I Said It Wasn’t Complex, I Didn’t Say It Was Easy, Part II

 

In last week’s blog I discussed the phenomenon of the codex of commonly-accepted management theories being, well, wrong in several of their assertions, and of the outright impossibility of getting those theories’ adherents to see their error. Frustrating, isn’t it? I mean, these so-called experts in business and management theory can be shown instance after instance of real-world contradictions to their theories, and they just won’t budge. If you happen to be in one of these “expert’s” classes, and you, as a PM-type, provide such evidence, they won’t listen to you – they’ll just flunk you. If this “expert” is a colleague, and you happen to be sitting across from him in the board room when a particular point of managerial technical approach comes up that absolutely should not be performed their way, and you say so, they will attack your intelligence, credibility – heck, even your character.

Wouldn’t it be so much better if those calcified hacks had just a modicum of the flexibility that we PM-types exhibit on a regular basis?

Hey! Who’s That In The Mirror?

Well, brace yourselves dear readers – the other reason (from last week’s blog) that PM is so difficult is because of what we do to ourselves in accepting uncritically (or even perpetuating) our own version of flawed management science hypotheses.

Probably the most pernicious recent addition to the cavalcade of these PM hypotheses is the push to align the basis of estimate’s (BoE’s) line items with their equivalent entries in the general ledger. It’s a commonly-known axiom among real Earned Value specialists that comparing budgets to actual costs is meaningless, and doing so at a greater level of detail is not only just as meaningless, it takes a lot more time and effort to accomplish.

Can I prove it’s meaningless? Absotutely.

Consider a project that was originally estimated at $100,000 (USD), with the split of $75K in labor, $25K in equipment. When the project is completed, it actually spent $25K in labor, and $70K in equipment. A properly-functioning Earned Value system would have indicated the project’s mild positive performance throughout, but the “management information system” that tracked the original estimate against the actual costs on a line-item by line-item basis would have been throwing up red flags all over the place, despite the fact that the project came in under budget!

Comparing budgets to actuals doesn’t generate a Cost Variance – that’s done only by comparing Earned Value to Actual Costs. It creates a spend variance, which is truly irrelevant information. But the guidance-issuing entities that insist on this kind of “analysis,” which results in no usable information whatsoever, have also pushed the notion that too many start-to-start relationships in a Critical Path schedule network will allegedly hide true performance issues. I swear I am not making this up. These guidance-issuing entities will insist on the generation of provably invalid data streams, and then turn right around and impugn the integrity of a valid one if it shows a singularly irrelevant characteristic. Does this seem right?

Irrelevancies! Irrelevancies Everywhere!
And don’t even get me started on the time-phased estimate to complete (ETC).

Or the bottoms-up estimate at completion (EAC).

Or the so-called 80% confidence interval on cost or schedule baselines.

But it must be noted that we PM practitioners are doing these things to ourselves. These guidance-generating organizations are churning out this stuff under the auspices of advancing project management, and they are doing so through means that would never pass muster with true peer-reviewed PM evaluation venues, such as The Project Management Journal.

However, in order to assure that I don’t turn in to one of these calcified hacks, I would like to invite my readers to send me any instance of where comparing budgets to actuals was (a) relevant, and (b) more so due to being done on a line-item basis. Fair warning – please include specific assertions, and assemble them into a valid, logical argument.

Otherwise, my frustrations with the abandonment of valid management science scholarly research will soon turn me into a calcified hack.