Expectations and Single Point Estimating

Bob Barnes and Fred Baker have an interesting blog post entitled Project Life Cycle is Essential in Managing Risk. Their blog is at http://www.pmprofessors.com/ This is an interesting example of stakeholder expectations, and here’s the DeliveryDemon’s take on it.

Common understanding of an estimate is that it is a single point value. As project managers we know that there is an uncertainty range associated with any estimate, which narrows as more knowledge becomes available through the life of a project. Business processes tend to force us to provide a single point estimate, and expectations are adopted on the basis of that value. It’s an ongoing piece of work for a project manager to keep stakeholders in touch with the reality of what is happening, and that is no guarantee that a stakeholder won’t suddenly revert to the original expectation.

This is a reflection of the current level of maturity in non-PM understanding of project management processes. It won’t go away until PM becomes a core business competency, at the level exercised by today’s above average PMs, and we are still some way away from that.

Today’s PM needs to be aware of the issue and factor it into stakeholder expectation management.

Expectation Management

Any well trained project manager knows that surprises are bad news. Underperform, and it’s your fault. Overperform and people want to know why you didn’t make a more challenging commitment in the first place. Such is the lot of the project manager!

Every project is surrounded and permeated by expectations. The team has them, so does the project sponsor, and all the suppliers, not to mention customers, and the operations team. All those expectations are coloured by the recollections and assumptions and experience of the individual stakeholder. Ask a stakeholder what their expectations are and you will get a response but that won’t be the whole story. Often expectations aren’t identified until they are not met, and the stakeholder sees it as a project failure. As project managers, we talk glibly about expectation management, but it’s a complex and delicate subject. A project manager needs to analyse the project environment and decide how much effort needs to go into expectation management. It’s not a one-off exercise either. This decision needs to be reviewed at each stage and major change and decision point, and at any time their are indications of loss of confidence in the project, or excessive expectations. And of course the communication plan needs to be updated to deal with the reality rather than the situation which the project manager *expected* to exist!

Thinking about expectation management in general, DeliveryDemon did an analysis of her own expectations during a recent trip to Edinburgh for a Saturday meeting, and was surprised at the extent of the assumptions made during the trip and how they affected her.

Lift to the airport DeliveryDemon assumed the driver would head for the motorway, the driver preferred the direct route through towns. There probably isn’t a lot to choose between the routes but at each red traffic light and school crossing the DeliveryDemon got twitchier and twitchier.

Before check-in the DeliveryDemon was hungry and popped into M&S for a sandwich and bottle of water, an obvious thing to do in an airport mall full of food shops. Full marks (sorry, pun!!) to the checkout girl who recognised the assumption of eating the food on the plane, and provided a gentle reminder that drinks can’t be taken through security.

Airside is really designed to take expectations, shake them up and leave the traveller feeling jumpy. On the one hand shops and restaurants encourage browsing and relaxing over a meal or a drink. On the other hand the departure boards demand attention. When the distant gate is finally announced, the delivery-oriented DeliveryDemon wants to head straight for the gate, and is frustrated by the shuffling, 6-wide groups who expect that others will match speed to that necessitated by their in-depth discussion of last night’s soap or football match. Then once the gate is open, airline staff rush the passengers through and chivvy them along  – to wait in a queue. Rush, stop, rush, stop – the metabolism doesn’t know what to expect. What a recipe for high blood pressure and heart attacks!

In the sky the DeliveryDemon tends to expect interesting clouds and clear, photogenic, views, and feels vaguely cheated by a flight through grey cottonwool.

Meeting people provides a good test of assumptions. The DeliveryDemon and colleague got the mobiles out to make contact with another colleague arriving on a different flight, arranging to meet at the luggage carousel in arrivals. After some confusion the invalid expectation became clear – the colleague had arrived on a European flight, coming through a different arrivals area.

