When Information Flow in Project Organizations Becomes Turbulent:
Toward an Organizational "Reynolds Number"
Raymond E. Levitt**, Michael Fyall, Per Bjornsson, William Hewlett, III
levitt@ce.stanford.edu
web site URL: www.stanford.edu/group/VDT/


     Projects involve difficult trade-offs among product scope, process schedule, and delivery
resources.  When project goals become overconstrained÷e.g., by excessive schedule pressure÷
something has to give!  Engineers struggling to meet unrealistic deadlines for complex products can
trigger organizational failure, when a combination of direct work, coordination work and rework
backlogs both workers and managers, causing coordination and rework to get shortchanged.  A
downward spiral then commences, in which exceptions trigger rework tasks that trigger ever more
exceptions, culminating in a "quality meltdown."  The prototype Lockheed Launch Vehicle that was
detonated when it departed controlled flight arguably resulted from this kind of organizational failure;
so did the flawed Intel Pentium chip that had to be recalled.  
     To model these kinds of organizational risks in fast-track project teams, The Virtual Design Team
(VDT) research operationalized and extends Jay Galbraith's information processing view of workflow
for multidisciplinary project teams engaged in fast-paced knowledge work such as new product
development or software engineering. VDT statistical introduces exceptions that workers must pass
up the hierarchy for resolution by subteam leaders and project managers.  Decision-making policies
such as centralization, formalization, matrix strength and team experience affect attention allocation,
exception routing and decision-making parameters in the model. VDT generates predictions of project
schedule, cost and process quality performance. IT has been validated on more than 100 projects,
and was commercialized as SimVision¨ by VitZˇ Corporation of Mountain View, CA in 1997.
     Other than using simulation tools like SimVision, there is currently no reliable way for managers to tell
when a project's goals have become so overconstrained that the risk of organizational failure has
reached unacceptable levels.  The "Reynolds Number" in fluid mechanics predicts whether the flow of
a fluid will be laminar, turbulent, or unstable between these two flow regimes.  Our vision is that,
armed with a similar non-dimensional number to predict turbulence in organizational information flow,
managers could use a small number of metrics describing the project's task interdependencies and
organization to predict incipient organizational failures, and could therefore adjust project goals and
resources proactively to prevent them.  
     We have been conducting research since 1993 to discover a metric that will predict whether the
information flow through a project organization is in the laminar or turbulent regime.  Specifically, the
metric would predict whether a particular set of project goals leaves the organization proposed for
executing the project sufficient organizational slack to deal with exceptions, or whether the project's
goals are so aggressive that exceptions will consume all organizational slack and push the
organization up to÷or beyond÷the "edge of chaos."  The research described in this paper uses the
Virtual Design Team simulation framework to model and calibrate alternative metrics similar to the
Reynolds Number in Fluid Mechanics for predicting organizational failure.  Early results are
encouraging.