader's Framework for Decision Making, Harvard Business Review Article, Nov 1, 2007
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Characteristics
Clear cause-and-effect relationships
The right answer exists; fact-based
Danger Signals
Complacency and comfort
Entrained thinking
No challenge of wisdom
Overreliance on best practice
Simple Context
What are simple cases, how do you recognize
them, and how are they handled?
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Example: Gas Gathering Project
Contract Provisions
PMBOK Skills
Project Monitoring
Claim Situation Recognition
Early Recognition of Metric Deterioration
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Characteristics
Expert diagnosis required
Causal relationships are discoverable
More than one right answer exists; fact-based
Danger Signals
Overconfident experts in their own solutions
Analysis paralysis
Viewpoints of non-experts excluded
Complicated Context
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Example: Coke Manufacturing Plant
Multiple Symptoms of Trouble
No One Determinant, Cause and Effect Relationship
Multiple Parties Share Responsibility
Successive Analysis Yield Different Results
No Coherent Relationship between Scope, Schedule and Cost Outcomes
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Characteristics
Flux and unpredictability
No right answers; unknown unknowns
Many competing ideas
Emergent patterns provide instruction
Danger Signals
Temptations to regress to habitual command-and-control management
Temptation to look for facts
Desire for accelerated problem resolution
Complex Context
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Example: Highway Automation
System
Every Known Symptom of Project Failure
Input to Output Models no Longer Work
Cost Spiral without Control
Progress is Impeded Across all Elements of the Project
Lots of opinions and finger pointing
Demoralization of Management and Staff
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Characteristics
High turbulence
No clear causal relationships
Unknowables
High tension
Many decisions to make with no time to think
Leaders Job
Act Sense Respond
Watch for what works, instead of right answers
Provide clear, direct communication
Danger Signals Next Steps
Set up parallel teams to take advantage of opportunities
Encourage advisers to challenge leaders point of view
Work to shift the context to complex
Missed opportunities to innovate
Applying command-and-control approach longer than needed
Chaotic Context
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The Cynefin Framework
This is NOT a recipe it is a contextual sense making
guide.
All contexts can exist at the
same time. You just dont know it.
SENSE and RESPOND are
common. WHAT is sensed and when?
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Simple Sense - Categorize -Respond We know what we know.
Heuristic:
We only need to know what we need to know when we know it. - David Snowden
CONTEXT0 THE LEADERS JOB DANGER SIGNALSRESPONSE TO
DANGER SIGNALS
SIMPLE
Sense, categorize, respond Ensure
that proper processes are in place
Delegate Use best practices
Communicate in clear, direct ways
Understand that extensive
interactive communication may
not be necessary
Complacency and comfort
Desire to make complex problems
simple
Entrained thinking
No challenge of received wisdom
Overreliance on best practice if
context shifts
Create communication channels
to challenge orthodoxy
Stay connected without
micromanaging
Dont assume things are simple
Recognize both the value and the
limitations of best practice
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Complicated Sense Analyze - RespondWe know what we dont know.
Heuristic:
We can't solve problems by using the same kind of thinking we used when we created
them. - Albert Einstein
CONTEXT THE LEADERS JOB DANGER SIGNALSRESPONSE TO
DANGER SIGNALS
COMPLICATED
Sense, analyze, respond
Create panels of experts
Listen to conflicting advice
Experts overconfident in their
own solutions or in the efficacy of
past solutions
Analysis paralysis
Expert panels
Viewpoints of non-experts
excluded
Encourage external and internal
stakeholders to challenge expert
opinions to combat entrained
thinking
Use experiments and games to
force people to think outside the
familiar
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Complex Probe - Sense - RespondWe dont know what we dont know.
Heuristic:
entropy eventually is nothing more nor less than loss of information.- Gilbert Newton Lewis
CONTEXT THE LEADERS JOB DANGER SIGNALSRESPONSE TO
DANGER SIGNALS
COMPLEX
Probe, sense, respond
Create environments and
experiments that allow
patterns to emerge
Increase levels of interaction
and communication
Use methods that can help
generate ideas
Temptation to fall back into habitual,
command-and-control mode
Temptation to look for facts rather
than allowing patterns to emerge
Desire for accelerated resolution of
problems or exploitation of
opportunities
Be patient and allow time for
reection
Use approaches that encourage
interaction so patterns can emerge
Open up discussion (as through
large group methods); set barriers;
stimulate attractors; encourage
dissent and diversity; and manage
starting conditions and monitor for
emergence
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Chaotic Act - Sense - RespondWe dont know.
