Estimates & Buffers

“A clever person turns great troubles into little ones and little ones into none at all.”

- Chinese Proverb

If you’ve been following the series on the well-formed schedule and the subsequent series of posts, you are aware that from the WBS you create estimates and iteratively refine those estimates by, for example, improving the probability of success and compensating for risk.  One of the PM challenges is how to balance motivating task owners, setting appropriate stakeholder expectations, reporting honestly and doing all of this in a forthright and ethical manner.

To demonstrate, let’s use our example task from Risk Buffers – An Example.  You might estimate that your Most Likely time for the commute is 30 minutes and the Optimistic time is 20 minutes.  However, the Expected (Mean) time might be calculated as 35 minutes (this is the 50% probability of success, where you’re as likely be early as late).  If you toss in one standard deviation to get to a 65% probability of success or two standard deviations to get to a 95% probability of success, the estimate could balloon to 45 or 55 minutes.  On top of this, then, you add those risk buffers, which might add 10-15 more minutes to the estimate.

Let’s take a look at this from your perspective with several of the stakeholders to examine the conflicts.  First, with the task owner:  Physics and Theory X management say that if you put that high estimate on the task, the task owner will take all of it.  In order to motivate the task owner, it is necessary to use, for example, either Most Likely or Expected.  In fact, I’ve managed projects in organizations that insisted that I use the Optimistic estimate and “stay on those team members” or they would just slack off.

Now looking at this from the perspective of your relationship with the project owner or sponsor, if you fill the schedule with fully bloated tasks (“What do you mean it’ll take 65 minutes to drive to the office!  I know full well it only takes 30 minutes.), you’ll lose all credibility.  However, if you use only Optimistic (!) or even Most Likely or Expected estimates, the end (date or cost) is not realistic and you’ve set yourself up for failure (as documented in The Schedule – Probability of Success). 

Some stakeholders want to know when it will really be done and how much it will really cost.  And they want to have realistic progress updates on these realistic completion values.  If you are not using fully weighted estimates, your reporting to these stakeholders will not be accurate.

Finally, another stakeholder that you have to true to is yourself (and the PM community).  How you address these conflicts must be ethical.

The conflict then is how to have individual task estimates that are under-weighted, but have the overall project estimate include the probability of success and risk adjustments.  The solution, of course, is to have “tasks” in the schedule that represent these estimating and risk buffers.  So let’s say you create these buffers and put them all at the end of the schedule.  This also creates reporting problems because there will be the appearance, at the start of the project, of a large gap between the end of the last deliverable and the end of the project.  It will appear as you progress and report completion of deliverables that you are (most likely) late on all of the deliverables.

At a minimum then, you need to distribute these buffers into each deliverable, spreading them over the life of the project.  You, as project manager, own these buffers and you have to deplete them as you go, continually reassessing much has been consumed by actual task overage and underage.

Since these buffers are included in the project (cost and time) budget, they cannot be arbitrarily reduced, eliminated, increased or created except through formal project change control.  They can (depending on the rigor of project change control) be moved between deliverables, but this should be documented.

Before closing I want to mention that the book Critical Chain by Elihayu M. Goldratt describes a formulaic approach to determine the appropriate amount and placement of the buffers.  This approach has been successfully used in many organizations and should be considered as an alternative to the custom and complex approach to buffers I’ve presented.  Further, he goes in to much more detail on the operational practices.

In my next post I’ll conclude this series on buffers and then we can move on to some new topics.

What challenges have you had convincing stakeholders to use realistic schedules?  Do you get pushback that you are just padding your estimates?  How do you handle it?

© 2013 Chuck Morton.  All Rights Reserved.

The WBS - Intermediate

Two (or six) months into your project, you and your business owner disagree about whether a particular feature or component is included in the project.  You, of course, consider this controversial item obscure and expensive to include;  the business owner, in contrast, asserts that it is absolutely essential, the whole project is value-less without this item, and, further, that since it is in the original scope it shouldn’t cost more or take more time.  How do you resolve this dilemma?

Project Management success is determined by delivering both the project (what you promised) and customer/owner/stakeholder satisfaction (what they expected).  Failure at either of these is failure.  Even if you deliver the greatest technical solution imaginable, if the customer is not happy, you are not going to stay around long or get that next job.

Our success as project managers, then, is to get agreement up front for what we’re going to do, do it, and then get acceptance that we did it.  How then do we get agreement on scope up front?  How do we avoid the dilemma described in the opening paragraph?

The Work Breakdown Structure, which I’ve been discussing in the past several posts, is not an academic exercise.  It, along with the Task Dictionary, defines the scope of your project.  A well constructed WBS/ Task Dictionary agreed to at the start of the project by the key stakeholders will greatly reduce the kind of disagreements described above.  That is, the WBS becomes the basis for determining Project Change Management, and without the WBS it is just “I say – They say,” which ultimately leads to project failure.

