When we've made a decision that has led to serious trouble, it's possible that a cognitive bias known as neglect of probability might have played a role. This cognitive bias can affect decision-making by causing us to choose among options based solely on the values of the respective "best outcomes," respectively, of those options. Using this criterion leads to trouble when the outcomes of the options are uncertain, because it ignores the probabilities of actually achieving those outcomes.
Stated a Neglect of Probability causes us
to choose among options based
solely on the values of their
respective "best outcomes,"
ignoring the likelihood of those
outcomes actually coming aboutbit more precisely, a rational decision would be based on considering both the value of an option's potential outcome and the probability of actually generating that outcome. Instead, when we're under the spell of Neglect of Probability, we tend to assess the goodness of an option by focusing solely (or excessively) on the value of its best outcome, while ignoring the probability of achieving that outcome.
An illustration might clarify this effect further.
The IT department at Dewey, Cheatham and Howe, LLP, (a fictitious global law firm), is upgrading the operating systems of DCH's fleet of personal computers from PC-OS 11 to PC-OS 12 (a fictitious operating system). The task would be relatively straightforward were it not for the enormous number of commercial and custom applications running on those computers. DCH's experts expect that the change from PC-OS 11 to PC-OS 12 will render many of those applications unusable. Among the 18,000 total applications, most are expected to operate correctly, but many will not. The full list of questionable applications is unknown.
Testing all 18,000 applications is an impractically large effort. But by working with the vendors of the commercial applications, and by collaborating with IT departments in other law firms, DCH has reduced the number of applications whose status is unknown to a mere 1,500. That number is less daunting, but it's still impossibly large.
IT has therefore decided to let users of each of the questionable applications perform the testing and certification, in three stages. In Phase I an application expert checks that the app operates in PC-OS 12. If it does, then in Phase II for that app, 10% of the app's users are authorized to use the app for up to 30 days. If they report no problems, then the app is cleared for Phase III, general use. If the Phase II users do report problems, usage of that app is suspended and IT works with the vendor or internal author to resolve the issue. When the issue is resolved, the app is returned to Phase II for another 30 days and the procedure repeats until the app is cleared.
In this way, IT can reduce the number of apps that need more thorough testing. And when an app functions properly, the cost of determining that it does so is very low. These cost-control features are very attractive to IT decision-makers.
But there's a problem with this approach. In the 30 days during which Phase II users operate untested apps, those untested apps might corrupt existing data or documents, without the knowledge of the users of the apps. Based on prior experience with PC-OS 10, this corruption is almost certain to occur in many apps. Therefore, the probability of a successful outcome for IT's intended three-phase approach is very low. But the decision-makers in IT who conceived of this plan are neglecting the probability of that good outcome. They're attracted by the low cost of the best outcome, and that has caused them to ignore the fact that some applications — IT knows not which ones — will almost certainly cause data corruption. In this example, IT's approach might have a very good outcome, but the probability of that outcome is small.
Neglect of Probability is most likely to play a role in decision-making when the decision-making scenario involves choosing among a set of options, some of which have outcomes very much more attractive than others. In these decision-making scenarios, Neglect of Probability tends to cause the decision-makers to choose options with too little regard for — or without regard for — the probabilities of success of the various options.
And even when decision-makers do consider probabilities, the risk of a poor decision remains unacceptably high for some kinds of mission-critical decisions. Decision-makers might in some cases estimate probabilities in a biased way that tends to favor the options with the outcomes they find most appealing. There are indeed many ways to mess things up. Top Next Issue
Are your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!
Your comments are welcomeWould you like to see your comments posted here? rbrenmhXARWRMUvVyOdHlner@ChacxgDmtwOKrxnripPCoCanyon.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.
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.
More articles on Cognitive Biases at Work:
- Managing Hindsight Bias Risk
- Performance appraisal practices and project retrospectives both rely on evaluating performance after
outcomes are known. Unfortunately, a well-known bias — hindsight bias — can limit the effectiveness
of many organizational processes, including both performance appraisal and project retrospectives.
- Scope Creep and the Planning Fallacy
- Much is known about scope creep, but it nevertheless occurs with such alarming frequency that in some
organizations, it's a certainty. Perhaps what keeps us from controlling it better is that its causes
can't be addressed with management methodology. Its causes might be, in part, psychological.
- Historical Debates at Work
- One obstacle to high performance in teams is the historical debate — arguing about who said what
and when, or who agreed to what and when. Here are suggestions for ending and preventing historical debates.
- Perfectionism and Avoidance
- Avoiding tasks we regard as unpleasant, boring, or intimidating is a pattern known as procrastination.
Perfectionism is another pattern. The interplay between the two makes intervention a bit tricky.
- How Messages Get Mixed
- Although most authors of mixed messages don't intend to be confusing, message mixing does happen. One
of the most fascinating mixing mechanisms occurs in the mind of the recipient of the message.
Forthcoming issues of Point Lookout
- Coming June 10: They Don't Reply to My Email
- Ever have the experience of sending an email message to someone, asking for information or approval or whatever, and then waiting for a response that comes only too late? Maybe your correspondent is an evil loser, but maybe not. Maybe the problem is in your message. Available here and by RSS on June 10.
- And on June 17: An Introduction to Workplace Ostracism
- We say that a person has been ostracized from a group when that person is ignored by the members of that group or excluded from participating in that group's activities, and when we might otherwise expect that person to be a member. Workplace ostracism can have expensive consequences for the enterprise. Available here and by RSS on June 17.
I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenmhXARWRMUvVyOdHlner@ChacxgDmtwOKrxnripPCoCanyon.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 words in your inbox in one hour. License any article from this Web site. More info
- Bullet Points: Mastery or Madness?
Decision-makers in modern organizations commonly demand briefings in the form of bullet points or a series of series of bullet points. But this form of presentation has limited value for complex decisions. We need something more. We actually need to think. Briefers who combine the bullet-point format with a variety of persuasion techniques can mislead decision-makers, guiding them into making poor decisions. Read more about this program.
Here are some dates for this program:
- Time: 12:00 Eastern Time. Place: Wherever you are. It's a
Webinar.: June 24, Monthly Webinar, sponsored by Technobility Webinar Series. Register now.
- Time: 6:00 PM Eastern Time. Place: Wherever you are. It's
a Webinar.: June 24, Monthly Webinar, sponsored by Technobility Webinar Series. Register now.
- Time: 12:00 Eastern Time. Place: Wherever you are. It's a Webinar.: June 24, Monthly Webinar, sponsored by Technobility Webinar Series. Register now.
- The Power Affect: How We Express Our Personal Power
Many people who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.