Are You a Good Witch or a Bad Witch? (Part 15 of Cognitive Biases)

After a long hiatus while we renovated our house, our survey of cognitive biases continues with Pr-Pu. In this installment, we'll learn about projection bias, the pseudocertainty effect, and publication bias. Next week will be brought to you by the lettter "R."


Projection Bias

Sigmund Freud named this bias, a psychological defense mechanism in which we unconsciously deny our own attributes, thoughts, or emotions and ascribe them to the outside world, whether to other people or to phenomena like the weather…or in one famous case, witches.

Projection bias is one of the medical explanations of bewitchment that attempts to diagnose the behavior of the afflicted children at Salem in 1692. The historian John Demos asserts that the symptoms of bewitchment experienced by the afflicted girls in Salem during the witchcraft crisis were because the girls were undergoing psychological projection. Demos argues the girls had convulsive fits caused by repressed aggression and were able to project this aggression without blame because of the speculation of witchcraft and bewitchment.

The Salem Witch Trials affected a community under considerable strife: property lines, grazing rights, and upheavals in the church had all given Salem Village a reputation as quarrelsome. Population pressures from increasing family size built demand for farmland. And in the Puritan culture, anything from loss of crops or livestock, illness or death of children, and even bad weather were generally seen as the wrath of God in action.

The Salem witches were hardly the first accused witches in the area. Making ccusations of witchcraft against widowed or orphaned land-owning women was a good way to take their land. And, of course, witches served as a good target for the projection bias: all the ill feelings and bad conduct of the community were projected onto a group that couldn’t fight back.

The Salem Witch Trials claimed twenty victims.

Pseudocertainty Effect

Which of the following options do you prefer?

C. 25% chance to win $30 and 75% chance to win nothing
D. 20% chance to win $45 and 80% chance to win nothing

Now consider the following two stage game. In the first stage, there is a 75% chance to end the game without winning anything, and a 25% chance to move into the second stage. If you reach the second stage you have a choice between:

E. a sure win of $30
F. 80% chance to win $45 and 20% chance to win nothing

You have to make your choice before the first stage.

Here's how most people choose:

In the first problem, 42% of participants chose option C while 58% chose option D. In the second, 74% of participants chose option E while only 26% chose option F.

The actual probability of winning money in option E (25% x 100% = 25%) and option F (25% x 80% = 20%) is the same as the probability of winning money in option C (25%) and option D (20%) respectively.

If the probability of winning money is the same, why do people choose differently? The answer is the pseudocertainty effect: the tendency to perceive an outcome as if it is certain when it’s actually uncertain. It’s most easily observed in multi-stage decisions like the second problem.
In the second problem, since individuals have no choice on options in the first stage, individuals tend to discard the first stage (75% chance of winning nothing), and only consider the second, where there’s a choice.

Publication Bias

Out of a hundred scientific studies where 95% of them had a negative outcome (no correlation found) and 5% had a positive outcome (correlation found), which do you think is more likely to get into print?

The publication bias is, simply, that positive results are more likely to get published than negative ones. This is also known as the file drawer problem: many studies in a given area of research are conducted but never reported, and those that are not reported may on average report different results from those that are reported. Even a small number of studies lost "in the file drawer" can result in a significant bias.

The effect is compounded with meta-analyses and systematic reviews, which often form the basis for evidence-based medicine, and is further complicated when some of the research is sponsored by people and companies with a financial interest in positive results.

According to researcher John Ioannidis, negative papers are most likely to be suppressed:

• when the studies conducted in a field are smaller
• when effect sizes are smaller
• when there is a greater number and lesser preselection of tested relationships
• where there is greater flexibility in designs, definitions, outcomes, and analytical modes
• when there is greater financial and other interest and prejudice
• when more teams are involved in a scientific field in chase of statistical significance.

Ioannidis observes that "claimed research findings may often be simply accurate measures of the prevailing bias.” In an effort to decrease this problem some prominent medical journals, starting in 2004, began requiring registration of a trial before it commences so that unfavorable results are not withheld from publication.

More next week.

Previous Installments

You can find the bias you’re interested in by clicking in the tag cloud on the right. To find all posts concerning cognitive biases, click the very big phrase.

Part 1 — Bias blind spot, confirmation bias, déformation professionnelle, denomination effect, moral credential effect.

