Balancing Enthusiasm with Realism
This is Attitudinal Project Shaping #1
A necessary component of any high-tech project-funding bid is the enthusiastic belief by the protagonist(s) that it can be executed on time, on budget. This often leads to under-reported estimates, most disappointing when over-selling is used to win favor with funders. For example, Grün[6] talks of project proponents, project managers, contractors, and planning experts who may form "over-optimism-coalitions". Grün further identifies over-optimism[7] as the "tendency to underestimate the difficulties of achieving the technical goals ... the operation & maintenance costs, and the costs caused by the changing of technical goals."
Evidence of optimism is not hard to find. A lessons-learned workshop from the Gemini telescope project revealed that the effects of science drivers on cost and schedule led to overly optimistic estimates, resulting in a 300% over-budget in one instrument).[8] Observations in a radio astronomy technology White Paper describe overly optimistic cost and development time estimates as the most frequent cause of project de-scoping.[9]
A UK defence report lamenting a £205 million cost increase over 20 projects admitted that "on far too many projects, the Department is over-optimistic and sets unachievable cost, time and performance objectives".[10] In the US, NASA officials, seeking to boost congressional support, sought to emphasize the Space Shuttle's apparent low development cost. Such optimism proved flawed, as the program encountered delays of three years and cost overruns of 60% prior to its first mission loss in 1986.[11] When interviewed, NASA Director, George Morrow asserted "a major pitfall is being overly optimistic early in the project lifecycle".[12]
The cost-schedule paradox is a formidable enemy. A US Defense Acquisition office investigation concluded that once past 15%, an over-budget program is "highly unlikely" to recover original projections and the final overrun will get worse.[13] Over-optimistic budget and schedule expectations are shown to inhibit project success and are especially likely on projects with institutional difficulties. IT projects appear to be especially vulnerable.[14]
How then might we recalibrate our thinking without losing the all-important project enthusiasm? Blanchard claims objectivity may be the only defence against the snowballing effect of eagerness, and bravely suggests that, as a balancing process, project proponents should also develop a case for not proceeding.[15] Realistic estimates and plans (i.e. neither optimistic nor pessimistic) would seem a correct approach, but Erno-Kjolhede argues that this could lead to project participants failing to innovate, and result in second-best performance.[16]
Butts & Linton who investigated NASA's cost estimation performance, conclude that undershooting cost and schedule projections is a well-verified NASA phenomenon, being rooted in an historical practice of over-optimism.[17] In response, their report introduces a hybrid model (the Joint Confidence Level — Probabilistic Calculator, JCL-PC) for accurately estimating cost and schedule reality in complex science and engineering environments where maturing technologies are present.
6. Grün, O. (2004). Taming giant projects (management of multi-organization enterprises). Berlin: Springer-Verlag.
7. Ditto, on p41.
8. NRC. (1999). Common threads in project management: presentations, notes and lessons. Gemini Lessons Learned Workshop, National Research Council Canada: Parksville, BC.
9. Fisher, J, R. (2010). Large instrument development for radio astronomy: Astro2010 technology development white paper. Observatory Technical Council, National Radio Astronomy Observatory, Charlottesville.
10. MoD. (2009). Major projects report 2008, UK Ministry of Defence, House of Commons Public Accounts Committee. HC 165, London.
11. Shenhar, A. J., & Dvir, D. (2007). Reinventing project management: the diamond approach to successful growth and innovation. Massachusetts: Harvard Business School Press.
12. NASA. (2009). ASK Magazine: The NASA source for project management and engineering excellence, NASA, California.
13. Butts, G., & Linton, K. (2009). Joint confidence level paradox — A history of denial. NASA 2009 Cost Estimating Symposium, Galveston, USA.
14. Murphy, D. C., Baker, B. N., & Fisher, D. (1974). Determinants of project success. Massachusetts, USA: School of Management, Boston College.
15. Murphy, D. C., Baker, B. N., & Fisher, D. (1974). Determinants of project success. Massachusetts, USA: School of Management, Boston College.
16. Erno-Kjolhede, E. (2000). Project management theory and the management of research projects. Copenhagen Business School.
17. Butts, G., & Linton, K. (2009). Joint confidence level paradox — A history of denial. NASA 2009 Cost Estimating Symposium, Galveston, USA.
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