Eight to Late

Introduction

There are two distinct views of project management practice: the rational view which focuses on management tools and techniques such as those espoused by frameworks and methodologies, and the social/behavioural view which looks at the social aspect of projects – i.e. how people behave and interact in the context of a project and the wider organisation. The difference between the two is significant: one looks at how projects should be managed,  it prescribes tools, techniques and practices;  the other at what actually happens on projects, how people interact and how managers make decisions.  The gap between the two can sometimes  spell the difference between project success and failure. In many failed projects, the failure can be traced back to poor decisions, and the decisions themselves to cognitive biases: i.e.  errors in judgement based on perceptions. A paper entitled, Systematic Biases and Culture in Project Failure, by Barry Shore looks at the role played by selected cognitive biases in the failure of some high profile projects. The paper also draws some general conclusions on the relationship between organisational culture and cognitive bias. This post presents a summary and review of the paper.

The paper begins with a brief discussion of the difference in the rational and social/behavioural view of project management.  The rational view is prescriptive  – it describes management procedures and techniques which claim to increase the chances of success if followed. Further, it emphasises causal effects (if you follow X procedure then Y happens).  The social/behavioural view is less well developed because it looks at human behaviour which is hard to study in controlled conditions,  let alone in projects. Yet, developments in behavioural economics – mostly based on the pioneering work of Kahnemann and Tversky – can be directly applied to project management (see my post on biases in project estimation, for instance).  In the paper, Shore looks at eight case studies of failed projects  and attempts to attribute their failure to selected cognitive biases. He  also looks into the relationship between (project and organisational) culture and the prevalence of the selected biases. Following Hofstede, he defines organisational culture as shared perceptions of organisational work practices and, analogously, project culture as shared perceptions of project work practices. Since projects take place within organisations, project culture is obviously influenced by the organisational culture.

Scope and Methodology

In this section I present a brief discussion of the biases that the paper focuses on and the study methodology.

There are a large number of cognitive biases in the literature. The author selects the following for his study:

Available data:  Restricting oneself to using data that is readily or conveniently available. Note that “Available data” is a non-standard term: it is normally referred to as a sampling bias, which in turn is a type of selection bias.

Conservatism (Semmelweis reflex): Failing to consider new information or negative feedback.

Escalation of commitment:  Allocating additional resources to a project that is unlikely to succeed.

Groupthink: Members of a project group under pressure to think alike, ignoring evidence that may threaten their views.

Illusion of control: Management believing they have more control over a situation than an objective evaluation would suggest.

Overconfidence:  Having a level of confidence that is unsupported by evidence or performance.

Recency (serial position effect): Undue emphasis being placed on most recent data (ignoring older data)

Selective perception: Viewing a situation subjectively; perceiving only certain (convenient) aspects of a situation.

Sunk cost: Not accepting  that costs already incurred cannot be recovered and should not be considered as criteria for future decisions. This bias is closely related to loss aversion.

The author acknowledges that there is a significant overlap between some of these effects: for example, illusion of control has much in common with overconfidence. This implies a certain degree of subjectivity in assigning these as causes for project failures.

The failed projects studied in the paper are high profile efforts that failed in one or more ways.  The author obtained data for the projects from public and government sources. He then presented the data and case studies to five independent groups of business professionals (constituted from a class he was teaching) and asked them to reach a consensus on which biases could have played a role in causing the failures. The groups presented their results to the entire class, then through discussions, reached agreement on which of the  biases may have lead to the failures.

The case studies

This section describes the failed project studied and the biases that the group identified as being relevant.

Airbus 380: Airbus was founded as a consortium of independent aerospace companies. The A380 project which was started in 2000 - was aimed at creating the A380 superjumbo jet with a capacity of 800 passengers. The project involved coordination between many sites.  Six years into the project, when the aircraft was being assembled in Toulouse, it was found that a wiring harness produced in Hamburg failed to fit the airframe.

The group identified the following biases as being relevant to the failure of the Airbus project:

Selective perception: Managers acted to guard their own interests and constituencies.

Groupthink:  Each participating organisation  worked in isolation from the others, creating an environment in which groupthink would thrive.

Illusion of control:  Corporate management assumed they had control over participating organisations.

Availability bias: Management in each of the facilities did not have access to data in other facilities, and thus made decisions based on limited data.

