Hi community, I wanted to know your opinion in respect of what seems to be a common practice among some executives: gut feeling estimates.
A friend of mine was recently asked to estimate a small project to include an overview of the schedule and the budget in a project charter.
My first shock was to find out that the dates and figures generated in this very early stage were often used to secure funding and used to set up a time expectation for completion of the project.
BUT, the real surprise came after he explained what his approach was and what happened after. Please read on... he started by identifying stakeholders, then he met with them to discuss the scope and got a 3-points duration estimate. Using a 2 standard deviations PERT duration, he then sequenced the work and came up with a high-level schedule which he then used to derive resources and cost based on utilization and calendar dates.
He was ready to impress by saying that with 95% confidence, they were expecting to finish between A and B dates and within X and Y dollars. Well, it was a total bummer! One of his executives took him to a one on one room and offered him some advice. He as a PM was expected to use his “expertise” to “question” the team estimates and come up with a more realistic number.
My friend’s reaction was to explain the mathematical foundation of probability in normal distributions, and to explain that with an appropriate risk management plan, there were no reasons to distrust the given estimates. The executive doubled down! He wanted to see an estimate of a very particular number X +/- 10K USD because he had a hunch.
What do you think? I am posting this because its not the first time I have heard a fellow manager being asked to “tweak” a project budget or schedule based on executive management direction... what do you call that, Organizational Strategy? Have you ever been in such situation? Saving Changes...
Leaders often create "stretch goals" to challenge their teams. Often, contributing groups provide estimates that are padded for contingencies or easy to meet. By challenging teams to come up with more aggressive estimates, challenge the assumptions, and take on some risk, they are more likely to find efficiencies than if they don't. They might in fact say that if you have 95% confidence in your estimate, then you are not challenging your teams enough. Saving Changes...
Joseph GherloneCo-chair, Naval-NRO Coordination Group| US Navy, Naval Information Warfare Systems CommandPentagon, Arlington, VA, United States
There's a lot to unpack here.
The cynical view (heaven forbid I ever adopt that!!) might be that the exec in question knew how much budget and time his compatriots in the exec ranks would be likely to accept, so he was "guiding" your friend to make his estimate fit that reality. He could easily believe that the estimates were perfectly reasonable & accurate, but would be unacceptable to leadership. The strategy on the part of the exec in this case is to get buy-in and plan to execute changes to accommodate reality after first accommodating the preferences of his peers.
The other cynical view (I lied - I've worked for the US government for far too long) is that he has no respect for methodology and depends on his prior experience to make the call on such things. That can work if the exec in question is an SME on the technical aspects of the matter at hand. Unfortunately that is rare.
Keith's suggestion is a very good alternate that is far less cynical. It is not a myth that engineers consistently add margin to estimates, but that is the way to account for uncertainty & risk, so there is nothing wrong with that. An exec with sufficient understanding of the problem at hand, the environment in which the project is due to be executed, and the personalities involved could motivate using this technique, but I prefer to get cards on the table and question the assumptions, refine the risk analysis, determine the appropriateness of margin (& where to hold it within the WBS) more directly. Making an apparently arbitrary change to a carefully derived estimate without discussion of the whys & wherefors does not seem to me to be positive leadership. Then again, see cynicism comments above. Saving Changes...
Sergio Luis ConteHelping to create solutions for everyone| Worldwide based OrganizationsBuenos Aires, Argentina
Is not problem with estimation. The problem is the needed attitude to publish what you estimated and mainly to assume the responsability to help people to understand what the results mean. See Barry Bohem[s Cone of Uncertainty and you will understand my point. Saving Changes...
Thomas WalentaGlobal Project Economy ExpertHackenheim, Germany
Ricardo, this happened to me personally and I have seen it happen many times. So it is a phenom that a project manager is better prepared for.
There are several situations when this can happen.
If such an estimation starts, the project already has a history in making, and there are expectations around it. It is mandatory to understand these expectations. It is good if you find a budget estimate in a document, a business case, a portfolio dashboard, or a project charter. Consider this to be a budget limit and the project estimate and planning should take it as a constraint, as well as expected scope and timeline. Planning then is the exercise to balance all the constraints to produce a feasible way forward, possibly reducing scope and timelines, finding different approaches to the project and resources and pointing out the key risks from that kind of planning.
I have also seen that a sponsor looks for a scapegoat who can be sacrificed because he committed to a impossible target. A real case: planning for a 3 year project, but the sponsor is only incentivized for selling the project and the 1st year of delivery. Why should he care if the estimated budget is realistic? His target is to make it acceptable for the client and survive the 1st year. (This often happens in public projects).
Or that a sponsor just wants to put on pressure, a challenge on the project manager, to make him work hard, but has a contingency in the backhand.
In any case, it is very important to understand the motivation of sponsor, engage with him and try to understand whats going on. A mentor can give you advice and a some security.
(when I say 'he' I understand that there are more and more female PMs, good thing!, same may happen to them).
