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Managing risk – it’s unnatural for humans

Humans are innately bad at assessing risk. We compensate through learning by experience. Project management is all about managing probability or risk and that’s why DMW argues that you need experienced project managers for complex risky projects.  It’s much better than using people who happen to be free and are keen to help. Here’s an interesting true story to support the argument.

In 1975 the ‘ask Marilyn’ column for ‘Parade’ magazine in the US received a letter about a puzzle that had confused a reader.  It involved a game show contestant who was shown 3 closed doors.  He was challenged to pick the car that was behind one door rather than the goats that were behind the other two doors.  The contestant picked a door (let’s call it door 1).  Now the game show host showed the contestant a goat that was behind another door (door 2, say).  The contestant was asked if he wanted to stick with door 1 or change to door 3.  To stand the best chance of getting the car what should he do; stick, change or doesn’t it matter?

It’s a really simple problem.  Marilyn of ‘ask Marilyn’ fame responded that the contestant should always change his choice to the other door. Marilyn vos Savant is in the Guinness Book of Records because of her high IQ (218).  Despite this 10,000 people wrote to her to say that she was wrong including 1,000 people with PhDs.  She was publicly ridiculed.

She was right and those that doubted her including many famous mathematicians were only convinced when the game was computer modelled and the game played repeatedly.  Experience is important because, unless we have the highest IQ in the world, we can’t completely trust our inborn abilities with even simple risk analysis.  And this is why we need project managers who have managed many similar projects before and can consider the risks based on their experience rather than relying on their frail human intuition.