Project management methodologies vary widely, often classified into "Fake" or "Real" paradigms.
Understanding these distinctions is vital for effective project leadership.
Fake project management adheres to a rigid, step-by-step process consisting of initiation, planning, execution, monitoring and controlling, and closing phases.
Initiation involves launching the project, defining its vision and objectives, and securing approval to proceed. This phase assesses project feasibility and establishes the project charter.
Project planning is the second phase, focusing on creating a detailed roadmap encompassing timelines, resource allocation, and risk management strategies.
Execution is the third phase, where the project team implements the plan developed during the planning phase, working to deliver project objectives.
The fourth phase, monitoring and controlling, entails tracking project progress and making necessary adjustments to ensure alignment with the project plan.
Closing, the final phase, involves project wrap-up, stakeholder acceptance, and formal project closure activities.
Contrary to the predefined steps of fake project management, real project management transcends procedural constraints, focusing on the fundamental principles of economic value creation for the shareholders by identifying available resources, focusing on stable opportunities, and maturing production processes.
Essentially it is about creating network effects and reward systems that drive the project forward such that it becomes self-sustaining and self-improving over time and the burn rate is optimized.
Network effects occur when the value of a project or product increases as more people use it. By fostering network effects, real project management aims to create a positive feedback loop where the project becomes increasingly valuable as it grows.
Reward systems incentivize stakeholders to contribute positively to the project's growth and sustainability. These systems can take various forms, such as financial incentives, recognition, or opportunities for personal or professional development.
Identify underutilized resources. (Supply/Demand)
- Capital markets
- Legal markets
- Labor markets
Brian Chesky on how Airbnb was started
Brian-Chesky-how-Airbnb-was-started.mp4
So I had this moment, I'm sure all of us have these moments in our life where we make a change and everything changes after that.
I quit my job and I put everything, I have an old Honda Civic, I put everything I own in the back seat and the trunk of old Honda Civic, including a rolled up foam mattress. I have a thousand hours of the bank and I called Joe and I said, I'm coming to San Francisco. It turns out that Joe said, well, the rent is $1,150. So I actually can't pay rent. It turns out that weekend, this international sign conference is coming to San Francisco. We go to the conference website and notice that all the hotels and the conference website are sold out. Then we had this idea, we said, well, what if we just turned our house into a bed and breakfast for the sign conference? Unfortunately, I don't have any beds, but Joe had three air beds. We pulled the air beds out of the closet. We inflated three air beds. We called it the air bed and breakfast.
Larry Page on allocating resources (Google's co-founder)
Larry: I think my job is to create that scale that we haven't quite seen from other companies. You know, how we actually invest all the capital we have. And so on. I think [...] part of our job is kind of like Warren Buffett, managing these disparate things well. I've been doing that in a pretty independent way. And then I think part of our job we see is creating new things, creating new things or buying them at very early stages. Like we do with Android. I think we bought them with 10 people. And that was something I was really excited about.
Interviewer: So you'll keep going. You'll keep expanding the portfolio.
Larry: Yeah, and I think, you know, just looking at how we really invest the resources we have and continue to grow that.
Focus on things that are unlikely to change. (Change/Time)
- Risks and uncertainties
- Rights and obligations
- Skills and abilities
Jeff Bezos on customers and the things that don't change (Amazon's CEO)
Jeff-Bezos-speaks-on-customers-and-the-things-that-don-t-change.mp4
I get asked a very interesting question from time to time that I like and I enjoy and I answer and I play with; and the question is, Jeff, what's going to change over the next 10 years? And that's a fun dinner conversation.
I'll tell you, there's an even more important question that I almost never get asked. And that is: what's not going to change over the next 10 years?
And the reason that question is so important is you can build your plans around those things.
So at Amazon, I know for a fact, customers are going to want low prices 10 years from now. That's not going to change. Customers are going to want fast delivery. They're going to want big selection.
So all the energy we put into those things will continue to pay dividends.
It is impossible to imagine a customer coming to me 10 years from now saying, Jeff, I love Amazon, I just wish you delivered a little more slowly.
Or I love Amazon. I just wish the prices were a little higher.
It's not going to happen.
And so when you can figure out the things that are going to remain true under almost all circumstances, then you can put energy into them.
Patrick Collison on the case for big business (Stripe's CEO)
Jeff-Bezos-speaks-on-customers-and-the-things-that-don-t-change.mp4
Patrick: It's obviously virtuous or compelling or exciting to foster all these nascent startups and to kind of be an anti-incumbent, but what's the case for supporting established businesses?
I think people misunderstand where a small business typically, not in every case, but at least in the cases where we denote them startups, there's usually an embedded innovation and the innovation is kind of all that the company is, like the new idea and they're going to do something better, different or whatever.
