Tag Archives: skewed

Project Time Estimates

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Why is it that projects more often than not come in behind schedule and over budget? This question drives business executives crazy. Why shouldn’t there be an even split between on time project delivery and late project delivery? These are valid questions.

The answer lies in statistics and human nature. Let’s deal with statistics first. When events are independent, like in rolling a pair of dice, all possible results are independent of each other.  For example if I roll a set of two dice 20 times, I will get 20 results that range from two to twelve.  If I plot these results in a frequency plot, I will get a normal distribution (a bell curve for you non-statistical types). If I roll the dice another 100 times, I will get the same distribution. Why? Because the probability of getting a pair of 2’s on roll one of the dice is exactly the same as the probability of getting a pair of 2’s on rolls two, three, four, etc.  I could bore you with a discussion of the central limit theorem at this point, but let’s not.

Instead, let’s change the rules of dice rolling and magnetize the die so that if die one comes up 2, die number two will come up 2 also. Now the result of each roll of the dice is no longer independent. Instead the resulting sum is dependent upon whether one of the die comes up two or not. The resulting distribution of 100 rolls will be skewed instead of normal. What does this have to do with projects meeting time and budget goals?  Let me explain.

If you look at a project map, a Gantt chart for example, you will see that the tasks in the project are not independent.  They depend upon each other. For example, let’s say that task three cannot start until task one and task two are finished. This means that task three’s start time is not independent. It is dependent upon the finish time of tasks one and two. So, a delay in either task one or two will result in a late start of task three. Since there is dependency between the successful on time delivery of these tasks, the central limit theorem does not apply. Additionally, the dependency tends to push the time line to the right (late delivery).  If we were to run through tasks one, two and three 100 times, the distribution would be skewed to the right (late delivery).

The reason dependency, in this case, skews the time line to the right is related to human nature. Estimators tend to over promise to satisfy the requirement of a bid process (work is rarely awarded to the bidder with the longest delivery time).  Workers tend to wait until the exact start date to begin work rather than start early. Surprises in the task schedule nearly always delay the completion of a task or schedule (how many times have you observed an unforeseen problem shorten the delivery time in a project?).

So what is an executive supposed to do? Most look at a schedule and apply a 70% efficiency factor to it. In other words, assume the time line will be 30 % longer and more expensive than planned. Of course the more you know about a project, its customers, and the quality of your delivery processes, the better you can estimate.

Intuition and Data Analysis

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The analysis of data is now, and always has been, problematic. We are not machines. Our thinking is affected by intuition and experience, which are not empirical in nature. In business, Six Sigma or not, the ability to see information from both an empirical perspective and from the perspective of human stake holders (not empirical), is critical to quality decision making.

Let me give you an example of a non-empirical, intuitive/experiential perspective. If you have ever returned to a playground that you knew when you were young, you may have remembered the sliding board being really high, but now it seems small.  It did not shrink. Your perspective changed.  This is a fundamental rule of human thought. We learn through experiment (experience). These learnings change the way we view the world. In other words, the context of our information changes.

This is both good and bad.  We learn not to put our hand on a hot stove, to look both ways before crossing the street and to not insert keys into electrical wall sockets, because of severe negative consequences. This is the result of the power of observation.

This works well on simple systems where results are not ambiguous, and are easy to understand and predict. On systems where there is complexity and results are not easy to predict, you must “peel the onion” with your observations. When evaluating a complex system, intuition must be used very carefully.

Dr. Daryl Bren does a magic trick with his students on their last day of class with him.  The magic trick is really a lesson. He attempts to demonstrate his ability to read a student’s mind by way of giving information about their personal history that he could not otherwise know. He is always successful and his students grapple with what to think about this intriguing skill. Their intuition, based on trust in their professor, compels them to want to believe. Once he has given them enough time, he tells them how he accomplished the feat. Basically he knew who he was going to” read” and collaborated with their family ahead of time, without the student knowing. It is a trick, not magic. He then delivers the punch line, never substitute your intuition for real data.

Another story.  Several years ago I had an employee that told me that he had started a rumor about the possibility of a major management shakeup. Two weeks later he came to my office, excited, saying that he had it on good source that there was going to be a major management shakeup. He even had details (facts?), which his intuition bought into.. I had to remind him that he, in fact, started that rumor two weeks earlier and fell victim to it. Intuition, in the absence of fact, will nearly always lead to incorrect conclusions.

This is not to say that intuition is not important. Intuition is a critical evaluation tool, and just like any other tool, must be used properly. Intuition can indicate that either your perspective or the data is skewed in some way.  Maybe both are skewed.  Intuition will point to what needs a reality check or more information.

This is just another case where balance and perspective play important roles in our lives. In reality, what I am talking about is finding the “why” behind a set of data or “facts”. Successful Six Sigma Projects and quality business decisions depend on it.