Today we will talk about cost explosion – yet shift our focus from exponential to existential. With that, why don’t we pay closer attention to some expressions of human nature that often are the exact reason for drastic cost development? Two enchanting ladies, Mrs. Scarlet O’Hara and Madame de Pompadour, will support us in this undertaking, whereas the great Master of Suspense, Sir Alfred Joseph Hitchcock, will inspire the general atmosphere.
Anyone who has ever heard of “Gone with the Wind” (and a good share of the rest of the world), knows at least one quote from this opus magnum: “I'll think about that tomorrow”. With that, the illustrious Mrs. O’Hara appeals to a very natural human propensity: a strong preference for having goods or pleasant experiences sooner rather than later. By the same token, it means postponing unpleasant tasks, discussions, and decisions into the future. Thus, one “deposits” a tiny hurdle to be addressed later. And not dissimilar to an interest-earning asset, one gets more in the future. Only in the case of project management, a tiny hurdle not addressed on the spot, grows into a gigantic roadblock later and an insignificant miscalculation at the planning stage becomes gargantuan by the time of go-live. Ka-Ching!
The problem of individual time preference is omnipresent to such a vast extent that it becomes white noise and often goes unnoticed. At the same time, it is full of irony. Smoke-related health issues and mind-boggling expected costs that one will face in the future hardly ever make devoted smokers extinguish a just-lit cigarette, but a 50€ fine to be paid on the spot works like a charm.
The reasons behind the time preference are numerous, the research is vast, and it is safe to say that time preference is deeply hardwired into human nature itself. Thus, expecting or even hoping this aspect to change would be fruitless, so you must work with and around it. But don’t despair just yet! It can get much worse still.
Once split responsibility, or après moi – la deluge enters the game, as bedazzling Madame de Pompadour would describe it, you have a whole new dimension added to your initial problem. This means that the issue with time preferences becomes even more critical if the roles and responsibilities are fluid throughout the project and the ownership changes hands between project phases (as in “Plan” vs. “Implement”) or between project and operations. If one department (or person) is responsible for the planning process and the measure of success is how fast the plan gets written or how tightly the project costs fit the assigned budget, and a totally different set of individuals is responsible for the successful realization “as per project plan”, you can bet a good amount of money that you are up for a very unpleasant surprise – which in retrospect should not have been surprising at all. (If you are feeling adventurous and betting a small fortune, odds are that this fortune will be exactly the size of the hole in the project budget).
Add into this recipe the spice in the form of interpersonal animosities, conflicts, and hidden agendas of all types and forms – and bingo, you might end up with a scenario Hitchcock would die for. Finally, there is also a very special case when a project is initiated by someone, who is about to leave the organization permanently and is dead set on giving it “the last present” or to make it “happy”, sometimes against its will. This is the moment when Hitchcock would sob with envy… Now, this finally looks like the rock bottom of our little Pandora's box of horrors! And now that we are here, it is about time to let some hope out… But let us keep the suspense for a bit to make the Master proud of us.