Coast Guard Maritime Domain Awareness Project: This project, initated in 2001, was aimed at creating the maritime equivalent of an air traffic control system. It was to use a range of technologies, and involved coordination between many US government agencies. The goal of the first phase of the project was to  create a surveillance system that would be able to track boats as small as jet skis. The surveillance data was to be run through a software system that would flag potential threats.  In 2006  – during the testing phase – the surveillance system failed to meet quality criteria. Further, the analysis software was not ready for testing.

The group identified the following biases as being relevant to the failure of the  Maritime Awareness project:

Illusion of control: Coordinating several federal agencies is a complex task. This suggests that project managers may have thought they had more control than they actually did.

Selective perception: Separate agencies worked only on their portions of the project,  failing to see the larger picture. This suggests that project groups may have unwittingly been victims of selective perception.

Columbia Shuttle: The Columbia Shuttle disaster was caused by a piece of foam insulation breaking off the propellant tank and damaging the wing. The problem with the foam sections was known, but management had assumed that it posed no risk.

In their analysis, the group found the following biases to be relevant to the failure of this project:

Conservatism: Management failed to take into account negative data.

Overconfidence:  Management was confident there were no safety issues.

Recency:  Although foam insulation had broken off on previous flights, it had not caused any problems.

Denver Airport Baggage Handling System: The Denver airport project, which was scheduled for completion in 1993, was to feature a completely automated baggage handling system. The technical challenges were enormous because the proposed system was an order of magnitude more complex than those that existed at the time. The system was completed in 1995, but was riddled with problems. After almost a decade of struggling to fix the problems, not to mention being billions over-budget, the project was abandoned in 2005.

The group identified the following biases as playing a role in the failure of this project:

Overconfidence: Although the project was technically very ambitious, the contractor (BAE systems) assumed that all technical obstacles could be overcome within the project timeframes.

Sunk cost: The customers (United Airlines) did not pull out of the project even when other customers pulled out, suggesting that they were reluctant to write off already incurred costs.

Illusion of control: Despite evidence to the contrary, management assumed that problems could be solved and that the project remained  under control.

Mars Climate Orbiter and Mars Polar Lander: Telemetry signals from the Mars climate orbiter ceased when the spacecraft approached its destination. The root cause of the problem was found to be a failure to convert between metric and British units: apparently the contractor, Lockheed, had used British units in the engine design but NASA scientists who were responsible for operations and flight assumed the data was in metric units. A few months after the climate orbiter disaster, another spacecraft, the Mars polar lander fell silent just short of landing on the surface of Mars. The failure was attributed to a software problem that caused the engines to shutdown prematurely, thereby causing the spacecraft to crash.

The group attributed the above project failures to the following biases:

Conservatism: Project engineers failed to take action when they noticed that the spacecraft was off-trajectory early in the flight.

Sunk cost: Managers were under pressure to launch the spacecraft on time – waiting until the next launch window would have entailed a wait of many months thus “wasting” the effort up to that point. (Note: In my opinion this is an incorrect interpretation of sunk cost)

Selective perception: The spacecraft modules  were constructed by several different teams. It is very likely that teams worked with a very limited view of the project (one which was relevant to their module).

Merck Vioxx: Vioxx was a very successful anti-inflammatory medication developed and marketed by Merck. An article published in 2000 suggested that Merck misrepresented clinical trial data, and another paper published in 2001 suggested that those who took Vioxx were subject to a significantly increased risk of assorted cardiac events. Under pressure, Merck put a warning label on the product in 2002. Finally, the drug was withdrawn from the market in 2004 after over 80 million people had taken it.

The group found the following biases to be relevant to the failure of this project:

Conservatism:  The company ignored early warning signs about the toxicity of the drug.

Sunk cost: By the time concerns were raised, the company had already spent a large amount of money in developing the drug. It is therefore likely that there was a reluctance to write off the costs incurred to that point.

Microsoft Xbox 360: The Microsoft Xbox console was released to market in 2005, a year before comparable offerings from its competitors. The product was plagued with problems from the start; some of them include: internet connectivity issues, damage caused to game disks, faulty power cords and assorted operational issues. The volume of problems and complaints prompted Microsoft to extend the product warranty from one to three years at an expected cost of $1 billion.

The group thought that the following biases were significant in this case:

Conservatism: Despite the early negative feedback (complaints and product returns), the development group seemed to acknowledge that there were problems with the product.

Groupthink:  It is possible that the project team ignored data that threatened their views on the product. The group reached this conclusion because Microsoft seemed reluctant to comment publicly on the causes of problems.

Sunk cost: By the time problems were identified, Microsoft had invested a considerable sum of money on product development. This suggests that the sunk cost trap may have played a role in this project failure.

