Project plans usually include estimates of costs and schedules in addition to plans for work to be done, and the order of doing that work. Sometimes we fail to complete all the work we had in mind; sometimes we find we cannot do some work we wanted to do; sometimes we discover additional work we needed to do. But overall, the work actually done in a project does roughly approximate the work that was planned. Not so for cost and schedule. Cost and schedule can differ from projections by double, triple, and more, even when we make allowances for differences between work planned and work actually done.
In a 1977 report, Daniel Kahneman and Amos Tversky identify a particular cognitive bias, the planning fallacy, which afflicts planners. [Kahneman 1977] [Kahneman 1979] They discuss two types of information used by planners. Singular information is specific to the project at hand; distributional information is drawn from similar past efforts. The planning fallacy is the tendency of planners to pay too little attention to distributional information and too much attention to singular information, even when the singular information is scanty or questionable. Planners tend to underestimate cost and schedule by failing to harvest lessons from the distributional information, which is inherently more diverse and reliable than singular information.
But even when planners attend to distributional information, two forms of self-serving considerations can lead planners to make estimates that cannot be met. Here's how.
- Self-serving bias
- Choosing local experts is a common pattern for designating people to make estimates of cost and schedule. Usually the experts designated tend to be people who've done similar work in the past, and sometimes they must assess their own past work. When estimators must evaluate their own work, they have a conflict of interest that can compromise objectivity as a result of a cognitive bias known as self-serving bias. [Campbell 1999] Self-serving bias causes us to perceive ourselves more positively than objective judgment warrants. We tend to attribute successes to our own talents and decisions, and attribute failures to external factors.
- When the The work actually done in a
project does roughly approximate
the work that was planned.
Not so for cost and schedule.estimators designated for a project were themselves involved in the past efforts they're evaluating for estimation purposes — what Kahneman and Tversky call distributional information — self-serving bias tends to lead them to biased conclusions, which they then use to make projections for the project whose cost and schedule they're estimating. - Organizational politics
- From the perspective of objective estimation based on balanced assessment of distributional and singular information, organizational politics can make a bad situation even worse. Estimators who are evaluating past efforts in which they played roles can use their evaluations as tools of what psychologists call impression management — to make themselves look good. They can thus enhance their own prospects for advancement. [Drory 2006] In this way, politics can limit the willingness of estimators to faithfully represent sources of successes and failures in past efforts. In effect, to gain political advantage, estimators tend to attribute too much of the reason for past successes to their own actions, and too much of the reason for past failures to external factors or to the actions of others, especially political rivals.
The distortions that result from the planning fallacy, from self-serving bias, and from organizational politics can reduce the chances that estimators will produce reliable results. When that happens, cost overruns and schedule delays become more likely. Top Next Issue
Is every other day a tense, anxious, angry misery as you watch people around you, who couldn't even think their way through a game of Jacks, win at workplace politics and steal the credit and glory for just about everyone's best work including yours? Read 303 Secrets of Workplace Politics, filled with tips and techniques for succeeding in workplace politics. More info
Footnotes
Your comments are welcome
Would you like to see your comments posted here? rbrendPtoGuFOkTSMQOzxner@ChacEgGqaylUnkmwIkkwoCanyon.comSend me your comments by email, or by Web form.About Point Lookout
Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.
This article in its entirety was written by a human being. No machine intelligence was involved in any way.
Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.
Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.
Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.
Related articles
More articles on Project Management:
- Geese Don't Land on Twigs
- Since companies sometimes tackle projects that they have no hope of completing successfully, your project
might be completely wrong for your company. How can you tell whether your project is a fit for your company?
- Some Risks of Short-Term Fixes
- When we encounter a problem at work, we must choose between short-term fixes (also known as workarounds)
and long-term solutions. Often we choose workarounds without appreciating the risks we're accepting
— until too late.
- Seven Planning Pitfalls: II
- Plans are well known for working out differently from what we intended. Sometimes, the unintended outcome
is due to external factors over which the planning team has little control. Two examples are priming
effects and widely held but inapplicable beliefs.
- Seven More Planning Pitfalls: I
- Planners and members of planning teams are susceptible to patterns of thinking that lead to unworkable
plans. But planning teams also suffer vulnerabilities. Two of these are Group Polarization and Trips
to Abilene.
- Tuckman's Model and Joint Leadership Teams
- Tuckman's model of the stages of group development, applied to Joint Leadership Teams, reveals characteristics
of these teams that signal performance levels less than we hope for. Knowing what to avoid when we designate
these teams is therefore useful.
See also Project Management and Cognitive Biases at Work for more related articles.
Forthcoming issues of Point Lookout
- Coming April 24: Antipatterns for Time-Constrained Communication: 1
- Knowing how to recognize just a few patterns that can lead to miscommunication can be helpful in reducing the incidence of problems. Here is Part 1 of a collection of communication antipatterns that arise in technical communication under time pressure. Available here and by RSS on April 24.
- And on May 1: Antipatterns for Time-Constrained Communication: 2
- Recognizing just a few patterns that can lead to miscommunication can reduce the incidence of problems. Here is Part 2 of a collection of antipatterns that arise in technical communication under time pressure, emphasizing those that depend on content. Available here and by RSS on May 1.
Coaching services
I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrendPtoGuFOkTSMQOzxner@ChacEgGqaylUnkmwIkkwoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.
Get the ebook!
Past issues of Point Lookout are available in six ebooks:
- Get 2001-2 in Geese Don't Land on Twigs (PDF, )
- Get 2003-4 in Why Dogs Wag (PDF, )
- Get 2005-6 in Loopy Things We Do (PDF, )
- Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, )
- Get 2009-10 in The Questions Not Asked (PDF, )
- Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, )
Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500-1000 words in your inbox in one hour. License any article from this Web site. More info
Follow Rick
Recommend this issue to a friend
Send an email message to a friend
rbrendPtoGuFOkTSMQOzxner@ChacEgGqaylUnkmwIkkwoCanyon.comSend a message to Rick
A Tip A Day feed
Point Lookout weekly feed