Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 20, Issue 41;   October 7, 2020: Seven More Planning Pitfalls: III

Seven More Planning Pitfalls: III


Planning teams, like all teams, are vulnerable to several patterns of interaction that can lead to counter-productive results. Two of these relevant to planners are a cognitive bias called the IKEA Effect, and a systemic bias against realistic estimates of cost and schedule.
Assembling an IKEA chair

Assembling an IKEA chair. Image (cc) Cheon Fong Liew.

In two previous posts, I noted five different phenomena that can lead planning teams to devise unworkable plans. They included Group Polarization, Trips to Abilene, False Consensus, Groupthink, and Shared Information Bias. In this final post of the series, I explore effects that cause planning teams to adopt or accept approaches for reasons other than their merits.

The IKEA effect
A cognitive bias known as the IKEA Effect causes individuals to place an inordinately high value on products they assembled themselves. [Norton 2012] One might speculate that an analogous bias occurs with respect to organizations. If this speculation is valid, organizations would tend to place inordinately high value on assets and processes that they created or helped to create, compared to similar assets or processes that they could acquire elsewhere. This phenomenon, if confirmed experimentally, might be related to what is sometimes called the not-invented-here syndrome. [Katz 1982]
Planning teams A cognitive bias known as the
IKEA Effect causes individuals
to place an inordinately
high value on products
they assembled themselves
would be affected by the "organizational IKEA Effect" by assessing as more valuable or effective approaches that exploited products or technology developed in part or in toto by in-house efforts. That might also cause them to be compelled by internal political forces to use such assets, even if they were inferior to commercial alternatives.
Competition bias
When internal experts provide estimates of cost and schedule, they're vulnerable to a number of cognitive biases that cause them to underestimate both. I've noted some of these, such as the priming effects or Shared Information Bias, in previous posts. But even if the members of the planning team weren't vulnerable to these biases, another problem — potentially even more significant — causes them to produce underestimates. The forces that create this problem are traceable to competition, both internal and external. I call this phenomenon Competition Bias.
Boehm, et al., observe that because organizational resources are finite, project advocates compete with each other for resources. [Boehm 2016] They are compelled by this competition to be unrealistically optimistic about their objectives, costs, and schedules. Although the authors call this mechanism the "Conspiracy of Optimism," possibly facetiously, it isn't actually a conspiracy. Rather, it's a variant of the N-Person Prisoner's Dilemma. [Hamburger 1973]
Market dynamics provide a second illustration of the effects of competition. Those who advocate marketing strategies based on the so-called "first mover advantage" believe that the organization that first delivers an offering to a marketplace can gain advantages by arriving early. The strategy is somewhat controversial [Suarez 2005], but it is believed widely enough that it leads to pressure on project planning teams to reduce their estimates of cost and schedule.
Estimates of cost and schedule are more likely to be realistic if the estimators aren't subjected to pressure to produce low estimates.

Last words

In these last six posts, I've inventoried 14 different phenomena that can lead to unworkable plans.

But there is a trap here. Some might feel that when a plan goes awry, and we see some evidence that the IKEA effect might have played a role, then the people who devised the plan are at fault for not recognizing the problem and doing something about it. That would be a mistake. Replacing those people, or disciplining them in some way, is unlikely to affect substantially the probability of a recurrence.

The root cause of the problem lies not in the people who devised the unworkable plan, but in the processes they used when devising the plan. To reduce the probability of recurrence of the IKEA effect, for example, we need to add to the planning process new steps. Those new steps must ensure decision maker objectivity with respect to the origins of the assets they're planning on using. For each of the 14 phenomena I've been exploring, we would need to add some measures like that.

Undoubtedly there are dozens more phenomena that lead to unworkable plans. It's a wonder that any of our plans are workable. First in this series  Go to top Top  Next issue: Power Mobbing at Work  Next Issue

