What Makes a Good Estimator? - ACostE Systems ACostE NW What... · No estimator can be an expert in...

03/02/2015 1

What Makes a Good Estimator? Alan R Jones

Chief Estimator – Professional Development and Continuous Improvement

ACostE North West Region 29th January 2015

© BAE SYSTEMS PLC 2015 All Rights Reserved

The copyright in this document, which contains information of a proprietary nature, is vested in BAE SYSTEMS Public Limited Company. The contents

of this document may not be used for purposes other than that for which it has been supplied and may not be reproduced, either wholly or in part, in any

way whatsoever, nor may it be used by, or it contents divulged to, any person whatsoever without the prior written permission of BAE SYSTEMS Public

Limited Company

ACostE NW Region Mar 2015 03/02/2015 © Copyright BAE Systems. Any use, duplication or disclosure of information contained on

this page is subject to the restrictions on the title slide of this document. 2

What Makes a Good Estimator?

What do we mean by “good”? Let’s say “Upper Quartile”

Contents

• Contextual Framework

• Personal Attributes

• Subject Knowledge

• Technical Skills

• Inter-personal Skills

• Summary

• Open Discussion

2

The Building Blocks of any Estimating Capability are:

“Data, tools, people and process;

… but the most complex is people!”

Source: Dr Mark Gilmour, Dale Shermon (2014) “Data, tools, people and process;

but the most complex is people!”, Project Control Professional, ACostE


this page is subject to the restrictions on the title slide of this document.

Estimating Process

Stakeholder Attitudes

Prior Experience

Personal Competence

Organisational Culture

Contextual Framework

What makes a good estimator?

3



Everyone has an influence on us …

The way we think … the way we work … the way we react …

are influenced by others around us …



Estimating Inference Ladder

I adopt beliefs

I take action

based on my beliefs

I make assumptions based

on the meaning(s) I add

I draw conclusions

I add meaning to the data

I select data from what I

observe

I am exposed to observable

data and experiences

My beliefs are formed from

what I observe or am led

to observe by others

My beliefs affect what data I

unconsciously observe

and subsequently select

to act on in future

This helps to re-affirm my

beliefs

We are all guilty of

unconscious bias.



Unconscious Bias - Example

Squares A and B are Different Shades of Grey

True or False?

Let’s take some colour samples

A

B



Contextual Framework

The Estimator will be affected by the environment in which they work …

• Core Competences

– Are we suited to being an estimator? Are we inherently creative?

• The Estimating Process we are expected to follow

– How flexible is it? Have we been trained in what we should and should not

do? Do we know how to apply the technical skills required?

• Stakeholder Attitudes

– Are we seen as friend or foe?

• Organisational Culture

– Is challenge encouraged or discouraged?

• Depth of Knowledge

– Do we have prior experience and knowledge we can draw upon?

7



BAE Systems Skills Quadrant

8

Technical Skills

Interpersonal Skills

Product & Capability

Knowledge

Business Skills

In BAE Systems we have a 4 Quadrant Model across the organisation for

developing our people

... this applies to our estimators



Estimating Skills Requirement

There is no single recipe for what makes a good estimator, but the

best ones have a range and mix of attributes:

• Personal Core Competences (Quadrant 1 + 3)

• Business, Product and Capability Knowledge (Quadrant 2 + 4)

• Technical Skills (Quadrant 3)

• Interpersonal Skills (Quadrant 1 + 3)

... every estimator has these in varying degrees

9



Personal Attributes or Core Competences


10



• A head for numbers (strong numeracy skills)

• Sound verbal reasoning skills

• Well organised (data and thoughts)

• Honest and ethical

• Level Headed

• Naturally inquisitive

• Good powers of recall

• Fearless and thick-skinned in the face of opposition

• Tendency to cynicism perhaps?

11

Personal Attributes (in no particular order)

11

Yeah,

really?!

I think

therefore I am.

QED



Product, Process, Organisation Subject Knowledge


12

Not necessarily,

an “anorak” but

they do need to

know “who they’re

going to call”



Knowing the Product or Process Context

No estimator can be an expert in everything but they

need to have a basic awareness, and a supporting

network of helpful knowledgeable contacts:

• Products and services we are selling

• Our Process Capabilities

• Our Process Capacities

• The way we conduct our business

• Our data recording systems

Any Estimate without an understanding of its context

might as well be just a random number!

13



Knowing the context we are required to estimate

The context also includes the purpose we are creating an estimate ...

How long should we leave for a trip to the railway station?

• According to our “Sat Nav” it should take us 20 mins

• But the time we allow may depend on whether we are:

– Catching a train?

