A DIFFERENT DRUMMER

Exact Estimates: Oxymorons, Insights and Tips for eXtreme Projects

by Doug DeCarlo, Principal
The Doug DeCarlo Group
www.dougdecarlo.com



You're damned if you do and damned if you don't. Estimates are one of those project rituals you can't get away from. When it comes to eXtreme projects - those high-speed ventures characterized by high uncertainty and high change - estimating can be a health hazard if you mismanage expectations.

Business Owners have a legitimate right to ask for estimates. Because I'm an idealist, I also believe you have a moral obligation to the business, to management and to your team to tell it like it is. Here are some hard-earned guidelines:
  • Your goal is to expose the business folly of coming up with a secure estimate (whether it be schedule or budget).


  • Since there is no security on an extreme project, not only is the term "exact estimate" an oxymoron, giving such an estimate also makes you one too.
Oxymorons have no refuge. Expecting to hold others accountable for your estimates goes a long way to demoralize the team; it practically guarantees failure. A reminder: best estimates come from those who will do the work. In other words, avoid being the lone estimator. There is safety (and intelligence) in numbers. Get your team involved, or trip a few been-there-done-that veterans and ask them.

Then do a gut-level rating of each of the unknown elements that can influence the estimate. How? Get out your spreadsheet and perform a hip pocket risk assessment to educate the Business Owner. Start by making a list of the unknowns and other factors that are likely to impact estimates for your particular project. The broad categories to work with are:
Business conditions: such as competitive factors, government regulations, economic environment

Deliverable requirements: scope, complexity, performance level, completion criteria, newness, external vendors, etc.

Project management capability: team availability, dependency on other projects, stakeholder participation, internal approval cycles
Then rate these factors. The scale I like to use is "our degree of control" over each element." "0" = no control. "10" = complete control. You can even show off and do a weighted average for each element. For example, "Team member availability," might have a weight factor of 5 points. "Internal approval cycles" might have a weighting of 2 points. Tip: one of the principles of extreme project management is, "Simplicity Wins." So, too, with this hip pocket assessment.

Use the hip pocket assessment first as a reality check to educate yourself on what you are in for on this project. According to some project managers I work with, a major benefit of the hip pocket risk assessment is it helps them to get up the courage to face the Business Owner.

Confidently deliver the news.
Once you see the project for what it is, use it to keep the Business Owner from living in fantasyland. Yes, chances are the Business Owner will go into project sticker shock once s/he sees your numbers and begins to confront the realities of the project. (That's their problem. Your job is not to save the innocent or the naïve from the truth about estimates.)
  • Make it clear that your team's (or group's) estimate is not a prediction, or a commitment. It's not a promise or a guarantee (although the Business Owner will most likely take it as such if they are still breathing).


  • Stay away from single-point estimates. Always give a range (even though they'll take the midpoint or low end.) Say something like this: "Given the level of unknowns at this time, we guestimate that it will run $250K, plus or minus 75%. We say this with a 50% level of confidence.
Then take a deep breath. Shut up and listen.

Assuming the Business Owner still wants to move forward, ask for what you will need in order to gain more control over the controllables. It always seems to come back to the "C" word: Courage.

eXtremely yours,

Doug




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