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Thinking fast and slow is a critical concept in project management that can hold the key to project success. It’s a well-known fact that IT projects have a notorious reputation for failures. Just look at the following examples.
IT projects are notoriously difficult to manage. A survey published in HBR found that the average IT project overran its budget by 27%. Moreover, at least one in six IT projects turns into a “black swan” with a cost overrun of 200% and a schedule overrun of 70%. In other words, while most IT projects will fall short of their budget targets, a few might overshoot the targets so much as to cause catastrophic organization-wide problems. KMart’s massive $1.2B failed IT modernization project, for instance, was a big contributor to its bankruptcy.
HBR
Among IT projects, failure rate corresponds heavily to project size. An IT project with a budget of over $1M is 50% more likely to fail than one with a budget below $350,000. For such large IT projects, functionality issues, and schedule overruns are the top two causes of failure (at 22% and 28% respectively).
Gartner
A PwC study of over 10,640 projects found that a tiny, tiny portion of companies – 2.5% – completed 100% of their projects successfully. The rest either failed to meet some of their original targets or missed the original budget or deadlines. These failures extract a heavy cost – failed IT projects alone cost the United States $50-$150B in lost revenue and productivity.
Gallup
Among IT projects, project performance varies significantly. While software projects have an average cost overrun of 66%, the same figure for non-software projects is 43%. However, 133% of non-software projects fail to meet their stated benefits, compared to just 17% for software projects.
McKinsey
The Project Management Institute has identified Seven Causes of Project Failure, but even with this knowledge, projects continue to fail.
It’s a frustrating feeling, and it’s one that many project managers experience. But what if I told you that the cause of project failures is cognitive biases?
Cognitive Biases in Project Management
Cognitive biases are the mental shortcuts our brains take to process information more efficiently. While they can be helpful in some situations, they can also lead to flawed decision-making and contribute to project failures. So, how do cognitive biases affect project management? Consider this: every project is composed of different personalities, characteristics, and behaviors, and each person brings their inclinations and perspectives to the table. Left unchecked, they can lead to misunderstandings, miscommunication, and ultimately, project failure.
Thinking Fast and Slow
I recently read the book “Thinking, Fast and Slow” by Daniel Kahneman and was fascinated by the insights it provided on the two different ways our brain forms thoughts and how these can influence our decision-making. It made me realize that understanding how our cognitive biases and fallacies affect our projects.
Stop Project Failures
On this site, I want to share my experiences and thoughts on project management and explain the biases and fallacies I’ve witnessed first-hand throughout my career. We can overcome the common obstacles that lead to project failures by paying attention to these cognitive biases.
So, if you’re an IT project manager looking to increase your chances of success, let’s explore and apply the concepts of “thinking fast and slow” in project management and how it can help us break the stigma of project failures that plagued the field for many years.
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