Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 21, Issue 5;   February 3, 2021:

Cost Concerns: Scale

by

When we consider the costs of problem solutions too early in the problem-solving process, the results of comparing alternatives might be unreliable. Deferring cost concerns until we fully understand the problem can yield more options and better decisions.
A vial of COVID-19 vaccine

A vial of COVID-19 vaccine. Vaccinating the world's population is a problem of scale. Developing the vaccine itself was a manifestly successful project. Vaccination of the global population has been less successful. Photo by Maksim Goncharenok from Pexels.

One attribute of a successful problem solution is affordable cost. At every stage of development from conception through elaboration, design, deployment, usage, and retirement, the cost of the solution must be within the reach of the users of the solution. One common pattern that hinders finding successful solutions is excessive concern with costs during the conception stage.

To clarify the importance of understanding the problem in depth, consider this admittedly artificial scenario based on a workshop exercise:

The Marigold project team has been charged with building a tower using only index cards. Neither tape, nor glue, nor fasteners of any kind are permitted. The tower should be as tall as possible using no more than 5000 cards. According to the rules, the "revenue" for the invention is calculated as 1000*E, where E is the elevation of the tower's highest card in centimeters. The "expenses" are calculated as 10*C, where C is the number of cards used. "Profit" is Revenue minus Expenses.

The team immediately starts exploring ways of building tall card towers using very few cards. After about a half hour of this, two team members, Roberta and Robert, leave the room to get ice creams and to think. When they return, the other tower builders have constructed a wobbly tower about two meters tall, which immediately collapses from the breeze that comes through the door Roberta and Robert opened when they returned.

While the other tower builders rebuild their tower, Roberta and Robert decide to read the rules again. (In the real world, the "rules" would be called "requirements.") They discover that the rules have a loophole. If they insert a single card into the crack between two ceiling tiles, that one card meets the definition of a "tower" according to the rules. And the elevation of that card is as high as the room will allow. So, highest possible tower, minimum possible card count. Voila! Maximum "profit."

This scenario Devising brilliantly clever problem
solutions often requires a deep
understanding of the problem space
illustrates two important points about problem solving. First, devising brilliantly clever problem solutions often requires a deep understanding of the problem space. And second, understanding cost sources for solutions requires understanding the properties of the available solutions.

Problems of scale are high risk

The importance of these two ideas is perhaps most obvious when the solution to the problem at hand must scale. In problems of scale, after we find a solution, we must deploy many copies of that solution to large numbers of users. Because some solutions scale more readily than others, cost comparisons among solution options must take scale into account. And that can be tricky for some teams.

The composition of many problem-solving teams is biased in favor of knowledge relevant to conceiving and implementing solutions. There are sound reasons for this. Early in the problem-solving process, the range of possible solutions is poorly understood. Because the people most familiar with implementation technologies are also best able to generate solution options to investigate, we tend to populate problem-solving teams with people who are needed early in the problem-solving process.

But in some cases this practice introduces risk when the team focuses on cost comparisons among solution options too early in the problem-solving process. Consider what happens when significant costs of all relevant solutions are associated not with implementing or manufacturing copies of a solution, but instead, with deploying the solution, or with convincing users or customers to adopt it. For such problems, comparisons of costs of solution options based on comparing their implementation costs are likely to provide misleading results.

This phenomenon is more likely to occur when a solution has significant cost components that lie downstream of the conception phase of problem solving. For example, consider two kinds of attributes such a problem solution might have.

Implementation
Implementation costs are associated with the technologies employed in actually conceiving the solution. For example, if we're making an adhesive, the chemistry of adhesives would be one of the implementation technologies. And the implementation costs would most likely be dominated by the cost of discovering and manufacturing the adhesive.
Stakeholders
Problem solutions have stakeholders. Stakeholder classes vary in size, but the stakeholder classes most likely to contribute significant costs are those associated with large groups of customers or users. The costs that are most significant for problems of scale are those associated with marketing a solution to customers, or with persuading users to adopt a solution, or with obtaining the approval of regulators, or with the logistics of delivering solution-related materials to users.

Teams that have expertise biased in favor of implementation-related issues are more likely to tend to emphasize effort to minimize implementation-related costs. The estimates of stakeholder-related costs by such a biased team are more likely to be inaccurate or incomplete. If teams address cost concerns too early in the problem-solving process, before they acquire team members who are expert in stakeholder issues, their exploration of the space of possible solutions is more likely to be biased in favor of solutions that have low implementation costs, rather than low total cost. For example, they might reject a solution on the basis of high implementation costs, without recognizing that it has very favorable stakeholder-related costs.

