Tag Archives: Project Controls

Project failure revisited

Project-FailOver the holiday period there has been a couple of interesting discussion on project success and failure. The consensus of the many commentators was that the simplistic measures of time, cost and scope are inadequate but there was little consensus on the solution.  This post poses some of the questions that need a considered answer:

Firstly, the APM website posed the question which of the following projects was successful?

Two organisations decided to undertake identical projects with a normalised value of  $1million.
–  Organisation A assessed their project and set the project budget at $800,000
–  Organisation B assessed their project and set the project budget at $1,200,000
Organisation A’s team did their best to ‘meet the challenge’ and achieved an outcome of $900,000 – a cost overrun of $100,000 nominally a project failure.
Organisation B’s team did ‘a good job’ and achieved an outcome of $1,100,000 – a profit of $100,000 nominally a project success.

But which project is really successful??  The one that cost $900,000 or the one that cost $1,100,000 to produce the same output.  This example is simplistic, the numbers are given and the problem is demonstrated, but nowhere will you ever have two identical projects run against different baselines.  How can you assess the ‘project risk’ caused by soft or hard targets??

Similar issues arise when allocating the blame for ‘failure’ to different parts of the ‘performing organisation’.  Many so-called project management and project leadership failures are likely to be either unavoidable consequences or symptoms of far more significant underlying issues (for more on this see: Project or Management Failures?).  Focusing on the superficial (and blaming the project manager) prevents a more thorough ‘root cause analysis’  of the real issues and problems in organizations.  I will take 2 examples and borrowing from Toyota’s ‘Five Whys’ ask ‘why’ a few times:

  1. Failure of PM leadership. The project manager failed to lead, relate or communicate, with stakeholders. But the project manager did not appoint him/her self , some of the unanswered questions are:
    1. Why did the organisation appoint a PM lacking the requisite skills?
    2. Why did the organisation fail to support/train the PM?
    3. Why were the failings not picked up and resolved during routine project surveillance?
  2. Failing to use recognised techniques such as risk management. Some of the unanswered questions are:
    1. Why does the organisation allow sub-standard practices to exist?
    2. Does the organisation have proper templates, processes and support in place to support the practice?
    3. Does the organisation provide adequate time, training and resources to implement the practice?
    4. Why were the failings not picked up and resolved during routine project surveillance?

The answer to these questions may go back to organisational culture, the overall organisational ability to effectively manage and support its projects (the strategic management of projects)  and/or ultimately the governance of the organisation.

Certainly some projects will fail for project related reasons; projects and programs are innately risky and this means project related failures are to be expected – minimising this cause of failure will be valuable. But, simply measuring performance against cost and time targets is influenced by the way the initial target was set in the first place.

project-failure-2The problem is compounded by the lack of ‘root cause’ assessments. I expect a proper study of the root causes of many so-called ‘project failures’ will show many projects are effectively set up to fail by the organisation.  Allowing executive management to continue with these types of practices is ultimately a governance failure. Addressing the ‘root causes’ of failure hidden in executive management practise, culture and governance are likely to generate significantly greater benefits than simply trying to ‘fix project management’; but you cannot see the failures without proper data.

One initiative aimed at working towards a standardised assessment of project failures is a series of articles being published by Proff. Alan Stretton in PM World Journal, see: http://pmworldjournal.net/article/series-project-success-failure-deficiencies-published-causes-project-failures/  (registration is free).

Given the general management mantra of ‘you cannot manage what you cannot measure’, developing a measure of project failure that is valuable and consistent would be a good start in developing the data needed to allow management improvement across the board.

As Alan concluded the referenced article:

The above deficiencies in current data all point to an urgent and obvious need to develop comprehensive data on causes of project failures – preferably validated by appropriate and agreed criteria as to what constitutes success / failure, and covering the widest possible range of project types and project management application areas.