NYC Police Communications System: (Note: I couldn’t find any pertinent links to this project). In brief: the project was aimed at developing a communications system that would enable officers working in the subway system to communicate with those on the streets. The project was initiated in 1999 and scheduled for completion in 2004 with a budgeted cost of $115 million. A potential interference problem was identified in 2001 but the contractors ignored it. The project was completed in 2007, but during trials it became apparent that interference was indeed a problem. Fixing the issue was expected to increase the cost by $95 million.

The group thought that the following biases may have contributed to the failure of this project:

Conservatism: Project managers failed to take early data on intereference account.

Illusion of control: The project team believed – until very late in the project – that the interference issue could be fixed.

Overconfidence:  Project managers believed that the design was sound, despite evidence to the contrary. 

Analysis and discussion

The following four biases appeared more often than others: Conservatism, illusion of control, selective perception and sunk cost.

The following biases appeared less often: groupthink and overconfidence.

Recency and availability were mentioned only once.

Based on the small data sample and the somewhat informal means of analysis, the author concludes that the first four biases may be dominant in project management. In my opinion this conclusion is shaky because the study has a few shortcomings, which I list below:

• The sample size is small
• The sample covers a range of domains.
• No checks were done to verify the  group members’ understanding of  all the biases.
• The data on which the conclusions are based is incomplete – based only on publicly available data. (perhaps is this an example of the available data bias at work?)
• A limited set of biases is used – there could be other biases at work.
• The conclusions themselves are subject to group-level biases such as groupthink. This is a particular concern because the group was specifically instructed to look at the case studies through the lens of the selected cognitive biases.
• The analysis is far from exhaustive or objective; it  was done as a part of classroom exercise.

For the above reasons, the analysis is at best suggestive:  it indicates that biases may play a role in the decisions  that lead to project failures.

The author also draws a link between organisational culture and environments in which biases might thrive. To do this, he maps the biases on to the competing values framework of organisational culture, which views organisations along two dimensions: 

• The focus of the organisation – internal or external.
• The level of management control in the organisation  – controlling (stable) or discretionary (flexible).

According to the author, all nine biases are more likely in a stability (or control) focused environment than a flexible one, and all barring sunk cost are more likely to thrive in a internal focused organisation than an externally focused one. This conclusion makes sense: project teams are more likely to avoid biases when empowered to make decisions,  free from management and organisational pressures. Furthermore, biases are also less likely to play a role when external input – such as customer feedback –  is taken seriously.

That said, the negative effects of internally focused, high control organisations can be countered. The author quotes two examples:

1. When designing the 777 aircraft, Boeing introduced a new approach to project management wherein teams were required to include representatives from all groups of stakeholders. The team was encouraged to air differences in opinion and to deal with these in an open manner. This approach has been partly credit for the success of the 777 project.
2. Since the Vioxx debacle, Merck rewards research scientists who terminate projects that do not look promising.  

Conclusions

Despite my misgivings about the research sample and methodology, the study does suggest that standard project management practices could benefit by incorporating insights from behavioural studies.  Further, the analysis indicates that cognitive biases may have indeed played a role in the failure of some high profile projects.  My biggest concern here, as stated earlier,  is that the groups were required to associate the decisions with specific biases – i.e. there was an assumption that one or more of the biases from the (arbitrarily chosen) list was responsible for the failure. In reality, however,  there may have been other more important  factors at work.  

The connections with organisational culture are interesting too, but hardly surprising: people are more likely to do the right thing when management  empowers them with responsibility and authority.

In closing: I found the paper interesting because it deals with an area that isn’t very well represented in the project management literature. Further, I  believe these biases play a significant role in project decision making, especially in internally focussed / controlled organisations (project managers are human, and hence not immune…).  However, although the paper supports this view, it doesn’t make a wholly convincing case for it.

The service desk phone rang one morning. The guys were busy attending to other jobs, so the manager picked up the call, “Morning, IT service desk, Jake speaking. How can I help you?”

 ”I had asked for Consolidate to be installed on my new computer, but have just noticed that it wasn’t.” The lady at the other end of the line sounded irritated. The software should have been installed on her computer – it was on top of the list she had provided to the service desk when she’d put in the request for her new computer.

“Have you logged a  service request?” enquired Jake.

“Yes,” she said, ‘but this is urgent. I have to send my sales figures for the month to head office this morning, and I can’t do it without Consolidate. Could you please send someone up right away?”

