The Top 10 Behavioral Biases in Project Management
How to use behavioral science to become a better leader.
👋 Hey, Kyle here! Welcome to The Influential Project Manager, a weekly newsletter covering the essentials of successful project leadership.
Today’s Overview:
In any big projects - people think, make judgments, and make decisions. And where there are thinking, judgement, and decisions, psychology is at play…
The greatest threat we face as Project Managers isn’t out in the world, it is in our own head, in our behavioral biases.
This piece identifies the 10 most important behavioral biases for project management: (1) strategic misrepresentation, (2) optimism bias, (3) uniqueness bias, (4) the planning fallacy, (5) overconfidence bias, (6) hindsight bias, (7) availability bias, (8) the base rate fallacy, (9) anchoring, and (10) escalation of commitment.
The Top 10 Behavioral Biases in Project Management
Filed under: Project Management, Leadership & Managing People
It’s tempting to think that projects fail because the world throws surprises at us:
Price and scope changes
Accidents
Weather
New management
The list goes on..
But this is shallow thinking.
Consider the Sydney Opera House. It didn’t fail because Jørn Utzon couldn’t predict every single challenge; it failed because he took the inside view on his project and didn’t study how failure typically occurs for large-scale architectural projects.
Why didn’t he?
Because focusing on the particular case and ignoring the class is what human psychology inclines us to do.
The greatest threat Utzon faced wasn’t out in the world; it was in his own head, in his behavioral biases.
This is true for everyone of us and every project. Which is why your biggest risk is YOU.
Today’s newsletter features an academic paper by Prof. Bent Flyvbjerg covering the top 10 most important behavioral biases in project planning and management. It is one of the most read articles in the Project Management Journal.
Each bias is defined, and its impacts on project management are explained, with examples.
They are the biases most likely to trip up planners and managers and negatively impact project outcomes, if the biases are not identified and dealt with up front and during delivery.
According to the research findings, the top 10 behavioral biases are:
1. Strategic Misrepresentation
The tendency to intentionally and systematically distort or misstate information for strategic purposes. Also known as political bias, strategic bias, or power bias.
Ever seen a project or an idea made to look better than it is? That's strategic misrepresentation. People are naturally inclined to twist facts and sugarcoat things to get funding or approval. Like when a contractor underestimates costs to win a bid, only to face budget overruns later. Recognize this and always triple-check your assumptions.
2. Optimism Bias
The tendency to be overly optimistic about the outcome of planned actions, including overestimation of the frequency and size of positive events and underestimation of the frequency and size of negative ones.
We all love a good success story, but optimism bias makes us think everything will go perfectly. Remember the last time a project timeline seemed too good to be true? That’s optimism bias at work. Always watch your downside.
3. Uniqueness Bias
The tendency to see one's project as more singular than it actually is.
It’s easy to see our projects as one-of-a-kind. When in reality, it’s part of a larger class of comparable projects. That's uniqueness bias. Even the most unique projects have similarities with past ones. Learn from previous projects to avoid repeating mistakes. No need to reinvent the wheel every time.
4. The Planning Fallacy
The tendency to underestimate costs, schedule, and risk and overestimate benefits and opportunities. Just as the name suggests, the planning fallacy can lead to poor planning, causing us to make decisions that ignore the realistic demands of a task (be it time, money, energy, or something else).
It also leads us to downplay the elements of risk and luck; instead, we focus only on our own abilities—and an overly optimistic assessment of our abilities at that. Always add strategic buffer time and budget to your plans.
5. Overconfidence Bias
Overconfidence bias is the tendency to have excessive confidence in one's own answers to questions and to not fully recognize the uncertainty of the world and one's ignorance of it.
Are you overly sure about your predictions? Overconfidence bias can blind you to uncertainties. It's like betting everything on one plan without a backup. Always question your assumptions and consider multiple outcomes.
6. Hindsight Bias
The tendency to see past events as being predictable at the time those events happened. Also known as the I-knew-it-all-along effect.
Thought you "knew it all along" after a project fails? Hindsight bias makes us believe past events were predictable. Instead, focus on learning from mistakes without assuming you could have seen them coming.
7. The Availability Bias
The tendency to think that events which are easier to remember are more likely to happen.
Remembering only the most recent or dramatic events? That’s availability bias. It skews our perception of what's likely. If a recent project had a major issue, you might overestimate its frequency. Balance recent experiences with historical data.
8. The Base Rate Fallacy
The tendency to ignore general statistics and instead focus on specific stories. If you play poker and assume different odds than those that apply, you are subject to the base rate fallacy and likely to lose. The objective odds are the base rate.
Stay away from thinking your project will be the exception to the rule. Always consider the broader data. If most projects in your field face certain risks, so will yours.
9. Anchoring
The tendency to rely too heavily, or “anchor,” on one trait or piece of information when making decisions, typically the first piece of information acquired on the relevant subject.
Anchoring is basing decisions on the first piece of information you get. For example, if the first cost estimate is low, you might stick to it despite new, higher estimates. Always seek several data points before letting your thoughts take control.
10. Escalation of Commitment
The tendency to justify increased investment in a decision, based on the cumulative prior investment, despite new evidence suggesting the decision may be wrong. Also known as the sunk cost fallacy.
This is when you feel urged to stick with a decision because you've invested so much in it. Think of a project or an initiative you knew was failing but kept funding anyway. Cut your losses early to avoid bigger failures down the line.
Final Thoughts
From my experience in project management, I've seen firsthand how these biases can derail even the best-laid plans. Recognizing and addressing them must be a priority.
For instance, during one of my first projects, I got caught falling into both the planning fallacy and optimism bias. We were working on a new healthcare facility, and I was way off about meeting a tight deadlines. I overestimated our resources and underestimated the variability. Midway through the project, we faced unexpected supply chain issues. The delays piled up, and the client was frustrated. Knowing what I know now about these biases, I would have built in more buffer time and managed expectations more realistically.
In closing, I encourage you to become more familiar with top 10 behavioral biases in project management. You can gain a lot more influence over your project outcomes if you are. It boils down to:
Structured decision-making processes.
Iterative feedback loops.
Leveraging historical data.
If you can bake these systems into your execution and leadership, there is an opportunity to reduce the impacts of these biases, leading to more successful projects.
Until next week,
Kyle Nitchen
🧰 KYLE’S TOOLBOX
A short list of what I’m learning, pondering, or exploring. Feel free to forward along if the spirit moves you.
WHAT I’M READING
Does Critical Path Management Work? by the Project Production Institute
Day Trading Attention by Gary Vaynerchuck
The Bottleneck Rules by Clark Ching
WHAT I’M LISTENING TO
QUOTE I’M PONDERING
“I don't like that man. I'm going to have to get to know him better." - Abraham Lincoln
When you're ready, here’s how I can help:
Upgrade your PM software. Project financials, management, and construction admin. Switch to INGENIOUS.BUILD to evolve from an administrative project manager to strategic project leader.
Get my full toolbox (free). It contains 30+ software and hardware tools I’m using today.
Hold your schedule accountable. Gain stability and flow in your projects with this Takt Planning & Control online course. Use code “Influentialpmtakt” for 30% off!
Advertise in this newsletter. Put your brand in front of 3,000+ construction project managers, leaders, and execs. (Booked out 5 weeks)
Support this Newsletter. The Influential Project Manager articles will remain free, but if you find this work valuable, I encourage you to become a paid subscriber. As a paid subscriber, you’ll help support this work.