A suggestion (or challenge) here is for global project management organisations (IPMA, PMI, apfpm, etc) to jointly create a framework to develop and share project success / failure data, covering the widest possible range of project management types and application areas. This would include

  • Developing and agreeing common criteria for project success / failure;
  • Collecting and sharing validated data on success/ failure rates;
  • Researching and sharing validated data on success drivers / failure causes.

If you agree support Alan and start lobbying your PM association of choice. Defining the problem is easy, solving it elegantly is not!

Ethics, Culture, Rules and Governance

RulesFar too many governing bodies spend far too much time focused on rules, conformance and assurance.  While these factors are important they should be an outcome of good governance not the primary focus of the governors.

When an organisation sets high ethical standards and invests in building an executive management culture that supports those standards the need for ‘rules’ is minimised and the organisation as a whole focuses on doing ‘good business’ (see: Corporate Governance).

The order of the functions outlined in The Functions of Governance, places: ‘Determining the objectives of the organisation’, ‘Determining the ethics of the organisation’, and ‘Creating the culture of the organisation’ ahead of both assurance and conformance.  The rational being creating a culture of ‘doing the right thing’ that extends from the very top of the organisation to the very bottom, means most people most of the time will be doing the ‘right thing’ making assurance and conformance a relatively simple adjunct, there to catch the few errors and malpractices that will inevitably occur.

A very strong endorsement of this approach to governance has recently come from one of the world’s most successful business people, Warren Buffet.  His recent memo to the top management of his holding company, Berkshire Hathaway’s subsidiaries (his ‘All Stars’) emphasised that their top priority must be to ‘zealously guard Berkshire’s reputation’ (read act ethically). He also reminded his leadership team that ‘we can afford to lose money–even a lot of money. But we can’t afford to lose reputation–even a shred of reputation’.

His advice to managers also included this good advice ‘There’s plenty of money to be made in the centre of the court. If it’s questionable whether some action is close to the line, just assume its outside and forget it’. This is a simple ethical guideline that avoids the need for pages of precise ‘rules’ designed to map the edge of legality drafted by lawyers and argued over endlessly.  See more on Ethics.

Rule#1Reading the memo, its clear Buffet has built a massive organisation based on an ethical culture, employs executives that reinforce the culture, and still makes a very good profit. It’s a long term investment but infinitely preferable to the sort of issues that confronted Salomon Bros., 20 years ago (see: Warren Buffett’s Wild Ride at Salomon), the banks associated with the GFC, and the on-going damage continuing to be suffered by the Australian banks as more ethical failures come to light. I’m sure they all had hundreds of ‘rules’ some of which may even have been sensible.

A copy of Warren Buffet’s memo can be downloaded from:  http://www.mosaicprojects.com.au/pdf/Ethics_Culture_Rules-Buffet_Memo.pdf

The three phases of project controls

The need to control projects (or bodies of work that we would call a project today) extends back thousands of years. Certainly the Ancient Greeks and Romans used contracts and contractors for many public works. This meant the contractors needed to manage the work within a predefined budget and an agreed timeframe.  However, what was done to control projects before the 19th century is unclear – ‘phase 0’.  But from the 1800’s onward there were three distinct phases in the control processes.

Phase 1 – reactive

The concept of using charts to show the intended sequence and timing of the work became firmly established in the 19th century and the modern bar chart was in use by the start of the 20th century. One of the best examples is from a German project in 1910, see: Schürch .  A few years later Henry Gantt started publishing his various charts.

BC#03

From a controls perspective, these charts were static and reactive. The diagrams enabled management to see, in graphic form, how well work was progressing, and indicated when and where action would be necessary to keep the work on time. However, there is absolutely no documented evidence that any of these charts were ever used as predictive tools to determine schedule outcomes. To estimate the completion of a project, a revised chart had to be drawn based on the current knowledge of the work – a re-estimation process; however, there is no documentation to suggest even this occurred regularly. The focus seemed to be using ‘cheap labour’ to throw resources at the defined problem and get the work back onto program.

