The True Face of Your Portfolio

written by Stuart Easton

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Let’s have a little fun, shall we?

Tell me, what did you see when you looked at the photo of a potato?

If you saw a face (look again if you missed it), then you just experienced facial pareidolia. Don’t worry; it’s normal to see faces in inanimate objects, though some people experience it more easily than others.

But what’s a funny potato got to do with project portfolios?

Your brain, the pattern recognition machine

Well, you’re hard-wired to recognize patterns. This is useful for at least two reasons. First, being able to rapidly recognize a pattern means that your brain can more rapidly process all the sensory information coming in to it.  Your brain constructs a model of the world based on these patterns and then simply compares incoming information with that model (looking for differences) which is a lot quicker than having to process all the data all the time.

The second reason is, perhaps, more important for our purposes today. If you react quickly to a “pattern” that represents danger it means that you’re likely to survive longer. That means you’ll be able to breed and pass on the genes for rapid pattern recognition…

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This mop looks like an angry alien to me. Just me? Oh…

Anyway, rapid pattern recognition put me on guard before I’d processed the picture and worked out that it’s just a mop… but that feeling of having seen a face never leaves you. The subconscious pattern affects your perception. For example, I would not want to own that particular mop for fear of midnight encounters on flying saucers!

When making decisions, we usually use our “gut” and selecting the project portfolio is no different.

The problem is that, for most business-level decisions, the gut is not reliable. There are several reasons for this and this “recognition of false patterns” is just one of them.

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This alarm clock is not really sad about having to get up early.That’s you (or is it just me again?) seeing a pattern and giving it an interpretation that doesn’t exist.

It’s rather amusing until you start doing the same thing in resource allocation meetings. I don’t mean seeing faces, obviously, but imagining “patterns and meaning” that don't exist. This is one form of bias that affects both individual and group decision making.

Not all project prioritization methods are equally good

Right, now we get down to it. This is the first of what, I hope, will be several similar blogs looking at the psychology of decision-making and its impact in Project Land. False pattern recognition is not the only form of bias that affects us and these biases affect our decisions.

Including project prioritization.

Now, of course this means that your project portfolio is probably the result of flawed decision-making. That’s not to say that your executive team is full of “bad decision-makers”. No, they’re just human.

Decision science has been looking at ways to reduce or eliminate the bias in decision-making for 40-odd years. This has led to several methodologies for reducing bias – my favourite is the analytic hierarchy process (AHP) – yet relatively few organizations use these methods during project prioritization.

The research is clear, in fact, that almost all methods for selecting projects are significantly flawed. Researchers found that, out of over 100 project prioritization methodologies, only 2 were suitable - AHP was one of them.

Spreadsheets, Powerpoint presentations and most PPM solutions do virtually nothing to reduce bias. And if you knowingly making significant decisions based on flawed methods, it is… well, that seems like the road to negligence.

Okay, that was kind-of a heavy message and I had promised fun.

The good news is that it’s easy to get out and improve your prioritization process and it’s worth doing. Read up a bit on AHP (or other research-based methods) and put them in place and it will go a long way to improving your portfolio.

Otherwise, you might get a visit from “the angry bag”!

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How to improve project success rates.
Why AHP is different