– Meeting a train?

– Or just buying / collecting a ticket for a train on a future date?

The context should lead us to consider:

– The consequences of the journey taking longer than we expect

– The day, time of day, time of year that we are going

– Whether there is an alternative solution

– Potentially who else is involved

14



Technical Skills for Estimating


15



Technical Skills

• Can perform basic Statistical Data Analysis

• Has an understanding of Product and Process Cost

Drivers and their Correlation with Cost

• Can create top-down and bottom-up estimates

• Understands the difference between the three basic

estimating techniques (APE)

• Knows their way around a Spreadsheet

• Follows Best Practice Spreadsheet Modelling as an

aid to independent Verification & Validation

• Understands Risk, Opportunity and Uncertainty

Evaluation and Contingency Planning

• Ability to document the Basis of Estimate

16



Choosing an Appropriate Estimating Technique

There are only three basic Estimating Techniques

Expert Judgement

Scope

Cost

??? Eeny, meeny, miny moe

No Cost Reference Points

Analogy

Scope

Cost

Actual

Estimate

+20% growth

Single Cost Reference Point

Parametric

Cost

Estimate

Actuals

Multiple Cost Reference Points

Trend

Analysis



The Science and Art of Understanding ROU

18

May or May Not Occur Will Occur

Risk &

Opportunity Register Defined

Baseline Tasks

Emergent

Baseline Task

Performance

Undefined Risks

or the

“Unknown Unknowns”

Clearly Defined

Undefined

or Unclear

Baseline

Estimate

Bottom-up

Uncertainty

Assessment

Bottom-up

Risk &

Opportunity

Assessment

Gap in Monte

Carlo Analysis

Likelihood of Task Occurrence

Task

Definition



Other Technical Skills

19

The inner geek within

me wants to continue

on this theme but

there is a severe risk

of a sudden epidemic

of A2D2

Audience Attention

Deficit Disorder ...

70% of all statistics are made up, which

reminds me of the time we invented this little metric



Inter-Personal Skills of an Estimator


20



Inter-Personal Skills Requirement

The goal of the estimator is to generate or compile an honest and

independent assessment of the cost based on the agreed requirements

The Estimator’s role is that of a Mover, Shaper, and Independent Thinker

… a role which requires a range of interpersonal skills in order to deal

effectively with the issues faced when interacting with others in order that our

products are more affordable, and we are more competitive as a business



BAE Systems End-to-End Estimating Process

Re

co

nc

ile

an

d M

ain

tain

Es

tim

ate

Re

co

mm

en

da

tio

ns

Plan and Manage Cost Estimates

Cre

ate

an

d M

ain

tain

Co

mm

erc

ial In

de

pe

nd

en

t E

sti

ma

te

Provide

Support to Contract

Management

Re

vie

w a

nd

Re

co

nc

ile

Fu

nc

tio

na

l E

sti

ma

tes

Co

mp

ile

an

d M

ain

tain

Ris

k

Op

po

rtu

nit

y a

nd

Un

ce

rta

inty

Eva

lua

tio

ns

Co

nd

uc

t E

sti

ma

te

Cle

ara

nc

e a

nd

Re

sp

on

d

Cre

ate

an

d M

ain

tain

Fu

nc

tio

na

l E

sti

ma

tes

Manufacturing

Procurement

Engineering

Project

Management

Support

Iterate in line with

Product Maturity

through to

Contract Award



“Soft Skills” in the Context of E2E Estimating

Infl

uen

cin

g S

tyle

s

Stakeholder Management & Influencing Styles

La

tera

l T

hin

kin

g

Influencing Styles

Team Working

Qu

es

tio

nin

g S

kil

ls ,E

ffe

cti

ve

Lis

ten

ing

& N

eg

oti

ati

on

Sk

ills

La

tera

l T

hin

kin

g &

Qu

es

tio

nin

g S

kil

ls

Infl

ue

nc

ing

Sty

les

& P

res

en

tati

on

Sk

ills

Te

am

Wo

rkin

g

Be

ha

vio

ur

Ma

na

ge

men

t

Tra

ns

ac

tio

nal A

na

lys

is

Ch

an

ge M

an

ag

em

en

t

… to name but a

few of the

interactions

However, all the

development of

these skills from an

estimating

perspective are

often overlooked

They are regarded

as the domain for

Human Resource

Professionals to

develop



Soft Skills in Estimating – An Alternative Perspective

• The “Soft Skills” required to support the E2E can be summarised as:

– Planning and Setting Expectations

– Engaging with Others

– Getting Information

– Overcoming Problems and Difficulties

– Going Public and Selling the Story

• All of which requires an element of:

– Management

– Communication

– Thinking Skills

… in order to maximise our Personal Effectiveness

The National Occupational Standards for Estimating also include Personal Effectiveness skills

24



Key Soft Skills Identified for Estimators

1. Change Management

2. Stakeholder Management

3. Behaviour Management

4. Team Working

5. Time Management

1. Negotiation Skills

2. Influencing Styles ...

3. Transactional Analysis ...

4. ... Questioning Styles ...

