Most people agree that projects seem to take longer and longer.
I ask people in classes, "Does everyone know what contingency is?" All participants usually signal that they do indeed understand it. Then I ask someone to define it. A lot of wiggling in place usually follows the question, but eventually, sometimes after I single out an individual, someone offers an answer along the lines of, "Extra time or money to handle the unexpected." I then ask, "Extra compared to what?" More puzzled expressions. I refer to Figure 3.6 as an example of the variation in task performance (which they have previously experienced by an estimating exercise), and ask, "Isn't it a huge difference if you add contingency to the 50% probable task estimates, as compared to adding it to the 90% probable task estimate?" They all agree and understand that the word contingency can have a vast difference in meaning, depending on how you choose to interpret the base. I offer an operational definition: "Contingency is the difference between a 50% probable estimate and a 90% probable estimate." If you do not like this definition, you are welcome to change it. Just be sure that the people you are communicating with are using the same meaning.
Everyone wants to have a successful project. One necessary condition for this is to have the project complete on schedule. In order have projects completed on schedule, we must have every task on the critical path complete on schedule. In order to have every task on the critical path complete on schedule, we must plan each task to include the contingency (as defined above) because we know that there is uncertainty in task performance. This is the only way to do it with the present CPM. Further, since you only find out the critical path by estimating all of the project tasks and connecting the network, you have to include contingency in all of your task estimates.
Project managers generally agree that they want people to keep their commitments and deliver on their task delivery date. People generally agree that in their organizations, people who complete tasks on time are good performers, and people who do not complete tasks on time are considered poor performers. They acknowledge that when project managers ask for input on task times, they want contingency included in the estimates.
Usually, there is also pressure to plan to complete projects as soon as possible. In competitive bid situations, the bidder who can complete sooner usually has an edge. Everyone knows that planning to complete the project sooner tends to reduce project cost, therefore helping to make a competitive bid. For those performing R&D projects, the impact of shorter development may make the difference between
the success and failure of the project. For deadline-driven projects, a shorter plan time usually alleviates the pressure to start now.
For all of these reasons, in order to plan a successful project, the project manager must have a shorter critical path for the project. In order to have a shorter critical path for the project, the project manager must have shorter task estimates that do not include contingency.
Figure 3.7 shows the Evaporating Cloud for the dilemma we describe above. Of course, we cannot have both 50% probable task estimates and high-probability task estimates, so there is a conflict. In many environments, this conflict plays out with the task estimators proposing high-probability estimates and management, including the project manager, reducing these estimates as a "challenge" or "stretch" goal. These time cuts usually do not include a method to achieve the time reduction. They are arbitrary. Usually people know that management still expects them to achieve these low-probability task times. They go into the schedule as fixed dates, and management will request status to that date.
Task performers tend to accept the "challenge." They really have no option. There is considerable pressure to be a team player and to do your part. Subcontractors often face the same pressure; meet the reduced time, or we will give the work to someone else. Experienced people justify accepting the situation as a management-dictated version of the chicken game. Remember the old movies where two drivers would race toward a cliff or toward each other to see who would "chicken out" first and veer off or stop the racing car? People on a project know that what is happening to them is also happening to every other task on the project. If they agree to the time cut, it is very likely that reality will strike some other project task before it hits them, causing management to chicken out and extend the project time. This will give them the time they need to complete their task, so they can win in the system. If they were to object to the time cut, they would lose immediately, as management would brand them "nonperformers" or "nonsupporters." They have no choice in the real world of power politics.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.