Costs management seems to have be little different; the reports of the Royal Commissioners to the English Parliament on the management of the ‘Great Exhibition’ of 1851 clearly show the accurate prediction of cost outcomes. Their 4th report predicted a profit of ₤173,000.  The 5th and final report defined the profit as ₤186,436.18s. 6d. However this forward estimation of cost outcomes does not seem to have transitioned to predicting time outcomes, and there is no real evidence as to how the final profit was ‘estimated’. (See Crystal Palace).

Phase 2 – empirical logic

Karol Adamiecki’s Harmonygraph (1896) introduced two useful concepts to the static views used in bar charts and the various forms of Gantt chart. In a Harmonygraph, the predecessors of each activity are listed at the top and the activities timing and duration are represented by vertical strips of paper pinned to a date scale. As the project changed, the strips could be re-pinned and an updated outcome assessed.

The first step towards a true predictive process to estimate schedule completion based on current performance was the development of PERT and CPM in the late 1950s.  Both used a logic based network to define the relationship between tasks, allowing the effect of the current status at ‘Time Now’ to be cascaded forward and a revised schedule completion calculated.  The problem with CPM and PERT is the remaining work is assumed to occur ‘as planned’ no consideration of actual performance is included in the standard methodology. It was necessary to undertake a complete rescheduling of the project to assess a ‘likely’ outcome.

Cost controls had been using a similar approach for a considerable period. Cost Variances could be included in the spreadsheets and cost reports and their aggregate effect demonstrated, but it was necessary to re-estimate future cost items to predict the likely cost outcome.

Phase 3 – predictive calculations

The first of the true predictive project controls processes was Earned Value (EV). EV was invented in the early 1960s and was formalised in the Cost Schedule Controls System Criteria issued by US DoD in December 1967.  EV uses predetermined performance measures and formula to predict the cost outcome of a project based on performance to date.  Unlike any of the earlier systems a core tenet of EV is to use the current project data to predict a probable cost outcome – the effect of performance efficiencies to date is transposed onto future work. Many and varied assessments of this approach have consistently demonstrated EV is the most reliable of the options for attempting to predict the likely final cost of a project.

Unfortunately EV in its original format was unable to translate its predictions of the final cost outcome (EAC) into time predictions.  On a plotted ‘S-Curve’ it was relatively easy to measure the time difference between when a certain value was planned to be earned and when it was earned (SV time) but the nature of an ‘S-Curve’ meant the current SVt had no relationship to the final time variance.  A similar but different issue made using SPI equally unreliable. The established doctrine was to ‘look to the schedule’ to determine time outcomes. But the schedules were either at ‘Phase 1’ or ‘Phase 2’ capability – not predictive.

A number of options were tried through the 1960s, 70s and 80s to develop a process that could accurately predict schedule completion based on progress to date. ‘Count the Squares’ and ‘Earned Time’ in various guises to name two.  Whilst these systems could provide reasonable information on where the project was at ‘time now’ and overcame some of the limitations in CPM to indicate issues sooner than standard CPM (eg, float burn hiding a lack of productivity), none had a true predictive capability.

The development of Earned Schedule resolved this problem.  Earned Schedule (ES) is a derivative of Earned Value, uses EV data and uses modified EV formula to create a set of ‘time’ information that mirrors EV’s ‘cost’ information to generate a predicted time outcome for the project. Since its release in 2003 studies have consistently shown ES to be as accurate in predicting schedule outcomes as EV is in predicting cost outcomes.  In many respects this is hardly surprising as the underlying data is the same for EV and ES and the ES formula are adaptations of the proven EV formula (see more on Earned Schedule).

Phase 4 – (the future) incorporating uncertainty

The future of the predictive aspects of project controls needs to focus on the underlying uncertainty of all future estimates (including EV and ES).  Monte Carlo and similar techniques need to become a standard addition to the EV and ES processes so the probability of achieving the forecast date can be added into the information used for project decision making. Techniques such as ‘Schedule Density‘ move project controls into the proactive management of uncertainty but again are rarely used.

