Building Better Decisions - Overcoming Cognitive Bias in Construction
Cognitive biases are systematic errors in thinking that affect people's decisions and judgments. These mental shortcuts or "rules of thumb" can lead to deviations from rational, logical decision-making. With so much at stake in the construction world, these biases can have significant consequences, influencing everything from project planning and risk assessment to safety protocols and financial decisions. Cognitive biases often operate subconsciously, making them particularly challenging to identify and address. For construction companies, understanding and mitigating these biases is crucial for improving project outcomes, enhancing safety, and maintaining competitiveness in a demanding industry. This article explores some of the most common cognitive biases affecting construction companies and offers strategies to overcome them, paving the way for more objective, data-driven decision-making processes.
Common Cognitive Biases in Construction
Overconfidence Bias
Overconfidence bias is where people overestimate their own abilities, knowledge, and skills. Construction executives often overestimate their company's capabilities or underestimate project risks. This can result in decisions to take on projects beyond the company’s expertise or capacity to perform. Often, projections for project timelines and costs are based on perfect schedules and estimates when the stark reality is that no project is ever completed precisely as planned. Perhaps the worst cases of overconfidence bias are in safety, where potential hazards are downplayed, creating dangerous situations for workers.
Confirmation Bias
Confirmation bias is the tendency to search for, interpret, favor, and recall information in a way that confirms or supports preexisting beliefs or values. This bias leads decision-makers to seek information that confirms their beliefs while ignoring contradictory evidence. In the construction world, one example of confirmation bias is stubbornly clinging to original cost estimates, disregarding new information suggesting the project will cost more. Contractors may favor familiar materials or methods, overlooking newer, more efficient options due to their preference for what they’ve always used.
Anchoring Bias
Anchoring is a cognitive bias that causes people to rely too heavily on the first piece of information they receive (the “anchor”) when making decisions or judgments. This bias influences subsequent thoughts and judgments, as people tend to interpret newer information from the reference point of their anchor instead of evaluating it objectively.
The most common example of anchoring is in negotiating the price of a contract. Initial budget estimates or bids are a reference point for measuring all subsequent changes. Anchoring can cause negotiators to give too much weight to the initial figure and inadequately consider objective data on project cost.
Strategies to Overcome Cognitive Biases
Implement Structured Decision-Making Processes
Construction companies should use data-driven approaches for project planning and risk assessment to combat biases. By implementing formal decision-making frameworks that encourage objective analysis, companies can avoid preventable errors.
Promote Diverse Perspectives
Encouraging diverse viewpoints can help challenge ingrained biases when companies form cross-functional teams for project planning and risk assessment or consult with external experts on complex issues. Rotating executives through different roles or departments can lead to broader perspectives in decision-making.
Conduct Regular Training and Awareness Programs
Educating staff about cognitive biases is crucial. Companies should provide comprehensive training on common biases in construction and how they impact project results. Many sources of real-world examples and case studies from the industry can help executives practice bias recognition.
Conduct Post-Project Reviews
Regular reflection can help identify areas where biases may have influenced decisions. One best practice for construction companies is to perform thorough post-project analyses at the end of every project. These after-action meetings are crucial to capturing the lessons learned during the job. In these meetings, project teams should compare initial estimates with actual outcomes and analyze the reasons for the gaps. They should identify lessons learned and areas for improvement and document them for future use.
By implementing these strategies, construction companies can work towards minimizing the impact of cognitive biases on their operations. This approach can improve safety outcomes, provide more accurate project planning, and ultimately lead to more successful and profitable projects.
Addressing cognitive biases requires ongoing effort and commitment from all levels of the organization. However, the potential benefits make it a worthwhile investment for any construction company aiming to excel in a challenging industry.
Spark Notes:
Cognitive biases are mental shortcuts that can significantly impact decision-making in the construction industry, leading to flawed project planning, risk assessment, and safety protocols.
Overconfidence, confirmation, and anchoring biases are common in construction, often resulting in underestimated risks, rigid adherence to initial estimates, and reliance on familiar methods.
To mitigate these biases, construction companies should adopt structured, data-driven decision-making processes, encourage diverse perspectives, provide regular training, and conduct post-project reviews.
Addressing cognitive biases requires ongoing organizational commitment but can lead to improved safety, more accurate planning, and increased project success.
