For almost a year here in this column, I've discussed the need, importance, usefulness and various types of referencing techniques used in the estimating process. This discussion included referencing techniques like schematics, profiling and indexing. Part of the purpose of establishing and implementing good referencing techniques is the subject of this, the first column of the New Year.
Aside from consolidating disparate and complex information into a readily accessible and understandable format, the referencing process serves an even greater purpose: minimization of mistakes. Just like paper cuts, mistakes are an inevitable part of the estimating process. Estimating is too complex a process for there not to be a mistake, both minor and major, made in the course of producing a comprehensive quantity survey and cost analysis.
I've known estimators who claim never to have made a mistake in their careers as estimators. As Colonel Potter would say, "Horsehockey!" This is self-deception at best, dishonesty at worst. When a mistake is made by an estimator, the natural human instinct for self-preservation is triggered in our brain and the tendency is to deny and detract. We've all been there. However, as construction professionals, it is our obligation to admit to our mistakes and take responsibility for them whenever and however they occur.
That's why pencils have erasersFor the employer, it's important to separate the mistake from the person who made it. Unless the mistake was made with malicious intent, it is a forgivable sin. If it was made with malicious intent and proven so, this is grounds for terminating that estimator's employment. By far, most mistakes made in the estimating process are the result of human fallability, not malicious conduct. It is the mistake that is bad, not the person who made it. That is the key to dealing with mistakes for the estimator's employer.
The only situation I can envision for an employer to be angry enough to terminate an estimator's employment is the repetition of the same kind of mistake over and over again from one job to the next. It is the estimator's job to learn from his or her own and other's mistakes and make every effort not to repeat them.
Inherently, all mistakes--whether minor or major--are bad and every effort must be made to minimize them or to eliminate them completely. Often, when I lecture on the subject of trade estimating, I begin the discussion on the topic of making mistakes by posing a hypothetical question to the class: "Why is it bad to make a good mistake?"
The question appears at first to be an oxymoron. How can a mistake at once be good and bad at the same time? To further illuminate the question posed, I offer this hypothetical example:
"You have closed a job and upon commencement of the work it is discovered that you, the estimator, have made a big mistake. The floor plans and RCPs indicated the scale as 1/8 inch = 1 foot, 0 inches and you conducted your quantity survey in this scale uniformly. However, it is discovered that this was a mistake on the part of the architect. The actual plan scale for all floor plans and RCP is actually 1/4 inch = 1 foot, 0 inches.
Perhaps every other estimator at every other trade contractor made the same mistake you did and, all things being equal, your bid won the job fair and square. In effect, this means that your winning bid includes double the labor, material and equipment, etc., required to produce this job in the field. As such, all that cost in the form of labor, material, equipment is transposed from the cost column to the profit column on the job's balance sheet. It would be hard to lose money on a job like this when, from the outset, you are way ahead of the actual cost to produce the job.
Lessons learnedNow that it is clear to my students, I pose the question again: "Why is it bad to make a good mistake and why is this example such a bad thing?" There are always those students who cannot see the forest because the trees are in the way. Their response typically is: "Give that estimator a raise" or "What's so bad about that?" Fortunately, there are always one or more students in the class that see the forest--not just the trees.
These students are typically the best candidates for a career as an estimator. They understand that by way of simple applied logic the situation could just as easily been reversed. It could have been that the very same estimator measured 1/8 inch = 1 foot, 0 inches, floor plans and RCPs in 1/4 inch = 1 foot, 0 foot scale had the architect made the same mistake in reverse. This is one of the reasons it is very important to check and verify the scale you are working in--on every floor plan and RCP. It is a fail-safe method to prevent this kind of scenario. Typically, I use a given dimension line and scale it to verify the scale in use (usually a window opening). Another quick check are door openings: they are typically 3 feet, 0 inches wide on the plans. Better to use given dimensions though.
By this simple example, it is now clear why all mistakes are inherently bad and must be avoided. Next month, in Part 2 of our discussion of making mistakes, we'll discuss the five key elements central to the minimization and elimination of making mistakes in the estimating process.