Sophie Wallis, Upthink, and member of the Perth City Chapter, believes that nudge theory (or behavioural insights) can help to address some of the natural cognitive biases (as introduced in the last two posts) and thus to improve infrastructure decision making. In this post she looks at a study of project delivery in the UK’s Department for Transport (DfT), carried out by the Behavioural Insights Team (which Nobel Prize winner, Richard Thaler and others helped to set up).
Cognitive biases are hard for us to notice, even if we’re aware of them. It’s taken painstaking research to uncover the ones we have, and we’ve only just started to realise some of their implications.
The BIT chose to focus on 3 key cognitive biases that could impact DfT’s major projects. Interviews with key personnel indicated where these biases were impacting decisions, whether biases were built into their systems and processes – and what could be done to correct them.
The three biases BIT studied were:
Planning Fallacy – We’re wired to assume things will turn out well, that we are more than capable of reaching our goals, and less likely to fail than others are. For major projects, BIT found this led to consistent overestimation of success and under-estimation of cost and time requirements, particularly during the project planning phase.
Groupthink. Strong group dynamics are great for project teams, but we must be wary of the tendency to be influenced by others in our group and the impact this can have on decisions. Have you every been in a group where an ‘outsider’s’ view was shut down and discounted? That might be groupthink at play, and it can tend towards non-contentious ‘middle ground’ decisions rather than the ‘best’ decision. Have you been in a team where it felt safe to raise alternative ideas, and leaders encouraged this? What was different?
Sunk cost fallacy. Stopping a project mid-delivery is a fairly unpalatable option – a ‘courageous decision, Minister’. But when we make decisions based on the money and time already spent, rather than on the suite of potential outcomes, we fall into the sunk cost fallacy trap. BIT suggests a simple tool like a decision-tree can help to break the ‘escalation of commitment’ in large projects.
Question: Are these cognitive biases affecting decisions in your organisation? One elegantly simply tool suggested by BIT is the ‘pre-mortum’. Imagine the project has been completed, but went really badly – what went wrong?
Have you tried this? Did it provide insight? What other solutions might also prove effective?