Summary:

From the mid 1800s (and probably much earlier) projects and businesses were being managed against ‘plans’.  The plans could be used to identify problems that required management action, but they did not predict the consequential outcome of the progress being achieved.  Assessing a likely outcome required a re-estimation of the remaining work, which was certainly done for the cost outcome on projects such as the construction of the Crystal Palace.

The next stage of development was the use of preceding logic, prototyped by Karol Adamiecki’s Harmonygraph, and made effective by the development of CPM and PERT as dynamic computer algorithms in the late 1950s. However, the default assumption in these ‘tools’ was that all future work would proceed as planned. Re-scheduling was needed to change future activities based on learned experience.

The ability to apply a predictive assessment to determine cost outcomes was introduced through the Earned Value methodology, developed in the early 1960s and standardised in 1967.   However, it was not until 2003 that the limitations in ‘traditional EV’ related to time was finally resolved with the publication of ‘Earned Schedule’.

In the seminal paper defining ES, “Schedule is Different”, the concept of ES was defined as an extension of the graphical technique of schedule conversion (that had long been part of the EVM methodology). ES extended the simple ‘reactive statement’ of the difference between ‘time now’ and the date when PV = EV, by using ‘time’ based formula, derived from EV formula, to predict the expected time outcome for the project.

The Challenge

The question every project controller and project manager needs to take into the New Year is why are more then 90% of project run using 18th century reactive bar charting and the vast majority of the remainder run using 60 year old CPM based approaches, non of which offer any form of predictive assessment.  Don’t they want to know when the project is likely to finish?

It’s certainly important to understand where reactive management is needed to ‘fix problems’, but it is also important to understand the likely project outcome and its consequences so more strategic considerations can be brought into play.

Prediction is difficult (especially about the future) but it is the only way to understand what the likely outcome will be based on current performance, and therefore support value based decision making focused on changing the outcome when necessary.

I have not included dozens or references in this post, all of the papers are available at http://www.mosaicprojects.com.au/PM-History.html

What is the critical path?

One of the most common misconceptions in planning and scheduling is that float somehow determines the ‘critical path’. For the PMI-SP exam and any serious consideration of the definition of the ‘critical path’, float is not the right answer.

Associating zero float with the critical path is correct if, and only if, there are no constraints placed on the schedule.  As soon as you introduce a contract completion date the critical path may finish before the contract requirement and have positive float or after the contracted completion date and have negative float (and knowing by how much is important to managing both the schedule and the work).

Then add in the common contractual issues of delayed access to areas of work (available on or after a specified date), and mandated interim handovers of part of the deliverables and float goes all over the place. These issues were considered at length when we were writing of the Guide to Good Practice in the Management of Time in Complex Projects.

The description of the critical path developed for The Guide is:

Critical Path = the longest sequence of activities from commencement to completion of a key date, section, or completion of the works as a whole. In relation to each, it is that sequence of activities, which will take the longest to complete or, put another way, the sequence of activities, which will determine the earliest possible finish date. Hence, it is timely commencement and completion of those activities on that path, which will secure completion of the key date, section, or the works as a whole on time.

This description was condensed to a definition in ISO 21500 Guide to Project Management (2012), as:

Critical Path: sequence of activities that determine the earliest possible completion date for the project or phase.

This ‘Standard Definition’ does not preclude the possibility of several ‘completions’ within the one project to account for interim handovers required under a contract. It allows for the possibility of the critical path starting at the beginning of the schedule or at some interim point where an external dependency allows the ‘critical’ work to start. Additionally, the sequence of activities may be determined logically (through links or dependencies) or through the sequential movement of resources. The definition is both concise and unambiguous. For more see: http://www.mosaicprojects.com.au/WhitePapers/WP1043_Critical_Path.pdf

You need to get with the game – people who want to ignore the current international standard definition will become increasingly marginalised as the various national standards move into alignment with ISO.

