Optimism Bias

Remember all the things that have gone wrong on your projects in the past? Well here is a word of advice, don’t forget them.

he reason for this is optimism bias.

Optimism bias is the tendency for individuals to expect better than average outcomes from their actions.

Like I said, remember on your last project when you underestimated the cost of finishing your project, or thought that you could get the utility companies to do their thing in a reasonable timescale, or that the planners took double the 12 weeks they quote.

Well optimism bias on projects does lead to an underestimation of project duration, an overestimation of people’s abilities & competencies and most crucially an underestimation of the cost.

And its prevalent on all projects. According to studies, it is worst in the early stage planning of projects. You know the phase before most involve any external help.

You know the best time to kill a project

As early as possible to minimise how much money you spend on something that will never work.

This is especially true in property – there are lots of opportunities out there but only a small percentage of them are deals worth pursuing

Working For Free

I recently had a potential client who wanted me to carry out my services for free.

Well initially anyway.

Like quite a lot of clients I come across, they had slightly unrealistic budget constraints.

They also had an initial quote from a builder for doing the works based on a site visit but not much else.

By engaging with me as to deliver their project for them, they were hoping to deliver the project in a more cost-effective way that using a single contractor.

The theory being that my fee would be less than a building contractor’s overhead and profit. Which is quite often the case.

Using a project manager (is also a QS) also brings about many other benefits as we have complete oversight of the technical and commercial aspects of a project.

Plus I know how to set projects up for success.

BUT

Like a builder usually gives a “quote” for free, they wanted the same from me. But as I do things properly, I would have to….

Set an objective, build the scope, produce a schedule of work, programme, budget and build the project supply chain including sending out all the big tenders

All to see if my service would be cheaper than a quote they had no faith in

Maybe it was my fault and I didn’t convey the value I bring?

project control simplified

Common Errors Made When Estimating

There are many errors that can be made during the compilation of a cost estimate, however there is usually a recurring theme which is present across many estimates which we have seen. This blog will take you through these common errors in the hope that the recognition will prevent or remove these from your estimates.