Why We Suck at Estimates

...And how to get better

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📰 In this week’s edition:

  • 5 procurement jobs that caught my eye

  • Why are we so bad at estimating how long tasks will take?

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🌙 Sunday Night Note

Why We Suck at Estimating How Long Tasks Will Take…

Let's face it. Asking someone how long they think a task will take to complete (including asking yourself) is a really bad way to get a good estimate…. Yet, it is the most used estimation method out there (both in our personal and professional lives).

Do you remember drifting around aimlessly in a department store while your photos were being developed in... “about an hour”...? Those damn pictures were never ready in 60 minutes… (Thank you digital photography, am I right?!).

I run into this truth every time I start a new ProcureTech implementation project...

The project manager asks everyone how long their piece of the project will take. Team members guess based on the vendor’s standard deployment documents, their company culture, their own personal experiences and heuristics (“I just estimate and then multiply by 3…” 😅).

On average, everyone is very wrong with their estimates (software vendors included)… The bigger the project scope, the worst the estimates…

So how do most projects deliver on time? Well most don’t 😂

It’s already hard enough estimating how long things will take in operational settings… Project work just adds an additional layer of variables… Projects bring teams together with:

  • Various experience levels

  • Different personalities (who’ve mostly never worked together)

  • A novel context (Every business has a different combination of systems, organizational structures, cultures, existing processes, etc.)

…to make an idea come to life.

Anyone who’s done project work understands this dynamic…

Today, I want to give you a few tools to make your estimates better, whether in your next ProcureTech implementation or just in your personal life.

The first thing I’ll say is that estimates are not guarantees… Especially when trying to deliver on innovation… By definition, innovation is a new method, idea, product, etc. When navigating in uncertainty, estimates are therefore “our best guess” by definition. Estimating is an art.

Here’s how to be a better artist:

1/ Before attempting to estimate, determine the task “type”

Different tasks have different characteristics that will influence if you should even estimate in the first place.

  • Is the task finite or infinite?

    • A finite task has a clear start and end. It has a sequence of events that leads to a conclusion (e.g. doing the laundry leads from dirty to clean clothes with a pre-defined process)

    • An infinite task is one that can go on forever. These tasks are organic with unclear boundaries (e.g. Research. You can do research forever…)

Finite tasks can reasonably be estimated but allocation is a better method to deal with infinite tasks (“I will allocate X amount of time to this task, aim to make it fit and move on with the results”)

  • Is the task divisible or indivisible?

    • A indivisible task can only be done by one person. You can reasonably estimate how long it will take because you are not dependent on other inputs/outputs.

    • A divisible task can be (and most often is in professional settings) divided or cut up amongst different people. Unless you are a well oiled machine, estimates are difficult for divisible tasks because you are dependent on uncertainty.

Furthermore, even for indivisible and finite tasks, the nature and characteristics of the task ahead of you will influence the degree of certainty you can associate to any estimate:

  • Have I done this before? Can I reasonably use analogous estimation (e.g. using similar completion times for similar past tasks)?

  • Are there lots of uncertain variables?

  • What are my underlying assumptions?

The more uncertainty and assumptions you can identify in your estimation reasoning, the larger your margin of safety needs to be (time to deal with the unknown).

2/ Break up bigger tasks into a collection of smaller tasks

When applying the above rules, try to first reduce tasks down to their simplest expression.

“Clean the house” is not as useful a To Do List item as:

  • Spray and squeegee the first story windows

  • Dust the kitchen cabinets

  • Vacuum all floors on the first story

When doing this, you’ll also uncover dependencies and task sequencing considerations that are lacking at the higher level of detail (e.g. you probably want to dust the kitchen cabinets before cleaning the windows to avoid getting dust on your freshly cleaned windows).

Zooming into detail where possible (e.g. don’t get paralyzed if you can ‘zoom in’ to particular parts of your project tasks; just assign margin) will turn up the precision on your estimates because it’s easy to imagine the time to complete smaller tasks and big monolithic task blocks.

3/ Train with Time Block Planning

What’s the best way to learn tango? DANCE!