Part 2 — Base rate fallacy, congruence bias, experimenter’s bias

Part 3 — Ambiguity aversion effect (Ellsberg paradox), choice-supportive bias, distinction bias, contrast effect

Part 4 — Actor-observer bias, anchoring effect, attentional bias, availability cascade, belief bias

Part 5 — Clustering illusion, conjunction fallacy, cryptomnesia

Part 6 — Disposition effect, egocentric bias, endowment effect, extraordinarity bias

Part 7 — False consensus effect, false memory, Forer effect, framing, fundamental attribution error

Part 8 — Gambler’s fallacy, halo effect

Part 9 — Hawthorne effect, herd instinct, hindsight bias, hyperbolic discounting

Part 10 — Illusion of asymmetric insight, illusion of control, illusory superiority, impact bias, information bias, ingroup bias, irrational escalation

Part 11 — Just-world phenomenon, loss aversion, ludic fallacy, mere exposure effect, money illusion

Part 12 — Need for closure, neglect of probability, “not-invented-here” (NIH) syndrome, notational bias

Part 13 — Observer-expectancy effect, omission bias, optimism bias, ostrich effect, outgroup homogeneity bias, overconfidence effect

Part 14 — Pareidolia, planning fallacy, post-purchase rationalization

Martian, Martian, Martian! (Part 14 of Cognitive Biases)

A cognitive bias is a pattern of deviation in judgment that occurs in particular situations, and boy howdy, are there a lot of them!

Here’s another installment of Cognitive Biases, this one brought to you by the range of Pa-Po. Pr-Pu will follow shortly.

(Marcia and Jan have only an indirect connection to what follows.)

Pareidolia

On July 25, 1976, a camera aboard Viking 1 took a series of pictures of the Cydonia region of the planet Mars. Above, you see a photograph of a 1.2 mile long Cydonian mesa at 40.75° north latitude and 9.46° west latitude. Nothing special, right?

How about the picture below?

This is the famous “Face on Mars,” an example of the cognitive bias known as pareidolia, the tendency of the human brain to turn vague or random stimuli into objects of significance. Watching for patterns in clouds is an exercise in voluntary pareidolia. Some people overrate the significance of these patterns, especially when they see apparent religious imagery, like the infamous Virgin Mary grilled cheese sandwich or the Jesus tortilla.

When you look at a Rorschach inkblot, the images you see are the result of “directed pareidolia.” The blots are carefully designed not to resemble any object in particular, so that what you see is what you project. Pareidolia appears in sound as well. There’s a tendency to hear apparently meaningful words and phrases in a recording played backward. To me, the resemblance between the sound “Martian” and “Marcia” led to the Brady Bunch influenced title of this installment.


Planning Fallacy

In a 1994 study, 37 psychology students were asked to estimate how long it would take to finish their senior theses. The average estimate was 33.9 days. They also estimated how long it would take "if everything went as well as it possibly could" (averaging 27.4 days) and "if everything went as poorly as it possibly could" (averaging 48.6 days). The average actual completion time was 55.5 days, with only about 30% of the students completing their thesis in the amount of time they predicted.

The researchers asked their students for estimates of when they (the students) thought they would complete their personal academic projects, with 50%, 75%, and 99% confidence.

• 13% of subjects finished their project by the time they had assigned a 50% probability level;
• 19% finished by the time assigned a 75% probability level;
• 45% (less than half) finished by the time of their 99% probability level.

In project management, this is sometimes referred to as Hofstadter’s Law: It always takes longer than you expect, even when you take into account Hofstadter’s Law. (Douglas Hofstadter was the author of the 1979 work Gödel, Escher, Bach.) There are a number of theories as to why this is so often true. To my mind, the best explanation comes from Elihu Goldratt in his 1997 Critical Chain, which analyzed project management issues from a different perspective.

Goldratt argued that when asked to estimate task duration, people tended to give a safe estimate whenever possible. Knowing the estimate had safety built in, people then tended to procrastinate or attack other problems until the actual time available was insufficient to get the job done. This is also known as Parkinson’s Law, the tendency of work to expand to fill the time available for its completion.

Numerous books (including some of mine) try to point out solutions, but the problem persists.


Post-Purchase Rationalization

There’s the infamous story about the guy who accidentally dropped a quarter in an outhouse, so he pulled out a $20 bill and threw it in afterward. When asked why, he said, “If I’ve got to go down there, it had better be worth my while.”

