September 2017

How Did You Arrive At That Estimate?

Calculator, printed numbers on spreadsheet, calculator

Image Credit: © Wolfilser– Fotolia.com #78451137

As anyone who has ever been involved in estimating a large, unique and complex piece of work will attest to, estimation can be difficult.  So often, change initiatives are delivered in a volatile and uncertain environment. With shifting sands, estimates have a high element of uncertainty. We shouldn’t be surprised at this—even seemingly simple and repeatable activities involve uncertainty. Imagine driving to the airport: If your drive to the airport normally takes 2 hours, how long do you allow when you’re driving your family there for a vacation? Well, if it involves a trip on a busy and congested highway where there are often accidents you might take a view that it’ll take between 1.5 – 3 hours, and you’ll likely plan on this basis, or at least take this into account.  If there is uncertainty in something as seemingly mundane as a car journey, is it any wonder that estimating effort on a complex project is difficult?

 

Yet the real danger is not in the uncertainty itself—that is a given—it is that this uncertainty becomes hidden or opaque, and projects proceed based on an estimate that has been arbitrarily plucked from the air. The uncertainty goes unacknowledged and so often projects act as if it isn’t there at all. A difference of expectations emerges:

 

Person A: “What is your ballpark estimate for this”

Person B: “Well… you’re putting me on the spot here…. but around 100 days… probably”

 

What happens next? So often 100 days becomes the figure, it is seen as a commitment. It is treated like a contract that is set in stone, and if it isn’t met then often the “blame game” starts.  “People will just have to work harder. It is their estimate” an aggressive manager might say.

 

Show Your Working

Perhaps in some cases these types of conflict emerge due to a difference in expectation over what is being estimated, and the level of uncertainty attached to that estimate.  Reflecting on the example above, Person B may be talking about effort rather than duration… they may also be basing this estimate on previous project experiences and there may be some unstated assumptions.  They may, in their mind really be thinking “It’s around 100 days, perhaps with a range of -25%/+200%, as we don’t know enough yet”.  Because this isn’t stated, the level of uncertainty stays hidden, and too often “100 days” is taken as an undisputed objective truth, even though that was never the intent.

 

A great question to ask when presented with an estimate is:

 

“Can you tell me how you arrived at that estimate?”