Project Management

The Money Files

A blog that looks at all aspects of project and program finances from budgets, estimating and accounting to getting a pay rise and managing contracts. Written by Elizabeth Harrin from

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Recent Posts

The Evolving Landscape of Benefits Realisation

5 Challenges of Integrating Sustainability into Project Plans

Challenges that arise from implementing alternative metrics

Stakeholders: how to improve engagement

How to reduce your project’s carbon footprint


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Adjusting for optimism bias

optimism bias

Let’s not kid ourselves: optimism bias creeps into most things we do. I’m certainly guilty of it: “Yes, of course I can finish that slide deck for the board today, even though I’ve done nothing on it yet.”

Project teams at all levels of experience and in all sectors tend to approach their work optimistically; it’s human nature. In UK government projects, they even have a process for addressing optimism bias. Estimates are expected to explicitly adjust for bias when stating the costs and benefits. I think this is fantastic. It forces people to think about what is realistic and what bias they might be bringing to the table. It helps highlight risk too.

The published Guide to Developing the Project Business Case also talks about adjusting the adjustments down again when there is some performance-based evidence to show that the project is progressing to plan. So we don’t have to worry about padding the estimates forever – they can be readjusted as and when you have more specific, data-driven information to include in the forecasts.

The guidance even includes what percentage increase to use on your estimates to counteract the effects of bias. Of course, you can choose to use whatever you feel is the best adjusted value, but the numbers given for time and cost are based on a study by Mott MacDonald and are a good starting point if you don’t have internal data to draw from.

(As an aside, if you don’t have internal data to draw from, what are you doing to start building up that repository of information? Given the amount of data we capture in our project management tools these days, and the prevalence of AI tools to help us interpret and interrogate it, we really should be setting ourselves up to rely on our own data sources instead of industry-aggregated ones. But in the absence of your data source being substantive enough on its own at this time, do tap into published data sources as a starting point.)

For example, the suggestion is that for a software development project, you should add 54% on to the schedule! I’m not sure my stakeholders would agree with that as it seems an awful lot of padding. However, past experience tells me that this is probably not far from the mark realistically. 54% is the top bracket – you could opt to add the lower bracket of 10% or anywhere in between.

It also suggests adding between 10 and 200% to the project budget to bring you more in line with something you can realistically achieve. Again, I’m not sure my sponsor would go for doubling my budget ‘just because’ but I think these numbers open up the conversation to allow us to talk about risk and the validity of estimates.

The guidance suggests that you start with the upper limit and then work back from that based on whether you feel the optimism bias can be or has been reduced. For example, have risks been managed, have estimates been fully throught through in a robust way and benchmarked across industry actual results and so on.

If you do take this approach, make sure that everything is documented and you can explain your rationale for adding an adjusted figure – including why you haven’t been able to mitigate against optimism bias (yet). Stay transparent and keep talking about what it means for the project.

What do you think of this approach? Let us know in the comments!

Posted on: July 11, 2023 08:00 AM | Permalink | Comments (3)

5 Considerations for Assigning Tasks to Team Members

I’ve chosen a bad headline for this article: I have an issue with assigning tasks – it doesn’t feel like the collaborative, co-created environment I would like to work in. Ideally, we’d meet as a team to do some planning, have a workshop or two and then tasks would be selected by the right people. If we had Kanban boards, team members would be able to select what they want to work on – because as long as they are working on something, the board would manage the priorities and it would be all good.

However, sometimes on projects you do need to reach out to people and assign them work, even if you ask nicely. Sometimes it happens because it’s obvious who is going to do the work because there is only one person in the organisation who can do it anyway.

Let’s take ‘assigning’ in the broadest possible sense, so it doesn’t mean ‘expecting people to do stuff on a project without engaging them’. Because regardless of whether the work is obviously destined for them, it’s always polite to ask.

Here are 5 considerations to take into account when distributing tasks to team members.

1. Capability

They have to have the right skills. If you are looking for colleagues to contribute to your project, consider the tasks they are going to be doing. The person who ends up with the task has to have the skills to carry it out.

Of course, there are exceptions to that, and we often use people working through an apprenticeship or less experienced staff to complete tasks as part of their on-the-job learning. They will be supported by an experienced colleague, but if you don’t learn, you’ll never get the confidence or skills to do it yourself in the future. Factor in additional time, support or training budget if necessary so you can make sure the people taking on tasks are equipped to do them.

2. Cost

People need to be budgeted for at different rates. Consider the cost impact to your budget if you assign tasks to people who are expensive!

3. Availability

People’s availability is a constraint on your project timeline. If the person allocated to the task is on holiday, they won’t do it, and the task will be late. That might be fine – perhaps you have the flexibility to schedule around the best person for the role and the work can wait until they get back.

Perhaps you have a fixed date to hit and need to find someone else.

4. Location

Does it matter these days? I think it depends on the role. If I want in-person, classroom based train-the-trainer training so I have a team equipped to go out and deliver on site training, then I do need them to be within travelling distance.