The hotel was one of two in a larger chain, situated in the Grassmarket. Expecting to stay in the same hotel as other colleagues, several people were annoyed to lose out on the opportunities of discussion over breakfast or a late night drink as overbooking meant the party was split between two hotels. For the unlucky group diverted down the road, the hotel failed to meet expectations of cleanliness with rooms where evidence of previous occupants had not been removed, and failed to meet expectations of construction standards with double glazing so ineffective that it would have been as quiet sleeping out in the Grassmarket during the Friday night festivities.

Finding a restaurant also upset a few expectations. Nose to the steamed up glass, DeliveryDemon waved to colleagues crammed round some window tables in the recommended eatery. There was no way that three of us would be able to battle through the crowds to the tables, never mind find seating space. But we did. And the staff conjured up chairs and created elbow room from a fifth dimension. The DeliveryDemon was very glad of being persuaded to ignore her expectations of not getting a seat, more so when faced with a steak served up on a hot stone with a pile of jacket wedges!

Grey days Having lived in Edinburgh, the DeliveryDemon expected and was prepared for grey skies and sharp winds, seasoned with the odd rain shower. Fortunately the DeliveryDemon also favours contingency planning, and adapted her expectations when faced with warm sunshine and clear blue skies, sneaking out between sessions for some impromptu architectural photography.

Castle from Grassmarket

The Hub

The Hub

Boswell’s Court

Castle silhouette

Detail of Statue near St Giles

Royal Mile

St Giles

 Lunch hadn’t been a high spot at previous meetings, but the DeliveryDemon’s expectations were overset by a tasty cooked lunch which was light enough to avoid doziness during the afternoon session. Of course, with the Edinburgh hotel showing what can be done, expectations have been reset for lunches at future London meetings.

The return flight DeliveryDemon had hoped for a return flight to Luton, much closer to home than Heathrow but the expected evening return didn’t exist. DeliveryDemon is unimpressed with the UK’s domestic transport arrangements. At least Edinburgh airport was quiet, the rugby fans still celebrating in town. But the expectation of a leisurely browse round a selection of malt whiskies was upset by the feeling of urgency generated by a departure board announcing that the flight was already boarding, well before departure time. The flight left on time and arrived early. The DeliveryDemon expected problems on arrival, given the publicity Terminal 5 has attracted, so the quick baggage arrival came as a surprise.

Just a step on the way Of course, whatever expectations the advertising raises, Heathrow is not a destination in its own right, and the hapless traveller is often faced with an onward journey of a few miles which takes considerably longer than the flight.

London Underground For decades, a big red circle with a blue bar through it has raised the expectations that a Tube station is nearby. It’s a simple, brash, logo whose message is well known. Brash, not sophisticated, and that’s the problem. When designers are let loose on the signage of a transport hub, the prissy result has no place for such a dominant and informative graphic. They tone it down so it doesn’t stand out among all the other information. The result is that the tired traveller, looking for train or toilet or taxi, has to search through an undistinguished clutter of signs for the information they need. Not good for the traveller, not good for the traffic flow, and not particularly clever, given that the purpose of signage is to deliver information. So it is at Terminal 5.

And finally the train home Saturday evening. London. The last train. One might expect it to be full of happy people who followed a show with a meal and a glass or two of wine before returning home. Not with East Midland Trains’ final departure at 10.30. It made a nailbiting journey from Heathrow for the DeliveryDemon who couldn’t be sure if she could expect to catch the last train, or have to rely on the slow and uncomfortable line which goes no further than Bedford. And not knowing the train meant having to buy the ticket on the day. UK trains are notoriously expensive, but who would expect the cost of a single ticket to be the same price as a return?

It was just an overnight visit to Edinburgh for a meeting. But what a lot of expectations and assumptions arose. Some were met or well managed, others not. If that’s the expectation pattern for a single person on a simple trip, how much more varied and complex are the expectations and assumptions of the many stakeholders over the lifetime of a project? For a project manager, expectation management is a serious business, and a major factor in the success of a project. Forget this at your peril!

