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Making Right Decisions in IT Project Management
Psychological Traps
Let’s consider an example of such psychological traps. In 2002, Daniel Kahneman was awarded the Nobel Prize in economics "for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty.” According to the theory he developed together with Amos Tversky, people are using heuristics or “rules of thumb” to provide a correct judgment. These heuristics are essentially certain simplification strategies or mental “shortcuts”. In many cases such heuristics work reasonably well. However, in some causes they provide predictable faulty judgment or cognitive bias. One of such “rules of thumb” is called availability heuristic. Decision makers assess the probability of an event by the ease in which instances or occurrences can be brought to mind. For example, project managers sometimes estimate the task success rate based on similar tasks that have been previously completed. If they make judgments based on the most or least successful tasks they remember, it can cause inaccurate estimations. Another heuristic is called anchoring. It refers to the human tendency to remain close to the initial estimate. For example, project manager started thinking about the duration for an activity that had an original estimate of five days. Anchoring causes the analysis to stay close to the original estimate, so that even after the analysis is completed, the five day guess will remain the most likely estimated duration or average duration will be within a range from four to six days. There are a number of other important psychological phenomena project managers should be aware of, including selective perception, biases in estimation probabilities and risks, psychological issues related to group decisions.
The knowledge of the illusion does not guarantee that project manager’s decisions will not be a subject of illusion. In other words, even though project manager might know potential mental pitfalls, he could still fall into these pitfalls. The solution is to use some analytical tools such as computer software, forms, or templates, which can provide a rational input for subjective human decision-making process. The example is the tools for statistical analysis of historical project data as part of project portfolio management solution. If the project manager has an access to comprehensive set of data related to previous activities, the estimation of future similar activity will be more accurate. It will help to mitigate negative impact of availability or anchoring heuristics.
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