Project Planning

Build vs. Buy

The Nature of Projects

Everything costs twice as much, and takes twice as long as you expect.

The “Iron Law of Megaprojects” according Bent Flybjerg is “over budget, over time, under benefits” 2.

Projects are driven by psychology and power2.

Projects often have a “fat-tailed” distribution (as opposed to normal distributions) where the tails have extreme outcomes. That is, costs aren’t just going over, but theres a non-trivial chance that they go disastrously wrong2.

Projects of any meaning size tend to exist in an environment of complexity and interdependencies. Therefore, disruptions tend to ripple through the system2.

How to run a successful project

  • “Think slow, act fast”: Spend as much time planning as feasible or necessary so that action is smooth and quick2
    • Mistakes and iterations in planning are cheap, mistakes in during action are deadly and can lead to a break-fix cycle leading your project into a morass

Methods of Project Scheduling

Forward Pass and Backward Pass

Psychological Aspects to project planning failures

“You want the flight attendant, not the pilot, to be an optimist”

You want hard-nose analysis when planning a project, not unbounded optimism2.

  • One common problem is a rush to commit to the first suitable option rather than evaluating all potential options 2.
  • Lock in occurs when the organization acts as though the path or option they chose is the only way to proceed2.
  • Prematurely locking in is what the author calls the “commitment fallacy” 2.
  • Unchecked optimism and snap judgments lead to poorly scoped projects2.
  • “planning fallacy” - common underestimation of time required to complete tasks even in the face of conflicting information2.
  • Tendency to picture the best-case scenario as the best-guess scenario2.
  • “bias for action” - action weighs heavy on decision makers, and they tend not value planning particularly in the face of progress.2.
  • “sunk cost fallacy” 2.
  • Don’t assume you know all there is to know2.
    • What you see is all there is (WYSIATI) fallacy2.

References

1.
2.
Flyvbjerg, B. & Gardner, D. How Big Things Get Done: The Surprising Factors That Determine the Fate of Every Project, from Home Renovations to Space Exploration and Everything In Between. (Currency, 2023).