IPO Theory is Incomplete

October 29th, 2002 by Hal

Koskela and Howell (K&H) claim in their paper The Underlying Theory of Project Management is Obsolete the theory-in-use of project management is based on a production theory and a management theory. The production theory is transformation: input-process-output (IPO). The management theory is closed-loop: planning-executing-controlling, with the emphasis on planning (management-as-planning, the dispatching model, and the thermostat model of control). For this posting I'll focus on the transformation model. Tomorrow I'll comment on management-as-planning.

Our practices for creating the WBS get in the way of combining theories.

The transformation model is so pervasive in our experience and thinking that we don't see the world a different way. The approach is reductionist — break the project down into milestones, phases, activities, and tasks. The project management mechanism for defining and organizing plan items is the work breakdown structure (WBS). K&H argue that IPO theory misses two complementary theories: flow and value generation. Both theories have been around for quite some time, 1920s and 1930s, respectively. But in our machine-dominant world tbe IPO model pervades, missing the attention these other theories give to time and to what is of value for customers.

So where do we go from here? Some people contend that we can just put the three production theories together in our practice. In my experience, our practices for creating the WBS get in the way of this. Other approaches must be pursued. Some of the more promising approaches are business process mapping (workflow), story-boarding, and the scrum development approach of iterating.

In the meantime, perhaps there's a litmus test for defining or accepting plan items. Ask, "Would my customer be willing to pay for (see value in) what I plan to do?" If not, then adjust the plan.

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