The illusion of control: dancing with chance

In a new book called ‘Dance with chance, making luck work for you’ authors Spyros Makridakis, Robin Hogarth and Anil Gaba suggest that people tend to assume they can control much more than they actually do and as a consequence, they underestimate the role of chance.

One of the key ways of dealing with risk is accepting that there are things that you simply can’t control, and one of those things is the future. Underestimating uncertainty has very serious implications for risk management, and project managers should pay special attention to what can be predicted and what we can’t predict. The authors pinpoint two kinds of risks: subways and coconuts. You can plan for the subways, but it is difficult to plan for the coconuts.

  • You can do research and be relatively sure that the subway will be predictable most of the time (but never all of the time!).
  • On the other hand, you know that coconuts fall from trees, but you can’t predict when they will fall or where they will land.

They argue that we have to accept that there are some things that we simply can’t predict and as a consequence, the idea that project managers can control risk is an illusion. “Just accepting that is a huge step. It doesn’t come easily for most people, but it is absolutely the first critical step” Gaba says.

Acceptance is the first part of what the authors call the ‘Triple A’ strategy of accept, assess and augment:

  • First you accept that there are things you can’t control.
  • Then you try to assess the uncertainty and finally
  • Augment your project plans to make sure you manage risk more effectively.

This means using models, independent opinions, internal and external advice and any other means to assess the unknown risks and to make your team nimble and open to change when the unexpected does happen.

In this context, the project schedule and cost plan are two models that can help in the assessment but they neither control the future nor eliminate risk. What these plans should do though is provide a good foundation for implementing a nimble response when the unexpected does happen.

For more on the book see: http://dancewithchance.com/index.html (and any men of a ‘certain age’ should read the blog ‘Testing, testing, testing… is it necessary?’)

To understand the role of schedules and other plans in a 21st century project see: Project Controls in the C21 – What works / What’s fiction

See also:

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9 responses to “The illusion of control: dancing with chance

  1. Hi Pat, thanks for bringing this book to my attention. Having read through your post, though, I’m not clear on what new message has this book brought alight? It seems to repeat concepts that are already well and truly in the public domain. What’s your view on this?

    Cheers, Shim Marom
    http://www.quantmleap.com

  2. Pat and Shim,

    There’s a difference between probability and statistics.

    http://herdingcats.typepad.com/my_weblog/2010/03/probability-v-statistics-in-cost-and-schedule.html

    is a quick survey of the problem. You are correct Pat in that people fall into the trap of “dancing with chance,” but it is because they don’t separate probability from statistics.

    This is the source of the mandated use of Monte Carlo Simulation in the domain we work. The MCS provides the means to define the underlying statistics – either from part performance or through a model. Then the probability of reaching a goal (date or cost) can be modeled.

    • you are right Glen, but the problem is somewhat deeper that just understanding statistical probability. What most people fail to realise is that any simulation, including Monte Carlo has a range error. The result may be 90%, 95% or even 99% reliable but there is still a possibility of a result falling outside of the predicted range. Historical data is not a guarantor of future outcomes, only an indicator of what should happen; as was clearly demonstrated in a near miss disaster in 2003 – see Seconds From Disaster at https://mosaicprojects.wordpress.com/2010/03/28/seconds-from-disaster/

  3. Pingback: Seconds From Disaster « Mosaicproject’s Blog

  4. Pingback: The powerful illusion of control | Stakeholder

  5. Pingback: The powerful illusion of control « Stakeholder Management's Blog

  6. Another dimension to the illusion of control is that individuals who have power to think they have more personal control over outcomes than they, in fact, do. Power has been demonstrated to lead to perceived control over outcomes that were either uncontrollable or unrelated to the power. For more on this see: The powerful illusion of control at http://stakeholdermanagement.wordpress.com/2010/03/28/the-powerful-illusion-of-control/

  7. Pingback: My weekly contribution to Project Management related debates | quantmleap

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