08 June 2013

The Flaw of Expected Values

No matter how well-managed they are, projects tend to finish late and over budget. We keep doing things to correct this problem, but project failure rates have remained constant for decades.

It turns out that one of the reasons, perhaps the principal reason, is that the math we use for estimating project cost and duration is fatally flawed; it gives us consistently optimistic estimates.

The fatal flaw is the Flaw of Averages, eloquently described in Sam Savage's book of the same name.

In project planning and estimating terms, that's the Flaw of Expected Values.