Post-purchase rationalization is the bias that once you’ve invested significant time, money, or energy in something, you tend to think it was all worthwhile. In his brilliant 1984 book, The Psychology of Influence, Dr. Robert Cialdini cites several examples. Just after placing a bet at the racetrack, people are much more confident about their horse winning than they were before they placed the bet. Researchers staged thefts on a New York City beach to see if onlookers would risk themselves to stop the thefts. Four in twenty observers gave chase. Then they did it again, but now the supposed victim first asked the onlooker, “Would you watch my things?” Nineteen out of twenty people tried to stop the theft or catch the thief.

Most interestingly, when an attendee at a sales meeting for Transcendental Meditation raised a series of embarrassing questions that undermined the claims made by the presenter, enrollments went up, not down! One person who signed up told the observer that he agreed with the points, but needed help so much that the criticisms made him sign up now, before he had time to think about them and fail to join up.

There’s a value in consistency. Foolish consistency, as we recall, is the hobgoblin of little minds.


More to come…


Previous Installments

You can find the bias you’re interested in by clicking in the tag cloud on the right. To find all posts concerning cognitive biases, click the very big phrase.

Part 1 — Bias blind spot, confirmation bias, déformation professionnelle, denomination effect, moral credential effect.

Part 2 — Base rate fallacy, congruence bias, experimenter’s bias

Part 3 — Ambiguity aversion effect (Ellsberg paradox), choice-supportive bias, distinction bias, contrast effect

Part 4 — Actor-observer bias, anchoring effect, attentional bias, availability cascade, belief bias

Part 5 — Clustering illusion, conjunction fallacy, cryptomnesia

Part 6 — Disposition effect, egocentric bias, endowment effect, extraordinarity bias

Part 7 — False consensus effect, false memory, Forer effect, framing, fundamental attribution error

Part 8 — Gambler’s fallacy, halo effect

Part 9 — Hawthorne effect, herd instinct, hindsight bias, hyperbolic discounting

Part 10 — Illusion of asymmetric insight, illusion of control, illusory superiority, impact bias, information bias, ingroup bias, irrational escalation

Part 11 — Just-world phenomenon, loss aversion, ludic fallacy, mere exposure effect, money illusion

Part 12 — Need for closure, neglect of probability, “not-invented-here” (NIH) syndrome, notational bias

Part 13 — Observer-expectancy effect, omission bias, optimism bias, ostrich effect, outgroup homogeneity bias, overconfidence effect

Decisions, Decisions

“A decision,” wrote author Fletcher Knebel, “is what a man makes when he can’t find anybody to serve on a committee.”

Committees and teamwork are often an essential part of decision-making, but even in that framework, each of us must sooner or later take our stand, knowing full well the range of potential consequences. In an organization, a decision-making process must often be open and auditable. We must know not only the decision we make, but also the process that led us to that decision.

Decisions often require tradeoffs. A perfect solution may not exist. Each potential choice may have a downside, or may be fraught with risk. In some ways, making the least bad choice out of a set of poor alternatives takes greater skill and courage than making a conventionally “good” decision. Napoleon Bonaparte observed, “Nothing is more difficult, and therefore more precious, than being able to decide.”

The outcome of a decision, whether positive or negative, is not in itself proof of the decision’s quality, especially where probability is concerned. The odds may be dramatically in favor of a positive outcome, yet the dice may come up boxcars. Equally, if someone makes a stupid decision but gets lucky, the decision is no less stupid in spite of a good outcome. A good decision process improves our odds and results in the desired outcome the majority of the time.

There are two types of complexity in decision-making. The first, and most obvious, is the technical complexity of the issue and the tradeoffs that may be required. The second, though not always openly addressed, is the organizational complexity: the number of people involved, the number of departments or workgroups that must be consulted, the existing relationships that shape communication among people and groups, the organizational culture, and the pressure of the political process.

Decisions also vary in their importance. Importance can be measured in terms of the consequences of the decision and the constraints imposed on the decision process. Critical decisions fall into three categories:

• Time critical decisions must be made within a narrow window of time
• Safety critical decisions have the potential for injury or death
• Business/Financial critical decisions can affect the future or funding of the organization

At different times in the decision-making process, consider the opportunities as well as the negative consequences that can result both from the decision to act and from the decision to wait. If the consequences of a missed opportunity are greater, then the appropriate bias is in the direction of action. If an inappropriate decision could cause greater harm, the bias should fall in the direction of delay: gather more information and reassess.