There was a short pause at Jake’s end. “I’m looking at the SLA right now, and Consolidate isn’t listed as a business critical application. There’s no way we can do this right now.”

“Look, it’s critical as far as I’m concerned. It’s got to be done right away or head office won’t get their sales figures. So, when can I expect a response?” Her annoyance levels were starting to increase

“Not before tomorrow, or may be even day after, depending on how soon we clear other, pending jobs.”

“I think I’ve made it clear this is important. Can’t you do it sooner?”

“No.” Jake clearly thought that no further explanation was necessary. Can’t have folks jumping the queue; service desk processes were put in place for a reason.

She took a more conciliatory tone, “Please understand,” she said, “I wouldn’t make an issue out of it if it weren’t important… the sales figures must be done by this afternoon. I just need the application installed; it shouldn’t take more than five minutes.”

“Sorry, you’ll just have to wait.” He didn’t sound sorry at all.

She’s starting to get really ticked off now. “It was a help desk mess-up in the first place. You should take responsibility and fix it now.”

“Perhaps you didn’t hear what I said; someone will come by tomorrow or day after. That’s the best we can do given that Consolidate is not a business critical application. You’ll just have to wait your turn.” There was no response from her side, so he added, “We have processes in place. We can’t bypass them for just any request.”

Jake’s reference to processes only annoyed her further, “Obviously your processes – whatever they may be – don’t work. The application should have been installed when I got my computer.”
 
“I’m sorry about that, but I can’t make any exceptions to the way we deal with service requests.” He sounded even less sorry now.

She seethed. “Thanks….you’ve been so very helpful.” Her tone made it clear that she thought Jake was being singularly unhelpful. She hung up, not waiting for a response.

—

Jake had a point: proper functioning of a service desk depends on processes. Bypassing these can lead to problems – not the least being that everyone would expect an instant response. Service desk processes ensure efficiency and transparency. Everyone knows what they can expect when they lodge a request; expected service levels being documented in excruciating detail in  service level agreements. Yes, all this is true, and can’t be argued.  Even so, I can’t help but think that the lady deserved better.  Jake could have explained his position in a more acceptable way, or damn it – even got off his rear and fixed the issue himself in five minutes flat. He would have bypassed his beloved processes, but  gained much goodwill in doing so.

Over the years, processes have become entrenched in corporate IT, as witnessed by the plethora of best practices such as ITIL and  CMMI. Implementation of processes based on these frameworks and methodologies helps standardise the way corporate IT carries out its functions. This, in most cases, is a good thing. Yet, processes aren’t the be all and end all of IT. At the receiving end of IT services are ….yes, real people doing real work that keeps businesses ticking. Conflicts between IT and the business occur when IT folks forget that people are more important than processes; like Jake in the true incident described above. This holds not just for operational IT (like the service desk), but also for development work (i.e. projects)  as I’ve mentioned in an  earlier post. Trouble is,  processes  trump people more often than not.  When that happens, things aren’t working the way they should- processes are intended to help people, not to hinder them. This is something folks who work in corporate IT would do well to keep in mind; especially these days, when business leaders are being seduced by the call of outsourcers and the IT-as-utility crowd.

All too often, IT management thinks of processes as a panacea for all IT ills. The way I look at it is a little different: processes are fine and good, and even necessary; but the people who are served by IT must come first. If that means making the occasional exception to a mandated process, then so be it.

Note: Despite references to this sorry saga, the author affirms that this is a work of fiction.

Good morning, Mr. CEO Sir,
we offer services complete.
We’ll take care of your computers,
and fudge your balance sheet.

We’ll overstate your revenue,
and inflate profits.
Thus boosting your share value
in global stock markets.

We’ll find you well-known auditors
to sign off your accounts.
A thumbs-up from their managers
will put to rest all doubts.

Soon you’ll get rewards for sure,
despite such malfeasance.
Trophies and awards galore
for corporate governance.

I trust our varied expertise
gives you confidence.
We’ll take good care of your IT
…and your finances.

It is an unfortunate fact of corporate life that management is sometimes practiced as a series of games between the manager and the managed (with the odds stacked against the latter, of course).  In this post I list some of the more common games I have witnessed over time. As with all games, it is useful to know the ground rules before proceeding. In this case it’s simple because there’s only one: the manager always wins. Now that the ground rule is set, let the games begin…

Two cents up: Some managers feel obliged to contribute to any and every discussion – even those involving  topics they know nothing about. These gents (and ladies) are professional players of the game of Two Cents Up. The game is played as follows: contribute your two cents (or equivalent in any other currency) to all discussions. There is no limit on the number of turns, and at the end  of the discussion you  simply tot up  your  contributions to get your net score.  In case it isn’t clear, only managers get a turn. Expert players of this game routinely end up with several dollars worth of pointless contributions.

