Some special features of the Successive Principle

The Successive Principle gives management an early overview with proven high accuracy.

It is made possible by integrating new psychological scientific knowledge with modern statistical theory. It allows human intelligence, intuition, creative and group synergy to be utilised more efficiently. This is as a valuable supplement to the documented historical facts. Read more. (link to the next page)

Can intuition be used in a disciplined manner?

The Successive Principle uses more than “just” the logical skills of the key persons involved: it also relies - albeit in a disciplined manner - on their intuition and intelligence. This combination, which has proven to be a more effective facility than generally supposed, has been dubbed “intelligent calculation”.

Another distinctive feature is that in successive stages (hence the name) the analysis process zooms repeatedly in on the most important factors, and subsequently works on them in depth. This produces a highly efficient performance. Finally, through the workings of a multi-disciplinary analysis group, the Successive Principle also helps to break through the departmental “silos” of sales and marketing, development, production, finances and maintenance.

Expert assessments with verified neutrality?

Hitherto, subjective quantitative assessments have been given a wide berth; thus, a fixed percentage is normally applied to cover those elements of a budget estimate or similar projection which cannot be verified. This will typically take the form of a “10% supplement for contingencies”. In another example, since 2006 the Danish Ministry of Transport has applied either 50% or 30% in respect of large-scale traffic projects (depending on the phase of the project).

There had so far been good reasons for avoiding subjective quantifiable assessments. Research conducted by Nils Lange at the Technical University of Denmark, DTU, identified up to 30 different pitfalls which can lead to distortion of a subjective assessment. Over-optimism and wishful thinking are just two of these. However, Lange’s research was followed up by a comprehensive Danish-Norwegian development project which used psychology alongside modern statistics. It was so successful in compensating for these pitfalls that it has now been possible for a number of years to achieve astonishingly neutral and precise results.

The resulting procedure, which has been incorporated in the Successive Principle, is based primarily on the use of correctly balanced assessment groups and scientifically documented integration of the individuals’ personal assessment to produce an overall result.

Ref.: N. Lange: ”Sikker vurdering af usikkerhed” [Reliable assessment of uncertainty], Masters Thesis 1985, DTU (unpublished), referenced in S. Lichtenberg: Proactive Management of Uncertainty, 2000, 334 pages, published by the author.

Why successive steps?

The Successive Principle is a top-down process using specification and other clarification of items in successive steps. At each step the most critical local source of uncertainty is pinpointed and then subjected to further systematic clarification. Calculations are then updated and typically produce a new ‘most critical value’.

This process ensures that time is not spent on relatively unimportant matters. It is the shortest, fastest route to the optimal result, namely a result whereby, all local sources of uncertainty having been minimised, the least possible uncertainty is achieved.

Forecasts of project duration a better match than expected!

The Successive Principle has been used over the years to analyse a large number of project time schedules. The results are presented as an average and the spread around that figure. In principle, project durations should vary by typically falling on both sides of the computed average.

However, many of the actual durations match the computed average exactly: in fact, so many as to be significant. A possible explanation is that the average calculated accommodates the appropriate time for the delays which normally arise under way but which are not normally included in traditional time schedules. It can seem fair to project managers and their teams to have these reserves available, allowing them to perceive the challenge of hitting their targets on time as realistic. If a few more unexpected delays crop up along the way, in practice an extra effort generally does the trick. 

Decades of economic forecasts - not a single failure

Through its long history of analysing project investments, tender estimates and much else, our procedure has proved itself to be an extraordinarily effective analysis tool. A Norwegian contractor has been using the Principle for years to avoid loss-making orders; this is the fastest-growing company in Scandinavia and its performance in repeatedly achieving a positive bottom line is head and shoulders above the norm for the sector.