Threats and opportunities both require proactive management, but opportunities even more so. Good luck and bad luck operate differently. If a person, say, loses $100, it’s gone, and all the consequences of that loss flow automatically. If, on the other hand, there’s a $100 bill somewhere in the area, it’s possible to miss it, there is no requirement to pick it up, and no obligation to spend it wisely. Exploiting opportunity requires observation, initiative, and wisdom.

Decisions must reflect goals. A successful project outcome is not necessarily an organizationally desirable outcome. Project managers and technical professionals must consider wider factors. Sometimes the right organizational decision involves hampering or even destroying the project.

Less than ideal circumstances are typically the reality. If there were more money, if the policies were different, if procedures didn’t require this item, the decision frame would be different—and so, likely, would be the decision itself. Generally, technical professionals prefer an emphasis on getting the job done correctly over meeting the schedule, but organizational circumstances may compel the latter.

When teams are involved in the decision, team decision-making considerations come into play. Conflict is not only inevitable, but if managed properly, desirable. The goal is to reach a consensus, which is not necessarily 100% agreement but rather a decision all team members can live with.

Compare the actual to the intended. If there is a discrepancy, the crucial question is “Why?” Knowing the actual results, would the team have done better with a different process? Should the process for future decisions be modified? Is there a trend in outcomes, especially in bad outcomes? If so, there may be process issues.


Thoughts adapted from “Decision Making,” by Michael Dobson et al., in Applied Project Management for Space Systems (Space Technology Series), McGraw-Hill, 2008.

Heads I Win, Tails I Win (and the Same to You)

Negotiation is such a fundamental “threshold” skill that it’s nearly impossible for you to succeed long-term without developing skills in this area.  Unfortunately, many people get the wrong idea about what negotiation is and how works.

The distaste that some people feel for the concept of negotiation results from seeing negotiation as “win/lose” (I win, you lose) or “lose/win” (I give up rather than make an enemy out of you) rather than “win/win” (we both come out of the negotiation with our needs met).  In addition to moral or ethical qualms, the reality is that we leave someone unhappy, and that person is unlikely to forget.  We will have to deal with the leftover negativity at some future time.  “Win/win” approaches aren’t just nice, they’re necessary for our long-term relationships and performance.

But how is it possible to negotiate and have both parties win?

Understanding “win/win”

Negotiation isn’t simply about compromise (let’s just split it 50-50).  While sometimes a compromise solution in which each party gives a little bit is acceptable, often a compromise turns into “lose/lose.”

Roger Fisher and William Ury of the Harvard Negotiation Project point out that in many negotiations the participants see a “fixed pie,” but that it’s often possible to “expand the pie.”

They tell the story of “the proverbial sisters who quarreled over an orange.  After they finally agreed to divide the orange in half, the first sister took her half, ate the fruit, and threw away the peel, while the other threw away the fruit and used the peel from her half in baking a cake.”

In other words, “common sense” would suggest the orange could only be split in such a way that the parts added up to 100%, but this particular orange could have been split 100-100, not 50-50...because the two sisters had different yet complementary interests!

The “win/win” concept of negotiation emphasizes that preserving the relationship is an important goal in most negotiations, and that’s particularly crucial when the other participant in negotiation happens to be your boss.  You might be able to force your desires through his or her resistance, but you have to expect him or her to remember that in the future.  “If you wrong us,” Shylock says, “shall we not revenge?”

Win/win isn’t only ethically superior, it’s more practical as well.

“Hard” vs. “soft” styles

You can make a lifetime study of negotiation, and it will benefit you in every area of your life.  It’s worth adding to your list of areas for personal and professional development, because you will ultimately find yourself in continual negotiation situations.  Negotiation styles are sometimes divided into “soft” and “hard,” but that’s not a very meaningful distinction.

The Fisher/Ury Getting to Yes techniques are sometimes referred to as “soft” because they involve collegiality and teamwork.  But even in a “hard” negotiation program such as Roger Dawson’s excellent The Secrets of Power Negotiating, you’ll find his commitment to “win/win” negotiation, “a) Never narrow negotiations down to just one issue.  b) Different people want different things.”




Some key principles of win/win negotiation


As you study negotiation skills, you’ll find that different authorities have certain specific detailed and tactical suggestions.  However, some general principles of effective negotiation are common to the various styles and strategies.

