Planning Fallacy Planning Fallacy

3/26/2009

Agenda The Obvious, • Getting your hands around Not So Obvious, organizational culture. and Hidden • Essence of influence: The Not So Patterns that Obvious and Hidden Patterns. • The High Performing culture. Affect Your Organization

Diagnostics Exercise #1: Put a star by the ones that you feel like your organization excels in and a check by those that you feel your organization needs to work on. ___ What needs to be in place to produce culture Leadership change? ___ Defining a compelling safety vision? ___ Implementing and sustaining important safety & initiatives? ___ Maintaining morale and trust with the employees? Culture ___ Maintaining strong, positive employee relationships? ___ Maintaining management and employee teamwork? ___ Creating new methods for change? ___ Making strategic safety plans become reality? ___ Aligning safety efforts top-down? ___ Working collaboratively on safety problems? ___ Delivering effective safety communication?

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Leaders approach to culture Trial and Error Leaders

• Trial and Error leaders. • White Bear Syndrome. • Non-systematic, toss in initiatives and see • Matterhorn Syndrome. what sticks, not sure why something works. • War Room Mentality Syndrome. • Behavioral leaders. • Peer Pressure Syndrome. • StSystemati tidtc, data-oritdiented approac h centered on behavior change. • Common Sense Syndrome. • Seeking leaders. • Seek systematic measures reflecting the support of the culture.

Behavioral leaders Seeking leaders

• Pinpoint • Successful Change • Results • Vision • Behavior • Worthwhile • Measure • Shared Belief • Share d Goa ls • Feedback, and • Everyone can participate • Reinforce • Enthusiasm • Information flow • Trust

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Culture: what is it? What is Culture?

• Understanding culture – there first must be a “Culture is the acquired knowledge working definition of culture. people use to interpret experience and • There are, however, almost as many definitions of culture as there are anthropology texts. generate behavior.” • The first respected definition of culture was written bSiEddby Sir Edward TlTylor (1890’s ). He state d t hat cu lture is “that complex whole that includes knowledge, Anthropologist James Spradley belief, art, morals, law, custom and any other 1970’s capabilities and habits acquired by man as a member of a society.” • In short, everything one does is a product of culture. • Must be studied “indirectly” by studying behavior, customs, material culture (artifacts, tools, technology), language, etc.

Though there isn’t just one, all accepted, definition – there are several characteristics that appear • The somewhat obvious aspects of in common one’s culture that a member can consciously identify and measure are Four that may have significant impact on said to be part of the explicit culture. organizations: 1) Learned. Culture is transmitted via social • The hidden aspects of one’s culture interaction. are said to be part of the tacit culture. 2) Shared by the members of a group. 3) Patterns develop because of a groups set of beliefs. 4) Internalized. Taken for granted by the group.

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Explicit Culture Organization Factors Explicit Culture Team Factor

Procedural Fair decision-making by managers, Trust, respect and cooperation among Justice Work Group supervisors & leaders – “Consistency” Relations co-workers – “Interpersonal Dynamics” Degree to which co-workers: Perceived Organization is concerned about needs • Treat each other with respect, Organizational Support and interests of employee – “Awareness” • Listen to each other’s ideas, • Help one another out, and Relationship between employee and • Follow through on commitments LeaderLeader--MemberMember supervisor/leader; “goes to bat” for me; Exchange has my best interests at heart; highest Extent to which working with my team Teamwork correlation with safety performance – members is an effective way to get “Influence” things done – “Effectiveness” • Planning Management What managers say is consistent with Credibility the things they do – “Alignment” • Communication • Performance within the workgroup

Explicit Culture Safety Explicit Culture Specific Factor OCDI – Other Factors

Org. Value for Attention and resources devoted Injury Measures tendencies of workers to Safety to safety by the organization – Reporting report injuries and incidents and the “Responsiveness” general climate around reporting – “Willingness”Willingness Approaching Individuals’ willingness to speak Others About Safety up to co-workers about safety – “Collaboration”

Upward Encouragement by managers/leaders Communication About Safety to bring up safety issues – “Openness”

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Site 1: Overall Percentile by Scale Site 3: Overall Percentile by Scale Explicit Culture Explicit Culture TICR – .8 TICR – 7.8 98 96 94 90 59 89 89 88 87 86 87 86 83

Overall Overall Lower Quartile (25th Percentile) 38 Lower Quartile (25th Percentile) Median (50th Percentile) Median (50th Percentile) rcentile Score Upper Quartile (75th Percentile) rcentile Score e

e 25

Upper Quartile (75th Percentile P

P ) 22

16 17 13 10 9 8 6 7

LMX MC Org WGR Team OVS UC PJ LMX MC POS Org TW WGR Team OVS UC AO Safety PJ POS TW AO Safety Factor Factor Factor Factor Factor Factor

