I Tanked the Budget! What now?
2

Question

I Tanked the Budget! What now?

casseopeia (Structural)

(OP)

6 Mar 11 12:44

I tanked the budget for an assigned project, a leak investigation on 5-building complex.  I finished up the bulk of the report on Friday.  I'm not 100% done and already over-budget by about 50%.  It's not completely my fault.  The budget was set and partially used up before I was hired.  I came in at the end of the contract negotiation.   And to make things worse, when I reviewed the budget prior to starting the work, I noticed that there was 20% of the fee left on the table due to a math error.

My question is

1. Do I mention it at the Monday staff meeting where project managers are asked for a quick review of their projects and budgets, or

2. do I try to catch the boss before the meeting (usually not possible unless I block his way to the men's room), or

3. do I dodge answering the budget question at the staff meeting and catch the boss afterwards?

4. do some other option not included in the list above.

My inclination is to bring it up at the staff meeting and to also discuss that my  postmortem analysis of the project budget revealed that when fees were divided by the number of tasks divided by an average billing rate, divided by the average number of people working on the project, I came up with about 1-1/2 hours per person per task to conduct an initial tour of the site, write a proposal, negotiate the contract, search for and review the construction documentation, develop a test protocol including a graphic analysis of building component transitions, coordinate the services of the test support contractor, carry out the tests, record data, analyze the data, and write the report.

An hour and a half is not nearly enough by any standard.  But do I want to say that at the staff meeting?  The boss is the one who set the budget and elected not to re-negotiate the contract for the fees left on the table.

"Gorgeous hair is the best revenge." Ivana Trump

JedClampett (Structural) · Answer 1 · 2011-03-06 13:33:34

It's not clear whether or not you're the PM. If you're not, I'd tell the PM we're over budget and it's going to get worse. If you are, the PM meeting seems like a proper place to bring it up. Save the excuses for a one-on-one meeting, if ever. Make sure you have a plan to finish the project and how much budget it's going to take. Maybe the client would be agreeable to a change order. And don't delay. No boss wants to get the bad news when the project is finished and his tools to fix it are gone.

casseopeia (Structural) · Answer 2 · 2011-03-06 14:53:45

Well Jed, my title is PM, but if I think of my firm as a slave ship, and my boss as the owner/operator of the slave ship, and the Senior PM's as the first mate and Navigator, I'm somewhere around the level of one of the slave drivers. There is an illusion of authority, but in actuality I just get the responsibility for the ship going off-course because I control the operation of the oars. The fact that my a$$ never comes near the pilot house is is completely ignored. And as far as that first mate and navigator, they are too preoccupied with their own duties and entertaining the various kings, queens and minor despots to have any time for actual production work.

"Gorgeous hair is the best revenge." Ivana Trump

TheTick (Mechanical) · Answer 3 · 2011-03-06 17:07:15

I think you should not blindside an entire meeting full of people with this information. Someone should know and be ready to back you before you "go public".

MikeHalloran (Mechanical) · Answer 4 · 2011-03-06 17:14:12

Break the bad news as soon as possible, at as low a level as possible.

Your _internal_ report should address the non-obvious response; how to adjust the process so that future similar projects don't go sideways.

Mike Halloran
Pembroke Pines, FL, USA

GregLocock (Automotive) · Answer 5 · 2011-03-06 17:22:39

After one too many of my amusing discoveries being announced at meetings my boss' boss decided on a "no hand grenades" rule - if you've got bad news, brief those in the line of fire beforehand.

Cheers

Greg Locock

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cvg (Civil/Environmental) · Answer 6 · 2011-03-06 17:29:59

sooner is better than later. you should have brought this up at your very first opportunity. a plan could have been developed to mitigate the losses (possibly). Either way, it's too late to fix it now.

Ron (Structural) · Answer 7 · 2011-03-06 18:42:23

Agree with Greg and The Tick....side meeting with boss beforehand.  He should appreciate it, but don't bet on it.

Do your homework...have everything you can think of documented and lay it out.  If you need to complain about anything, make it a complaint of things you absolutely could not control but were required to take responsibility for without a choice....otherwise, don't complain...just state the facts and offer a way out if you have one.  Any chance of unforeseen conditions as an extra?  Did you exceed the scope out of necessity?

We don't typically do lump sum evaluations on multi-building properties.  We'll do the initial triage for lump sum, but Phase II is based on time with an estimate of range to be expected.  Phase III for litigation support NEVER has a top end.

casseopeia (Structural) · Answer 8 · 2011-03-19 00:22:53

Ron, I took your suggestion for going into a meeting with the boss fully prepared and did my own post-mortem working late every night going over invoice and time report details.  I also finished the report, all 50 pages of it, on my own time.

I downloaded an excel spreadsheet for planning party expenses with a nice graph and pie chart because I didn't like any of the so-called management tools I found.

I modified the spreadsheet and pie chart, took out the graph and put in a stacked-tube bar chart to show each task estimate on the bottom and overrun on top for total actual cost and walked into the meeting with those.  I think the boss and accountant were so dazzled by the presentation that it took the sting out of the line items I put in for the math error and budget overage, which I called 'discount' and 'write-off.'

Moral of the story, never underestimate the power of a colorful pie chart.

Instead of the flogging I expected to receive, he asked if I could work up a chart to show personnel time and project staffing.  I'm still looking for a good spreadsheet to steal for that one.

"Gorgeous hair is the best revenge." Ivana Trump

Ron (Structural) · Answer 9 · 2011-03-19 06:44:59

Way to go, Cass! So you covered both ends...you dazzled 'em with brilliance AND you baffled 'em with BS! shadeshappy

tygerdawg (Mechanical) · Answer 10 · 2011-03-19 09:43:52

Cass, perhaps the real moral is this simple philosophy that seems to in such short supply:

Always try to do your best. Always.
Mediocrity is cheap, easy, & abundant; excellence requires creativity, hard effort, & long hours.
Tell the truth and have data to back it up.
Accept responsibility and take your lumps (if they come) with style, grace, and a sense of humor.

If I was your managers in that meeting, I would have been thoroughly impressed and pleased with your handling of this difficult news.

Now for follow-through. Something clearly doesn't work in the company processes. Suggest alternative process changes and implementation plans to avoid repetition.

TygerDawg
Blue Technik LLC
Virtuoso Robotics Engineering
www.bluetechnik.com

KENAT (Mechanical) · Answer 11 · 2011-04-11 15:21:25

Management are generally distracted by pretty colors, at least here.

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I Tanked the Budget! What now?
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