Grand Designs or Grand Delusions?

Why it’s likely that you’ll underestimate the time and cost of building your dream house

I've always known that projects take longer than you think they will.  This was especially true when my college roommate and I would perform maintenance (without the Zen) on our motorcycles - it became a credo of ours, "this will take twice as long as we think it will".  This was useful because our expectations were low that we would finish before that time, and so when we did finish early, it was a pleasant surprise.  

Fast forward 15 years.  I'm reading "Nudge" and learning the economics side of behavioral research - I come across the planning fallacy: "predictions about how much time will be needed to complete a future task display an optimism bias and underestimate the time needed." During the same time my wife and I are obsessed with the British show, "Grand Designs".  Hosted by Kevin McLeod, each episode showcases the journey of designing and building a house.

The formula for the show is simple and effective: 

1. Kevin introduces the person or family and discusses their project, often at the location of the future construction

2. A digital model is shown of the eventual design to give the viewer an idea of the finished product

3. Construction starts and Kevin checks in randomly throughout the build

4. Once the construction is completed (or the folks have run out of money) Kevin returns to showcase the final product and interviews the owner(s).

Often, before step 3, Kevin would ask the owners/builders how long the project would take and how much money was set aside to complete the build. Kevin would also follow up with final costs and duration during the final interview..... LIGHTBULB!

The Research Question:  How many homeowners would meet their estimated time and budgetary goals for their new houses?

The Method:  I watched (and rewatched) all the available episodes and seasons of Grand Designs on Netflix (4 Seasons, 31 Episodes) and captured the estimates of duration and cost of the home builds, as well as the final cost and duration. If an episode left out any of this information I did not include it in my analysis, i.e., the episode must have discussed both cost and duration estimates as well as cost and duration actual results to be included.  Sometimes this information could be determined by the dates that Kevin returned to the site, so watching and rewatching was necessary. 

I threw out episodes where cost and time information was missing, or when the buildings were not completely finished.

Results: 

Estimated and final duration of costs of home builds from Grand Designs

• 85% of the builds were over on either cost, time, or both

• 1 out of 20 builds met both time and cost estimate (S13E7)

• 2 out of the 20 builds were on time and under budget (S13E4, S14E2)

Lessons learned:

• Knowing that people are prone to underestimation - don’t do that. Add a buffer to the cost and duration as things rarely go as planned.

• Those who used fixed-price agreements with their builders had more success at coming in on budget.

• Don’t project manage if you’ve never project managed before. A lot of episodes featured folks who were ready to put in the work and manage the construction with no prior experience - it usually ended in disaster.

• Don’t count on stuff for free - there were a few examples of homeowners who were relying on friends or volunteers to do work or supply material.  This always ended in delays as the “promises” rarely came through.

• Kevin McLeod is true renaissance man - he can speak Italian, help build houses, and can illustrate landscapes. Every episode is like peeling layers of an onion to find more depth of character.