Schedules and Compound Probability
Using the mogul skiing metaphor--that a project is merely a series of linked recoveries--then what is the probability of making it to the bottom of a run without some face first tongue-surfing--or more germane to this blog, completing a project on-time, on-budget?
Compound probability--the probability of an outcome dependent on a series of linked events--for example, the probability of obtaining two heads in two flips of a coin is 1/2 x 1/2 =1/4 or 25%, or five heads in five flips is (1/2)^5 or 1/32, or roughly 3%.
For a real world example, lets look at the feasibility cascade at recycling the 275 acres out at San Quentin. To get an alternative, sustainable, job-creating land use going, there are three steps that have to be taken--
- the State laws that require all condemned prisoners to be incarcerated at San Quentin, and executed there, has to be changed to allow for other locations in the State of California.
- An alternative 320 acre site has to be identified and entitled.
- The State has to end prison ops on the site and decommission the prison.
Lets say there is a 25% chance of the first happening, a 70% chance of the second event occurring and then a 85% chance of the third event occurring. Multiply these together and you get an 15% probability of getting to first base. Better than buying a lottery ticket, but not by much.
When you are getting your head around a schedule, good probabilities make good estimates. And good estimates help you raise the confidence level of your schedule. Which helps to get your deal capitalized. And a good capitalization helps you get to an on-time, on-budget result.