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Saturday, December 15 , 2018, 8:26 am | Fair 43º


Paul Burri: Four Key Words — What Will It Cost?

Estimating the expenses for a project is complicated by company politics

A few more reminiscences from my days of estimating for Walt Disney Co. As you may remember, I managed one of the two estimating departments at Disney during the time the company was building Epcot and Tokyo Disneyland.

In an earlier column, I described the politics surrounding the estimating of costs at Disney. But beyond the politics, there were additional problems of estimating costs at Disney. They had to do with the philosophy of the whole company, and that goes all the way back to how the company was run under Walt himself.

Companies run by geniuses are not run like other companies. I am thinking of geniuses like Howard Hughes, Steve Jobs, Walt Disney, Dean Kamen (inventor of the Segway) and probably Henry Ford, Thomas Edison and others.

A company run by people like that doesn’t depend on committees or boards of directors to make decisions. Plain and simple, many, if not most, of the decisions are made by the top guy who makes them quickly and intuitively, and usually correctly — but also sometimes at great expense.

This brings to mind two stories I know about Walt Disney. One day he was sitting at one of the many outdoor restaurants in Disneyland, and he suddenly decided that a certain very large, 100-foot-tall tree across from where he was sitting wasn’t in exactly the right place. At his direction, it was boxed, uprooted and moved about 100 feet from where it was. No committee meetings, no discussions, no memos, no “studies” — just move it because Walt said so.

Another time, Walt was called from his office to look at a huge mockup of an interior set for some project. He walked around it slowly for about 20 minutes, and then remarked, “I don’t care for the blue look.” Over that weekend, the set was entirely dismantled, repainted in another color and then reassembled. A few days after that, Walt was called down to look at the completely refurbished and repainted set. Again, he slowly examined it for about 20 minutes and then said, “No, I think the original blue was better.”

So what does all this have to do with estimating the cost of projects at Disney? Even after Walt died, the philosophy of autonomous control of projects continued. At Disney, we did not have project managers, we had directors. (Everything harked back to Disney’s movie days. Even today, the employees at Disneyland are referred to as “cast members,” and everything outside the view of the public is referred to as “back stage.”) The individual director of a particular project had almost absolute control of his project, and could make even the most expensive changes almost at will.

So we in estimating always kept wondering how we should estimate the cost of a project. Should we estimate what it should cost (if it was built efficiently to the original specifications) or what it would cost (after the director got through making his numerous artistic changes)?

If you read my previous column, you will know that estimating a project’s true cost (based on knowing the climate and philosophy of the company) would never get the approval of upper management. The estimating departments were always pressured for lower and lower estimates and were then held liable for poor estimating when the projects inevitably overran.

— Paul Burri is an entrepreneur, inventor, columnist, engineer and iconoclast. He has been a counselor with the Santa Barbara chapter of SCORE (Service Corps of Retired Executives) for the past eight years. SCORE offers free business counseling to local businesses. He is also the membership director of the Channel City Camera Club. The opinions and comments in this column are his alone and do not reflect the opinions or policies of any outside organization. He can be reached at .(JavaScript must be enabled to view this email address). Click here for previous Paul Burri columns. Follow Paul Burri on Twitter: @BronxPaul.

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