If it’s a graphic design job, they could be anywhere.

Think about where the team members are based and whether that matters to the task in hand.

5. Cultural add

I was talking to someone the other day about one of their colleagues who was considered a ‘toxic cultural fit’.

The challenge with cultural fit is that it can be interpreted as simply hiring people who look like you and think the same as you, so they slot neatly into the environment without disruption. That’s not what this is about. Consider ‘cultural add’ instead. We want diversity of opinions. We want new ideas and different interpretations. We want disruption and challenge.

The people on your team should lift you up and make the team, and the solution, better.

What do you consider when working with your team to divide up the responsibility for tasks? Is there anything else you take into account? Let us know in the comments!

Posted on: June 14, 2023 08:00 AM | Permalink | Comments (17)

5 Tips for Creating Psychological Safety

When I first started out managing projects, I had never heard of psychological safety. It’s a concept I’ve only come across in recent years, and it’s fascinating.

Psychological safety is part of what I would have called a blame-free team culture in the past: the idea that you can talk about hard things without worrying that there would be career consequences for raising challenges.

A report came out from the UK Ministry of Defence at the end of last year on psychological safety in projects, and the report defines it like this:

Psychological safety is the idea that we can be candid and raise issues without fear of reprisal.

The MOD manages plenty of high profile, high stakes projects, so they know a thing or two about how to create empowered teams – and also the consequences of what happens when projects don’t go to plan.

Here are 5 tips from the report that resonated the most with me.

1. Be present

Unsurprisingly, leadership behaviours were found to significantly psychological safety in teams, and if you’ve ever worked with a leader who made you feel like you never wanted to open your mouth to say anything in a meeting, you’ll know why.

The role we have as project leaders is key to shaping the environment and creating a safe space. From the 240+ surveys carried out to inform the report, a key takeaway was to be present in the project environment.

Being visible means there is a route for people to get in touch with points to escalate, progress updates or issues.

2. Reaffirm the direction and goals

The research found that clarity of direction was the second most important factor in creating psychological safety, after the behaviour of leaders, and it’s not hard to understand why.

We feel more comfortable raising concerns if we understand the mission and have a clear direction to follow. Plus, it’s easier to challenge behaviours and tasks that don’t support the mission, because everyone knows that’s what should be pulling focus.

The report concludes that project leaders should continually have conversations about the direction, especially when the context changes, for example economic or political changes.

3. Ask for (and give) help

Over 80% of people who responded to the MOD survey disagreed that it was difficult to ask others for help. However, it also identified that it was harder to ask for help outside of an individual’s specific team.

The lesson for us is that we should build working relationships across silos and up and down the hierarchy to be able to establish trust and respect across the organisation.

4. Create a learning culture

A culture of learning “mediate[s] the relationship between psychological safety and team performance”.

Project professionals can create a learning culture by being open to finding out more from their peers and colleagues, and also through sharing information and lessons learned freely.

5. Recognise individual excellence

I’ve written a lot in the past about how to celebrate team success and making sure to mark project-related milestones. But recognising individual contributions is just as important. Ideally, we should be rewarding contributions as well, so if your company has a staff recognition scheme, it’s time to dust off the submission guidance and think about who you could put forward for an award.

The report says that project leaders should ‘unlock purpose and empowerment to drive value’ which I interpret to mean helping the team see that their work is making a difference.

The research report has lots of other interesting takeaways, but those were the key headlines for me. I’d be interested to hear your tips for maintaining psychological safety on projects – let me know in the comments!

Posted on: June 06, 2023 08:00 AM | Permalink | Comments (4)

False Urgency

Have you ever worked on a project where when things went wrong, the sponsor was calm and measured, helping you create a map towards a resolution but backing off as required and letting you get on with the work?

That’s great.

The alternative is a much more destructive environment, where pressure from the levels above create a sense that everything has to be done now, even the tasks that don’t actually have to be done now. When things go wrong, that pressure intensifies. The team are pressed to deliver a fix to the exclusion of everything else, or to hit a milestone that has been made up by a senior leader and would never have been committed to if the full plan was understood at the time.

Where does false urgency come from?

False urgency comes from the pressure that is put on a team, group or individual to make a decision. It’s normally – in my experience – the result of some kind of failure.

Something goes wrong, and suddenly the big boss says he wants it fixed by 5pm. There’s no denying it’s a mistake that needs to be fixed, and fast, but the 5pm deadline is false urgency. Wouldn’t it be better to be fixed by 6pm and be right, rather than slap together an issue response plan and do a not-so-good job by 5pm?

The other situation I’ve found myself in is where a senior leader has committed in public – to a client, customer or during a Town Hall meeting – that something will be done by a certain date. And then we, as the project delivery team, have to find a way to meet that date. This false urgency is created by someone who doesn’t have the full information about what work is required and how much effort is likely to go into the project. But once a date is out there in public, it’s kind of hard for it to be extended without someone losing face.

