Knowledge Matters™

Today I thought I would share with you two new diagrams from my doctorate, because they elicit interesting management questions. Consider the network diagram below. The graph shows a programme of projects, all of which are dependent on one another for one reason or another. For example a project building an electricity distribution grid in a new town might be critically dependent on a project that is building a dam that will produce hydro-electricity.

The circles are projects coloured and grouped by business unit, and sized by value. The large light blue project at the bottom of the screen is obviously the project with the largest budget. The lines represent the dependency and are coloured by the importance of that dependency – red lines representing a critical dependency.

As a manager where would you give priority to resource allocation? I suggest if you subscribe to the dollars view of the world the bulk of your effort would be directed to the light blue business unit. Now consider the next diagram.

The projects are in the same relative position and use the same colour-codes. This time I have sized the project by the number of incoming links. A project that links to another project is reliant on that project to deliver part of its capability.

Note the dramatic change in size of the projects when viewed this way. Also note how the light blue business unit decreases in importance, relative to the other business units. Now where would you give priority to resource allocation and effort?

A couple of observations are worth noting. The dollar view of the world is well understood in the organisation – that is the senior managers all know what the budgets of the projects are. The link view is not well understood at all. Few project managers see the linkages beyond the links to and from their project. Business unit managers tend to look inwards unless there is a “big-dollars” project in another business unit that impacts on them. No-one has a complete understanding of the inter-project linkages.

The second diagram provides a visualisation of collective knowledge, and is powerful because it has the potential to generate a paradigm shift in how the organisation is managed. Understanding the linkages matters.

Regards Graham