DeMacro made this post, which has been picked up by the agile community to mean estimating is a waste.
My early metrics book, Controlling Software Projects: Management, Measurement, and Estimation (Prentice Hall/Yourdon Press, 1982), played a role in the way many budding software engineers quantified work and planned their projects. […] The book’s most quoted line is its first sentence: “You can’t control what you can’t measure.” This line contains a real truth, but I’ve become increasingly uncomfortable with my use of it.
Implicit in the quote (and indeed in the book’s title) is that control is an important aspect, maybe the most important, of any software project. But it isn’t. Many projects have proceeded without much control but managed to produce wonderful products such as Google Earth or Wikipedia.
To understand control’s real role, you need to distinguish between two drastically different kinds of projects:
Project A will eventually cost about a million dollars and produce value of around $1.1 million.
Project B will eventually cost about a million dollars and produce value of more than $50 million.
What’s immediately apparent is that control is really important for Project A but almost not at all important for Project B. This leads us to the odd conclusion that strict control is something that matters a lot on relatively useless projects and much less on useful projects. It suggests that the more you focus on control, the more likely you’re working on a project that’s striving to deliver something of relatively minor value.
Let's start with some logic assessment in the context of an actual business.
- If I'm investing $1,000,000 (long form for effect) and only getting back, $1,100,000 - that is $100,000 return on a $1,000,000 investment, that's a 10% return on investment. Assuming the investment of $1,000,000 is just labor, a standard burdened rate gets me, 10 staff, over a year's work. The natural variances of work productivity, staff turnover, delays and disruptions, and other event-based and naturally occurring variances has a high chance of wiping out or greatly reducing my $100,000 return.
- If I'm investing $1,000,000 and getting $50,000,000 back, that's a 500% return on my investment. Implying there is no need to measure the project performance and by implication no need to estimate. This, of course, ignores the need to know how much of that $50M minus the $1M am I willing to loose? This is the value at risk discussion.
Let's look at a few of the companies SEC 10K to see what their Return on Equity and Return on Investment is ...
The 50 to 1 return on a project is a logical fallacy of exaggeration / stretching the truth / overstatement occurs when a point is made by saying something that would be true, but the truth has been distorted in some way.
Having been through a few startups, with one went public, one failed, and one got bought and being married to a person who has gone through 6 startups, I have some familiarity with how startups work.
A 50 to 1 ROI is unheard of. There is mention of Google maps as a 50:1 return. Google Maps makes money by monetizing the Pins. The 2015 10K shows $74.5B total revenue for Google. The total cost of revenue is 37% and the R&D expenses as a percentage of revenue is 15%. The details of individual products are in the balance sheet, but there is no 500% ROI on Maps or any other product used as an example.
As well, again from hands-on experience with startups, those investing need to know when they'll get their money back. If they are not an external investor, the internal CFO needs that same information. DeMacro had made several other off the wall comments - one in IEEE Computer - that appear to be misinformed about how projects and business work in the 21st century. For example in "Software Engineering: An Idea Whose Time Has Come and Gone?" where the original 10% and 500% return example comes from, he goes on with an analogy of parenting teenagers where he says ...
Now apply “You can’t control what you can’t measure” to the teenager. Most things that really matter—honor, dignity, discipline, personality, grace under pressure, values, ethics, resourcefulness, loyalty, humor, kindness—aren’t measurable.
I don't know where he grew up, but where I grew up - the Texas Panhandle - those attributes were certainly measurable. So I get a bit skeptical when a thought leader makes statements that are not logical. The measures of attributes are exemplified in the Boy Scouts, on sports teams, sitting in the church pews, observed in the volunteer activities, and further on in adulthood, in the leadership activities of the military and business management.
Don't fall for the Strawman Fallacy, where exaggerating, misrepresenting, or just completely fabricating an argument takes place. This kind of dishonesty serves to undermine honest rational debate.
This is common in the #NoEstimates community.
- We can build a ticketing system in 24hrs.
- All estimates are evil.
- I can make decisions in the presence of uncertainty without estimating the impact of those decisions.
- I really don't mean NO when I say NO Estimates, I mean YES, but it means NO, so give me $1,000 and I'll let you hear me say that in person.