Travis Anderson guest post
Glen Alleman mentioned?Against the gods? The remarkable story about risk? In a previous PM Student post, ‘How Expectations Misunderstand Project Estimates. I am a PM Analyst by trade and have an EVMS background. EVM fundamentals require measurements. Even for projects not required to use EVM measurements are always necessary.
I found one paragraph about measurement vs. intuition very interesting.
?Intuition always wins over measurement: rational people make decisions based on information and not on whims, emotions, or habits. After analyzing all available information, they make well-defined decisions. They value more wealth than less and seek to maximize utility. They are also cautious in the Bernoullian sense of the utility of additional wealth being inversely proportional to the amount they already have. (Bernstein 1996, p. 246)
This aphorism can be applied to project management. It could be said that project managers should always use measurement instead of intuition when making decisions. PMs cannot afford to be emotional or impulsive when analyzing information and making decisions. The PM will choose positive variance over negative, and will work to maximize company profits. They are willing to take risks if the project is on time and earns optimal profits.
In general, better outcomes are achieved when you combine intuition with measurements. We would still be looking to the stars and oracles to find answers, rather than using Income Statements or Cash Flows to measure the results of various decisions we make during our daily encounters with projects. These measurements often confirm our intuitions. It is important to recognize reliable measurements that can lead to more rational decisions, and thus to the best possible outcomes.
Sometimes more is not always better. Project managers need to understand the law that diminishes return. Project managers spend so much time explaining why the?Why?. Customers are presented with various reports that show red (unfavorable), measures. Project managers spend so much time explaining the?Why? that they neglect to mention the?What?. The?What? The?What? refers to the people and processes involved in achieving the final result. Reports are not a way to verify that the process is actually working. Did the project manager use intuition or measurements during the decision-making process that led to a red indicator. Project managers are not psychics. They must use rational decision making and intuition to determine the precise measurement technique to develop accurate plans, consistent status and reliable forecasts for future outcomes. I’m sure that we all have war stories to prove this point.
It doesn’t matter if we get the same satisfaction from eating one hamburger as we do from eating another. Utility and risk are two different things. Most people make decisions and then try justifying them later. The PM may spend a lot of time and resources on projects and then defend the plan afterward, even though the plan is not realistic or feasible six months later. PMs can become emotionally attached to past decisions and rationale. As time passes, the unknowns of yesterday can become more obvious. This requires a change in reasoning and decisions to ensure that the project is completed successfully.
I believe that intuition is always more important than measurement when we are playing the dice or flipping coins. On projects and in business, however, there is something to say about gained intuition and the use of measurement as an instrument for validating what we already know. Although we have made great strides since the days of using mysterious oracles to guide us, it is still difficult to be a b
Travis Anderson guest post