5. ... ... Effective Listening

6. Presentation Skills

7. Virtues and Vices of Virtual Meetings

1. Psychology of Estimating / Unconscious Bias

2. Lateral Thinking ...

3. ... De Bono’s Six Thinking Hats

4. ... Brainstorming Techniques

Management Skills

Communication

Skills and

Techniques

Thinking Styles

BAE SYSTEMS PROPRIETARY – Internal Use Only

Unpublished Work Copyright 2013 BAE Systems. All rights reserved.

Change Management



Overcoming Resistance to Change

... In the context of Behavioural and Cultural Change - not Configuration Control

Implementing Change – Lewin’s 3-Stage Approach to Changing attitudes

Unfreeze … Change … Refreeze

Create the

burning platform

Turn off the heat

and solidify again

U

Show them the

way to safety



The Change Curve – An Emotional Rollercoaster

Imp

act

Shock,

Denial Anger, Fear Acceptance Commitment

Old Status

Quo Disruption Exploration Rebuilding

New Status

Quo

Reaction

Change State



Managing The Change Curve

Imp

act

Time

U

Accelerate the

Change

Reduce the Negative

Consequences

Unfreeze … Change … Refreeze

Manage the change to accelerate the benefits and minimise their effects

In a bid situation we can’t afford to wait around while others catch up



Stakeholder Management and

Behaviour Management



Where there’s an Interaction, there’s a Stakeholder

End-to-End

Estimating

Process



Stakeholder Management

Power or

Influence

High

Low

Low High Interest

Key Shapers

Supporters Fringe Players

Potential Distractors



Stakeholder Behavioural Styles

Submissive

Hostile

Dominant

Consensual

Terrorist Leader

Blocker Helper

... Knowing someone’d behaviour style helps to identify strategies to deal with them




Know your Stakeholders …

• Apply the “Triple A” Test to the Most Influential of these

• In terms of what you are trying to achieve, are they an:

ADVOCATE AGNOSTIC ADVERSARY




High

Low

Low High

Marginalise / Mentor Monitor

Manage / Mould Mitigate

Power or

Influence

Interest



Team Working & Team Management



Stages in the Life of a Team

From the Birth to the Death of a Team ... and when team members change

Forming Storming Norming Performing Mourning

New Team

comes together

Team

performance

drops off as

Weaknesses

emerge

Team

performance

improves as

combined

Strengths

emerge

Team performs

well as

synergies are

maximised

Performance

dips as team

begins to

disband

Minimise and

shorten

Maximise and

lengthen

Effectiveness

With a Bid Team, it is essential that we

minimise the “Storming Stage” and

maximise the “Performing Phase” ... and

know who’s doing what, when and how



Who’s Who in your Team? Belbin’s Roles

How can we summarise Belbin’s Team Roles in a nutshell?

Co-ordinator Acts as a Chairperson

Team Worker Encourages co-operation

Resource Investigator Explores outside opportunities

Shaper Challenges the team to improve

Implementer Puts ideas into action

Completer-Finisher Ensures thorough timely completion

Plant Presents new ideas and approaches

Monitor-Evaluator Analyses the options

Specialist Provides specialised skills and knowledge

Each role brings something positive and different to the team … but they also bring

with them some behavioural “baggage” …

… that’s the trade-off – you can’t have one without the other …

People

Oriented

Roles

Action

Oriented

Roles

Thought

Oriented

Roles



Negotiation Skills



Stages of Negotiation

The process of negotiation includes the following stages:

1. Preparation Know what is important to the other party

2. Opening Deal with the decision maker, not the messenger

3. Discussion Breaking the ice and establishing rapport

4. Proposing Clarification of goals (use appropriate Influencing styles)

5. Bargaining Negotiate towards a Win-Win outcome

6. Adjournment? Only if needed - links back to influencing styles

7. Agreement Re-state all that has been agreed (like Active Listening)

8. Recording Summarise in writing the agreed course of action

Even for informal negotiation, the following is important:

