book

Project Decisions

by Lev Virine, Michael Trumper

October 2007

Beginner

376 pages

8h 53m

English

Berrett-Koehler Publishers

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The Burden of Poor Decision-makingWhy Do We Make Wrong Decisions?Approaches to Decision-makingDecision Analysis as a ProcessNormative and Descriptive Decision TheoryDriving Forces behind Project Decision AnalysisA Little Bit of HistoryDecision Analysis Today
Human Judgment Is Almost Always to BlameBlink or Think?Cognitive and Motivational BiasesCognitive BiasesMotivational BiasesPerceptionBounded RationalityHeuristics and BiasesAvailability HeuristicRepresentativeness HeuristicAnchoring and Adjustment HeuristicBehavioral TrapsTime Delay TrapsIgnorance TrapsDeterioration TrapsFrames and AccountsTraining for Project Decision-Making Skills
Decision AnalysisWhen Decision-Makers Go BadThe Decision Analysis ManifestoThe “3C” Principle of Project ManagementConsistencyComprehensivenessContinuityDecision Analysis Process vs. the PMBOK® Guide’s Project Risk ManagementDecision Analysis and Other Business ProcessesPhases of the Decision Analysis ProcessPhase 1. Decision-FramingPhase 2. Modeling the SituationPhase 3. Quantitative AnalysisPhase 4. Implementation, Monitoring, and ReviewBig and Small DecisionsThe Value of Project Decision Analysis
Decision PolicyWhich Choice Is Rational?Expected ValueThe St. Petersburg ParadoxRisk-Taker vs. Risk-AvoiderExpected UtilityExpected Utility TheoryExtensions of Expected Utility TheoryHow to Use Expected Utility TheoryDescriptive Models of Decision-Making
Creativity and Decision-MakingPsychology of CreativityCreativity BlocksFraming and Perceptual BlocksValue-Based BlocksCultural, Organizational, and Environmental Blocks
Psychology of Group Decision-MakingAggregating JudgmentGroup Interaction TechniquesBrainstormingTools for Facilitating DiscussionsA Few Words about Game Theory
What Is FDS?Why FDS Is a ProblemHow Does FDS Spread?Three Common Myths about FDSMyth 1: Our organization is not suitable for an FDS-free environmentMyth 2: When companies implement organizational processes, FDS resultsMyth 3: An FDS-free corporate culture leads to anarchyThe Roots of FDSTreating FDSThe Second Russian Revolution
Who Are the Players?Identifying Problems and OpportunitiesAssessing Business SituationsSome Tools and Techniques
Different Objectives and Different Criteria for Decision-MakingAligning Project ObjectivesDecision Analysis as an Art of TradeoffsProject Objectives Hierarchy
Identifying Risks and UncertaintiesGenerating AlternativesRisk Breakdown StructuresRisk TemplatesRisk-Response PlanningRisk Registers
How Do We Make Estimates?How We Think When We Make EstimatesImpact of Politics on EstimationImpact of Psychology on Estimation and the Rule of PiStudent SyndromeOther Cognitive Biases in EstimatingOther Explanations of Problems with EstimationWhere Does the Problem Lie—In Psychology or Politics?Many Mental Errors and One Wrong EstimateSimple RemediesNever Make a Wild GuessCollect Relevant Historical DataPerform Reality ChecksConduct an Independent Assessment
Model of the ProjectSchedule ModelEconomic ModelAlternative ModelsThe Critical Path MethodThe Critical Chain MethodEvent Chain MethodologyModeling with Influence DiagramsThe Agile Approach to Project Modeling
Approaches to Estimating ProbabilitiesSubjective Estimation of ProbabilitiesHow We Subjectively Assess Probability and RiskMethods of Eliciting Subjective Judgments in Project ManagementWhat If a Decision Is Sensitive to Probability?Qualitative Risk Analysis
What Are Correlations? Why Do We Need to Analyze Them?Sources of Correlations in ProjectsPsychology of Correlation and CausationHow to Improve Your JudgmentSensitivity AnalysisQuantitative Analysis of CorrelationsCrucial TasksCorrelations between Tasks
What Is a Decision Tree?Why Project Managers Avoid Decision Trees (and Why They Shouldn’t)Converting Project Schedules into Decision TreesThe Value of Perfect InformationThe Value of Imperfect Information
How Much Will It Really Cost?PERTStatistical DistributionsThe Monte Carlo TechniqueWhich Distribution Should Be Used?How Many Trials Are Required?Analysis of Monte Carlo ResultsSensitivity and CorrelationsCritical IndicesProbabilistic CalendarsDeadlinesConditional BranchingProbabilistic BranchingChance of Task ExistenceIs Monte Carlo the Ultimate Solution?
How Events Can Affect a ProjectBasic Principles of Event Chain MethodologyPrinciple 1. Moment of risk and state of an activityPrinciple 2: Event chainsPrinciple 3: Critical event chainsPrinciple 4: Analysis using Monte Carlo simulationsPrinciple 5: Performance-tracking with events and event chainsPrinciple 6: Event chain diagramsEvent Chain Methodology PhenomenaRepeated ActivitiesEvent Chains and Risk MitigationResource Leveling Based on EventsDelays in Event ChainsHow to Use Event Chain MethodologyExample of Event Chain MethodologyEvent Chain Methodology and Mitigation of Psychological BiasesWork Breakdown Structure + Risk Breakdown Structure + Analysis = Event Chain Methodology
How to Communicate the Results of Decision AnalysisMotivational Biases in Reporting Decision Analysis ResultsPut It in PerspectivePresentations Must Have MeaningExpressing UncertaintyThe Power of Fear
What is Multi-Criteria Decision-Making?The Psychology of Balancing Multiple ObjectivesTwo Approaches to Multi-Criteria Decision-MakingRanking Criteria with the Scoring ModelAdvanced Methods of Multi-Criteria Decision-Making
Adaptive Management As Part of Project Decision AnalysisPrinciples of Adaptive ManagementPrinciple 1: Use actual project data in combination with original assumptionsPrinciple 2: Minimize the cost of decision reversals. (“Try not to kill the cow.”)252Principle 3: Make small, sequential decisionsPrinciple 4: Support creative business environmentsPrinciple 5: Identify and fix problems early (avoiding behavioral traps)The PMBOK® Guide Approach to Project Executing, Monitoring, and Controlling
Why Do We Need Post-Project Reviews?How Could We Not Foresee It?“I Knew It All Along”Overestimating the Accuracy of Past JudgmentsThe Peak-End RuleThe Process of Reviewing DecisionsCorporate Knowledge Base
Common Misconceptions about Decision AnalysisMisconception #1: The decision analysis process is not beneficial because it does not ensure project successMisconception #2: Decision analysis adds new levels of bureaucracyMisconception #3: Only organizations with mature project management processes can benefit from decision analysisWhy Do We Believe that the Decision Analysis Process Is Important?

Content preview from Project Decisions

CONCLUSION

Does Decision Analysis Provide a Solution?

“It is our choices, Harry, that show what we truly are, far more than our abilities.”

—DUMBLEDORE TO HARRY POTTER IN

J.K. ROWLING’S HARRY POTTER AND THE CHAMBER OF SECRETS

During the past 15 years, NASA and aerospace companies have been involved in a number of attempts to revolutionize space launches (Ballhaus 2005). All of these projects were canceled due to cost and technology problems (Table Concl. 1). As Ballhaus points out, “the bottom line—$4.4 billion was spent on these programs, with little to show for it.”

In 1996, NASA selected Lockheed Martin to design, build, and fly the X-33 ...