How does false urgency affect people?

False urgency makes people think the situation is out of control, especially as the first deadline whooshes by. I’ve been on teams where we’ve been asked to do something asap, but it’s become clear that the solution – the correct solution – is going to take a bit longer. Suddenly, the fake deadline is swept out of the way. The fake urgency is gone. It feels like that was just a tool to get us to focus, which of course we did. And would have done anyway. We all know the problem needs resolving and that it’s top priority.

That sense of not being respected or allowed to find the solution, the pressure of having to do something just because someone says so, it all goes towards creating feelings of anxiety and anger. I know I get grumpy if I think something is important and someone then comes along and tells me it should be my most important task. It is already – but as a project manager, there’s often not much I can do beyond facilitating the process of issue resolution.

It's also tiring to be micromanaged and to be under the pressure of scrutiny.

The pressure of being in an urgent situation can make people do strange things. For example, looking busy. Busy is not the same as proactive or productive. When the bosses are circling because a client is being affected by a project issue, it’s important to look like you are gainfully employed, even if you can’t actually help the team to code the solution or run the fix or whatever.

There are lots of meetings, often to go over things that you’ve already gone over with other people. There are lots of reports. You end up defending behaviour and progress and explaining why things are taking as long as they are or involving the resources that they are.

How do we avoid this?

Given that false urgency can have such a negative impact on the team, I think it’s important to consider how it can be avoided. Sometimes – such as when your sponsor blurts out a delivery date in a client meeting and you haven’t even finished the estimating yet – you can’t in the moment. You can, however, mitigate the impact with open and honest communication and a bit of negotiation.

Be data-led, keep the communication channels open, be transparent with your sponsor and customer and avoid promising things before you have finished the planning stages. Have you ever been in a situation like this before? If you’re prepared to share, please tell us in the comments!

Posted on: February 02, 2023 08:00 AM | Permalink | Comments (2)

Holiday season for projects!

holiday checklist

Are you winding down for the end of year festivities? Whatever that looks like for you, here are 10 things to consider when heading into the holidays.

1. Thank your team

I’m sure you do this all the time anyway, but as a gentle reminder, this is a great time of year to be thanking people for the work they have done over the past 12 months.

You don’t have to spend a lot of money (or any money). A digital card, a message on your corporate internal social network, a thank you in person or on email: it all makes a difference.

2. Thank your suppliers

Suppliers have had a tough year, just like the rest of us. Rising costs and clients who have had to scale back their plans as a result of belt-tightening have made it a difficult economic climate for many, especially small businesses.

3. Organise a celebration

Whether it’s a Christmas jumper day, a lunch out to mark the end of another year and still being together as a team, or simply the option of meeting in person, try to find some time to celebrate what you have achieved this year.

Look back at the projects that the team delivered, or the successes that have happened on your journey in your current project. Find something that everyone can do, so your celebration is inclusive.

4. Remember that payment runs are early

Back to business: payment runs are early in December. Your Finance team might be processing everything a week or so before the normal cutoffs to account for people being out of the office or bank deadlines due to the holiday season.

Make sure you get any invoices or expense claims in on time so you don’t miss out.

5. Be prepared for the change freeze

Your IT department probably has a change freeze planned for the holiday period. This is a time when they won’t make changes to production systems, normally because they are running with a reduced staff due to people taking time off. It might also be because it’s a busy time of year for your business and they don’t want to do anything that would mess stuff up.

If your project needs IT changes, talk to them about the dates for the freeze and get your change requests to the CAB (Change Advisory Board) as soon as you can.

6. Do your accruals

If the end of the calendar year coincides with the end of your financial year, you might have to do accruals. This is where you financially account for items that have not yet been delivered but have been ordered, or have been delivered but haven’t yet been invoiced.

Talk to your finance team about what they need from you. In my old job, we used to get a form to complete from Finance that detailed all the info they needed about open purchase orders so they could close the books for the year.

7. Send feedback to line managers

If you have benefited from having subject matter experts on your team, take a moment to send some feedback to them and their line manager about their contribution to your project. That can be included in their performance appraisal.

8. Prep for your end of year review

On the topic of appraisals, if you have an end of year review coming up (ours are often in January), take half an hour or so to document what you have achieved this year so you can reference it in your meeting.

9. Be mindful of other people’s leave

Even if you aren’t taking much (or any) time away from the office, your colleagues may well be. Try to bear in mind their leave dates so you aren’t bothering them with emails during their break.

10. Set your out of office

It’s time to take a break from the office, so update your out of office message and let people know who to contact while you are away.

Now all that is done, you can rest up and enjoy the holidays! I hope you have something lovely planned to mark the end of another year.

Posted on: December 01, 2022 08:00 AM | Permalink | Comments (7)

"If you think you can, you can. And if you think you can't, you're right."

- Mary Kay Ash