52 Tips for Leaders of Project-Oriented OrganizationsAre 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!


[Norton 2012]
Michael I. Norton, Daniel Mochon, and Dan Ariely. "The IKEA effect: When labor leads to love," Journal of Consumer Psychology 22:3 (2012), 453-460. Available here. Retrieved 21 September 2020. Back
[Katz 1982]
Ralph Katz and Thomas J. Allen. "Investigating the Not Invented Here (NIH) syndrome: A look at the performance, tenure, and communication patterns of 50 R & D Project Groups," R&D Management 12:1 (1982), 7-20. Available here. Retrieved 21 September 2020. Back
[Boehm 2016]
Barry Boehm, Celia Chen, Kamonphop Srisopha, Reem Alfayez, and Lin Shiy. "Avoiding Non-Technical Sources of Software Maintenance Technical Debt," USC Course notes, Fall 2016. Back
[Hamburger 1973]
Henry Hamburger. "N-person Prisoner's Dilemma," Journal of Mathematical Sociology 3 (1973), 27-48. doi:10.1080/0022250X.1973.9989822. Back
[Suarez 2005]
Fernando Suarez and Gianvito Lanzolla. "The half-truth of first-mover advantage," Harvard Business Review (2005), 121-127. Available here. Retrieved 21 September 2020. Back

Your comments are welcome

Would you like to see your comments posted here? rbrenZLkFdSHmlHvCaSsuner@ChacbnsTPttsdDaRAswloCanyon.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.

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 Cognitive Biases at Work:

Deputy Secretary of Defense Wolfowitz, Defense Secretary Rumsfeld, and President Bush in a press conference on September 17, 2001Overconfidence at Work
Confidence in our judgments and ourselves is essential to success. Confidence misplaced — overconfidence — leads to trouble and failure. Understanding the causes and consequences of overconfidence can be most useful.
An actual bandwagon in a circus paradeCognitive Biases and Influence: I
The techniques of influence include inadvertent — and not-so-inadvertent — uses of cognitive biases. They are one way we lead each other to accept or decide things that rationality cannot support.
Prof. Jack Brehm, who developed the theory of psychological reactanceCognitive Biases and Influence: II
Most advice about influencing others offers intentional tactics. Yet, the techniques we actually use are often unintentional, and we're therefore unaware of them. Among these are tactics exploiting cognitive biases.
An abandoned railwayPerfectionism 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.
The Leonard P. Zakim Bunker Hill BridgeSeven Planning Pitfalls: III
We usually attribute departures from plan to poor execution, or to "poor planning." But one cause of plan ineffectiveness is the way we think when we set about devising plans. Three cognitive biases that can play roles are the so-called Magical Number 7, the Ambiguity Effect, and the Planning Fallacy.

See also Cognitive Biases at Work and Project Management for more related articles.

Forthcoming issues of Point Lookout

Cracking walnuts with a nutcrackerComing February 1: The Big Power of Little Words
Big, fancy words, like commensurate or obfuscation, tend to be more noticed than the little everyday words, like yet or best. That might be why the little words can be so much more powerful, steering conversations where their users want them to go. Available here and by RSS on February 1.
Two bull elk sparring in Grand Teton National Park, WyomingAnd on February 8: Kerfuffles That Seem Like Something More
Much of what we regard as political conflict is a series of squabbles commonly called kerfuffles. They captivate us while they're underway, but after a month or two they're forgotten. Why do they happen? Why do they persist? Available here and by RSS on February 8.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenZLkFdSHmlHvCaSsuner@ChacbnsTPttsdDaRAswloCanyon.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:

Reprinting this article

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

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at Twitter, or share a tweet Subscribe to RSS feeds Subscribe to RSS feeds
The message of Point Lookout is unique. Help get the message out. Please donate to help keep Point Lookout available for free to everyone.
Technical Debt for Policymakers BlogMy blog, Technical Debt for Policymakers, offers resources, insights, and conversations of interest to policymakers who are concerned with managing technical debt within their organizations. Get the millstone of technical debt off the neck of your organization!
Go For It: Sometimes It's Easier If You RunBad boss, long commute, troubling ethical questions, hateful colleague? Learn what we can do when we love the work but not the job.
303 Tips for Virtual and Global TeamsLearn how to make your virtual global team sing.
101 Tips for Managing ChangeAre you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt?
101 Tips for Effective MeetingsLearn how to make meetings more productive — and more rare.
Exchange your "personal trade secrets" — the tips, tricks and techniques that make you an ace — with other aces, anonymously. Visit the Library of Personal Trade Secrets.
If your teams don't yet consistently achieve state-of-the-art teamwork, check out this catalog. Help is just a few clicks/taps away!
Ebooks, booklets and tip books on project management, conflict, writing email, effective meetings and more.