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The problem of biases is of critical importance, given that judgment pervades human experience. "Is the defendant guilty?" "Will the stock market go up?" "For whom should I vote?" Not surprisingly, there has been a fair amount of effort devoted to looking for ways to reduce bias. Unfortunately, there does not appear to be an easy fix. One line of research investigated whether biases could be reduced by encouraging subjects to put more effort into forming judgments. Asking students to "show their work," for example, has been shown to slightly increase the chances of obtaining a correct answer (it is more helpful for pinpointing where lack of understanding may occur). In general, the limited success of such techniques suggests that most biases are not sensitive to the amount of effort one applies. Establishing accountability for opinions helps in some circumstances. Thus, it has been suggested that, when obtaining critical information from someone, it may be useful to take notes (or to appear to take notes). If people believe you may quote them to others, they may be more careful in what they say. Similarly, to support project-selection decisions, it is useful to have project proponents document precisely why they believe their proposed projects should be conducted. Going on record encourages managers to be more careful in their logic, and the fear of being proved wrong helps counter over-optimism. |
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Training (in biases) has been shown to help people address some biases. However, the effect is generally short lived and does not produce an overwhelming improvement in performance. One problem is that it is often hard to get people to appreciate that bias is something that affects them personally, not just others. Thus, in situations where time permits, it useful to demonstrate biases. For example, if you are obtaining judgments from a group of individuals and are concerned about overconfidence bias, don't just tell them about the 2/50 rule (described above). Instead, run them through an exercise that demonstrates that the rule applies to them. An encouraging observation for project portfolio management is that experts appear to be less subject to biases when addressing issues that are within their areas of expertise. This provides an argument for using formal models for valuing and prioritizing projects. The models break the problem of evaluating project performance down into individual pieces such that different experts with specialized knowledge can be selected to focus on each piece. Also, there is some evidence that debiasing techniques can be made more effective when integrated with process knowledge relevant to the field in question. Figure 5 (derived from Wilson and Brekke [10]) shows a general strategy for reducing judgmental baises. As illustrated, most debiasing methods involve subjecting one's thinking to a series of tests and evaluations. Steps are taken to ensure awareness and understanding of the potential for bias, and, when necessary, to remove or counter the error that would otherwise result. The technique used to mitigate the bias of concern is often the application of a countering bias, for example, countering overconfidence bias by encouraging subjects to describe (and, therefore anchor on) extreme possibilities. Some of the recommendations provided in this paper as "Advise" are based on this logic.  Figure 5: General strategy for debiasing. Decision AidsHundreds of decision aids have been developed or recommended to reduce the distortions in decisions caused by biases. I developed the list of sample aids below in the context of a chapter I prepared for a book on aids for environmental decisions [11]. (Note that many entries in the table represent a category or type of aid rather than a specific aid.) As indicated, there are at least 5 categories of aids: (1) checklists for promoting a quality decision process, (2) thinking aids intended mainly to create insights, (3) models and optimization methods for recommending choices, (4) aids for promoting group consensus, and (5) voting methods. As an example of the first category, Figure 6 is a checklist aid for scoring the decision-making process relative to the components of a quality decision-making process.
 Figure 6: Checklist diagram for evaluating deficiencies in the decision-making process [12]. Approaches to making good decisions differ greatly in terms of the amount of time and effort required. Figure 7 illustrates that the best approach to decision making depends on the significance of the decision, the challenges involved, and the time available for analysis. It is useful to develop a quiver of decision making strategies, and to select the approach that makes most sense for the given circumstance.  Figure 7: The appropriate decision aid and decision-making approach depends on the nature of the decision. The best protection from bias comes from training, using formal techniques for obtaining important judgments, utilizing well-founded decision aids, and instituting rigorous decision processes that document the judgments and assumptions upon which choices are based. The subsequent parts of this paper describe such a process specific to decision making for project portfolio management. As stated by Ken Keyes, "To be successful in the business world we need to check our bright ideas against the territory. Our enthusiasm must be restrained long enough for us to analyze our ideas critically" [13]. References for Part 1
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Bounded Awareness & Decision-Making Heuristics