How to Lie with Earned Value
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The first thing management looks at when they see the chart is the small color-coded box in the corner that illustrates the overall project status. Each project is rated green, yellow, or red, depending upon the health of the project.
Nobody wants a yellow or red project. We used to say that yellow earned you a trip to the doghouse, and red earned you a trip to the woodshed.
Our director liked that joke so much that he included a slide with a red woodshed in his weekly PowerPoint.
The color off the box is the result of an earned value analysis calculation based upon the rate of cost and schedule performance compared to the baseline project plan.
Late or incomplete tasks and/or higher costs will push your project into yellow or red territory.
Once you're there, completing other tasks more quickly and under budget will help return the project to a green status. (Here's a sample earned value calculator.)
And now the mystery. In this company, a certain software development and integration project was coded green the first week, and green every week after that for the entire life of the project, a period of four months.
Yet, the project was a complete failure. It was late, it blew the budget, and nothing useable was ever delivered to the customer.
How did this happen? How did this disaster stay green for so long? Artful manipulation of the system.
Earned Value Cheat Sheet
The project manager knew how to beat the system. Here's the playbook.
The earned value scorecard that management put in place was designed to be a reliable indicator of project health. Unfortunately, it was no match for a determined project manager who had the ability to structure work and measure task completion and was willing to take whatever steps were necessary to keep it green.
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