Friday, July 26, 2013

Illusions in Decision Making

So what's your next move?
More often than one would think, people make decisions sure they're taking the best option when in fact they're not. The reason why? Well, there are all sort of biases that go unseen when making a decision. As Project Managers we are also exposed to this not only when we have a decision to make but also when we supply the information to support other people's decisions, such as the project sponsor. So how can we make sure we're making the best decision based on the data we have? And how can we help others do the same?

Optical Illusions

Probably this is the simpler way to start and face a basic fact: we don't see what's in front of us, we see what our brain regards as more relevant. There are countless examples of images you can easily find on the internet, I just selected this one. Can you believe that the lines that seem almost parallel are in fact parallel? Be my guest and double check if you don't believe...
Puzzling why this happens, isn't it? But the point is: we don't see with our eyes, we see we our brain.

Maximizers and Satisfiers

In this 2005 study "Doing Better but Feeling Worse", Sheena Iyengar, Rachael Wells and Barry Schwartz classify college students about to enter the workforce into maximizers (those who seek the best possible outcome) and satisfiers (those who are satisfied with a good enough outcome). An example may clarify the difference in behavior between these two. Maximizers would go through all the TV channels before choosing a show to watch but satisfiers would stop as soon and as they find something to watch that they find good enough.
Now back to this study, sometime after these students start work, maximizers are earning 20% more on average than satisfiers, but at the same time satisfiers view themselves considerably better off than maximizers do:
"Even though maximizers invested more time and effort during the decision process and explored more options than satisficers - presumably in order to achieve greater satisfaction - they nonetheless felt worse about the outcomes that they achieved. Results showed that maximizing tendencies were positively correlated with regret, depression, and decision difficulty, and negatively correlated with happiness, life satisfaction, optimism, and satisfaction with decision outcomes."
How come people that thrive to get the best out of a situation somehow feel frustrated? Like if they could do even better if they took some other option?
Puzzling why this happens, isn't it? But the point is: we easily forget that most of the time we don't need the very best way out, all we need is just enough so we can keep going - and possibly pick a better option further up on the road. How much more satisfaction would you get if you had a weighted evaluation system with each variable and respective weight carefully chosen to help you choose the best show that's on now on TV? Do you truly believe it's worth the trouble?

Change Management

Bringing this decision making thing to the Project Management field, this is why any Change Management methodology focus so hard on communication, not just emailing every employee with the news but bringing them onboard and making them feel the need for change. Check "Our iceberg is melting" by John Kotter and Holger Rathgeber" where John Kotter's fable focus on communication starting the "Create Urgency" process. And communication is all over his 8 steps...

Project Management

Change only happens through projects, right? So there's a link for you. Besides, as stated in the introduction, not only Project Managers have to make decisions all the time but they also supply the necessary information for others (sponsors, steering committees - and don't forget the project team) to make decisions.
The layout of the information itself can be crucial (but I'll be back on that on a near future) but whoever worked in Business Intelligence projects already knows that: you should never, never, never provide a dashboard with traffic lights all with the same shape as some men are colorblind - and most are colorblind to some extent. But regarding illusions alone you can be alert prior to making a decision to have the necessary information, how you'll make the decision, the process itself, the impact of each potential decision and so on. These won't prevent your biased decision but it will make it more difficult to creep in. The same goes for when you provide information that serve as the basis for other people's decision.

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