1. Do your homework.

Before negotiating anything with anybody, there are a couple of things you should do.
First, analyze your own goal, making sure that you focus on your interests (the reasons you want what you want) instead of only your positions (the specifics for which you’re asking.  The position of the sisters was that each wanted the orange.  To find the underlying interests, you focus on why.  Why do you want the orange?  What exactly would you do with it if you had it all?  What would not be useful or necessary for you?

Second, determine your bottom line.  What do you need--and what is the best you can do assuming that the negotiation goes nowhere?  You need to know this so you’ll know when you’re getting results...and so you won’t take an offer that’s less than what you’d get if there is no deal.  Fisher and Ury call this your “BATNA”:  your “best alternative to a negotiated agreement.”   Roger Dawson calls it “walk-away power.”

Third, put yourself in the shoes of the other person and do the same thing.  The more you understand the interests and goals of the other participant--and their own BATNA or walk-away options, the easier you’ll find it to locate win/win options.

2. Listen—for the real issues.

Being a good listener is a valuable negotiation technique for several reasons.  First, your understanding of the other person grows, which helps you in working toward the best outcome.  Second, when you listen, you automatically validate the other person, lowering their stress and emotions, and create a climate in which better results can occur.  Paraphrase what you’re being told to make sure you understand it fully.

3. Be persistent and patient.

You want to negotiate in order to achieve results for both parties.  Surrendering and giving in are examples of lose/win, not win/win strategies.  Keep your dignity and your personal strength intact by refusing to yield to hardball tactics and pressure.  One reason to study such tactics yourself is that it becomes easier to counter them in practice.

Being in a hurry to reach a deal often gives you a worse deal than you’d get with patience.  If a particular round of negotiation isn’t panning out successfully, maybe it’s time to walk away for now, think about what you’ve learned, and try again later.

4. Be clear and assertive.

You’ve heard it said, “If you don’t ask, you don’t get.”  That’s true even in cases where the other person isn’t necessarily hostile or negative to your interests.  If you don’t ask, there is a good chance the other person doesn’t even know what it is you want--and if he or she doesn’t know, how can you expect him or her to read your mind?  One of the most interesting elements of preparing well for a negotiation is how often you get your needs met without actually encountering the resistance you expected!


5. Allow face-saving.

When a negotiation or conflict situation ends up making one person be “in the wrong,” don’t be surprised if that person feels negative about it.  Being embarrassed or humiliated is not a positive emotion.  When you must show your boss that he or she is incorrect, or has made a mistake, or has make a bad decision, you not only have to get the situation corrected, you have to resolve the emotional issues in a way to allow your boss to “save face.”

Some techniques for face-saving include the “third party appeal,” in which you don’t say, “I’m right, you’re wrong,” but instead find a neutral third party (such as a reference book) that you’ll use to resolve the issue.  Another valuable technique is privacy.  It’s easier to admit to one person that one is wrong than admit it publicly to everyone.  (And never gloat afterward!)  A third is to find a way to allow the person to be partially right, or to allow yourself to be partially wrong.  (At least you can always allow for the possibility of improvement.)

You negotiate every day of your life and with all the people in your life.  Don’t wait until you are in a major conflict situation with the power dynamic stacked against you to develop this skill.



From Managing UP: 59 Ways to Build a Career-Advancing Relationship With Your Boss, by Michael and Deborah Singer Dobson (AMACOM, 2000). Copyright © 2000 Michael and Deborah Dobson. All Rights Reserved.

Paul is Dead and Sewell Avery is Stupid (Part 13 of Cognitive Biases)

It’s been a few weeks since the last installment of our survey of popular distortions in thought, perception, and decision-making. This installment is brought to you by The Story of O.

Observer-expectancy effect

In September 1969, Tim Harper, a student at Drake University in Des Moines, Iowa, published a humorously intended article in the campus newspaper, titled “Is Paul McCartney Dead?” The article listed a number of supposed reasons, including the claim that the surviving Beatles had planted backward messages in various songs.

About a month later, a caller to WKNR-FM in Detroit asked radio dj Russ Gibb about the rumor, asking him to play “Revolution 9” backwards. Gibb did, and heard the phrase “Turn me on, dead man.”

Or so he thought.

The “Paul is dead” story quickly got out of control, and any number of people (some not even stoned) started to pick up clues. Even statements from Paul himself were not enough to stop the story. There are still claims today that photographs of Paul pre-1966 and post-1966 show significant differences in facial structure.