– Attitude

– Knowledge

– Other Interpersonal Skills



Looking for the Win-Win Solution

Th

ey m

ust

win

att

itu

de

We must win attitude

Grudging Compromise

with no real ownership

Confrontation

There are no Winners

Lose / Win

They are happy; we are not

Win / Win

Everyone is

reasonably

happy

Win / Lose

We are happy; they are not

Their Maximum Concession

Their M

inim

um

Accepta

ble

Positio

n

Our Minimum Acceptable Position

Our

Maxim

um

Concessio

n

We must not lose attitude

Th

ey m

ust

no

t lo

se a

ttit

ud

e



Influencing Styles or, how to get over the factor

and turn

into more of a



43

Influencing Styles

• Proposing

• Reasoning

• Stating expectations

• Evaluating

• Using incentives and pressures

• Involving

• Listening

• Disclosing

• Finding common ground

• Visioning

• Postponing

• Changing the subject

• Taking a break

• Processing

• Withdrawing

• Blanking or dismissing

• Hiding

There are five basic Influencing Styles:

• Persuading

• Asserting

• Bridging

• Attracting

• Disengaging

• Avoiding

} }

Push Styles

Pull Styles

} Moving Away

Styles



“Transactional Analysis”

Dealing with others who are dealing with us

Dealing with ourselves



Berne’s Life Position Mindsets and Ego-States

My State

from my

Point of

View

I’m OK

I’m Not OK

Your State from my Point of View

You’re Not OK You’re OK

I feel good in myself

and about others

around me.

I’m confident we can

make things work.

I feel bad in myself

and see myself as

sub-ordinate to you

and others.

I feel bad in myself

and I feel bad about

you too. What’s the

point no-one will take

us seriously?

I feel good in myself ,

and I see myself as

better than you.

I hope you don’t hold

me back.



Overview of Transactional Analysis

Interactions between Ego-States

– Parent – Child Transactions

Gives instruction. Tends to “talk down” to

someone. Gives praise or criticism

– Adult – Adult Transactions

Makes reasonable requests of others. Provides

information objectively.

– Child – Parent Transactions

Seeks direction or approval. Gives a compliant

or defiant response to engagement with others.

– Child – Child Transactions

Off-the-wall creative thinking. Unfocused.

Distracted

P

A

C

P

A

C



Questioning and Listening Skills

??

? !!@

# This is a key skill for Estimators



Questioning Skills

There are different types of question styles

… some of which are useful:

– Open

– Closed

– Quantitative

– Qualitative

– Probing

– Non-Verbal

– Comparison

– Self-Assessment

… some less helpful:

– Multiple

… whilst others that are not so helpful at all:

– Leading

– Hypothetical

– Rhetorical

Only Open and Closed question styles

are mutually exclusive. All others can

be combined with at least one other

style

e.g. Closed Quantitative Probing

Questions



Questioning Skills: When to use

Examples of different types of question styles:

Open Questions

– Useful to get people to talk about a subject openly

– May be phrased as an invitation rather than as a question

“Tell me what you think about …”

Closed Questions

– Useful in clarifying specific points

– Designed to lead to a single factual answer or statement of

opinion

“What is the biggest risk … ?”




Quantitative Questions

– Useful to get clear statements regarding numerical values

– Can be used in open-style questions

“What is the possible range of outturn values for … ?”

– Or, in closed-style questions

“What is the probability of occurrence of … ?”

Qualitative Questions

– Useful in getting general “size” statements where people cannot or will

not commit to specific values

– Can be used in open-style questions

“How significant is this risk in general terms… ?”

– Or, in closed-style questions

“Which option provides the greatest opportunity … ?”

About

so big




Probing Questions

– Useful in exploring broad statements in greater detail

– Often used following either open or closed questions

“What is the basis of that estimate … ?”

Comparison Questions

– Useful to get people to put things into some sort of perspective or rank

– Can help to eliminate subjective expressions of size (e.g. big, major)

“How does that compare with the previous estimate … ?”

Self-Assessment Questions

– Useful to get people to reflect on their own area of competence

– Can help to differentiate between expert and messenger

“Is this an area which you consider yourself to be … ?”




... but be careful of targeting too much in one go:

“What is the most likely value of the risk, and the probability of it occurring? What are the optimistic and pessimistic values if it occurs and how can we best mitigate against it, and at what cost?”

Multiple Questions

– Useful in getting information in a structured manner

• Try not to string too many questions together, or ask too many challenging questions at one – risk of overload!

• Try instead just starting with …

“What is the most likely value of the risk, and does it have a high, medium or low probability of occurring?”

