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The Role of Cognitive Bias in Project Management Failure

February 12, 2009 | Author: PM Hut | Filed under: Project Management Musings

The Role of Cognitive Bias in Project Management Failure (#8 in the series Decoding the DNA of Failed Technology Projects)
By Robert Goatham

As well as having an appreciation of the process of making decisions, Project Managers need an appreciation of the cognitive biases that can influence how people and groups make their decisions.

Cognitive biases are the forces that unconsciously influence our decision making, often resulting in errors of judgment. Well known examples include;

  1. The Bandwagon effect (the tendency to follow the crowd)
  2. Ostrich effect (the tendency to ignore an obviously bad situation)
  3. Confirmation bias (the tendency to seek out information that supports our opinion while ignoring evidence that might disprove it)
  4. Mere exposure effect (the tendency to express a preference for something simply based on familiarity, also known as the comfort zone effect)

Of course there is also the all important “Rosy retrospection” (the tendency to look back on negative events in a more positive light than they had been viewed at the time they occurred) which in some organizations is sadly the only thing that keeps Project Managers taking on new projects.

Hundreds of such biases exist and they are a very real part of the dynamics in which project related decisions are made. One example I heard of a few years ago set a $100M project on a course to disaster. The project team in question was trying to decide how to break a large project into phases so that a legacy application could be safely migrated to a new application architecture. The new application was to be developed from scratch by a relatively new player in the industry while the legacy system was supported by a well established incumbent.

In advance of a joint planning meeting, the team who had supported the legacy application for many years did some brainstorming to identify options for how to break the project into phases while reducing risk. Those discussions generated many ideas, of which the simplest and safest was adopted as the recommended approach. The legacy team presented their recommendation at the joint planning session a few days later and was immediately greeted by a flat out rejection.

The problem the legacy team ran into that day is an example of the “not invented here” bias (the tendency to reject ideas because the source of the idea is an external party that is seen as the enemy).

In the case in question the new company was very suspicious that the incumbent was trying to find ways to win the customer back and there was considerable distrust. In the end the new company settled on a plan against the recommendation of those who knew the application best.

The adopted plan called for the first phase to be delivered in six months. At the time of writing, several years after those meetings, the first phase is still not complete. The interesting part of the story is that two years into the project, the new company saw the light and to their credit, admitted that they had erred. Partly that change in heart may have been because several other organizations that had the same legacy system used the recommended approach and had already migrated to new platforms successfully.

In retrospect the problem came about because of the way the meeting was facilitated. Knowing that the meeting was likely to be adversarial, the session’s facilitator should have worked towards building trust and an open discussion before allowing different camps to take their ground. Because the different camps pitched their opinions within the first five minutes, the meeting disintegrated into a long argument driven by the confirmation bias rather than an open identification and evaluation of options.

Such biases and the dysfunctional decision making that ensues, occur in most ailing projects. The disconnect failure that left the Asian cargo company with a modern system that inherited the same constraints as its legacy system may well have been influenced by those in the lower levels of the organization exercising the comfort zone bias (i.e. the desire to stick with their current processes because they were familiar). The strategic blunders made by those overseeing the Denver Baggage debacle may well have tripped over a bias known as “the planning fallacy” (the tendency to underestimate task completion times) or the “optimism bias” (the tendency to overestimate the likelihood of positive events and under-estimate the likelihood of negative ones).

Robert Goatham is the principal of Calleam Consulting. Robert founded Calleam in response to the on-going challenges organizations face in developing the leadership skills necessary to successfully deliver today’s complex technology projects. Specializing in the study of failed projects, Robert translates hindsight from yesterday’s projects into the foresight needed to ensure tomorrow’s success. Robert has more than 20 years experience in the technology sector playing roles that include developer, technical lead, architect, quality manager, coach and senior project manager. As a public speaker, writer and trainer Robert provides audiences with insights that go beyond the theory of a text book and speak directly to the challenges people face in today’s workplace. Robert is passionate about helping organizations and individuals develop their skills. Visit www.calleam.com for more information.

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