Now I delegate; now I don’t: This is essentially a game of delegation peekaboo. The manager delegates responsibility to an employee then, a little while later, takes it back. Then, later still delegates again and so on. The game can be played through several such delegation-undelegation cycles, driving the subordinate to responsibility uncertainty: a state where the subordinate knows not what he or she is  (or isn’t) responsible for. The best exponents of this game can ensure that nothing ever gets done because no one on the team (the manager included) knows who is responsible making decisions.

The second guess: This game is the favourite of managers who find it hard to delegate real responsibility to their subordinates. They delegate only when forced to (by their managers), but then constantly second guess decisions made by the delegatee. As per the Merriam-Webster definition of second-guess, the game can be played at two levels: a) criticise decisions when they are made and then b) criticise them again after the result of the decision is known. Two bites of the cherry! What more could a second-guesser want? No, no… don’t bother answering that.

My way: This is the management version of the well-known childrens’ adage: he who owns the ball, makes the rules.  In the grown-ups game the manager insists on doing things his or her way, riding roughshod over his team’s opinions or advice. The best way to sum up this game is through the (edited) lyrics of the eponymous song:

I’ll plan each charted course;
Each careful step along the byway,
But more, much more than this,
We’ll do it my way.

A more cut-throat version of the game is called my way or the highway – a cliche that nicely sums up what happens to those who choose not to follow the leader.

Bolt from the blue: This game is invoked by some managers when their  opinion is challenged by an employee with a well thought out, irrefutable case.  Just when the employee reckons the manager is about to concede, the manager invokes a bolt from the blue: a statement that has no relevance to the discussion, but serves as an effective distractor to confuse his opponent (sorry, I mean, employee). Here’s an almost true example from real life:

Ben - “So, from the evaluation,  I think we can safely conclude that Oracle is a better than option SQL Server for this project.”

Manager - “May be so, but have you considered using SOA…”

This non sequitur usually results in game, set and match to the manager.

Leap of logic: This game is an insidious variant of the previous one. Like the bolt from the blue, the leap of logic is aimed at distracting the employee. However, it is harder to tackle a leap of logic because the argument isn’t as obviously unrelated to the discussion as the bolt from the blue. Illustrating the leap of logic using the previous example, the manager’s response to Ben might be:

Manager - “Ah, but what about non-relational databases…”

Brilliant! Although the manager is ostensibly talking about databases, he is really spouting nonsense. Ben’s  gobsmacked, and doesn’t know where to begin refuting the point.

Picking nits: This game is played when the manager wants to find fault with work done. It’s an axiom that nothing’s perfect, so one can always find things that haven’t been done right. Some managers are specialist nitpickers – expressing great creativity in finding so-called errors or problems with the work done. Like the first game described in this post, this one can be scored. too. The scoring works as follows: a point per nit picked. At the risk of stating the obvious: only the manager can score.

Although management games are common in corporate settings, they aren’t particular to the business world. Games such as these are played out everyday in organisations ranging from  government bureaucracies to universities.  I should caution my readers that the foregoing listing is far from comprehensive – it is but a small list of the more common games that one might encounter. No doubt, other games (and variants of the ones I’ve described) exist, and still more are being invented by creative managers.  Please feel free to add in management games that you have come across – if they’re good you might even score a point or two.

It began as some projects do,
with users who hadn’t a clue.
Their requirements
made no sense,
filling merely a page or two.

The PM,  he knew the score.
He asked the users for more.
They flatly declined
saying ”We have no time,”
and booted him out the door.

The PM, now filled with dread,
went to the sponsor and said,
“We cannot proceed.”
The boss disagreed,
commanding him to press ahead.

The team, though flying blind,
worked hard (no time to unwind).
Built an app to the spec,
but the users said, “Heck,
this ain’t what we had in mind.”

The moral is clear to see:
With specs unclear or murky,
you’d do well to try
using techniques agile,
delivering frequently.

–

Some recent posts in my “five limericks” series are:

A cliche-ridden corporate crisis in five limericks
SOA what? A clarification for CIOs in five limericks
A cynic’s introduction to project management artefacts in five limericks
An IT system tragedy in five limericks