Friday, January 10, 2014

More Decision Biases: Choice Architecture


The way you present a choice for someone to make a decision can determine the decision itself. This may sound a bit far fetched and you may be thinking "Well, I guess you can build a scenario where people are almost forced to choose what we want". But the truth is that this is much, much easier to do than what you would expect.
There are many examples of this on advertising and marketing: from the way products are displayed on a supermarket to the ads we see that we don't think we remember, there are loads of examples.
But nothing like this can happen within a project. Or can it?

What is Choice Arquitecture

Choice Architecture is the way options are presented to the person or group of people making the decision. Pretty straight forward, really. And this topic is part of the Irrationality topic that I've been writing about here on the blog. The previous articles on Irrationality are:

A Tiny Difference Goes a Long Way

There are some Summer festivals in Portugal making the competition between them quite fierce. So how do they differentiate themselves? Notice that, for youths (which are the primary audience of these festivals) they are all basically the same: they last 3/5 days, they all have bands that they like very much, they all have bands that they don't like that much, and they all are taking place in remote locations. So, again, how do they differentiate themselves?
Free Wifi on a Summer Festival
Take a close look at the outdoor on your left for such a Summer festival that took place last year in Portugal. Even if you can't read Portuguese, the word "Wi-Fi" should sound strange once you know this is an outdoor for one such Summer festival. And "Wi-Fi Grátis" means free wifi. And why the large letters? I mean, you may have added this kind of information yourself on an outdoor, but probably on the tiny letters that no one reads because it's just not relevant. But this is not the case, so what's going on with this outdoor?
The fact is, if you have a tiny difference (like free wifi) between several options that look otherwise all the same, you go for the option that offers you the benefit (be as a tiny advantage as it may be). It makes sense now, doesn't it? If you have, let's say, 5 festivals to choose from and they all are about the same to you... but one of them gives you something, anything, that the others don't. Wouldn't it be silly to miss that offer? If they're all the same but that one gives you something else on top? This is how do you choose. You find a difference, any difference, as small as it might be! If you find this difference good for you, that's the choice you're going to make.
So people working on advertising know this and they make use of it. But nothing like this would happen in Project Management, right?.

A Slightly Different Version

Subscription options
Take a close look at this subscription offer from The Economists (not a current offer anymore, they changed it a while back, prior to the tablet widespread). Now please reason with me and imagine you want to choose a subscription for this magazine.
The first option is trully limitative, as you'd have to read the magazine sitting in front of a computer connected to the internet (remember this was an offering prior to the tablet widespread). So that one is out. And you're left to decide between two options for the same price, where one option offers you everything the other does but it also includes the web access to the magazine! For free! So this is a no brainer, right? You opt for the "Print & web subscription", right? Right on, you and everyone else subscribing to this magazine!
In fact, this effect is stronger than what you'd think at a first glance: even if this offering was made today, only a few clients would opt for the "Web subscription". These would be just those that could definitely find the benefit of it: either because they use a tablet all the time or because the price difference does make a difference. This would happen because of the middle option "Print subscription". That's right, that option that no one chooses is there because it forces you to see the "Print & web subscription" option as a much more attractive option.

What about Project Management?

This is all very interesting, but what does it has to do with Project Management? For starters, you'd think that people making choices like those in the previous examples would be perfectly aware of what they're doing - but in fact people can make the decisions we want them to make - without them noticing that the're are being played! And this affects Project Management for the simple reason that decisions are made also in the context of Project Management.
But there are 2 aspects of this that I'd like you to consider in particular. On one side, you, as a Project Manager, have decisions to make and so you can be influenced or biased while being completely unaware of the fact. On the other side, you, as a Project Manager, provide information that are the basis for other people's decisions.
Please pay attention, I don't mean to say that you should or even that you could manipulate the outcome of other people's decisions! What I mean is that both when deciding and when providing information for others to decide you should make sure that you're not biased or inadvertently influencing the decisions of others.

Some Red Flags

This is easy to say but not all that easy to do because you're usually too involved and focused in the process to be aware of secondary things such as:
  • Considering in the decision process things that have no relation to what's being decided (such as free wifi on a Summer festival)
  • Considering options that make no sense (such as a "Print subscription" for the same price as a "Print & web subscription")
When any of this happens don't think "these guys are nuts, this make no sense". Instead, consider why are they including things unrelated to the decision being made. Or at the very least, eliminate what's nonsense from the decision process...

Conclusion

We have a lot of biases affecting our decisions (check the articles on Irrationality here on the blog if in doubt) and Project Management requires a lot of decisions being made. If you're aware of the things that are influencing your decisions then you probably can make better decisions, right? And at the same time you become a better Project Manager as well!



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