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Premios > Insights  > Estimation and the Black Hole

Estimation and the Black Hole

This year I held a series of webinars on Estimation that resulted in some great questions. One of the most recent questions was regarding client expectations. For anyone who has ever had to provide an estimate, this question is probably familiar: “How do you handle clients who refuse to budge from their initial estimates when you know it is impossible to meet?”

Black holes are an astronomical phenomenon whose singular distinguishing characteristic is their immense gravity. Once matter begins traveling past the event horizon towards the center, it takes an incredible amount of energy to escape the gravitational pull.

The same can be said for pulling an initial estimate back and revising it based on reality. Setting client expectations requires both technical and political skills in framing the apparent mathematical certainty of numbers with the uncertainty of reality.

People want to trust numbers and to counter that you have to add assumptions and caveats that are just as compelling and consistent. In other words, you should always talk about assumptions, caveats and risks with the same importance as the actual number(s). This is a best practice we counsel our clients to exercise because no estimation (mathematical) model, whether embedded in a world-class tool like Seer-SEM or in a custom application/spreadsheet, should be given carte-blanche trust without understanding the underlying variables.

If you have done that work initially with a client, explaining how the numbers were arrived at and the assumptions used, it is easier to discuss revisions and changes when real world conditions occur. It will allow you to fly away from the black hole of crushed expectations.

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Have questions? Need more information? Let me know in the comments!

Tony Timbol
Vice President, Sales and Marketing

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