Estimates of costs of solutions to inherently large-scale problems must consider how scale affects the viability of each solution. And that consideration is more likely to be objective if it occurs after the team has developed an array of solution options.

Last words

Although problems of scale present special risk for teams that have expertise biased in favor of implementation-related issues, problems of any sort can present special risk for teams that have biased expertise. To manage these risks, tailor the composition of problem solving teams to match solution discovery risk to the needs of the organization. First in this series  Go to top Top  Next issue: Remote Hires: Communications  Next Issue

52 Tips for Leaders of Project-Oriented OrganizationsAre your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!

Your comments are welcome

Would you like to see your comments posted here? rbrenXEiRBfuFHUtjHrqUner@ChacpYPvvSVhUNIOeXHKoCanyon.comSend me your comments by email, or by Web form.

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Project Management:

Two colleagues chatting on their morning breakNine Project Management Fallacies: I
Most of what we know about managing projects is useful and effective, but some of what we "know" just isn't so. Identifying the fallacies of project management reduces risk and enhances your ability to complete projects successfully.
The U.S. Capitol at nightNepotism, Patronage, Vendettas, and Workplace Espionage
Normally, you terminate or reassign team members who actually inhibit progress. Here are some helpful insights and tactics to use when termination or reassignment is impossible.
An air traffic controller using a display system at an Air Route Traffic Control CenterRemote Facilitation in Synchronous Contexts: I
Whoever facilitates your distributed meetings — whether a dedicated facilitator or the meeting chair — will discover quickly that remote facilitation presents special problems. Here's a little catalog of those problems, and some suggestions for addressing them.
A Kemp's Ridley sea turtle (Lepidochelys kempi), ashore, probably to lay eggsSeven Ways to Get Nowhere
Ever have the feeling that you're getting nowhere? You have the sense of movement, but you're making no real progress towards the goal. How does this happen? What can you do about it?
Selling an ideaRisk Creep: II
When risk events occur, and they're of a kind we never considered before, it's possible that we've somehow invited those risks without realizing we have. This is one way for risk to creep into our efforts. Here's Part II of an exploration of risk creep.

See also Project Management and Problem Solving and Creativity for more related articles.

Forthcoming issues of Point Lookout

Adolf Hitler greets Neville Chamberlain at the beginning of the Bad Godesberg meeting on 24 September 1938Coming October 20: On Ineffectual Leaders
When the leader of an important business unit is ineffectual, we need to make a change to protect the organization. Because termination can seem daunting, people often turn to one or more of a variety of other options. Those options have risks. Available here and by RSS on October 20.
Browsing books in a library. So many books, we must make choicesAnd on October 27: Five Guidelines for Choices
Each day we make dozens or hundreds of choices — maybe more. We make many of those choices outside our awareness. But we can make better choices if we can recognize choice patterns that often lead to trouble. Here are five guidelines for making choices. Available here and by RSS on October 27.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenXEiRBfuFHUtjHrqUner@ChacpYPvvSVhUNIOeXHKoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

Reprinting this article

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500-1000 words in your inbox in one hour. License any article from this Web site. More info

Public seminars

The Power Affect: How We Express Our Personal Power

Many The Power Affect: How We Express Personal Powerpeople who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.

Bullet Points: Mastery or Madness?

DecisBullet Point Madnession makers in modern organizations commonly demand briefings in the form of bullet points or a series of series of bullet points. But this form of presentation has limited value for complex decisions. We need something more. We actually need to think. Briefers who combine the bullet-point format with a variety of persuasion techniques can mislead decision makers, guiding them into making poor decisions. Read more about this program.

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at Twitter, or share a tweet Subscribe to RSS feeds Subscribe to RSS feeds
The message of Point Lookout is unique. Help get the message out. Please donate to help keep Point Lookout available for free to everyone.
Technical Debt for Policymakers BlogMy blog, Technical Debt for Policymakers, offers resources, insights, and conversations of interest to policymakers who are concerned with managing technical debt within their organizations. Get the millstone of technical debt off the neck of your organization!
Go For It: Sometimes It's Easier If You RunBad boss, long commute, troubling ethical questions, hateful colleague? Learn what we can do when we love the work but not the job.
303 Tips for Virtual and Global TeamsLearn how to make your virtual global team sing.
101 Tips for Managing ChangeAre you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt?
101 Tips for Effective MeetingsLearn how to make meetings more productive — and more rare.
Exchange your "personal trade secrets" — the tips, tricks and techniques that make you an ace — with other aces, anonymously. Visit the Library of Personal Trade Secrets.
If your teams don't yet consistently achieve state-of-the-art teamwork, check out this catalog. Help is just a few clicks/taps away!
Ebooks, booklets and tip books on project management, conflict, writing email, effective meetings and more.