Agreement on the WBS is more than just sending an email and asking for approval.  Sit down with your stakeholders, walk through each Deliverable and The Activities and The Tasks that comprise each deliverable.  Discuss what is included.  You’ll be amazed at the results.  Many misunderstandings will be cleared up here, early enough to easily resolve them and prevent acrimony later;  they will find that you’ve included activities that they disagree with;  they will identify missing activities;  and, most importantly, they will begin to take ownership of the mutual delivery of the project.

I’ll have more to say about Project Change Management in a future post, but the other essential value of the WBS is that it becomes the foundation for building the project schedule.  In the next series of posts, we’ll discuss what is needed to build a well-formed project schedule.

When was the last time you conducted a WBS walkthrough with your stakeholders?  How did it turn out?

The Project Manager’s Cycle – Publish the Project Status Report

“Project status this week, in a nutshell, is that we are continuing to stay on schedule, but this is despite your team’s contribution.”  After the initial chit-chat, Srini intentionally opened the status meeting with a statement to get everyone’s attention, especially the Sponsor and Owner Jack.  “Our project team has been working around the delays of returning document reviews and approvals.  We’ve pretty much exhausted the continuing work, though.  As you can see on the status report, there are several deliverables over due for approval and the draft requirements document is held up.  If you think these durations will continue, then I recommend that we extend the time your team is allocated for these activities and extend the time line.”

With this post, we conclude documenting the activities in The Project Manager’s Cycle, the Monitoring and Controlling activities that the project manager performs each reporting cycle for the life of the project.  All of these activities (with the exception of the Client Project Meeting) build each week to the Project Status Report (PSR).  The PSR encapsulates all of the information the Sponsor/Client/Owner and all Stakeholders need into a compact package.

The PSR should document both the current status of the project (in summary) and progress since the last report.  The essential elements of the PSR include an Executive Summary, Accomplishments, Planned Accomplishments (in the next reporting period), Deliverable/Approval Status, Change Request Status, and Issues.  Accomplishments and Planned Accomplishments are reported relative to the plan (project management is the classic example of Management by Objectives).

Note that traffic lights (  Red,  Yellow,  Green) are not in my list of essential elements of the PSR.  I am ambivalent about them.  When used properly they are often valuable, but they are even more often used improperly.  If you use traffic lights, the meaning of each color must be defined clearly and all of the stakeholders reading the PSR must know what each color means.  Further, a single light is really not meaningful.  After all, the ultimate purpose of the lights is to show where external action is needed and one broad status doesn’t provide the specificity needed.  Rather, what I’ve seen that works best are lights representing Schedule, Scope, Budget, Resources, and Closure/Acceptance repeated for each project phase or (preferably) each deliverable.

The PSR is probably the most important document the PM produces and I can’t cover all of the nuances in one post, so expect to see more on other elements of the PSR in the future.

Do you have a project status report best practice to share?  How about a PSR disaster?

The Project Manager’s Cycle – Negotiate with Resource Managers

“Rainey, are you aware of any recent changes with Mani?” Don was having lunch with Rainey, the Analysis and Design Manager and Mani’s resource manager.  “She’s missed a couple of deadlines, which is unusual for her, and one of the business contacts mentioned she’s been ‘testy’ in some of the meetings.  I’m concerned.”  Rainey, after a thoughtful pause, replied “Have you asked her about it?”  “No,” Don answered, “not yet.  I will talk to her this afternoon; since we were here, I just thought I’d see if you had any background.”

Up to now in my series on The Project Manager’s Cycle we’ve primarily been working with numbers and reports, with little communication outside the project team.  This is the first activity where we start coordinating with project stakeholders.  This activity assumes a matrix organization, where you have temporarily and/or partially borrowed resources from department managers in order to staff the project.  If you own the resources – that is, they report directly to you as their line manager – then you can skip this activity.

This activity takes as input the results of the previous two activities:  replanning the schedule and reviewing team member progress and productivity.  As a result of those activities, there may be changes to the planned utilization of team members or concerns about their performance or productivity that you need to discuss with their managers.

For each project team member, prepare a schedule that shows their expected allocation by week for the next several weeks.  Depending on the organization and the resource manager’s planning cycle, this may be as short as 3-4 weeks;  other managers may require three months or a full schedule showing the allocation as long as the resource is needed.

You may also want to provide the information by task with completion dates, depending on the detail that the resource manager wants to see.  You can use your scheduling tool’s Gantt chart feature or populate a spreadsheet.

Provide these reports to the resource managers and, where appropriate, schedule to meet with them, especially if there are performance or productivity concerns.  Review the report, productivity, progress, and any changes you’ve noted from prior weeks.

But don’t expect the resource managers to just accept your plan.  They may actually have assignments, priorities, and expectations for these same resources, which, of course, may require some negotiation on your part and the possibility that you are back to replanning the schedule.

When you have performance or productivity problems with a project team member, do you talk to the team member first or to their resource manager?  Why?