We see what we expect to see. If we’re looking for a particular answer, the cognitive bias known as the observer-expectancy effect results in unconscious manipulation of experiments and data so that yes, indeed, we find what we were looking for.

The use of double-blind methodology in performing experiments is one way to control for the observer-expectancy effect. Try this thought experiment: if you are wrong, what would you expect to see differently?

Omission bias

You know an opponent of yours is allergic to a certain food. Before a big competition, you have an opportunity to do one of two things. Which, in your judgment, is less immoral?

1. Slip some of the allergen in his or her food.
2. Notice that the opponent has accidentally ordered food containing the allergen, and choose to say nothing.

A clear majority say the harmful action (1) is worse than the harmful inaction (2). The net result for the opponent is the same, of course. The reason is omission bias, the belief that harmful inaction is ethically superior to harmful action.

Part of the reinforcement of the bias is that it’s harder to judge motive in cases of omission. “I didn’t know he was allergic!” you might argue, and there’s a good chance you’ll get away with it. Every employee knows the technique of “malicious compliance,” whether or not we personally use it — that’s the tactic of applying an order or directive with such appalling literal-mindedness that you guarantee a disastrous result.

Even if no one else can judge your intent, you can. Don’t let the omission bias lead you into ethical choices you’ll later regret.

Optimism bias

Optimism bias is the tendency for people to be over-optimistic about the outcome of planned actions. Excessive optimism can result in cost overruns, benefit shortfalls, and delays when plans are implemented or expensive projects are built. In extreme cases these can result in defeats in military conflicts, ultimate failure of a project or economic bubbles such as market crashes.

A number of studies have found optimism bias in different kinds of judgment. These include:

• Second-year MBA students overestimated the number of job offers they would receive and their starting salary.
• Students overestimated the scores they would achieve on exams.
• Almost all newlyweds in a US study expected their marriage to last a lifetime, even while aware of the divorce statistics.
• Most smokers believe they are less at risk of developing smoking-related diseases than others who smoke.

Optimism bias can induce people to underinvest in primary and preventive care and other risk-reducing behaviors. Optimism bias affects criminals, who tend to misjudge the likelihood of experiencing legal consequences.

Optimism bias causes many people to grossly underestimate their odds of making a payment late. Companies have exploited this bias by increasing interest rates to punitive rates for any late payment, even if it is to another creditor. People subject to optimism bias think this won’t happen to them — but eventually it happens to almost everbody.

Optimism bias also causes many people to substantially underestimate the probability of having serious financial or liquidity problems, such as from a sudden job loss or severe illness. This can cause them to take on excessive debt under the expectation that they will do better than average in the future and be readily able to pay it off.

There’s a good side to optimism bias as well. Depressives tend to be more accurate and less overconfident in their assessments of the probabilities of good and bad events occurring to others, but they tend to overestimate the probability of bad events happening to them, making them risk-averse in self-destructive ways.

Ostrich effect

The optimism bias is linked to the ostrich effect, a common strategy of dealing with (especially financial) risk by pretending it doesn’t exist. Research has demonstrated that people look up the value of their investments 50-80% less often during bad markets.

Outcome bias

At the end of World War II, Montgomery Ward chairman Sewell Avery made a fateful decision. The United States, he was sure, would experience major difficulties moving from a wartime to a peacetime economy. Millions of troops would return, all seeking jobs. At the same time, factories geared for the production of tanks, bombers, and fighting ships would grind to a halt with no further need for their production.

Let Sears and JCPenney expand; Montgomery Ward would stand pat on its massive cash reserves (one Ward vice president famously said, “Wards is one of the finest banks with a storefront in the US today.”) and when the inevitable collapse came, Montgomery Ward would swallow its rivals at pennies on the dollar.

As we know, it didn’t turn out that way. Instead of falling back into depression, the United States in the postwar years saw unprecedented economic growth.

Sewell Avery was wrong. But was he stupid?

Outcome bias describes our tendency to judge the quality of the decision by the outcome: Sewell Avery was stupid. But that’s not fair. The outcome of the decision doesn’t by itself prove whether the decision was good or bad. Lottery tickets aren’t a good investment strategy. The net return is expected to be negative. On the other hand, occasionally someone wins. That doesn’t make them a genius. Wearing your seatbelt is a good idea. There are, alas, certain rare accidents in which a seatbelt could hamper your escape.