There’s More to Risk Than Probability

The DeliveryDemon is a Management of Risk (MoR) Practitioner so she is used to thinking of risk in terms of probability, impact and proximity:

• How likely is it?
• What’s the worst case scenario if it happens?
• Is it likely to come to pass soon or in the distant future?

June’s issue of Project Manager Today contains an article by David Hillson on risk perception, which refers to work by risk psychology researcher Dr Paul Slovic on factors which influence perceptions of risk. DeliveryDemon thinks that Dr Slovic’s work should be considered in the light of existing well-established MoR tools for identifiying and managing risk.

‘Dread If the outcome of a particular risk is something we imagine to be terrible…., our perception of the risk is heightened.’ Simply not true. The outcome (impact) is part and parcel of the risk, not something separate. The worse the potential outcome, the greater the risk. An illness with a 40% fatality rate is 100% fatal to the unfortunate 40%. The dread is associated with that harsh 100%, which is a factual numerical component of the risk, not just a perception.

‘Control When we believe we have control we perceive the risk as lower.’ When we have control we have tools to manage risk. Different people make different choices because tolerance of risk varies from person to person, and from organisation to organisation. If we have control we may choose, at one extreme to walk away from the risk, or at the other extreme, to live with it. We may take action to reduce the risk, or to pass the risk on to someone else. The decision may be not to drive that Porsche through the icy hairpin bends of a mountain pass, or to do it anyway and live with the consequences. The risk may be reduced with snow chains, or passed (partially) to someone else through an insurance policy with a good vehicle replacement clause. None of these options are available to the trussed up prisoner of a car thief whose drug intake has sent his risk tolerance sky high. Control allows the individual to match risk and risk tolerance. There is logic to this, not just perception.

‘Natural vs Man-Made Hazards resulting from human actions are seen as more risky than natural hazards.’  Control comes into this again. The geographical distribution of natural hazards is well known and people may choose not to live on the San Andreas Fault or the slopes of Stromboli. If brought up in a danger area and tied to it by family commitments, people know the warning signs and have learned ways of predicting and mitigating the problems. These days, people who find the risk level too great often have the option of moving away. Man-made hazards follow a different timescale. The announcement of a planned man-made hazards affects a previously blight free area, and individual inhabitants have little say over the introduction of the risk or its management, so have no tools available to match the risk to their risk tolerance.

‘Choice If I have some choice over my exposure to a risk then it seems lower than if I am exposed involuntarily.’  This comes back to control. If I have choices I am able to mitigate the risk by reducing the probability, the impact, the proximity. I can match the risk to my risk tolerance. Again, this is not merely a matter of perception. Choice allows us to alter numerical risk factors.

‘Children Any risk which affects children is seen as worse than one which affects only adults.’ Possibly. There are cultures which venerate childhood, and cultures which view children as more replaceable than their parents. DeliveryDemon is not an anthropologist so isn’t going to comment on this one.

‘Novelty New risks are seen as being higher than ones we have grown used to seeing’. A variation of ‘familiarity breeds contempt’. This is an extremely simplistic view. When a risk is new, less knowledge is available. The cautious will weight their risk assessment pessimistically to allow for that lack of knowledge. However, those with a stake in the risk source may equally discount the risk level on the basis that there is, as yet, no evidence to substantiate the risk, a common statement during discussions of the risks of large-scale GM planting. The Novelty factor may work either way. Similarly, lack of novelty can work to increase or decrease actual risk. That the building industry has a has a high level of injury and fatality may be attributable to a macho attitude to risk which leads to the cautious being viewed as wimps. The culture creates an additional risk which needs to be managed. In the abstract, extreme sports offer a higher level of risk than a building site, but the culture is very different. Conventions and support mechanisms have evolved such as diver buddying, parachute checking, frostbite checking, mountain rescue. There is an interest in the development of the individual and of technology to enable boundaries to be pushed. Participants court a dangerous edge, but they also seek the risk mitigation tools which will allow them to push beyond current boundaries.

