At the digital agency I help run, we work hard to try and ensure projects are delivered on time, to a high quality and with minimal stress for all concerned. We are, I’m pleased to say, good at delivering projects on time. This is in part because we put quite a lot of emphasis on estimating and planning projects (although there is always room for improvement of course).
When estimating it’s important to be aware of something called optimism bias. This is when people underestimate their own but not others’ completion times for tasks. Even with tasks similar to things we’ve done before, time and time again we still tend to make optimistic estimates. This is also referred to as Planning Fallacy (pdf). Consciously or subconsciously, we kid ourselves.
This has been studied by more clever people than me and here are some headlines:
- People focus on the most optimistic scenario for the task, rather than using their full experience of how much time similar tasks require.
- The bias only affects predictions about one’s own tasks; when uninvolved observers predict task times, they show a pessimistic bias, overestimating the time taken.
- Anecdotally, it appears that although people fail to meet their predictions, they do typically meet important deadlines.
- One experiment found that when people made their predictions anonymously, they do not show the optimistic bias.
This last point suggests that people may make optimistic estimates so as to create a favorable impression with others – colleagues, managers or clients and possibly themselves. In competitive environments and industries, there is clearly pressure to give optimistic estimates and costs for work. We’re geared towards doing everything efficiently and with minimal waste. Inefficiency is weakness. Delivery and timescales are the priority. This is true in both our professional and personal lives.
Do we really estimate it will take 8 weeks to create this thingy? We can’t go back to the client with 8 weeks, they’ll think we’re idiots. It must have been overestimated. We can do it faster this time I’m sure.
There is a fear that we, our team, our company might be seen as being inefficient. In competitive arenas, perhaps through procurement or in pitches, that is a cardinal and potentially business losing sin.
So if we accept this planning fallacy exists, what can we do?
Step 1 – be aware this happens. Make other people aware it happens.
Step 2 – get an external view of the estimate. A view more removed from the project. If you have a system which tracks timesheets and gives you stats on how similar’ projects fared, make use of it and let it influence you. If you feel something is overestimated, get someone more distant and ideally more experienced to check it. (The bias only affects predictions about one’s own tasks) There are two outcomes from this:
Step 3 – you may get two quite different estimates. Don’t treat this as a bad thing, it is valuable. This indicates different interpretations from different people. There is no smoke without fire, something, somewhere is unclear – scope, scale, experience, requirements whatever. If you can identify the source of the smoke and take steps to remedy it, you may avoid a fire.
Step 4 – you may find that both estimates do indeed indicate a project longer than you’d thought. Again, this is a valuable and possibly face saving early warning system. You may still have time to avert disaster by exploring options – reducing scope, phasing delivery, adding people etc. It’s better to know about the problem early when you may still be able to remedy it.
Step 5 – control your projects. The project you deliver is not the one you originally estimated. An accurate initial estimate is useless if you don’t have good project controls in place (it appears that although people fail to meet their predictions, they do typically meet important deadlines). I will revisit this point in a future post.
Step 6 and perhaps the most important. Create an environment where people feel they can give honest objective estimates. Yes there will always be commercial pressures, but underestimating projects causes pain for you, your teams and your clients. DO NOT put pressure on your staff to promise delivery to optimistic deadlines. Try to separate the estimate and the commercials.
Step 7 – trust your gut instinct and intuition.
These steps are important whether you are agency or client side. If as a client, an agency is telling you they can deliver the project in half the time that all other agencies say they can, then they are either inexperienced, falling victim to planning fallacy or telling you what they think you want to hear. All of these are going to lead to a place of unhappiness.
If you have other steps to add then let me know. Hopefully you got the mild joke in the title.