Schedule Calculations – Old and New

CPMThe way CPM schedules were calculated in the 1970s and 80s (prior to the availability of low-cost PC scheduling tools) used a simplification designed to minimise error and speed up a tedious task.  Whilst some of us are old enough to have used this ‘manual’ technique on real schedules, everyone in the modern world recognises Day # 1 = Wednesday 1st October and a 3 day duration activity will work on Wednesday, Thursday and Friday to finish on the 3rd October and the fact 1 + 3 = 4 is simply an anomaly in the way integers and ‘elapsed time’ interact that has to be dealt with inside the computers computations to produce accurate date based bar charts and tabulations.

Unfortunately there has been a rash of postings on linked-in over the last week totally confusing everyone with their nonsense about CPM calculations.  This blog is designed to correct the message!

To overcome the problem of a 3 day activity starting on the 1st October finishing on the 3rd October, but  staring on day 1 and adding a duration of 3 gives you 1 + 3 = 4, the simplified manual calculations assumed the starting point was ‘day Zero’ 0 + 3 = 3!

However, the old manual calculations starting from day Zero have never been correct – the start day number for every activity in a schedule is always the day before it actually starts.  The end dates (day numbers / dates) are correct and the advantage of this option is it only requires one simple calculation per task for both the forward and back passes and the Free Float calculations are a simple subtraction.

EF = ES + Duration
LS = LF – Duration ….  Easy!!

This simplistic methodology was absolutely essential for manually calculating large PDM schedules. The ‘normal’ scheduling practice through to the mid 1980s when affordable PCs arrived – very few companies could afford the expense of mainframe scheduling tools and those that did wanted to make sure the data was correct before the computer run.

The accurate calculation used in all scheduling software, recognises that a 3 day activity starts at the beginning of day 1 and works on days 1, 2 and 3 to finish at the end of day 3 and its successor (assuming a FS0 link) starts at the beginning of day 4.  Unfortunately these ‘real’ calculations require much more complex calculations[1].

ES = 1, EF = (1 + 3) – 1 to get to the end of day 3.
The Zero duration link requires (EF 3 + 0) + 1 = the next activity ES is the start of day 4.

This approach more than doubles the amount of calculation effort and increases the opportunity for error and of course affects Free Float calculations as well.

Fortunately computer software is not prone to making calculation errors and runs these more complex sums 100% accurately to calculate the date activities start and end accurately when transposed onto a calendar. For more on the actual calculations see: http://www.mosaicprojects.com.au/PDF/Schedule_Calculations.pdf

Given no one has used manual calculations to determine a major schedule in the last 20 years (at least) the old simplistic manual approach is redundant and should be consigned to my area of interest, the history of project scheduling (see: http://www.mosaicprojects.com.au/PM-History.html).

[1] For a more complete discussion see the excellent paper by Ron Winters written in 2003 and entitled ‘How to Befuddle a College Professor’, which can be found at:  http://www.ronwinterconsulting.com/Befuddle.pdf

Mind your language

Communicating ideas effectively to another person needs a common language, and a common understanding of the meaning of the symbols used in the language. While this sounds simple, language can take many forms including images, sounds and writing. This post is going to focus on the design and use of images as the language for communication.

The use of images as a language stretches back to the Ancient Egyptians. They developed a written language based on stylised pictures whereas the civilisations in the ‘fertile crescent’ developed cuneiform text.

1.hieroglyphics

Whist we may not be able to read the Egyptian script, many of these hieroglyphs are easily understandable.

2.cuneiform_script

Whereas the cuneiform script is completely indecipherable. However, just because we can identify a goose at the top of the third column of the hieroglyphs, it does not mean we understand its meaning!

A simplified graphical language can provide a really useful way of communicating complex information but when you use the language, you need to be sure the people you are communicating with have the same level of understanding you do and ‘see’ the same message.

One of the first attempts to stylise complex information and to make it accessible and easy to understand was the development of the London Underground map.

The London Underground Map

The London Underground is one of the most complicated systems in the world.  By the middle of the 20th century the map was becoming too complicated for easy use.

