Wednesday, July 11, 2007

Build out Budget:

Tom Peters reminds us that if we were realistic nothing would ever get built. His post is quoted below:

I decided to do a little careless research at a dinner party, asking several people about their projects. Three questions: How did you do vs. budget for projects completed a couple of years ago? If you'd known the real pricetag when you started, would you have gone ahead? And, in hindsight, was the eventual pricetag worth it?

To Q1, the answer ranged from about 25% over (if you can believe it) to 5 times (which I
do believe). As to Q2, 3 of the 6 I queried said "no way" if they'd known what they were getting into—2 others were on the fence. As to after-the-fact satisfaction, 5 said, in effect, "Yes! We'd do it again"—and one said "Maybe, maybe not."

It's obviously dangerous to generalize from such a sample, but my reading of history, business, and in general, says this phenomenon is as ordinary as it gets. Furthermore, in the back of one's mind, one damn well knows that the pricetag will be far in excess of what's planned.

And my point? You'd better have a great number-crunching CFO, but if you let him-her rule the roost, there won't be much left to roost on. Of course I know it's "Damned if you do, damned if you don't." On the other hand, progress hinges on illusion and delusion...

Cherish your dreamers!”