This statement Management is Prediction is the basis of the microeconomics of writing software for money, someone else's money.
Along with the quote of Daniel Boorstin's, The greatest obstacle to discovery is not ignorance – it is the illusion of knowledge. Boorstin was the Librarian of Congress. One of his other quotes was once the subtitle of this blog I Write to Discover What I Think.
And here's what I think about the predictive nature of managing projects. If we don't know how to estimate the impacts of our decisions on the future outcomes of those decisions, we have the illusion of knowledge, when in fact we have no knowledge.
There is a popular myth, that estimating the future outcomes of our present day decisions is somehow voodoo, guessing, making things up, and having our management treat them as commitments. It's clear we didn't pay attention in the probability and statistics class. Or worse yet, we have intentionally ignored what we did learn in that probability and statistics class. Thinking naively or with intent ignoring the probabilistic nature of all project work.
All variables in project work are random variables. These variables are almost always coupled to each other in some way, usually a non-linear way. Fix one variable, the other two are free to be variable. Fix two variables, the third variable is free. Fix all three, they still vary. This is the primary reason margin is needed for project to have a credible chance of showing up on time, on budget, and on value. These variances are Irreducible, meaning they will vary no matter what you do. Fixing Budget, only fixes the amount of money you've allocated to the project. It doesn't fix the cost to produce the value from the project, nor the time to produce that value.
So Why Do We Estimate?
When ever possible we should use evidence in making decisions about project variables. Observing the behaviour of the variables in an attempt to see what they are doing, where they are going, what the next outcome might be.
This is the basis of the OODA Loop. Boyd was an Air Force fighter pilot, and like Jeff Sutherland of agile fame, understood that emerging situations are the norm in the skies of Vietnam, just like they are on projects.
The OODA loop is often popularized as four elements going around in a circle. The picture is the only diagram Boyd ever drew. Boyd's OODA Loop describes the details. The title of the chart above comes from one of our briefings for Managing in the Presence of Uncertainty. But the domain OODA is applicable is not restricted to DOD acquisition, but is applicable in any domain where money, time, and performance are at risk.
Just to push a little harder, when you hear about Clausewitz and Tzu from agile coders, remember Boyd's comments when he spoke in public
“Don’t be a member of Clausewitz’s school because a lot has happened since 1832,” he would warn his audiences, “and don’t be a member of Sun Tzu’s school because an awful lot has happened since 400 BC.”
So just like those reference to 1968 reference to the Software Crisis - a lot has happened since then.
So Here's a Simple Fact
Also often ignored by some wanting us to learn to decide without knowing the impacts of those decisions.
People learn better when they predict
Making an estimate about the future — predicting on outcome or impact — forces us to think ahead about those very outcomes. Making an estimate causes us to examine more deeply the system we are observing and our engagement with that system and our reactions to the system. It causes us to question our understanding of the system as it is now — in its current state — and what we would like it to be in its future state. As well, by making estimating about future outcomes, we can learn more about our understanding of the management beliefs we hold as we examine the results of our predictions.
So like Deming tells us ...
Management is Prediction
Not making prediction's about the impact of our decisions, the processes affected by those decisions, like - cost, schedule, and technical performance - shown in the three legged picture above, ignores the principles of Deming. And when we do that, ...
... we're not managing how we spend other peoples money.
The only way this notion can't be called bad management is if the amount of money at risk is low enough that those providing the money don't care if we waste it or not.
