I think one of the weakest areas of project management (other than planning, which is rarely ever done very well) that I’ve encountered is the variance analysis. When things are planned and measurements are taken to determine the status of things, there’s often very little attention paid to understanding the root cause of the issue, and even less done to write those things down very well. I’ve seen tasks overrun, and the explanation written as, “Costs were higher than expected.” Gee, thanks. You’re telling me, “We overran because we spent too much.” Nice job, Sherlock. Did you come up with that one all by yourself?What were the original planning assumptions? What changed in the environment since then? Does that explain it? Were we off-target in our planning, or were we sloppy in our execution? Let me make sure to address things in the other direction, too. When there are significant under runs – why did they occur? Was the original estimate over-inflated to make sure we looked good? If we caught a break, is it a sustainable one? What will it mean for us in the future?
A good variance analysis should be comprised of the following elements:
- A detailed explanation of why the variance occurred, including a reference to the original planning assumptions and where reality differed from what was expected.
- An assessment of the impact. Oh, and “No impact” is NOT ACCEPTABLE! There’s always an impact. It might have an impact to cost, or schedule, or it might require re-prioritizing some resources, or it might simply yield a lesson learned for the future. Nonetheless, there’s always some effect that came from the cause identified in step 1.
- An action plan for mitigating the impacts in step 2. This can be simple or complex, but it should be realistic no matter the scale of the problem. Think of SMART objectives.
- Lessons learned, and recommendations for the future, so that the same issues aren’t repeated.
- Sharing all of the above!
A common complaint is that people just don’t have time to do this write-up. That’s nonsense. Yes, they should make the time and supervisors should give them the time – all that goes without saying. The real nonsense, however, comes in not being able to quickly describe what’s going on around you. That’s an indicator of a much, much bigger problem. Usually, it means the person being asked to do the write up is too far removed from the day-to-day aspects of the task, and needs to backtrack and learn from others in order to understand just what happened, and document it. That sort of disengagement in putting responsibility too far from the problem is the real issue.
Another frequent problem is that when writing the analysis – no one captures reality! Often, people don’t indicate exactly what is going on because, if they are honest about what really happened, good or bad, they’re in trouble. What nonsense. If, as a senior manager, you assume all variances are due to sloppy planning or execution, you’re going to stop hearing about problems. Not that you won’t have any, you’ll just stop hearing about them.
Copyright © 2011 David Kasprzak
