How do project managers evaluate combinations of healthy and unhealthy subprojects that belong to one larger project?

KNOWLEDGE @ BI: Project Management

Combining healthy and unhealthy subprojects leads to an averaging bias in which project managers overestimate the aggregate performance of the entire project.

The averaging bias refers to people’s tendency to average the calorie content of combinations of healthy and unhealthy items. This bias stems from people’s tendency to categorize food-related items according to a healthy/unhealthy dichotomy.

In an experiment (Chernev and Gal 2010), respondents were asked to estimate the calorie content of a hamburger alone, a broccoli salad alone, or a meal containing both.

Surprisingly, respondents estimated that the hamburger-and-broccoli meal would have fewer calories than the combined estimates of both dishes but also fewer than the perceived calorie content of the hamburger by itself. In other words, the combination of a virtue and a vice is believed to be healthier than the vice alone because people tend to average their benefits.

Managing large projects

What does this have to do with project management? Managing large projects is a challenging job for project managers.

The amount of information that these managers need to process is overwhelming, not to mention the huge amount of tasks that needs to be done and of team members that needs to be managed. As a result, many large projects are divided into smaller subprojects, each with their own subproject team and subproject manager who reports to the overall project manager (“divide and conquer”).

This project manager delegates the management and control of the nitty gritty details to the subproject managers, thereby saving time and energy to focus on the big picture, and to talk to the customer and other important stakeholders.

However, this division into subprojects and focus on the bigger picture may induce an averaging bias for the overall project manager as well. In focusing on the aggregate level, the project manager is inclined to categorize subprojects in healthy (virtue) and unhealthy (vice) parts. As a result, the combination of the virtue and the vice is believed to perform better than the vice alone, whereas in reality the overall project is only as strong and successful as its weakest subproject.

Healthy and unhealthy projects

In an analysis of a large European project (divided into multiple subprojects) in the public sector the authors find evidence of this averaging bias.

In the beginning of this project, when workload was still bearable and time pressure was low, the project manager was willing to listen to the issues of all subproject managers, and provided help to all of them.

However, when workload and time pressure started to increase, the project manager started to focus more and more on the bigger picture: neglecting the problems of one of the subprojects, while paying attention to the success of another subproject.

From the perspective of the project manager, the unhealthy and healthy project averaged each other out, and the project as a whole, was in good shape. As a result, the project manager did not notice that the project was in fact in trouble and problems were steadily increasing.

Managerial implications

What are the managerial implications? Our analysis suggests that project managers should be aware of this averaging bias and realize that an overall large project is only as strong and successful as its weakest link.

When one of the subprojects has serious problems, these problems cannot be compensated by the success or progress of other subprojects, not even when these subprojects are performed by independent teams that are working on independent modules or work packages.

The “divide and conquer” strategy is probably the only way to manage large projects. But, when one of the subprojects is facing problems, project managers should deal with these problems instead of averaging them out of sight. In this situation a “convene and conquer” would be a better strategy.

Reference:

The article is published in BI Leadership Magazine 2012/2013, a knowledge magazine from the Department of Leadership and Organizational Behavour at BI Norwegian Business School.

Comments?:

Send your comments and questions regarding this article by E-mail to forskning@bi.no

Questions about this article? Other questions? Contact BI Business Review

Comments

You can also see all news here.
BI Business Review

Newsletter

Sign up for our newsletter to get the latest news from BI Business Review.

sign up