Optimism Bias

This is worth a glance through (it’s a bit heavy for casual reading, although if readers have nothing else to do):

https://www.gov.uk/government/publications/rail-infrastructure-optimism-bias-study

The main document is of course the 39-page one.

On first glance it’s tempting to argue that figure E-1 (page 4) is shown wrong; the main budget should be remaining the same across all the stages and the optimism top-up reducing (rather than a consistent total cost as the estimate eats the optimism bias). After all, the optimism bias is an accounting trick to stop the project bankrupting the funder; the budget is the project manager’s estimate. The project manager, being a manager, should, one feels, have a rough idea of how long the project will take and at what cost; as development work goes on this should be proved right unless unexpected problems arise. Unfortunately the chart on page 19 goes on to show that the modal project involves starting with a figure, adding the optimism bias and then spending both. (Evidently railway projects involve a lot of unexpected problems.)

Recommendation 2 on page 29 also adds some amusement. The fact that most projects spend almost exactly the estimate and the optimism bias leads to an immediate conclusion that the optimism bias is encouraging slack spending. (“There’s money left, perhaps if we bought some nice gardens for our new station/ put in that crossover the operator wanted and we said they couldn’t have/ cleaned a few culverts while we’re here.”) The footnote then points out that equally the optimism bias might be inadequate and the project is being pruned to stop it going over that budget. (“There’s no money left, so let’s drop the second culvert/ push that bit of commissioning into someone else’s possession/ remove that crossover that the whole thing won’t work without.”)

It’s slightly scary to reflect that actually this does mirror my own workload, where I had four or five little tasks after Christmas that I intended to complete in a couple of weeks which have turned into big tasks that aren’t done (happily one has been overtaken by events and has gone away – not that the deadline’s passed, merely that someone has decided the work doesn’t need doing). It is with this sort of thing in mind that it might be worth tossing this unusually interesting Government report in the direction of anyone involved in workload management.

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