NTXISSACSC4 - Hacking Performance Management, the Blue Green Game

@NTXISSA #NTXISSACSC4
Hacking Performance Management
The Blue Green Game
Dr. Branden R. Williams
Director
Union Bank
8 October 2016

A quick poll
(Write your answers down)
Before we start…

• 1. Performance measures:
• a. Have little or no impact on behavior
• b. Have a moderate impact on behavior, but are
not a major factor
• c. Determine how individuals behave

• 2. It is most important that performance
measures should:
• a. Accurately reflect past performance
• b. Correctly influence future behaviors

• 3. Performance measurement should focus
on the department level and encourage
optimal departmental performance.
• a. True
• b. False

Game Theory Primer:
The Prisoner’s Dilemma
A Quick Primer

Source: https://youtu.be/t9Lo2fgxWHw

Stay Silent (Cooperate) Confess (Defect)
Stay Silent
(Cooperate)
(-1, -1) (-3, 0)
Confess
(Defect)
(0, -3) (-2, -2)
Prisoner Bob
Prisoner Alice

COMMON QUIPS ABOUT PERFORMANCE
MANAGEMENT

• Kerr (1975) argues that formal reward systems should positively
reinforce desired behavior, and not constitute an obstacle for
the organization and its employees to overcome.
• Johnson and Kaplan (1987) expose the inherent flaws of
traditional management accounting systems and describe
dysfunctional behaviors from traditional performance measures.
(Management Accounting)
• Kaplan and Norton (1992, 1996) further highlight the
weaknesses of traditional measurement systems that lead to
inappropriate behaviors such as short-term thinking, lack of
strategic focus, failure to reinforce continuous improvement,
and the resulting suboptimal system performance. (Balanced
Scorecard)
Copied and formatted from Umble & Umble (2012).

• Goldratt (1990) wrote “Tell me how you measure
me, and I will tell you how I will behave.” AND “If
you measure me in an illogical manner, do not
complain about illogical behavior.” (The Goal)
• Chenhall and Langfield-Smith (2007) argue that the
effectiveness of performance measurement
systems depends on how they impact individuals’
behavior.
• Radnor and Barnes (2007) suggest that
performance measurement systems should
promote appropriate behaviors.
Copied and formatted from Umble & Umble (2012).

Any examples of poor performance
management?
Before we play the game…

And now, on to the game!

RULES
Let’s play the Blue Green game (Umble & Umble)
and win some coffee!
Split into FOUR TEAMS.
Elect a manager!
If a department cannot reach a
consensus on the color of chip to
submit, the manager is authorized to
make the final decision
Team with the best score wins!
Every member of the winning team wins a $5 STARBUCKS GIFT CARD!
Yes, they actually work, and I’m not messing with you.

THE BLUE-GREEN GAME
Five rounds of play.
Notes:
• Points DOUBLE in Round 3
• Points TRIPLE in Round 5
Distribution of Chips Number of Points Won/Lost
4 Blue, 0 Green Each department wins 1 point
3 Blue, 1 Green Blue Departments
Green Departments
Lose 1 point
Win 3 points
Green Departments
Lose 2 point
Win 2 points
Green Departments
Lose 3 point
Win 1 points
0 Blue, 4 Green Each department loses 1 point

Round 1
Submit a chip!

SCORING
4 Blue, 0 Green Each department wins 1 point
Green Departments
Lose 1 point
Win 3 points
Green Departments
Lose 2 points
Win 2 points
Green Departments
Lose 3 points
Win 1 point
0 Blue, 4 Green Each department loses 1 point

Round 2
Submit a chip!

Round 3
Submit a chip!

SCORING
4 Blue, 0 Green Each department wins 2 points
Green Departments
Lose 2 points
Win 6 points
Green Departments
Lose 4 points
Win 4 points
Green Departments
Lose 6 points
Win 2 points
0 Blue, 4 Green Each department loses 2 points

Round 4
Submit a chip!

Round 5
FINAL ROUND
Submit a chip!

SCORING
4 Blue, 0 Green Each department wins 3 points
Green Departments
Lose 3 points
Win 9 points
Green Departments
Lose 6 points
Win 6 points
Green Departments
Lose 9 points
Win 3 points
0 Blue, 4 Green Each department loses 3 points

AND THE WINNER IS….
Each group announce their points

A quick poll
(Write your answers down)
Have things changed?

What did we learn?
Let’s debrief before the next slides.

RESULTS
Silos promote bad behavior, allowing each
organization to attempt to maximize their payoffs.
Rational players act to maximize their
payoffs, even at the expense of others
Poor transparency of goals and
performance promotes bad behavior
Given the opportunity, individuals will
take advantage of poorly constructed
plans
Pro tip: TEST performance management systems after you construct
them. See what would happen if you aim to maximize a particular
payoff. Reward systems are effective, at times to a determent!

TYING TO SECURITY
Organizational metrics are often not optimized to
allow employees to contribute to global optimum.
Security metric of most closed
vulnerabilities
Security metric of most blocked
attacks (which is sketch to begin
with)
Number of systems moved into
compliance with X standard
• Better Options:
% of systems that meet X
Length of security patch deployment, by severity

GAME THEORY FUN
People often take aggressive postures that lead to mutually bad outcomes even
though mutual cooperation is mutually preferable.
Even if everyone agrees that an outcome is everyone’s favorite, they might not get
that outcome.
Closing roads can improve everyone’s commute time.
Everyone might mimic everyone else just because two people chose to do the
same thing.
You shouldn’t try to maximize your score in Words with Friends/Scrabble.
As drug tests become more accurate, they should be implemented less often.
Source: https://williamspaniel.com/2014/05/25/game-theory-is-really-counterintuitive/

References
• Chenhall, R. H., & Langfield-Smith, K. (2007). Multiple perspectives of performance measures.
European Management Journal, 25(4), 266–282.
• Goldratt, E. M. (1990). The haystack syndrome: Sifting information out of the data ocean.
Croton-on-Hudson, NY: North River Press.
• Johnson, H. T., & Kaplan, R. S. (1987). Relevance lost: The rise and fall of management
accounting. Boston, MA: Harvard Business School Press.
• Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard—measures that drive
performance. Harvard Business Review, 70(1), 71–79.
• Kaplan, R. S., & Norton, D. P. (1996). Using the balanced scorecard as a strategic management
system. Harvard Business Review, 74(1), 75–87.
• Kerr, S. (1975). On the folly of rewarding A, while hoping for B. Academy of Management
Journal, 18(4), 769–783.
• Poundstone, W. (1992). Prisoner’s dilemma. New York, NY: Doubleday.
• Radnor, Z. J., & Barnes, D. (2007). Historical analysis of performance measurement and
management in operations management. International Journal of Productivity and
Performance Management, 56(5/6), 384–396.
• Umble, E., & Umble, M. (2012). Illustrating the Impact of Performance Measurement Systems
on Organizational Performance: The Blue-Green Game. Decision Sciences Journal of Innovative
Education, 10(3), 461–467.

That’s it, that’s the end!
@BrandenWilliams
brw@brandenwilliams.com

@NTXISSA #NTXISSACSC4@NTXISSA #NTXISSACSC4
The Collin College Engineering Department
Collin College Student Chapter of the North Texas ISSA
North Texas ISSA (Information Systems Security Association)
NTX ISSA Cyber Security Conference – October 7-8, 2016 37
Thank you

NTXISSACSC4 - Hacking Performance Management, the Blue Green Game

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