I always despise these kinds of exercises.
We know how to roll up estimates correctly with statistics--even moreso if we have historical data.
The problem is that management always hates the accurate number.
And that's where the dysfunction sets in.
While everybody else rolls things up "normally", I almost always roll up an "accurate" timeline and try to inform people up front. It rarely wins me friends, but it sometimes protects my team when things are going haywire later.
Few hypotheses are necessary for a thought experiment that reproduces the issue.
Given a project:
* some people/teams produce accurate estimates
* some people/teams produce overly optimistic estimates
If decision-maker is not aware, it can easily conflate optimistic estimate with a more efficient team (or just more enticing).
If the possibility of overly optimistic estimates are not taken seriously, the more accurate team can seem just less efficient / lazy / trying to charge more for the same work / etc. For example if the decision-maker is actually a client comparing several suppliers.
Extra risk if decision-making is diluted among many people (harder to get clear and consistent view).
This puts the teams in a competition similar to the prisoner's dilemma. Honest estimates get punished, treacherous estimates are favored. No wonder so many projects are over-budget, when they are not too over-budget to complete at all.
The only actual hypothesis here is: "decision-maker conflating optimistic estimates with better value". It seems very common. If decision-maker doesn't fall into this trap, the problem disappears, right?
What can we do to shift the equilibrium? A manifesto?
The "always" part isn't true in my experience. In fact, it's not even mostly true for me. Maybe I've just been lucky.
As an Eng. Leader I use planning and estimates to communicate with other stakeholders.
One thing the majority of people fail at is giving variance when providing a forecast/estimate.
If someone asks me to get an quick estimate for developing something I'll give them a range with wide margin, around the avg time I think it will take. If they want to reduce that range, then I need info to understand the requirements better.
Problem has always been that what engineers provide as an ESTIMATE, business takes as a deadline. So, engineers: always add buffer to your estimate.
Some folks tend to think that if a plan is produced but not followed exactly, then it wasn’t worth producing the plan. But actually having produced the plan is sometimes what makes it easy to deviate when complications arise. If a new decision is made that affects the plan, everyone can see exactly what the compromises are and be on the same page.