• You can always ask more questions later



Right

Answer

Left

Answer

53

Questioning Skills: What not to use

Examples of styles to avoid in the main:

Leading Questions

– Can produce the answer that was posed in the question!

– May eliminate a perfectly good answer that is not included in the question

“I think 30% sounds about right, but what’s your view?”

– However, they can be a useful in testing your understanding as part of

active listening

Hypothetical Questions

– Can produce considered answers to unrealistic questions !!!

“What would be the impact on the business of the entire Design

Team winning the lottery roll-over next week ?”

– Why would you want to waste your time doing that ?

Rhetorical Question



Questioning Skills: Body Language

You can also ask questions without saying anything:

Non-Verbal Questioning

– Useful to get people to expand or reflect without interrupting

– Facial expressions that invite people to continue or to explain further

A shake of the head, a frown, a hand gesture …

– Or express agreement or satisfaction

A nod, a smile, a show of surprise …

… but be careful or sending the wrong message with your expression



When people speak their listeners focus on the following:

… so make sure people can hear and see when they are listening

55

Effective Communication

7%

38% 55%

The words we say

Our tone of voice

Our facial expressions

Source: Albert Mehrabian



Art of Listening and Barriers to Listening

Points to remember:

• The person speaking is not necessarily the person in control of the process

• Listening/talking is a bilateral process

• Listening includes watching – body language can be very “vocal”

There are impediments to effective listening

• Resistance to change

• Disinterest in the subject

• Thinking of one’s own thoughts instead of listening

• Wishful hearing (closely related to wishful thinking)

• Making unwarranted assumptions

• Habitual secretiveness

• Allowing distractions



Lateral Thinking

… or, Thinking Sideways!



Lateral Thinking

• Lateral Thinking is the process of shifting thinking patterns away from

entrenched or predictable lines of thinking, in order to generate new or

unexpected ideas

– Traditional Thinking is often characterised by short logical links.

• Lateral Thinking looks for the less obvious, but no less logical, steps in

another direction

... may result in different solutions being generated, or in arriving at the same

solution via a different route



Lateral Thinking

Opposite Thinking:

– Declare the usual perception out of bounds, or provide some provocative alternative to the usual situation under consideration

– Think of the obvious – then think the opposite

– De Bono’s Six Thinking Hats!

Challenge:

– Simply challenge the way things have always been done or seen, or the

way they are. This is done not to show there is anything wrong with the

existing situation but simply to direct your perceptions to exploring outside

the current area

Random Entry:

– Choose something (images, words or concepts) at random, possibly by an

independent non-expert, then try to draw an association with the topic in

question

– Use instead of, or in conjunction, with Brainstorming



Put on a Thinking Cap

…stands for process control. This is the hat worn by

the co-ordinator who invites other ‘hats’ to be worn

…focuses on the information available, (and gaps)

Performs detailed analysis and draws conclusions

(Bottom-up)

…focuses on problems using intuition, gut reaction,

and ‘emotion’ (Top-down)

…thinking looks at what might go well. It focuses on

the optimistic viewpoint and the opportunities

…thinking looks at what might not go well. It focuses

on the pessimistic viewpoint and the risks

…is about creativity, coming up with different ideas

If you are more of a … Try being a … or a …



Summary


61



Conclusion

The perfect estimator is a mythical being, a somewhat endangered

species, hungry for data, but can exist on next to nothing for long periods

of time

– and as such probably does not exist!

62

Yeah,

really?! I think

therefore I am.

QED

Best

Case

Worst

Case



Conclusion

The perfect estimator is a mythical being, a somewhat endangered

species, hungry for data, but can exist on next to nothing for long periods

of time

– and as such probably does not exist!

… but the perfect estimating team can, so long as between them they …

– Cover product and business knowledge

– Know the process capabilities

– Can use numerical and statistical techniques

– Have strong inter-personal skills

– A good breadth and depth of experience and new ideas

... and are respected by other professionals

… after all, Estimating is a team sport

63

Time-Served

Graduates

Others



How good is the BAE Systems Estimating Team?

64

That’s not for me to say ... but others have …



Coming Soon in a Journal Near You …

65



Discussion Time

Thank you for coming, and thank you more for listening

… but that’s enough from me …

What do you think? Is the same true:

– In other organisations?

– In other industrial sectors?

– Across other disciplines of Estimating, Planning, Cost Engineering and Project Control?

What Makes a Good Estimator? - ACostE Systems ACostE NW What... · No estimator can be an expert in...

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Transcript of What Makes a Good Estimator? - ACostE Systems ACostE NW What... · No estimator can be an expert in...