What’s the best way to get good at estimating how long tasks will take? Estimate, measure, review and repeat.

Time block planning is the best way I’ve found to cultivate your estimation muscle at the personal level. While I’m not a time block planning zealot (e.g. I often fall off the time block planning train 🚂), I’ve found this method to be the most useful framework out there to be more intimate with your time (😘).

What you’ll realize while doing this is that, as Eisenhower said: “plans are worthless, planning is everything”.

You will understand the variables that influence how long tasks take to complete and develop more precise estimates going forward (although your estimates will still be wrong… Just less wrong…😅).

4/ Have a hard upper bound on how many tasks you work on at once

So many things can have an impact on team productivity (and therefore how long things take to get done). Maybe someone has gone through a traumatic event that’s rendered them unable to get anything done. Maybe you’re working in a different office with bad lighting for a few days. Maybe you ate something you shouldn’t have over the weekend and feel “off”… Whatever…

One of the big things that will lead to better estimating is learning to control the non-task related variables that influence how long it takes to accomplish things.

By controlling your environment, you diminish the total amount of variables that can influence your productivity and therefore, your estimates.

Now I’m not advocating you become a robot… Far from it… But I just want you to be aware that your environment (and your team’s environment) is having a much greater impact on your projects than you think.

THE BIG ONE that you CAN easily control without becoming a robot is managing how many tasks people work on at once. Task switching costs basically render your brain (and productivity) to mush…

The ideal? Work on a single task at a time.

Don’t jump from meeting to meeting, topic to topic.

Concentrate all of your energy on one thing at a time from beginning to completion.

(I know… Given the dynamic of today’s modern world of work, I sound like a nut job right now…)

But the science backs this viewpoint. My own experiments do as well…

If this is impossible to achieve, the next best thing is consciously building out your calendar and interactions with colleagues to minimize the number of things you work on at once (yes, even in ProcureTech project settings).

Being very meticulous about how you sequence work will have a drastic impact on the quality and speed of completion of the work. Overnight. It’s crazy.

(It’s basically the only way I’m able to write this newsletter…)

Try it and let me know what you find.

The last thing I’ll say is that for ProcureTech implementations, especially with the recent explosion in solutions, is that you will be working on projects characterized by innovation (especially if you read this newsletter 😅).

You might very well be the first company on earth to be connecting your specific “young” best-of-breed systems with your specific “middle-aged" S2P Suite systems and specific “very old” back end ERP systems.

Assuming 400+ different ProcureTech, S2P Suite and ERP systems that can all be connected together, we’re talking about upwards of 160,000 different connection combinations. (not scientific but it gives you a sense of scale…).

Even with “standard connectors”, you may be doing a “world first” for your industry… And there’s bound to be a novel interface in there somewhere…

Using a traditional CAPEX estimation and budgeting method for these types of projects is a surefire way to get disappointed. You’re much better off setting up OPEX budgets for experimentation (regular small bets — the “ante of access to innovation”) and then pulling the trigger on big CAPEX projects when you find setups and combinations that work for your company/context (go “all in”).

Innovation is a process and should be treated as such. Otherwise, you won’t really access innovation at all… You’ll access what your competitors were doing 3 years ago… When all the risk (and competitive advantage value) is gone.

Take a page out of our German brothers’ dictionary… Let innovation play out via its Eigenzeit (the time inherent to the process itself) and budget consequently.

The firms that take this approach are poised to craft the best marriage of Procurement People, Process and Technology… And the results that go along with it.

But that’s just my estimate…

💭 Quote of the Week

Estimating is what you do when you don’t know.

Sherman Kent

🌯 That’s a Wrap…

When you’re ready, here are 3 ways I can help:

  1. Pure Procurement Premium. Get access to Deep Dive guides and templates that help you get digital procurement right.

  2. Work with me. I’ve been helping global procurement teams digitalize their processes and practices for 12+ years.

  3. Reach 8000+ Pure Procurement readers. You have something to share with digitally-minded procurement professionals? Get in touch.

Till next time,

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