Journal article · 2022
How Bias Impacted the Project Manager Decision to Not Terminate a Failing Project
International Journal of Information Technology Project Management, 13(1), pp. 1–17 · Published
Summary
What question does this paper answer?
Why do some competent project managers not terminate a failing project after a risk event, and how much does hidden cognitive (value prospect) bias affect the decision not to end a troubled project?
What did the study find?
In a repeated measures experiment with 16 experienced US IT project managers, the mean likelihood of cancelling a failing project fell from 3.438 (SD = 1.672) in the basic condition to 2.438 (SD = 1.209) when a 400% bonus incentive was offered (t = 3.303, p = .005, Cohen’s d = 0.826). Risk competency was the significant factor (F = 7.861, p = .016, η² = 0.218, a 22% effect size), while certification was not (F = 1.956, p = .187).
Why does it matter?
Value prospect incentives (money and ego) can push even certified project managers to continue a doomed project against policy, which may explain some of the roughly 50% global project failure rate. The authors recommend that sponsors require both verified certification and tested competency when hiring project managers, and give existing project managers periodic refresher training in ethical decision making and risk estimation.
This study is part of the evidence overview What predicts IT project failure and success? Evidence on project managers, bias and team transparency from machine learning and experiments
Key findings
- The experiment tested 16 IT project managers (mean age 40.6, mean experience 9.8 years, 88% male, 44% certified), all based in the USA and working for small-to-medium organizations, using a simulated failing military IT software project.
- Fewer than half (43%) of the project managers passed the PERT-based risk estimation competency test; only 22% of non-certified project managers were competent compared with 71% of certified project managers.
- Offering a 400% bonus not to cancel reduced the mean likelihood of cancelling the failing project from 3.438 (SD = 1.672) to 2.438 (SD = 1.209) on a 1–5 scale, a significant difference (t = 3.303, df = 15, p = .005, Cohen’s d = 0.826).
- In the repeated measures ANOVA, project manager risk competency was a significant between-subjects factor (F = 7.861, p = .016, η² = 0.218), a 22% effect size, whereas certification was not significant (F = 1.956, p = .187).
- Competency correlated strongly with the decision to cancel a failing project in both the basic condition (Spearman rho = 0.824, p < .001) and the biased condition (rho = 0.631, p < .01), while age, gender and experience were not related to either decision.
- Incompetent but certified project managers cancelled in the basic scenario (M = 4.5) but not under the value prospect incentive (M = 1.5), whereas competent and certified project managers scored 4.5 and 3.6 respectively.
- Incompetent and uncertified project managers made the worst decisions, continuing the failing project in both the basic (M = 2) and biased (M = 1.7) conditions.
Source: Strang & Vajjhala (2022), International Journal of Information Technology Project Management, 13(1), pp. 1–17. DOI: 10.4018/IJITPM.304059
Study at a glance
| Research question | Why do some competent project managers not terminate a failing project after a risk event, and how much does cognitive bias affect that decision? |
|---|---|
| Design | Online repeated measures controlled experiment: a PERT risk-estimation competency test, then a basic (no incentive) and a biased (400% bonus) decision condition in a simulated military IT software project hit by COVID-19 |
| Sample | 16 project managers with at least 5 years’ experience, randomly drawn from about 23,000 professional-level PMs in a LinkedIn group; all based in the USA |
| Methods | Shapiro-Wilk tests, Spearman correlations, paired t-test and repeated measures ANOVA |
| Main result | Competency significantly predicted better decisions (F = 7.861, p = .016, η² = 0.218); certification did not (p = .187); the bias incentive lowered mean likelihood to cancel from 3.438 to 2.438 |
| Implication | Hire project managers on verified certification plus tested competency, and provide refresher training on ethical, policy-following risk decisions |
| Citation | Strang & Vajjhala (2022) · DOI 10.4018/IJITPM.304059 |
Abstract
Almost half of projects have failed globally during the last 50 years, yet most studies in the literature review were inclusive. The research design was a robust repeated measure controlled experiment where the 16 participants received all treatments, which may be contrasted to a similar 4x4 factorial experiment with a control group (common in psychology or healthcare) resulting in a group size of only four. All but the individual project manager (PM) factors were controlled, while primary demographic and behavior data were collected. PMs were tested for competence using a risk management scenario and given two manipulated conditions (a basic and a biased treatment). Since the organizational and project level factors were controlled, some individual level factors impacted the decision. PMs with higher competence made better decisions, with a 22% effect size, when all other factors in the model were accounted for. Competent non-certified PMs made better decisions as compared to certified incompetent PMs.
Abstract as published in International Journal of Information Technology Project Management.
Keywords: Crisis; Decision Making Bias; Experiment; Project Failure; Project Management; Project Manager; Risk Management
Key terms
- Prospect theory
- A model of risk decision making in which people choose between value prospects based on loss aversion, reference points and decision weights, tending to be risk-averse for losses and risk-seeking for gains (Kahneman and Tversky, 1979).
- Value prospect bias
- In this study, the influence of a personal economic and emotional gain (a 400% bonus) offered to a project manager for not cancelling a failing project.
- PERT estimate
- A three-point estimate combining optimistic, most likely and pessimistic durations, used here to test project manager risk-estimation competency (correct answer: 32 days).
Limitations
- Generalizations must be cautioned because the controlled experiment had only 16 participants.
- Certification was self-reported and not verified, and the specific type of certification was not contrasted.
- Competency was judged solely by the score on one open-book PERT risk calculation question, and was dichotomized (pass/fail) to allow repeated measures ANOVA.
- All organization-level factors were controlled and defined by the authors, so the project and organizational conditions may not match the real world.
- Generalizations are limited to IT project managers in the USA; participants were given only 15 minutes per decision.
How to cite
Strang, K. D., & Vajjhala, N. R. (2022). How Bias Impacted the Project Manager Decision to Not Terminate a Failing Project. International Journal of Information Technology Project Management, 13(1), 1–17. https://doi.org/10.4018/IJITPM.304059
BibTeX
@article{strang2022project,
title = {How Bias Impacted the Project Manager Decision to Not Terminate a Failing Project},
author = {Strang, Kenneth David and Vajjhala, Narasimha Rao},
journal = {International Journal of Information Technology Project Management},
volume = {13},
number = {1},
pages = {1--17},
year = {2022},
publisher = {IGI Global},
doi = {10.4018/IJITPM.304059},
url = {https://doi.org/10.4018/IJITPM.304059}
}Related research