3 MIN READ
Last time, we examined the four main challenges which always seem to pop up when planning projects:
being over-optimistic about the likelihood that all will go to plan
being overconfident about your capacity or speed
underestimating the complexity of pulling together the whole project
the inertia of everyday working life: procrastination, procrastination, procrastination...
In this post, after recognising what’s holding you back from realistic and successful project management, discover a simple fix suggested by Stephen Dubner and Bent Flyvbjerg (professor at Oxford University’s Saïd’s Business School) in a recent Freakonomics podcast.
Reference Class Forecasting
Rather than just focusing on the idiosyncrasies of the project you’re planning, consider previous similar tasks. Look back at projects with the same sort of scope, density and complexity, and frame your expectations about the new project based on those earlier ones.
Taking this principle further, Flyvbjerg describes a revolution in accurate budgeting and timeline planning by the UK Treasury, when they began to keep detailed records of every project they financed for the Department of Transport: how long they took, how much they cost—and crucially, how far off the mark the original predictions were.
These records became the Green Book, and its analysis allowed the Treasury to consistently and accurately predict what they’d need to allow for in terms of time and finance, by using data from past pieces of work to reveal just how much the combination of optimism bias and strategic misrepresentation costs their projects.
We’ve all seen what happens when you let a human make a calculation, rather than a computer. As the Economics Nobel Prize winner Danny Kahneman says, “If you realistically present to people what can be achieved in solving a problem, they will find that completely uninteresting. You can’t get anywhere without some degree of over-promising.”
A little bit of spin might get your project off the ground, but it could also create some serious headaches further down the line. A canny project manager allows for this creative marketing when they’re planning, by factoring in a reality check on the numbers they’ve been given—and reference class forecasting makes it possible to do more than just guess.
The gap between what old projects should have cost in time and money, and what they actually ended up costing will reveal the magic number by which you should scale up the initial project quotation.
The Green Book Mindset
This all sounds amazing, right? Perfect planning using reference class forecasting can resolve the frustration of the challenges we’ve discussed so far—but there’s a catch.
When you make the shift to this kind of planning technique, everyone needs to reset their attitude towards projects. Whether it’s a multi-million pound development, or an in-house bid on a report, every member of the team needs to recognise that the usual wriggle room has been eliminated.
If you have multiple partners and the stakes are high, you may need to build in incentives and penalties to ensure your contractors meet their targets.
Projects vary, and you won’t always be able to find a perfect match from your archives, but reference class forecasting coupled with the Green Book Mindset should make a real difference to your scheduling and budgeting processes.
Plan in extra help
And if your deadline is already set—as is often the case for bids or report submissions—this method of project planning will help you predict how much extra help you’ll need to meet your target.
Using a reliable project planning mechanism gives you the space to consider whether your team has capacity for all of their workload. And if not, using a professional freelancer (such as a writer, editor or proofreader) can all make the difference in completing your task on budget, and on time.
For a free consultation or quotation, please contact email@example.com, or give me a call on 07988 858873 to talk more.