Heuristic:
The absence of evidence is not evidence of absence, or vice versa. - Donald Rumsfeld
CONTEXT THE LEADERS JOB DANGER SIGNALSRESPONSE TO
DANGER SIGNALS
CHAOTIC
Act, sense, respond
Look for what works instead of
seeking right answers
Take immediate action to
reestablish order (command
and control)
Provide clear, direct
communication
Applying a command-and-control
approach longer than needed
Cult of the leader
Missed opportunity for innovation
Chaos unabated
Set up mechanisms (such asparallel teams) to take advantageof opportunities afforded by achaotic environmentEncourage advisers to challengeyour point of view once the crisishas abatedWork to shift the context fromchaotic to complex
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Situation Awareness
What is Situation Awareness and
Why is it Important in
Conditions of Complexity?
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The Cognitive Continuum
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Perception vs. Reality
Need to make sense
Ordered = analysis
Categorization is a kind of analysis
Fact-based relationships/cause-effect
Unordered = action
Probe is a kind of action
Pattern-based relationships/interactions
Disorder = no clear context
Total loss of information high entropy
Asymmetric collapse
What are you really sensing?
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Sense making is the ability or attempt to make sense of anambiguous situation. More exactly, sense making is the
process of creating situational awareness and understanding
in situations of high complexity or uncertainty in order to
make decisions.
It is "a motivated, continuous effort to understand
connections (which can be among people, places, and
events) in order to anticipate their trajectories and act
effectively.- Gary Klein
Sense = Sense making
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The Situational Awareness/Situational
Understanding (SA/SU) Model
Dealing with Interactive Complexity requires understanding that failures occur when
uncertainties and interactions are not properly
accounted for.
So what does the Leader need to do? Same basic issues faced by:
Pilots, Warfighters, Police, Doctors, Etc.
Leaders need to adopt
the Situational Awareness/Understanding mindset
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Who
What
When
Where
(Why)
Achieving Situational Awareness
Dont boil the ocean Avoid information overload
Information(Answers to?)
The first step..
Situation(Avoid boiling the ocean)
Helps to
Define
Narrows the
process
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..next, Situational Understanding
Decisions are based on reducing Decision
Risk!
Who
What
When
Where
(Why)
How(Decision)
Situational
Awareness
Situational
Understanding..Time to..
Sensemaking(Decision Risk)
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Example: Boyds OODA Loop SA/SU Model
Note the combination of Analyses and Synthesis as
part of Orientation
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Action Scripts
Patterns
Clues
Situation
Mental Simulation
Mental Models
To affect the
generates
that let you recognize
thatactivate
which youassess by
using your
Recognition-Primed Decision Model
Gary Klein 2003
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Application of SA/SU
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Second law of thermodynamics
Entropy (a measure of disorder)
Same principle applies to a program
Over time, a program will become more disordered if left alone and will move
through each context
Systemic Events can cause a program to move across contexts
As events move into complexity, the first law of thermodynamics comes into play:
Heat is transferred to the PM!!
Situational Awareness and Program Time
Program Time
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Heuristics: SA/SU Approach
Cognitive Focal Aids
Form follows function: Louis Sullivan (Architect)
Examples:
If each part of a system, considered separately, is made to operate as efficiently as possible, the system as a whole will
not operate as effectively as possible
The performance of a system depends more on how its parts interact than on how they act independently of each other
Heuristics help to focus quality thinking
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Applying Heuristics
The challenge:
To determine when and how to forego intuition for the application of rigorous objective techniques for
decision-making
Example: Over-reliance on risk models instead of using
good judgment (Wall Street)
Heuristic: If its too good to be true, then it probably isnt true. (Example: Madoff, Enron, etc)
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SA/SU Project Components: People and Technology
80+% of digitized information resides in individual hard drives and in personal files and is unstructured, not
secure nor backed up.
Employees get 50%-75% of their relevant information directly from other people via technology not face-to-face
Wasted Time is a key to ROI
Intellectual Property
Individual knowledge leaves with employees
Leverage past experience to organizational learning
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No agreed upon definitions (shared context)
Different tools and processes = different data
Manual transformations and analysis
Manual Audit Trails
Poor Data Quality
Poor Connectivity from applications to resources
One Way Data Traffic (errors not corrected at the source
Same data stored in multiple locations
SA/SU Project Components: People and DATA
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Red Flag: Dont worry everything is (or will be) Fine
How does one achieve SA/SU?
Make use of dashboards and scorecards
What are you measuring and why?
Ask questions: Who, What, When, Where, Why and How?
Use heuristics to develop key questions
Start a blog: Example CPL Cartwright
Take time to walk around and listen
Communicate, Communicate and Communicate some more talk to the whole system
What does a Program/Project Leader do?
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Applying Systems Thinking
How do you apply systems
thinking to project management
to mitigate complexity?
