Let’s examine different biases and ways to reduce risk evaluation bias. These steps will help ensure that the right decisions are made for the right reasons.
We all have biases, and many are helpful. In projects, we have biases toward successful projects and motivated teams. If a project sponsor says that schedule is the top priority, the project team will be biased toward meeting the schedule.
However, some biases are harmful. Stakeholders may attempt to sway decisions unfairly, undermining the project's health and breeding distrust.
Motivational and Cognitive Biases
Stakeholders may exhibit different types of bias. Motivational bias occurs when someone tries to bias the result in another direction. Cognitive biases occur when people make inferences in an illogical fashion. Cognitive biases are based on people’s perceptions.
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How to Manage Bias
- Uncloak the bias. Project managers should watch and listen for bias. Expose the bias in one-on-one or team meetings, whichever is most appropriate. Be careful – do not judge or challenge too quickly. Be slow to speak. Listen. Seek to understand.
- Have open conversations. When a bias is not understood, the project manager should dig deeper. If the bias is based on the wrong perceptions, provide the facts. If the bias is ill-intended, ask non-threatening questions that allow the individual to understand how the bias may negatively affect the project.
- Reduce subjectivity. Project managers use qualitative methods to evaluate risks quickly. Some project managers fail to understand that they may create more significant bias. Quantitative methods provide more objectivity.
How to Reduce Bias When Evaluating Risks
For small projects, I use a KISS (Keep It Super Simple) Method for qualitative risk assessments. This one-dimensional technique involves rating risks as:
- Very Low
- Low
- Medium
- High
- Very High
While the KISS Method is a simple and quick way to prioritize risks, it is also subjective and open to greater bias. When I use this method, I focus on open and honest conversations about the ratings.
A more common qualitative method is the two-dimensional Probability/Impact Assessment. With this method, we rate probability and impact on a scale such as 1 to 10, with 10 being the highest. This method provides a more in-depth analysis of risks than the KISS Method. However, a scale of 1-10 is still highly subjective.
How can we reduce the subjectivity?
The first step is to define qualitative terms (e.g., Low – Very High) for the ratings. Here is an example:
Another step is to define ranges for the scale (e.g., 0-5% for Low). Defining the scale reduces subjectivity and drives greater consistency in the ratings.
If the probability or likelihood of a risk is approximately 15%, we assign a probability rating of 5. If the potential impact on the budget or schedule is 55%, we assign an impact rating of 9. The resulting risk score would be 45 (i.e., 5 x 9 = 45).
If stakeholders need objectivity, perform a quantitative risk analysis. Although it takes more time than qualitative risk analysis, this method provides objective information and data for business decisions.
How About You?
Do you have a project where there may be some bias? If so, how can you reduce bias and ensure better decisions? As you develop your project management plan, could you consider how you will address these potential issues?