Month: October 2017

Estimation accuracy is a skill: here is how you train it

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One of the first things many of us do in the morning is stepping on the scales. You know, just to get the reassurance of how beautiful we are (ha ha, very funny!). I knew “tricks” for all of the scales I had. Because there are mornings, when the last thing you want is the harsh truth on the small LED screen under your feet. On those mornings, I knew that all I had to do was either lean forward or stand on my toes, or lean on something slightly using my hands.  I know, I know, I know… not fair, not accurate, “not” many other things. But what if I feel like it? And I am pretty sure many of you recognize what I am talking about. It’s called bias. Whether deliberate or unconscious – it is still bias. It will impact all of our estimations.

One thing is deliberately choosing to see the “lighter” version of the truth on the scales every morning. Another – making business decisions on inaccurate data. And I am not talking only about multi-million projects. Everything starts with small every day habits. Some examples:

  • Time planning. One option – being always late (arriving later than promised); second option – arriving always too early.
  • Budget planning. Making assumptions on spend, sales, growth, etc.
  • Selecting savings opportunities to be pursued – prioritising initiatives and projects.
  • Negotiation planning: estimating your own and your negotiation partner’s positions.

Making any assumptions or estimations at all means exposure to a human bias. I knew people have the tendency for overestimating or underestimating things, but it never occurred to me, that you can:

  1. Measure it.
  2. Calibrate it.

Yup, that is right. The rule “if there’s a will, there’s a way” works here, too. It is called confidence calibration. It is a skill and you can train and improve it. You can find some more detailed information here and here. The vast information pool on the internet offered a tool which I tried out on myself. Turns out, I am quite on spot if I know the subject and I am being rather “safe” (underestimating, leaving some space “just in case”), if I am uncertain.

This has helped me to increase the accuracy of my estimations. Furthermore, the old scales broke down and I am still working on finding ways to befriend the new ones. Would love to receive your feedback – if you try using the confidence calibration tool, that is. Oh, and any scale “calibration” tips would be highly appreciated.

Estimation accuracy is a skill: here is how you train it

Types and levels of proofness

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For instance, I blog under Futureproofitable: that is future proof and profitable in one word. You can buy things cheap. But if they are of no use – you are not getting far as a business.

The same rule applies across all of the organisations (private or public). You can have the strongest Procurement processes and function in place, but if the decision itself to buy something is wrong, then nothing can save you.

There are few levels of proofness, as I categorise it:

  • Idiot proof: if you know there is a risk of completely failing at the task or a project, just do not do it.
  • Future proof: you know there is a risk, but you choose to address it in advance.
  • Future proof and profitable: you know there is a risk, you choose to address it in advance in a way so that you can turn it into revenue stream in the future.

I will be sharing more examples in the future as I come across them. Today, I already have a bit of a library gathered. Here’s one example.

A PFI object. A health institution. You would expect the highest standard of cleanliness and hygiene. And still… you come across an artwork hanging from a ceiling like this:

ceiling art.jpg

Can you think of all the things that can go wrong? Cost of cleaning it? More like not affordable to clean? And if you cannot afford to clean it – what kind of risks are you exposing everyone to?

What has that got to do with future proofing? Here you go:

  • Level 1, #idiotproof: don’t do it. Just don’t. It adds no value, costs a fortune itself, the maintenance costs even more; without maintenance – it becomes a source of various risks.
  • Level 2, #futureproof: make it machine washable. I am not suggesting I know HOW to do it. But if you really need it in the first place – make it machine washable.
  • Level 3, #futureproofitable: make it machine washable “hall of fame”: hang a small artwork in the name of everyone who has contributed through charity to the purpose of the object.

Do you have any examples like this?

Types and levels of proofness