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The Difficulty of Shifting
Ones World View
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The Mechanistic View of the World
In the Renaissance, when the science as we know it today was born, a
scientific inquiry method called Analysis
was developed.
Analysis comes naturally. Just watch children taking apart new things, and
curious about the parts.
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Analytic Thinking
Take it a part - down to its indivisible parts, elements
Explain the behavior or properties of each part taken separately
Aggregate the explanations of the parts into an explanation of the whole
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A Systems Approach to the Capital
Project
View a capital project as a social system Social systems are purposeful systems that contain
purposeful parts and are contained in a larger purposeful system
A set of constantly changing processes, relationships, and components
The way in which the elements of the system come together can lead to outcomes that are materially different from those planned
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Definition of Systems Thinking
Systems thinking is a holistic approach to understanding that focuses on the way that a
system's constituent parts interrelate and how
systems work over time and within the context of
larger systems
To understand systems thinking, we must first understand systems
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Systems Thinking: What is a System?
Definition: SystemWhole which consists of a set
of two or more parts
Three requirements:
Each part must affect behavior
All parts must be interconnected
All subsets must effect behavior, none can
act independently
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Steps to a Systemic Approach
Synthesis vs. AnalysisSynthesis = putting things together
Analysis = taking things apart
3 Steps to Synthesis1. Identify the containing whole (system)
2. Explain the behavior or properties of the containing
whole
3. Then explain the behavior or properties of the subsystem
and its function within the containing whole
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Analytical and Synthetic Thinking
Analytical ThinkingThe object is considered a whole to be taken apart
Example: Calculus
Synthetic ThinkingThe object is considered as an integral part of a larger
whole
Leads to systems thinking
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The Importance of Systems Thinking
Helps to design smart, lasting solutions to problems
A more precise image of reality in its simplest sense
Encourages long-term thinking
Founded on fundamental principles that integrate all aspects of life
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From Mechanistic
Thinking
To Social Systems
Thinking
Analysis (An explanation of the whole derived from explanation
of its parts.)
Synthesis(An explanation of the whole derived from explanation
explaining the role of the system in the larger system of
which it is a part.)
Reductionism(The belief that everything can be reduced.)
Expansionism(The system is always a sub-system of some lager system.)
Cause and Effect(Environmental free theory of explanation, a cause
needs to both necessary and sufficient in order to have
the corresponding effect.)
ProducerProduct(Environmental full theory of explanation as opposed to
cause and effect where the importance of the environment is
stressed.)
Determinism(Fatalism.).prior condition )
Indeterminism(Probabilistic, observe and discover.)
Research(The embodiment of the above to arrive at instructions
based on theory.)
Design(The embodiment of the above to facilitate learning.
Designing the whole systems means creating a system
configuration that is optimum.)
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Design The Core Concept in Systems Thinking
Design a method of problem solving
Design is to the systems thinking as "continuous improvement" is to scientific thinking
Design - a process which requires the ability to question prior or existing assumptions regarding the ultimate state to be achieved.
Source: Van Gigh and Warfield
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All People are Designers Design is basic to all human activity Design is the conscious effort to impose meaningful
order
The planning and patterning of any act towards a desired, foreseeable end constitutes the design process
All that we do, almost all the time, is design Any attempt to separate design, to make it a thing-
by-itself, works counter to the inherent value of design as the primary underlying matrix of life
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Design Thinking
The designers who can solve the most wicked problems do it through collaborative integrative thinking, using abductive logic, which means the logic of what might or could be.
Conversely, deductive and inductive logic are the logic of what is.
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Prospective Hindsight or
A Pre-Mortem
Prospective hindsight, called a pre-mortem, is a method which helps project teams identify risks at the outset Research conducted in 1989, found that Prospective Hindsight
(imagining that an event has already occurred)increases the ability to correctly identify reasons for future outcomes by 30%.
The System Was Destroyed Last Night!
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Capital Projects As Social Systems
Include all primary stakeholders - owner, designer, and constructor as well as other stakeholders such as subcontractors, material and equipment vendors, and the end-user(s) of the product or service.
The adoption of a social systemic approach to capital project management has several implications. Three of these implications are: alignment of purpose
management of interactions, and
learning and adaptation
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Stakeholder Theory
A Stakeholder is any group or individual who can affect or whom is affected by the
achievement of the projects objectives
Stakeholder Theory describes the principle of whom or what really counts
and to whom or what managers give their
attention.