As it happens, Avery was stupid — not because he made a decision that turned out to be wrong, but because he stuck to it in the face of increasing evidence to the contrary, even firing people who brought him bad news. But that’s a different bias.

Outgroup homogeneity bias

In response to the claim that all black people look alike, comedian Redd Foxx performed a monologue that listed some thirty or forty different shades of black, set against the single color of white. “No, dear white friends,” Foxx said, “it is you who all look alike.”

The proper name for this perception (in all directions) is “outgroup homogeneity bias,” the tendency to see members of our own group as more varied than members of other groups. Interestingly, this turns out to be unrelated to the number of members of the other group we happen to know. The bias has been found even when groups interact frequently.

Overconfidence effect

One of the most solidly demonstrated cognitive biases is the “overconfidence effect,” the degree to which your personal confidence in the quality and accuracy of your own judgment is greater than the actual quality and accuracy. In one experiment, people were asked to rate their answers. People who rated their answers as 99% certain turned out to be wrong about 40% of the time.

The overconfidence gap is greatest when people are answering hard questions about unfamiliar topics. What’s your guess as to the total egg production of the United States? How confident are you in the guess you just made? (The average person expects an error rate of 2%, but the real error rate averages about 46%.)

Clinical psychologists turn out to have a high margin of overconfidence.

Weather forecasters, on the contrary, have none.

Previous Installments

Part 1 — Bias blind spot, confirmation bias, déformation professionnelle, denomination effect, moral credential effect.

Part 2 — Base rate fallacy, congruence bias, experimenter’s bias

Part 3 — Ambiguity aversion effect (Ellsberg paradox), choice-supportive bias, distinction bias, contrast effect

Part 4 — Actor-observer bias, anchoring effect, attentional bias, availability cascade, belief bias

Part 5 — Clustering illusion, conjunction fallacy, cryptomnesia

Part 6 — Disposition effect, egocentric bias, endowment effect, extraordinarity bias

Part 7 — False consensus effect, false memory, Forer effect, framing, fundamental attribution error

Part 8 — Gambler’s fallacy, halo effect

Part 9 — Hawthorne effect, herd instinct, hindsight bias, hyperbolic discounting

Part 10 — Illusion of asymmetric insight, illusion of control, illusory superiority, impact bias, information bias, ingroup bias, irrational escalation

Part 11 — Just-world phenomenon, loss aversion, ludic fallacy, mere exposure effect, money illusion

Part 12 — Need for closure, neglect of probability, “not-invented-here” (NIH) syndrome, notational bias

Failure *Is* An Option!

You probably won’t see the American Movie Classics channel run a festival of ‘‘Great Project Management Movies’’ any time soon, but if they did, Ron Howard’s motion picture Apollo 13, based on the real-life story, would be a natural candidate. Faced with a potentially disastrous accident, project teams overcome one potentially fatal barrier after another to bring the crew safely back to Earth, guided by mission director Gene Krantz’s mantra: ‘‘Failure is not an option.’’

But of course, failure is an option. Sometimes, it looks like the most likely option of all.

The odds in the actual Apollo 13 disaster were stacked against a happy outcome, and everyone—including Gene Krantz—had to be well aware of that fact. One of the key scenes in the movie involves a team of engineers trying to figure out how to rig a CO2 filter out of miscellaneous junk.

• The time constraint: before the CO2 levels overwhelm the astronauts. 
• The performance goal: to work well enough to let the astronauts breathe during the long trip home. 
• The budget: the junk on the table. 

And no one knows whether it’s even possible.

How do you balance the value of realism against the value of optimism in solving problems?

One way is to reject the false dilemma the question poses. Failure is not only an option, it’s a gateway to success ... if you fail in the right dimension.

If there is a trade-off to be made between the time constraint and the performance criteria, we know that ultimate failure—the death of the Apollo 13 astronauts—comes most rapidly from failure to meet the time constraint. That is, if we build a perfect CO2 filter, but we finish it too late, we’ve still failed. Perfect performance does not compensate for a failed deadline.

But wait! Why isn’t the reverse equally true? If you fail to meet the performance criteria, isn’t it irrelevant how quickly you fail to do so? Actually, it depends on the extent of the failure.

To illustrate, let’s look at this scenario: You’ve managed to come up with an inefficient partial solution that will last only half as long as it’s going to take to get the astronauts back home, but you’ve done so within the original time constraint. Do you take this solution? Absolutely!