1930 Underground Map.

1930 Underground Map.

The concept of the topological map we all know and use was developed by Henry Charles Beck. ‘Harry’ Beck was an English engineering draftsman at the London Underground Signals Office. He developed the first ‘topological map’ in his spare time, based on an electrical wiring diagram.

London Underground was initially sceptical of Beck’s radical proposal and tentatively introduced to the public in a small pamphlet in 1933. It immediately became popular, and the Underground has used topological maps to illustrate the network ever since. There is even a book on the map: Ken Garland’s, Mr Beck’s Underground Map (Capital Transport Publishing 1994). The book describes the enormous care, craft, thought, and hard work of Harry Beck that went on for decades (exactly what it takes to do great information design).

4.underground_london_Beck original-drawing1

Beck’s version of the 1930 Map.

This style of communication has carried through to modern times but is not without its problems – you can easily get to the station you want, but there is no indication of how close or how far apart different stations are ‘on the surface’ – particularly if the stations are on different lines.

The current London Underground Map.

The current London Underground Map.

Success is contagious; most transport maps world-wide follow Henry Beck’s lead and a new universal language has been created.

Part of the new Melbourne Tram Map, using a version of Beck’s language.

Part of the new Melbourne Tram Map, using a version of Beck’s language.

The Melbourne map uses the same style as the underground map – lines are vertical horizontal or at 45 degrees, but unlike the underground stations, tram stops are not shown; the designers believe the street names and route numbers are more important.

Part of the Stuttgart Metro map.

Part of the Stuttgart Metro map.

Based on your knowledge of the London or Melbourne maps, you do not need to be able to read German to have a good idea how to navigate the Stuttgart metro from the Hauptbahnhof to the Zoo. The language of transport maps has become fairly standard world-wide.

However, design of the communication is still important; the designers of each map need to decide what is important (eg, the route numbers on the tram map), what is emphasised, what is suppressed, and what is left out – bad design can reduce the elegance of the communication and block understanding. Whereas innovation can enhance it – the Tokyo train system has its trains painted the same colour as the line used on the transport map – the orange trains follow the orange route and you get to the right platform by following the orange signs!

A similar convergence of communication style has occurred with in-car road maps. Most books and electronic sat-nav systems use a stylised language similar to the map of North Sydney (below) – another language designed for a specific purpose.

North Sydney

North Sydney

For the purpose of navigating a car to the ‘Aiki Kunren Dojo’, this ‘simplified road map’ is far more useful than the 100% accurate photograph of the same location!

North Sydney

North Sydney

The style of the road map above has been taken ‘virtual’ and global by several organisations including Tomtom. You do not need to be able to read the street names or understand the spoken advice ‘turn left in ……’ to follow the map – the pictures say it all and are just as effective in Shanghai and Munich as Sydney or Melbourne.

10.TomTom

When designing a graphical communication language, useful, accurate and fully detailed are not synonymous! Both of the mapping languages discussed so far are really simple to use provided you have learned to ‘read the language’ and interpret them correctly. But as we all know North Sydney looks like the Google Earth photograph (not the map) and Melbourne’s geography only has a passing resemblance to the tram map – but we have learned how to read the ‘language’ and can then use that knowledge of the language to understand similar maps in different cities.

Project Maps

The same challenge applies to project dashboards, reports, and artefacts such as bar charts and CPM diagrams. Creating an appropriate level of understanding in a person’s mind about the true situation of the project and your intended work plans requires appropriate information to be communicated in a language that is understandable to the stakeholder. In this context, ‘appropriate’ does not mean complete or fully detailed; selecting the right level of detail is in itself an art form.  The bar chart below may be fully detailed and precise but it is not a good communication tool!

11.CPM

And while preferred by many project controls professionals, the CPM logic diagram below is even less likely to work as a communication tool for stakeholders.

12.cpm

These specialist languages are useful to trained project controls professionals and some experienced project management professionals but are too complex for most communication needs.