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Stakeholder Theory
EconomicForces Ecological
Forces
Socio-culturalForces
TechnologicalForces
PoliticalForces
Project Environment
StructureCulture
Competencies Resources
Transactional Environment
Trade AssociationGeneral
managers
Union/employees
Varied Instituions
Local, State and Gov
Work packagemanagers Suppliers
Contractorssubcontractors
Customers(users)
Corporate senior managers and
directors
Functional managers
Contextual Environment
Creditors
Employees
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Alignment of Purposes - Changing Mindsets
Requires a high level of commitment from all stakeholders
Purpose of the project must be aligned with the purpose of the larger, parent organization
The purpose of each of the parts must be aligned with the projects purpose
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Team Alignment - Convergence of Mindsets
Concerted Project Team Action
Concerted Project Team Action
Individual Mindsets
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Alignment of Purposes
Includes the purposes of the individual project team members as well as their own individual parent organizations.
The stakeholder organizations (especially the designer and constructor) must accept this approach to project management.
This buy-in is encouraged through the win-win incentives
Requires a substantial redesign of the contract documents.
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A Systems Approach
to Project Management
Application Examples
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Symptoms are Often Mistaken for Causes
Why is this the case? Organizational structures are inflexible and not aligned for
performance
People skill sets are lagging current needs
Current process improvement efforts are largely
independent and reactive
Insufficient technology resources being applied to
prepare for future (3-5 year out) problems
Policy does not align with advances in technology
Need To Re-Factor The Way We Lead Programs
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Abductive Reasoning
ABDUCTIVE REASONING is a means for design thinking
Purpose - to balance analytical thinking and intuitive thinking
A mix of reliability + validity Neither analytical (deductive and inductive
reasoning) nor intuitive reasoning are sufficient to maximize performance
Abductive thinking is exploitation and exploration
Combines adjustment and analysis Encourages innovation and efficiency Abductive
Thinking
Designers, who live in a world of abduction, actively look for new data points, challenge accepted explanations, and infer possible new worlds (Martin 64-65)
Analytical
Thinking
Intuitive
Thinking
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Analytical
Thinking
Intuitive
Thinking
Ackoff: wisdom, deals with the future because it incorporates
vision and design. With wisdom,
people can create the future
rather than just grasp the present
and past.
Abductive
Thinking
Abductive Reasoning
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REFERENCES
1. Fooled by Randomness, The Hidden Role of Chance in Life and in the Markets, Nassim Nicholas Taleb, 2004
2. Harnessing Complexity, Organizational Implications of a Scientific Frontier, Robert Axelrod & Michael D. Cohen, 2000
3. The Fifth Discipline, The Art & Practice of the Learning Organization, Peter M. Senge, 1990
4. Thinking in Systems, A Primer, Donella H. Meadows, 2008
5. The Black Swan, The Impact of the Highly Improbably, Nassim Nicholas Taleb, 2007
6. Thinking And Deciding, Fourth Edition, Jonathan Baron, 1988
7. The Fifth Discipline Fieldbook, Peter Senge, Richard Ross, Bryan Smith, Charlotte Roberts, Art Kleiner, 1994
8. Leadership and the New Science, Discovering Order In A Chaotic World, Margaret J. Wheatley, 2006
9. Complexity Leadership, Part I: Conceptual Foundations, Mary Uhl-Bien & Russ Marion, 2008
10. Business Dynamics, Systems Thinking and Modeling for a Complex World, John D. Sterman, 2000
11. Complex Systems Leadership Theory, New Perspectives from Complexity Science on Social and Organizational Effectiveness, James K. Hazy, Jeffrey A. Goldstein, Benyamin B. Lichtenstein, 2007 137
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WEB SITES
1. Ackoff Collaboratory: http://www.acasa.upenn.edu
2. The Systems Thinker Newsletter:
http://www.thesystemsthinker.com
3. The In 2 In Thinking Network: http://www.in2in.org
4. hbr.org | November 2007 | Harvard Business Review 69
Snowden and Boone
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Questions
1. What is interactive complexity and why should you
care?
2. How do you recognize complexity and why does
the basic PMBOK approach fail?
3. What is situation awareness and why is it
important in conditions of complexity?
4. How do you apply systems thinking to project
management?
5. How can a Systems Thinking approach mitigate
complexity?
6. How do you apply this knowledge to your
projects?
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7. Has anyone experienced what you believe
was complexity in a program?
8. If so, can you provide to share with us?
9. Did a solution emerge? If so, how?
10. What is emergence?
11. Do you think that more than one context can exist at a
time?
12. So how does a PM understand the different contexts?
13. What is abductive reasoning?
14. Why are assumptions so important to project success?
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Questions
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15. How many Black Swan events have you experienced in
PM?, in life?
16. Why are interactions the key to Complexity
17. If Complexity is not managed effectively, what results?
18. Who must assume leadership?
19. What is the OODA Loop?
20. What are the elements of situational awareness?
21. What are the three key elements to Project
Management?
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Questions