Cognitive Bias Brief

Commentary: This is a discussion on cognitive bias which is important to understanding decision making. Understanding bias's and how they influences decisions and thought will aide in managing audiences and individuals alike. There are many bias's and types. Unfortunately, not all the bias will be included. I will highlight a few to demonstrate project decision making and argument formulation.  

Cognitive Bias Brief

Cognitive bias results in poor decision making as it is a tendency to acquire and process information by filtering it through one's own likes, dislikes, and experiences. In general, the term is used to describe effects within the human mind, some of which can lead to perceptual distortion, inaccurate judgment, or illogical interpretation. The bias's fall into generalized categories of decision-making and behavioral biases, biases in probability and belief, social biases, and biased memory errors. In all, there are over seventy-eight different bias's identified.

The purpose of this posting is to offer some background regarding cognitive bias's. All too often analysis paralysis can set in as the project manager attempts to sort through the real issues when the focus should be  effectiveness at moving projects forward.  I'll discuss a few of the prevalent bias's and put the focus on techniques used to move things forward.

Cognitive Bias Types

As commented earlier there are over seventy-eight different bias's identified that fall into four generalized categories of decision-making and behavioral biases, biases in probability and belief, social biases, and memory errors.  For a comprehensive list of biases please refer to Wikipedia: List of Cognitive Biases. I'll look at three biases and discuss approaches to handling these.

Confirmation Bias

The first bias I would like to highlight is the confirmation bias which is defined as the tendency to search for or interpret information in a way that confirms one's preconceptions. This is particularly of interest when stakeholders and principles come to the project with an agenda. The options they desire and choices they push for are justified based on the agenda and selective information. This can be of a particular challenge during a project. Especially, if they are ardently pressing for the agenda which conflicts with or constrains the project by driving changes to the scope or delaying schedules due to the change orders that may be whimsically directed through political connections without properly vetting the options.

Hyperbolic Discounting Bias

Another bias deserving attention is hyperbolic discounting. This is the tendency of people to have a stronger preference for more immediate payoffs relative to later payoffs. The tendency increases the closer to the present the pay off occurs. Humans are said to discount the value of the later reward, by a factor that increases with the length of the reward delay. This process has been modeled in form of exponential discounting and has been improved over the years to a hyperbolic discounting model.  In project management, there are organizations that have a technology project in which the catch phrase "Go Live" or "We got to show results" becomes pervasive. This is reflective of a short technological attention span within an organization and generally originates out of a desire for a return on the investment driven by accountants.

Planning Fallacy Bias

Planning fallacy bias is the tendency to be optimistic on task-completion times or set unrealistic premature times for one's own tasks completion while independent third party estimates for the same task are typically pessimistic or overstated. This is a common problem in information technology projects. Optimistic and unrealistic dates are set resulting in schedules that are constantly being pushed out and delivery dates that are rarely achieved. 

There are so many biases that apply but limited time and space to post. Given these three biases, let's look a little further into them and how project managers can minimize the effect of these biases and others.

A Deeper Look at What is Going On

Given all the different biases and combinations in which they may occur project managers may seem overwhelmed trying to learn the biases and responses to them. Fortunately, there are methods available that preclude learning individual responses to each bias. Although, it could be of benefit to learn how to handle a few of the more prevalent one's with more direct methods. In this post I'll simply defer to generalized methods of handling biases when the symptoms show up.

In projects many symptomatic traits surface that indicate the presence of a bias. People have been shown to have very brief technological attention spans; as short as 3 seconds. This may be observed as glassy eyed looks when discussing technical issues or a frustration when waiting on the system to respond. In the case of technological projects, studies by the Gartner Group have shown the attention span is about 90 days when the average technology project term is 18 months. This differential can cause planning fallacy bias contributing to overly optimistic delivery dates. Additionally, catch phrases will begin to surface that we got to show results or go live at about the 90 day mark.

Another symptomatic trait is the natural tendency to seek an ROI, return on investment. Financial and accounting staff have professionally formulated this bias into their financial decision making. The sooner the return the better the option.  In fact,  in accounting and financial management practices there is a discount rate that shows a lower value for more lengthy capital investments periods. This bias, hyperbolic discounting, can be detrimental to the success of technology and strategic projects which often seek long term results or outcomes. For example, some companies seek to leverage a technological advantage in thier operations. This advantage may improve responsiveness to volatile markets or expose emerging niche markets that operate on a time-based profit model in which money to be made is measured in very brief periods before the market evaporates.  However, the time to develop the systems and processes may take long periods before the benefits are realized in the time after delivery.

In short, nearly all information technology projects are strategic in nature.  Most technological projects support operations by improving the immediate concerns such as compressing information or decision processing time as a collateral benefit of a larger picture. The organization pursuing information technology projects is usually seeking to reduce latencies, exploit patterns and trends for profit, improve quality-cost relationships, or strengthen measurable organization value MOV).

Handling Biases Means Managing Personalities

Personality management is a term coined to describe the processes and means of rallying people to a common cause and focus. The term has been widely used in the military where a wild child, a maverick, shows character and needs to be focused.   Often the need for expediency relies on compromise, guidance, and leadership. More importantly, is the ability of the project manager to develop a sense of community and unity of purpose.

For the project manager this process begins by developing a strong stakeholder register that includes project principles; people who are not stakeholders yet affect the project such as artisans, technicians, administrative staff, etc... Project principles can have strong influence on the project and often have significant experience they bring into a project. Principles may see poor paths the project is taking or know that certain approaches have failed in the past. Principles and stakeholders also have career aspirations and desire to see their ideas instituted over others.  Rather than assessing which cognitive bias is in play, project managers can use simple and common methods to move things forward.

All to often people pay too much attention to prepackaged programs such as Win-Win or Highly Effective Habits. They have their merits and should be implemented with earnest interest and not as some sort of thespian running through the script.  Dale Carnegie offers basic guidance in his principles.  The core principles of Carnegie's approach involves sincere appreciation, not condemning or complaining, arousing eager want, smiling, and being genuinely interested in other people. Practicing these five core principles can win others over during argumentation as well as move projects forward. When people have career aspirations such that their drive influences decision making, project managers can listen and given people a good name which are other Carnegie principles.

Nonetheless, project managers should not yield fully to other people's whims but instead genuinely listen and incorporate thoughts of value that do not delay or increase cost. If a principal or stakeholder insists on an idea that impacts costs or schedules then formal processes of change managment should be invoked.  Having structured arguments and processes are a baseline from which to deviate and measure ideas. Informal argumentation offers more flexibility to maneuver and reason constructively. Occassionally, leadership or others want to work outside the system of processes in place. There are circumstances in which this is productive. The project manager at this point may choose to accept the decision or encourage a parallel process to corroborate the decision and work outside the system.  There are a myriad of  exceptions. Project managers fall back on thier personal and political captial during these times and rely on guiding principles to move things forward.

Principles set moral and ethical boundaries. Acting and managing in a principled manner allievates the project manager from having to memorize biases and approaches used to correct them based on predetermined and managed scripts. Using principles as guideposts will establish the project manager as aspiring to greater heights and trying to sincerely achieve results within a set of parameters. People will understand that principles are to be upheld and decisions are to made against them as well as the system or structures in place to manage change. In the end, the project manager will have lead people towards the vision and objectives, extacted value from the corporate knowledge within the project, and made people feel a part of the system.