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Volume 21, Issue 8;   February 24, 2021: Risk Acceptance: Naïve Realism

Risk Acceptance: Naïve Realism


When we suddenly notice a "project-killer" risk that hasn't yet materialized, we sometimes accept the risk even though we know how seriously it threatens the effort. A psychological phenomenon known as naïve realism plays a role in this behavior.
Roger Boisjoly of Morton Thiokol, who tried to halt the launch of the Challenger space shuttle in 1986

Roger Boisjoly, the Morton Thiokol engineer who, in 1985, one year before the catastrophic failure of the U.S. Space Shuttle Challenger, wrote a memorandum outlining the safety risks of cold-weather launches. He successfully raised the issue then, and many times subsequently, including the evening prior to the launch. In 1988, he was awarded the Prize for Scientific Freedom and Responsibility by the American Association for the Advancement of Science, for "…his exemplary and repeated efforts to fulfill his professional responsibilities as an engineer by alerting others to life-threatening design problems of the Challenger space shuttle and for steadfastly recommending against the tragic launch of January 1986."

Mr. Boisjoly did not succeed in gaining acceptance of his objections to the Challenger launch. Moreover, he was shunned by colleagues, even after the investigation concluded, showing that his objections had been correct. He eventually resigned from Morton Thiokol. It is difficult to say from this distance, but this outcome could be an example of excoriation and ejection of a dissenter as a consequence of naïve realism.

Photo courtesy the Online Ethics Center at the National Academy of Engineering.

When a project is underway, or even when we're still in discussion stages, we sometimes stumble upon an unanticipated risk. Some unanticipated risks can be serious — fatal or near fatal to the project if they materialize. For convenience, I call these risks Very Bad News (VBN) risks. After serious study, if we can't devise practical approaches to avoid, transfer, reduce, or compensate for the VBN risk, we cancel the project and move on. That's what happens if we're thinking clearly.

Sometimes we don't think clearly enough. We decide to accept the VBN risk. Here are three scenarios that frequently lead to risk acceptance:

  • Someone who's politically very powerful insists that this project must succeed no matter what, and "you'll find a way around the problem somehow."
  • The team has found some approaches that might mitigate the VBN risk somewhat. The time, budget, or capabilities required are beyond what's available, but somebody says, "If we make a solid demo, they'll find the money."
  • There's division of opinion about whether the VBN risk is real. Most expert members of the project team acknowledge the risk, but one ambitious fellow, currying favor with Management, disagrees.

These situations are fertile ground for toxic conflict. When the VBN risk is fundamentally technological, a common pattern for this conflict is an oppositional debate between the "technologists" (IT or product engineers) on the one hand, and on the other hand the "business" (product managers, executives, or Sales or Marketing officials). When the conflict becomes toxic enough, it can leave lasting social scars that limit future organizational performance.

The conflict that arises in the context of debates about VBN risks isn't unique. We can understand its dynamics in terms of a psychological phenomenon known as naïve realism. Naïve realism is our human tendency to assume that our perceptions of the world are accurate and objective. [Ross 1995] Consequently, when our understanding of the world conflicts with that of others, we attribute the difference to distortions in others' perceptions, due to their ignorance, false beliefs, irrationality, or biases. As we do this, so do our partners in conflict attribute to us ignorance, false beliefs, irrationality, or biases. Naïve realism thus provides an elegantly symmetric setup for toxic conflict. It can transform a disagreement from one in which each party critiques the value of the other's approach to the issues to one in which each party attacks the other's value as a person.

But although a setup for toxic conflict is necessary, it isn't sufficient to seriously damage relationships. For truly destructive toxic conflict, the participants need to care deeply about the outcome of the conflict. VBN risks can provide the missing element. We know that conflict participants care deeply about the outcomes of debates about VBN risks, because they all regard VBN risks as "Very Bad News."

On the "business" side, After we identify a "Very Bad News" risk,
a common pattern for the ensuing
conflict is oppositional debate between
product engineers and the "business"
conflict participants strongly desire project success. They want what the project promises to deliver, and they can get what they want only if the project goes forward. On the "technologist" side, conflict participants want to work on successful projects, and they want to avoid working on projects that are doomed from the start. Too often, in their experience, project failures have been unjustly and incorrectly attributed not to foolhardy decisions to accept VBN risks, but to the lack of professionalism and low work quality of project teams. In the context of the VBN risk, the technologists can get what they want only if the VBN risk is properly acknowledged and managed, the cost of which can be prohibitive. The "business" faction wants the project to go forward despite the VBN risk; the "technologist" faction wants the project to be reconfigured or cancelled because of the VBN risk.

In many organizations, the "business" prevails. In practice, the technologists are directed to execute the project with the VBN risk wholly or largely unmitigated. Because the people who represent the "business" want the project to proceed, and because they cannot afford to manage the VBN risk, they decide to opt for "risk acceptance."

But exactly how does this happen? What patterns of thought and decision making enable the group to proceed despite this stark disagreement? I'll explore this part of the story next time.  Next in this series Go to top Top  Next issue: Risk Acceptance: One Path  Next Issue

How to Spot a Troubled Project Before the Trouble StartsProjects never go quite as planned. We expect that, but we don't expect disaster. How can we get better at spotting disaster when there's still time to prevent it? How to Spot a Troubled Project Before the Trouble Starts is filled with tips for executives, senior managers, managers of project managers, and sponsors of projects in project-oriented organizations. It helps readers learn the subtle cues that indicate that a project is at risk for wreckage in time to do something about it. It's an ebook, but it's about 15% larger than "Who Moved My Cheese?" Just . Order Now! .


Comprehensive list of all citations from all editions of Point Lookout
[Ross 1995]
Lee Ross and Andrew Ward. "Naive realism in everyday life: Implications for social conflict and misunderstanding." (1995). Available here. Back

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When we have a preconceived notion of what conclusion a decision process should produce, we sometimes engage in "motivated reasoning" to ensure that we get the result we want. That's risky enough as it is. But when we do this in relation to a chain of decisions in the context of uncertainty, trouble looms.
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See also Cognitive Biases at Work and Conflict Management for more related articles.

Forthcoming issues of Point Lookout

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When we alter existing systems to enhance them, we tend to favor adding components even when subtracting might be better. This effect has been attributed to a cognitive bias known as additive bias. But other forces more important might be afoot. Available here and by RSS on June 26.
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Additive bias is a cognitive bias that many believe contributes to bloat of commercial products. When we change products to make them more capable, additive bias might not play a role, because economic considerations sometimes favor additive approaches. Available here and by RSS on July 3.

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