How can you minimise the risk of a project’s timeline and budget blowing out as you work through to completion? By being aware of the inherent biases in our brains, and examining the landscape for insights into similar projects. By Vanessa Mickan.
Sydney’s light rail expansion is – surprise, surprise – massively over budget and behind schedule. I’m trying to imagine the planning meetings at the outset of the project, which will (eventually) add 12 kilometres of track to the city’s public transport network. I think we can safely assume the discussion did not go:
“Let’s dig up some main roads to cause chaos and bring retailers to their knees.”
“Then let’s surprise them by doing it for at least a year longer than we said we would.”
“Don’t forget to make it cost more too. Like a billion dollars.”
“Are you sure about that, only a million?”
“No, no, I said billion, with a b.”
“Genius idea. Taxpayers love that! All in favour say aye.”
Like most of us when we tackle a big project, everyone probably went into the light rail project believing they could get the job done on budget and on time.
So why is it that despite our best intentions and planning, big projects inevitably end up costing more and taking longer than we think they will? And as a business leader, what can you do about it?
Be aware of optimism bias. Four out of five of us have brains that are wired to present a rosier view of what will happen to us, according to cognitive neuroscientist Tali Sharot. For instance, about 40 per cent of people get divorced, yet newly married people rate their likelihood of splitting up at zero per cent. Step one in stopping the optimism bias from derailing your next big project is to simply start being cognisant of it.
Don’t fall for the planning fallacy. This common psychological quirk means we’re usually confident our project will go according to plan, even though we know other similar projects haven’t. Almost half of Olympic Games go over budget by more than 100 per cent, and many struggle to finish construction on time. Yet still Games organisers get taken by surprise. The Rio Games in 2016 are a memorable example, but the Montreal Games in 1972 hold the record: they were 720 per cent over budget and workers were sweeping up building debris as the opening ceremony began. The solution? Study data from similar past projects, and learn from them.
Streamline your communication. Tech innovator Justin Rosenstein designed the collaboration software Asana because of his frustration with wasting so much time at Google making sure the left hand knew what the right hand was doing – or what he calls “doing the work about work” – rather than developing products. But if it makes you feel any better about your own big projects, it took Rosenstein three years to launch his software … which just happens to be three times longer than he thought it would.