[4] Four Forms of Accuracy

In the book titled The New Economics, W. Edwards Deming states unequivocally, “Management is prediction.” Deming is on target. Executives and managers make predictions regularly, to shareholders, to customers, to banks, and even to the IRS. Some of these predictions involve the use of financial models (albeit many such financial models in use at this writing are highly questionable). The predictions required of executives are based in large part on the models of their projects, hence the need for unbiased, predictive models of projects.

Our need for predictive project models requires that our project models exhibit four forms of accuracy. These are:

1) Accuracy relative to deliverables.
2) Accuracy relative to logistics.
3) Accuracy relative to duration.
4) Accuracy relative to budget.

The four degrees of accuracy are hierarchical. Accuracy relative to deliverables is required before accuracy relative to logistics can be achieved. Accuracy relative to logistics lets us identify the required activities and the interactions among the various resources. It is necessary for accuracy relative to duration. The latter, in turn, is needed for accuracy relative to budget.

Therefore, the overall accuracy of a project’s model begins with the 1st form of accuracy, accuracy relative to deliverables. The tangible deliverables expected of a project must be defined clearly and completely, before the model of the project can be created.

Accuracy relative to deliverables is the responsibility of the customers of a project. The customers of any project include the customers of the enterprise and the leadership of the business, which represents the shareholders. As project managers, you bear a fiduciary responsibility. You are responsible for the overall accuracy of the model that you create, on behalf of the leadership team of your enterprise. Consequently, you must resist pressures to begin constructing a model of any project that lacks an agreed-upon list of tangible deliverables. In keeping with the iterative approach to product development, you cannot expect the list of tangible deliverables to be all-encompassing. But you must insist that expectations be well understood and well-defined for the limited project that you are about to undertake. In fact, you have a right to require that expectations be well-defined for any project that you are asked to undertake. This is accuracy relative to deliverables.

Accuracy relative to deliverables does not appear to be a difficult thing to achieve at this time. It is missing in many cases only because no attempt is made to achieve it. Once individuals are aware of the need to achieve accuracy relative to deliverables, they are usually quite capable of doing so. Therefore, I do not address accuracy relative to deliverables further.

Next on the hierarchy of accuracy there is accuracy relative to logistics. Accuracy relative to logistics is a product of the specific planning process that you use. Unfortunately, we do not study project planning in college. Consequently, very few people today possess an effective project planning process. The resulting project models lack accuracy relative to logistics to a substantial degree.

Today, most people who contribute to the construction of project models use a forward-going, workflow description approach to logistical planning. This is most unfortunate, for two reasons. First, the resulting logistical plan ends up with far too much detail, which severely limits the usefulness of the project’s model. Second, much of the work that is required for the successful completion of the project at hand is never included in the logistical plan. This happens because the conventional approach to logistical planning is not necessity based.

The alternative to this ineffective form of logistical planning is the Robust Project Planning Process, discussed in a subsequent chapter. Robust Project Planning yields logistical plans that are consistently complete and simultaneously devoid of unnecessary activities. Please study the corresponding segment of this book carefully, and practice the Robust Project Planning Process at every opportunity. If you use it consistently, it will serve you well for a lifetime.

After we achieve accuracy relative to logistics, we face the task of achieving accuracy relative to duration, with our project models. Here, virtually every project manager fails today, for the following reasons:

1) Due to damaging management practices, individual developers are justifiably unwilling to provide estimates of the process time of their tasks.

2) Due to widespread multitasking, individual developers today are entirely incapable of estimating the process time of their tasks.

3) Due to their lack of understanding of variation, project managers today are entirely incapable of taking into account the many effects of variation, on project duration.

4) Due to their completely lack of understanding of variation, executives and managers today strive to use project models not as predictive tools but as prescriptive tools, in a misguided effort to improve the performance of their teams.

Any one of these factors is enough to prevent you from building project models that exhibit accuracy relative to duration. It is very likely that in the future you will face all these factors, as do today’s project managers, for whom accuracy relative to duration is an unimaginable nirvana.

Although in this book I discuss the Robust Project Planning process, I focus purposely on achieving accuracy relative to duration, by addressing variation at every step of the modeling process. In my opinion, this is where the understanding of project managers falls short today, as does that of resource managers and executives.

Finally, we have accuracy relative to the budget. This is at the top of the hierarchy of accuracies. It relies upon all the other forms of accuracy. Thus, it is compromised to the greatest degree.

Accuracy relative to the budget is compromised further by the widespread misapplication of the Earned Value Measurement System, particularly among defense contractors. The section on accuracy relative to the budget addresses the Earned Value Measurement System, highlighting the changes that are needed to make the Earned Value Measurement System useful rather than counterproductive.