‘Publicity If a risk has a high profile in the media… it will be perceived as being more risky.’ This is all about understanding the impact. A dry paragraph mentioning an explosion in a distant city leaves it to the imagination to guess the impact, whereas a picture of mangled bodies leaves little room for doubt. The fact of publicity has less impact on risk perception than does the presentation of the published content. The theory behind this underpins the entire advertising industry. At the other extreme it can be used to explain mass hysteria. Publicity is less of a risk modifier than a risk in its own right. For example, late last summer there was a risk of severe economic downturn. Publicity helped it on its way by making people fear for the future to the extent that consumer spending was drastically reduced. It was less the fact of economic threat than the way it was presented in the media which prompted that. For example, the BBC might be expected to provide a dispassionate view of the situation, but Robert Peston’s highly emotive reporting style was a significant influence on consumer decisions to cut back on spending.

‘Propinquity If I could be a victim the importance of the risk seems higher than it really is.’  The word ‘seems’ is inappropriate here, as is ‘importance’. Impact is as important as probability when assessing a risk. If I am assessing a risk from a personal perspective, the 10% probability of occurrence is only a small part of the story if the impact is 100% fatality. The risk is genuinely greater, it is not just perception.

‘Risk – Benefit Trade-off If exposure to a risk could also result in a perceived benefit as well as a threat, the risk is discounted.’ Business case, anyone? It’s not actually a discounting of risk, more a balancing. It can be done on the basis of gut feel or total logic or a mixture of the two. Benefits may blind people to the risks but not necessarily. The DeliveryDemon knows that mountains and mountain weather can be dangerous, and has a lot of experience of assessing the risk. That doesn’t stop her heading out in (nearly) all weathers in search of benefits such as air like wine, panoramic views, solitude, wildlife, crisp snowfields and icewalls and glaciers, a good downhill run, or even a blast of wind and weather. The balancing bit of risk management is the prior selection of equipment, assessment of fitness, and choice of route. It’s not discounting of risk, it’s a balancing act.

‘Trust Where protection from risk is offered by a trusted party the risk is perceived as lower.’  In MoR terms this is transfer of risk, and the insurance industry is a classic example of it. It works by reducing the actual numerical risk at the impact level. If I’m travelling, insurance doesn’t reduce the probability of my luggage going missing, but it does reduce the impact because I can reclaim the cost from the insurance company.

The DeliveryDemon finds Dr Slovic’s classifications quite naive and much prefers MoR’s simple, factual and pragmatic analysis as a tool for programme and project managers.

Project / Programme Delivery and Service Delivery – Is There A Conflict?

(Shamelessly taken from a reply the DeliveryDemon provided to a question on LinkedIn)

Do you see a conflict?

The main interfaces with service delivery are:

• When defining the scope of the project, acknowledge that there will be an impact on service delivery, and involve the stakeholders who can form a view of the impact and how it is likely to affect other priorities, and take decisions.
• During the design / delivery / test stages of a project, identify and involve the service delivery stakeholders needed to provide input / carry out activities / test.
•  As part of dependency management, identify dependencies / resource conflicts with other projects also impacting service delivery, establish a suitable level of communication with them.
•  For transition to business as usual, allow for testing and business change within the service delivery function.

All of the above are down to planning and communication and should not be a significant source of conflict if well managed.

There is only ONE intrinsic and irresolvable conflict between programmes / projects and service delivery. Service delivery is there to deliver a service and that is their first priority. In the event of a serious incident, restoring the service has first priority.

In the event of a serious incident, all the programme / project manager can do is:

• Keep tabs on the incident resolution without hassling those at the sharp end.
• Make use where possible of resource not involved in the incident, provided their workload has not increased to cover colleagues dealing with the incident.
• Carry out an impact analysis, work on a contingency plan and implement it.
• Keep the project / programme stakeholders informed.
• Escalate only in the event that it is likely senior management will give the project priority over the service.
• Keep the morale of the team up when they can’t make progress.
• When the pressure lifts, get in there with the key stakeholders to ensure that the programme / project gets appropriate priority as the pressure comes off.