As suggested above, effective communication does not need fully detailed or accurate representation. What is needed is ‘useful’ information that can be used!  You do not need to be an expert in directional boring to understand the plan for this project (all that is missing is the timing for each stage):

13.storyline

Simple is good, simplistic is dangerous! One of the popular options for reporting project status is using simplistic ‘red-amber-green’ (RAG) traffic lights such as these:

14.RAG health_image

We know there is a scope problem but there is no real indication of the seriousness of the situation or how far into the ‘red zone’ the project actually is.  Rather than the simplistic 3 point RAG scale, the same information can be displayed using more insightful tools:

15.Beter option

Any of the ‘gauges’ will tell you where within each band the project is situated, add in a simple ‘change’ report and the trend becomes apparent as well. The art is knowing how much information is enough.

Conclusion

From the hieroglyphs of the Ancient Egyptians to the Tomtom road map, the art of using pictures for effective communication is creating a set of symbols that communicate your ideas and information simply and accurately, and then taking the time to teach your stakeholders how to read the language.

Effective communication, focused on obtaining the understanding and buy-in from a stakeholder needed to deliver a successful project requires:

  • Understanding who are the key stakeholders at ‘this point in time’ that you need to influence;
  • Understanding their needs and the best way to communicate with them (the Stakeholder Circle® methodology is designed for this purpose);
  • Communicating the appropriate amount of information in a way that can be understood by the stakeholder; and then,
  • Taking the time to help the person reach a proper understanding.

The communication challenge is recognising that some concepts will be easy to communicate in some communities of stakeholders, others will be more difficult; and people are frightened of things they don’t understand.

Designing an effective communication strategy requires the project team and project leaders to firstly derive a common understanding between themselves, then determine what the key stakeholders actually understand, then determine how to communicate effectively with the key stakeholders to build their understanding to the level needed to get the ‘buy-in’ required to make the project successful.

Effective communication is the tool that builds understanding, reduces opposition based in ‘fear of the unknown’ and generates a framework for success – for more on effective communication see: http://www.mosaicprojects.com.au/PM-Knowledge_Index.html#PPM07

Predicting Completion

At one level, completing on schedule has been a requirement, enforced to a greater or lesser extent for millennia. In the 1905 English court case Clydebank Engineering and Shipbuilding Co Ltd v Don Jose Ramos Yzquierdo y Castaneda [1905] AC 6; the court was prepared to uphold a ‘liquidated damages’ clause for delivery at the rate of ₤500 per week for each vessel not delivered by the contractors in the contract time. And rather more sever penalties could be imposed by Roman Emperors for late delivery.

As governments do today, the Romans outsourced most of their major works to contractors, with both public accountability and a legal framework as key governance constraints. What was significantly different was the consequences of failure! If a project went badly wrong in Roman times, the responsible public official would suffer a major career limiting event that could affect the prospects of his descendants for generations to come. Whilst the retribution applied to the contractor could be even more serious including death as well as retribution for generations to come.  Applying the Roman approach could give a whole new meaning to the ‘pain share’ part of a modern Alliance contracts…… as well as removing by execution many of the worst performing contractors. Rome was not built in a day but their empire did last for close to 1000 years [Frontinus – A Project Manager from the Roman Empire Era by Walker & Dart (Project Management Journal Vol.42, No.5, 4-16].

However, whilst there was undoubtedly an imperative for timely completion of contracts (projects in today’s terminology), there seems to be little in the way of predictive processes used by managers to assess the current expected completion date prior to the 1950s.

Having said that, I’m as sure that ‘smart people’ would have been assessing the expected completion of any significant ‘body of work’; both during the planning processes and during the course of the work. You simply cannot run a factory profitably if you cannot tell a customer when to expect his order – but predictive assessments and predictive processes are quite different.

Cost management and accounting has documented roots more than 6000 years old (provided you can read clay tablets), with modern book keeping emerging in the 15th century. I have found plenty of evidence of proficient governance and effective cost control on projects in the 17th, 18th and 19th centuries but so far nothing ‘predictive’ (cost or time) until the 20th century. Prior to the 20th century, ‘cost control’ focused on comparing actual costs against the planned cost (a process still common in many organisations).

