Published here September 2010

Introduction | Book Structure 
What We Liked | Downside | Summary


The authors observe that the driving forces behind Project Decision Analysis is that:

"Investors need to see assurances that money was spent wisely. Therefore, many companies have started to establish structured decision analysis processes. Many organizations use decision support tools such as Enterprise Resource Management or Project Portfolio Management systems to improve their efficiencies. Six Sigma is a proven methodology to improve decision-making related to quality. One of the main areas of improvement, especially in the area of new product development, is the ability to successfully select which projects should go forward."

However, none of these decision support tools currently address the issue of checking to see whether the products were used and performed up to expectations and that, therefore, the money was well spent.

One of the authors' recommendations to organizations in their decision-making is to establish consistency. That is:

"The decision analysis process should be standardized for similar kinds of problems and opportunities [because] inconsistency in decision-making can cause projects to change directions unnecessarily, which can lead to failure. This necessitates that organizations must have the same set of rules and preferences for making decisions in all similar types of projects."

Unfortunately, we have worked for such organizations where those "rules and preferences" were patently wrong. But at least all of the resulting projects were consistent failures. Our point is that the '"consistency" established must also be the right sort of consistency.

This book is as much about the psychology of project decision-making as it is about making rational choices based on analysis and logic. In fact, in their introduction to the psychology of project decision-making, the authors assert that the root cause of almost all project failures is human error or misjudgment and quote Hall's[9] list of reasons why projects are not successful:

  • Sloppy requirements and scope creep
  • Poor planning and estimation
  • Poor documentation
  • Issues with implementation of new technology
  • Lack of a disciplined project execution
  • Poor communication
  • Poor or inexperienced project management
  • Poor quality control

This list is the result of a survey of hi-tech managers so is not necessarily representative of all types of projects. But in any case, we are not told what constitutes "success" and whether we are talking of the success of the project (management) or the success of the project's product. In fact, in this list the two types of shortcomings are intertwined yet the two are not the same. You can have a "successful project" but the product is not successful, not because of any failure by the project manager, but as a result of management failure in the deployment of this product.

The authors point to Malcolm Gladwell who, in 2005, wrote a best-seller book called Blink: The Power of Thinking without Thinking.[10] This book focuses on the idea that most successful decisions are made intuitively, or in the "blink of an eye". However, in 2006 Michael LeGault responded with a book called Think! Why Critical Decisions Can't Be Made in the Blink of an Eye.[11] This book argues that in our increasingly complex world people simply do not have the mental capabilities to make major decisions without a comprehensive analysis. Where projects are concerned, we subscribe to the latter position, because the more factors that are involved, the more difficult it is to make the best choice.[12]

As a bad choice, the authors cite the following example:[13]

"In 2004-2005, Governor Arnold Schwarzenegger of California involved himself in the design process for the $6.3 billion project to replace the existing Bay Bridge in San Francisco. Although the construction of the foundations for the suspension span had started a few years earlier, the governor's office insisted that a simple viaduct would be cheaper and faster to build. [Consequently], work on the foundation was halted and the contract terminated. Following a detailed analysis, both sides agreed to follow the original design. The fight over the bridge design cost $81 million [resulting in a burden on] State funds and [the need to] increase toll revenue."

With this example, the authors observe that: "If you don't live in Northern California, you may not be directly affected by the Bay Bridge cost overrun. But, directly or indirectly, at some time you will pay for somebody's wrong decision regardless of where you live or what you do."[14]

The authors do not explain why they think this was a wrong decision, i.e. to get involved. We suggest that it was not the purpose of getting involved, i.e. to find a cheaper solution and save money, but rather the timing of the decision. Interfering in a project in its execution phase caused massive uncertainty to the point of progress being aborted. Perhaps this is a point the authors overlooked, that iterative development in some types of project simply does not work!

The authors go on to describe Cognitive and Motivational Biases in our decision-making. Cognitive biases are those that are introduced by the way that people process information. It is a mental error or a distortion in the way humans perceive reality.[15] Motivational biases are caused by the personal interest of the person expressing the judgment.[16] We see what we want to see. Perhaps the governor or his office in the example above just saw an opportunity to win political points?

What We Liked  What We Liked

9. Ibid, pp15-16. This listing is quoted from a paper by David C. Hall Lessons Discovered but Seldom Learned or Why Am I Doing This If No One Listens, Proceedings of Space Systems Engineering, October 2005. The list includes only the results of human factors.
10. Gladwell, M., New York, Little, Brown & Co. 2005
11. LeGault, M., New York, Threshold Editions, 2006
12. The authors have responded to this paragraph with the following observation:
"It seems that in the above paragraph you are arguing that we are positioning ourselves in the Blink camp. Our position is much more nuanced, in that we believe for relatively simple, short-term issues, intuitive decisions can be quite useful, i.e. 'Intuition can work well for most short-term decisions of limited scope'. However, for most project decisions, we are very much in the 'Think' side of the argument, i.e. 'In complex situations, intuition may not be sufficient for the problems you face. This is especially true for strategic project decisions that can significantly affect the project and organization. In addition, intuitive decisions are difficult to evaluate: when you review a project, it is difficult to understand why a particular decision was made'."
13. Project Decisions - The Art and Science, Management Concepts, abstracted from pp3-4
14. Ibid
15. Ibid, p302
16. Ibid, p308
Home | Issacons | PM Glossary | Papers & Books | Max's Musings
Guest Articles | Contact Info | Search My Site | Site Map | Top of Page