And so generally speaking, we like innovation and so we've positive sentiments towards that startup. But there's a lot of innovation that comes from large established businesses. That's not all they do. There's also just running the existing thing. And so maybe it's a smaller share, but the aggregate fraction of innovation that comes from established businesses is really large. And we have to be cognizant of the cognitive bias of the startups, perhaps being somewhat more conspicuous, to choose any sector of the economy, and a significant fraction of the important inventions that occurred over the last 10 or 20 years will have come from the incumbents. And so I think as a general class, and Tyler, of course, would have book on this, I think big business is underrated. I think it's true that established businesses tend to pay better. They tend to be more efficient. More of the innovation in our economy comes from them and they produce a lot of consumer surplus.
Maybe a lot of the tech industry doesn't place a lot of value on process and operational excellence. We kind of culturally value the spontaneous and the creative and the iconoclastic and the path breaking. But building mechanisms that can enable the very reliable provision of important services at scale and removing the sources of variability that can really cause a bad day for a very large number of people. I don't think they get quite as much cultural credit.
Interviewer: I mean, if you think about just like the big trends in society that need to just solve our big problems, like Moore's law or the cost of solar or something, these are just you have marginal improvements over many decades that the big tech or big companies are just able to invest a lot of money into doing the R&D.
Patrick: Relentless iterative improvement is underrated.
Interviewer: When we think about the way in which Stripe will continue to grow in the future, in some sense it will obviously involve a lot of big businesses. Now processing a significant amount of Amazon volume. There's other businesses you're doing deals with. Tell me how you think it kind of makes sense how an exponentially growing startup would contribute to exponentially growing growth for a Stripe. Does the Stripe keep growing at the same trajectory when it's existing big businesses that you're partnering with?
Patrick: Stripe is doomed to eventually grow at the rate of the economy. There is just a question of how long it takes to get there.
Seek energy efficiency. (Output/Input)
- Revenues growth
- Tax optimization
- Cost controls
Elon Musk's five-step improvement process (SpaceX, Tesla, etc.)
Elon-Musk-Five-Step-Improvement-Process.mp4
Everyone's wrong, no matter who you are, everyone's wrong, some of the time.
The most common error of a smart engineer is to optimize a thing that should not exist. Why would people do that? Well, everyone's been trained in high school and college that you gotta answer the questions, convergent logic. So you can't tell the professor your question is dumb. You'll get a bad grade. You have to answer the question. So everyone's basically without knowing it, they got like mental straight jacket on. They'll work on optimizing the thing that should simply not exist. Just make your requirements less dumb.
Your requirements are definitely dumb. It does not matter who gave them to you. It's particularly dangerous if a smart person gave you the requirements because you might not question them enough. No matter who you are, everyone's wrong, some of the time.
Then try very hard to delete the part or process. This is actually very important. If you are not occasionally adding things back in, you are not deleting enough.
The bias tends to be very strongly towards, let's add this part or process step in case we need it. But you can basically make in case arguments for so many things.
Only the third step is simplify or optimize.
Finally, you get to step four, which is accelerate cycle time. You're moving too slowly. Go faster. But don't go faster until you have worked on the other three things first.
And then the final step is automate.
Now, I have personally made the mistake of going backwards on all five steps. Multiple times. I automated, accelerated, simplified, and then deleted.
Dara Khosrowshahi (Uber's CEO) on being decisive
Dara-Khosrowshahi-on-being-decisive.mp4
This is not the first tough time for Uber. And the much tougher time, frankly, was post pandemic. Our mobility business, which was our cash cow, lost 85% of its volume, overnight, within the context that we were losing two and a half billion dollars anyway.
We were deeply unprofitable.
And I was like, all right, let's go. And I took input, but I started leading, and this is not something that you do all the time, because you want your team involved.
You got to be top down, you've got a solve for speed, and you've got to solve for decisiveness.
Because even if you're decisive, you make a decision that's 20% off, it's better than being indecisive and not doing anything.
Mark Zuckerberg on making bold decisions (Facebook's CEO, 2010)
[...] I think making it so that this is a place where people can move quickly is just key. Having an emphasis on making bold decisions and being bold and the products that we build. I think is why we have products like newsfeed, which at the time was controversial, but now is one of the core parts of the product and has been emulated by a lot of other startups and companies, or why we have a platform. When we built our first version of the development platform, people weren't thinking about social networks as social platforms for social software development. And that was a pretty controversial decision, and we decided to go for it. Now we have a development community of almost a million developers, so that is kind of a direct byproduct of that kind of line of thinking.
And then I think just also focusing on leverage and impact, the best people want to go to the place where they can have the biggest impact. We have always focused on this ratio here of the number of engineers that we have to the size of the user base, for the impact that they're going to have. And what we found is that each engineer here is roughly responsible for more than a million users. If you do that calculation, that's much more than smaller companies that have smaller user bases, but smaller employee bases, and much larger than larger companies that have maybe more users, but also a lot more employees. So we're kind of in this sweet spot, and we've always focused on building the company in a way where there's just a lot of leverage, and that that would encourage just the best people to come join the company.