Similarly, the idea of probability and making calculations about future outcomes from a risk management perspective can be traced back to the 17th century and the work of Newton, Leibniz, Bernoulli and Pascal.  These mathematicians advanced probability to the point where life insurance and annuities could be bought and sold, but again there seems to be little cross over into the realm of predicting project outcomes until the 20th century.

From a time management perspective, William Playfare ‘invented’ graphical statistics (including bar charts) and published a series of different charts in his Commercial and Political Atlas of 1786.

Playfair_TimeSeries-2

However, whilst Playfair’s charts are detailed and accurate, they only report history; trends and forecasts were not considered (or at least not published).

There is a continuum from these early charts through to the work of Henry Gantt (who is falsely accredited with developing ‘project management’ and ‘bar charts’) some 200 years later (for more on this see: The Origins of Bar Charting).

The most sophisticated of Gantt’s charts described in ‘The Gantt chart a working tool of management’ (Wallace Clark, 1923) shows slippage or acceleration on the overall target production for one batch of parts on one machine, but again this work does not extend to predicting the completion date for the work, or a related set of activities.

From a measurement perspective, the concept of ‘piece rates’ can be traced back to the 16th century (the phrase ‘piece work’ first appears in writing around the year 1549). Piece work requires measurement of performance to calculate a workers pay and record keeping. However, whilst there is ample evidence of people being measured and paid this way for more then 400 years, there is little indication of this information being used to predict outcomes.

Measuring performance was integral to Taylor’s scientific management and the work of Henry Gantt, Chapter 3 of Gantt’s ‘Work Wages & Profits’ focuses on incentives and bonus payments for production work in machine shops. Foremen and worker are to be paid a bonus if they achieve the target production time for a ‘piece’ of work. The bonuses are calculated after the event and nothing in work wages and profits refers to any form or predictive scheduling beyond the usual planning needed for machine loadings. Gantt’s work is the most advanced of any of the options discussed to date, but all of his charts are focused on highlighting problems so that management action could be directed to resolving the problem.

In short, nothing in the documented practice of accounting, ‘bar charting’, or piece rates, or Gantt’s motivational bonuses, were designed to predict the completion date of the work or it finals cost based on performance to date. All of these processes, including Gantt’s, were focused on solid planning and then working to achieve the plan by eliminating problems that caused slippage to make sure the work was accomplished in accordance with the plan (reactive management).

Whilst there would have been very little effort required to take the actual, planned or estimated production rates (minutes per unit) and divide that into the lot (scope of work) to predict when the production lot is going to be finished, no one seems to have taken this step. The start of predictive calculations does not seem to have emerged until operational research people started playing around with the concepts during WW2 (1940s).

Predictive time focused planning emerged at some time in the late 1940s or early 1950s with the development of linear programming in association with OR, which in turn morphed in CPM , PERT, MPM and a number of similar techniques all around the same time in the UK, Europe and the USA. Prior to the 1950s the focus was on ‘how far behind’ is any element of the work; the advent of network based scheduling allowed a process for predicting completion to be developed. Kelley and Walker’s 1959 paper is very clear on this (see Annex in A Brief History of Scheduling). From these time management foundations, PERT Cost emerged, then C/SCSC which in turn grew into EVM and more recently Earned Schedule (see: Predicting Completion).

Today, project controls are expected to predict cost and time outcomes for each project and in both business and government the expectation of forward predictions of profits, incomes and expenditures are normal.

The question posed by this blog is that given the fact astronomers were predicting celestial events from 1000 BC or earlier; and some of the charts and risk assessments we use today were available from at least the 17th century if not earlier, were these concepts used by managers to predict work outcomes?  Or did all of this emerge in the last 60 years??

More precisely, is there documented evidence of someone using current performance to update a plan and predict cost, time or other outcomes before the 1950s?

The evidence I have found to date that suggests predictions are very much a development of the last 60 years is freely available at: http://www.mosaicprojects.com.au/PM-History.html. I would be delighted to be proved wrong!