Although you have failed to make the performance goal for the project within the original time constraint, you’ve reset the game clock. With a day or more to work instead of mere hours, your chance of finding a solution that solves the remainder of the problem has become that much more possible.

The right kind of failure is not only an option, but sometimes a desirable one. In this project, we can’t accept a failure to meet the time constraint, but we can live with a partial performance failure and stay in this game.

This piece was written for Federal PM Focus, a newsletter published by Management Concepts. Click the title above to register for a free 30-day trial.

Adapted with permission from The Six Dimensions of Project Management: Turning Constraints into Resources, by Michael Dobson and Heidi Feickert, © 2007 by Management Concepts, Inc.  All rights reserved. www.managementconcepts.com/pubs

Understanding Politics (Office and Otherwise)

“Politics, n.  A strife of interests masquerading as a contest of principles.”

-Ambrose Bierce, The Devil’s Dictionary, 1906 -

Take this test to see if you have office politics in your organization.

        1) Count the employees.

        2)  Does the number exceed 3?

        3)  If the answer to #2 is “Yes,” you definitely have office politics.

Within this concept of politics you can play many different ways for many different goals.  Some tactics are unethical, others ethical.  Some goals are unethical, others ethical.  You must still use office politics as the vehicle to achieve your goals, because it’s the ultimate arena in which the necessary decisions and consensus will be made.


Most definitions of politics (or of any controversial topic, for that matter) reflect the moral outlook of the definer.  The American Heritage Dictionary, for example, describes a politician as “one who is interested in personal or partisan gain and other selfish interests” and politics as “partisan or factional intrigue within a given group.”  But the root word “politic, ” from Chambers Concise 20th Century Dictionary, means “in accordance with good policy:  acting or proceeding from motives of policy:  prudent: discreet.”

Motives


Consider these truisms about people and organizations:

• People have principled disagreements about policy and direction of the organization.

• People have different visions and goals.

• People have different personal and selfish interests.

• People have egos and like them recognized and stroked.

• People have different personalities that others react to in different ways.

• People remember past actions and behaviors.

There’s nothing very radical, nor inherently unprincipled or evil, in these statements; most people will easily acknowledge their truth:  that people don’t check their humanity at the door when they punch in on the time clock.

Scarcity

The second truism to consider is the concept of scarcity.  From the days of the pyramids to the present, every organization, company, or government has lived with the reality that there are far more desirable projects and activities than there are resources to manage them.  In other words, work is infinite but resources are finite.

Every time senior management gives you a dollar, or a person, or a week, it becomes a dollar, a person, or a week they can’t give to someone else for something that also has value.  (In financial terms, this is known as “opportunity cost.”)  That sets up an unavoidable competition, as we each strive to get the resources we need to accomplish our objectives, and the playing out of the informal competition is what we know as office politics.  And if our organization is under stress or financial challenge, the struggle gets that much worse.

It also gets worse when what’s at stake is competition for access to status, which is also a kind of limited resource.  For most people, when their personal status is at stake, the kid gloves come off.


Office Politics Defined  

This leads us to the following operational definition of politics:

Politics (\ˈpä-lə-ˌtiks\):  The informal and sometimes emotion-driven process of allocating limited resources and working out goals, decisions, and actions in an environment of people with different and competing interests and personalities.

This definition is intentionally neutral, as simply descriptive as we can make it.  It helps us understand what we’re about.  Here are the key points of this definition amplified:

• informal and sometimes emotion-driven.  Office politics is separate from the formal organizational structure and involves human dynamics and emotions in addition to facts and reason.

• allocating limited resources.  The ultimate outcome of office politics—and how success and failure are measured—is how the organization’s resources—time, money, people—are allocated.

• working out goals, decisions, and actions.  The purpose of office politics is to work out goals, decisions, and actions that can turn into reality.  This often involves negotiation, compromise, and application of power.

• different and competing interests and personalities.  People have different ideas and desires about what should be done, some based on reason and analysis, some based on emotion or personal agenda.  Personal likes and dislikes inevitably affect decisions.

There's no point in getting too wrapped up about the negative side of politics; it's inevitable wherever human beings gather together. Instead, it's better to learn how to play in a principled, positive, and above all effective manner.

Adapted from Enlightened Office Politics by Michael and Deborah Singer Dobson (AMACOM, 2001).