Project Managers and Knowledge Types

This article will discuss a fundamental economic inefficiency with Project Managers and Middle Management and how this leads into a delineation of knowledge types.


The Fundamental Problem With Project Managers and Middle Management

“I don’t have the local knowledge to do this,” said my project manager. His words, not mine. Although I wasn’t sure his statement was actually true, I understood what it meant. By “local knowledge” he meant knowledge of how to actually do the project task.

How strange, I thought, that he can give me a timeline on which to work when he doesn’t even know how the work is done! It suddenly made sense why his timelines were all wrong. It was the last piece to a puzzle which had been assembling for some time. His timelines are not based on reality, they are simply based on making his boss happy!

So there is a constant struggle where the person doing the task is trying to act according to a timeline based in reality and the manager is operating according to some timeline they think is a decent compromise, although they have no information by which to come to such a justification of reason.

The middle manager or project manager’s boss wants it done as quickly as possible, preferably now. On second thought, preferably 10 minutes ago. The middle manager realizes this is not possible, but still wants it to be done in such a time frame. The task executor under the manager knows how long the task will take if they hurry, on average, and if they slack, at least in the case where they possess “local knowledge.” They may attempt to convey this information to the middle manager, but the information becomes double-corrupted with a predictable bias.

The first corruption is a breakdown in communication. There are numerous reasons this may occur and a big one is simplification. Project timelines are complex. Many time-elements of a timeline are contingent timeframes, where project X will take Y time if Z occurs, and A time if B occurs. Other elements may have a predictable norm, but unpredictable variance. All of these things can be corrected with rigorous measurement and statistical modelling, but how many businesses actually engage in such activity? How many small and medium sized businesses can even afford to do so? In reality, there is alot of guesswork going on due to simplification. The direction of this bias may be random, or it may be “short-biased” if the executor wants to please the manager.

The manager, in turn, wants to please his manager. Another layer of “short-bias” occurs. Furthermore, as an authority figure and some sort of a leader (whether in reality or self-perceived), the middle manager and project manager may try and “play coach,” encouraging the executor to hustle quicker, and creating a doubly-short timeline. When the executor responds, “That’s just not realistic,” the manager may hear it as whining rather than as a matter of fact. Because the manager doesn’t possess local knowledge there is a bias toward hearing whining even when it is a matter of fact.

Although executors certainly do whine from time to time and so sometimes this process can actually produce a positive result. It’s an empirical question and I could be wrong, but my expectation is that there is a fundamental “short-bias” to the middle management process where information is distorted along projected timelines resulting in an over-promising and underproduction.

How do we fix this?

  1. Don’t hire whiners.
  2. Don’t hire people who prioritize making their boss happy over doing there job right and don’t hire exaggerators.
  3. Do hire managers who have local knowledge of the tasks to be executed. Imagine a case where the boss actually has more local knowledge than the executor! That would be awesome because they would be able to legitimately “play coach,” teaching the executor and improving productivity while at the same time producing accurate forecasts.
  4. Use robots instead of people. STATA will usually (but not always) give you a more accurate time forecast than Joe, even if Joe has a ton of local knowledge. It’s also faster, cheaper, doesn’t sleep, doesn’t come in late, doesn’t complain…
  5. Utilize a flat business structure. Just eliminate management as much as possible. Encourage executors to self-manage like doctors, lawyers, and top-notch professionals do.


Delineation of Knowledge Types in Theory

      Local knowledge is a kind of

human capital

    . Local knowledge is knowledge which is relevant to the task at hand. Knowing how to use a lawn mower is local knowledge if the task is landscaping and it is not local knowledge if the task is computer programming. Local knowledge also refers to the transferability of knowledge. Academic research is meant to lead to highly transferable general knowledge. Local knowledge is the polar opposite. Knowledge which is more local is less transferable. For example, knowing how to use a particular lawn mower is more local than knowing how to use lawnmowers, even though both are somewhat local. All knowledge can be considered local to varying degrees, but to call something local knowledge usual indicates that it is more local than general.

  • Active knowledge is taken into consideration as part of a transaction. It could be the case certain knowledge “skips the mind,” where it is known but it is not taken into consideration as part of the transaction or action at hand for some reason. It could be the case that a person is in a great hurry and fails to activate all of their local knowledge, they could be inebriated, or they could have conflicting knowledge and therefore even consciously decide to ignore this information (then we get into debate about information vs knowledge, etc, but let’s leave it be.)
  • Total knowledge is the sum of all knowledge an individual or system possesses. This can be tricky to measure as we are in a way saying that fruit is the sum of all apples and oranges in a system, but we are in theory here so I don’t need to address that. Total knowledge may be useful for some things, but it does not usually and directly cause increased efficiency, although I have no doubt they correlate. Local knowledge actually increases performance.
  • This is not an exhaustive list.


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