How much is a 2015 Lamborghini Huracan?

Earlier this year I held a meeting with a group of other project managers.  I wanted to demonstrate the value of collaborative work.  To do that, I showed a PowerPoint slide with a picture of a 2015 Lamborghini Huracan (yellow, if that matters).  My question to the group was,

How much does a 2015 Lamborghini Huracan cost?

No one could use any devices to lookup the answer on the Internet.  And, no one could blurt out answers, either.  Just like in a game of Planning Poker, I asked everyone to write down their estimate for the cost of the car, and hand it to me.  There were 14 project managers in the room.

The lowest estimate was $120,000.  Two PMs, in fact, thought that’s how much the car cost.

The highest estimate was $485,000.

The average estimate was $243,429.

The MSRP of a 2015 Lamborghini Huracan (in yellow) is $237,250.  The group’s average estimate was just about $6000 off from being correct.  (BTW, I considered the group’s estimate to be quite accurate, as it fit within my own, personal, tolerance for error; I knew based upon the group’s estimate that I could not afford a new Lamborghini!).

What was much more interesting to me was that out of 14 project managers, only one PM estimated more closely to the actual MSRP than the average estimate created by the entire group (one PM estimated that the MSRP was $240,000).  Thirteen out of fourteen PMs were less accurate individually than they were collectively.

That is the power of not estimating in a vacuum!

That is why the agile project management game of Planning Poker is so effective, because group estimation is — usually, but not always — more accurate than having a single person estimate.  While agile project management understands the importance of collaboration during the estimation process, traditional/waterfall project management often relies on creating estimates with little or no collaboration.  Even when a team estimates tasks for a traditional project, they often estimate their own, respective tasks singularly rather than collectively, so the project plan is an aggregation of many estimates for many tasks, but each task is estimated by only one person.

Not collaborating when creating estimates is a potentially very big error, indeed!

Leave a Reply

Your email address will not be published. Required fields are marked *