Organizational Factor Organizational Factor Team Factor Safety-Specific Factor Team Factor Safety-Specific Factor PJ Procedural Justice TW Teamwork OVS Organization’s Value for Safety PJ Procedural Justice TW Teamwork OVS Organization’s Value for Safety WGR Work Group Relations UC Upward Communication LMX Leader-Member Exchange WGR Work Group Relations UC Upward Communication LMX Leader-Member Exchange MC Management Credibility about Safety MC Management Credibility about Safety POS Perceived Organizational Support AO Approaching Others POS Perceived Organizational Support AO Approaching Others about Safety about Safety 90M_345 (0804) • L2 ©2008 BST. All rights reserved. Confidential Information. PHU – 17 90M_345 (0804) • L2 ©2008 BST. All rights reserved. Confidential Information. PHU – 18

Psychological Reasons: Status quo bias

Tacit Culture • Status quo bias – the tendency for people to like things to stay relatively the same . • The Not So Obvious and Hidden Patterns “Status quo, you know, that is Latin for ‘the mess we’re in.’” Ronald Reagan quotes (American 40th US President (1981-89), 1911-2004)

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Bandwagon effect Von Restorff effect

• Bandwagon effect – the tendency to do (or believe) things because many other • Von Restorff effect – the tendency for people do (or believe) the same. an event that “stands out like a sore • The Bandwagon Fallacy is committed thumb” to be more likely to be whenever one argues for an idea based remembered than other items. upon an irrelevant appeal to its popularity. • Why does the story last? Example: • Has all the qualities to intensify and give Advertising is a rich source of Bandwagon longevity – arguments, with many products claiming to • Involvement be “number 1” or “most popular”, even • Interaction though this is irrelevant to the product’s • Rallying point merits. Ian Cooper Nov. 15, 2005 Venture Magazine.com

Unit bias Mere exposure effect

• Unit bias – the tendency to want to • Mere exposure effect – basically states that finish a given unit of a task, pause and the more we are exposed to something the recognize accomplishments (often with more we come to like it. This applies equally to both objects and people. consumption of food in particular). • E.g., Zajonc (1968) showed Chinese • Recognizing accomplishments are characters to people from one to 25 times, important – asking them to guess the meaning. The • Intangible and Tangible more they saw a character the more positive a meaning they gave.

Zajonc, R. B. (1968) Attitudinal Effects of Mere Exposure. Journal of Personality and Social Psychology

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Mere exposure effect Selective perception

• However, exposure can be overdone. • Selective perception – the tendency After a certain number of exposures for expectations to affect perception. we will ignore the message. • What we wish to see in this world we will see in this world. Information we The antecedents receive will be processed in a manner of choice: that supports our current beliefs. • Memos • Signs • Slogans There really are no facts, only interpretations. Nietzsche

Planning fallacy Planning fallacy

• Students were asked to estimate when they thought • Planning fallacy – the tendency to they would complete their personal academic projects. underestimate task-completion times. • The researchers asked for estimated times by which the students thought it was 50%, 75%, and 99% probable The Denver International Airport opened 16 months their personal projects would be done. Would you care to guess how many students finished on or before their late – a cost overrun of $2 billion. estimated 50%, 75%, and 99% probability levels?

The Eurofighter Typhoon, a joint defense project of • 13% of subjects finished their project by the time several European countries, was delivered 54 months they had assigned a 50% probability level; late – a cost of £19 billion instead of £7 billion. • 19% finished by the time assigned a 75% probability level; The Sydney Opera House may be the most legendary • And only 45% (less than half!) finished by the construction overrun of all time – originally estimated time of their 99% probability level. to be completed in 1963 for $7 million, and finally Buehler, R., Griffin, D. and Ross, M. 2002. Inside the planning fallacy: Pp. 250-270 completed in 1973 for $102 million. in Gilovich, T., Griffin, D. and Kahneman, D. (eds.) Heuristics and Biases: Eliezer Yudkowasky Sept 17, 2007 The Psychology of Intuitive Judgment. Cambridge, U.K.: Cambridge University Press. Future of Humanity Institute 90M_345 (0804) • L2 ©2008 BST. All rights reserved. Confidential Information. PHU – 27 90M_345 (0804) • L2 ©2008 BST. All rights reserved. Confidential Information. PHU – 28

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Planning fallacy The High Performing

• When people are asked for a “realistic” Culture

scenario, they envision everything Supportive going exactly as planned, with no 5 (3) (4)

unexpected delays or unforeseen • Extinction factor high • High performance culture 4 • Some isolated culture • Rapid change capabilities change catastcatastrophesrophes – tthehe sasameme visionvision as ttheirheir e

“best case.” 3 (1) (2) Tacit Cultur • Reality, it turns out, usually delivers • Stagnant culture • Slow evolution but 2 • No results will get there results somewhat worse than the

“worst case.” 1 High Non- 12345 Buehler, R., Griffin, D. and Ross, M. 2002. Inside the planning fallacy: Pp. 250-270 Supportive in Gilovich, T., Griffin, D. and Kahneman, D. (eds.) Heuristics and Biases: Explicit Culture The Psychology of Intuitive Judgment. Cambridge, U.K.: Cambridge University Press.

Five Key Attributes of An InjuryInjury--free culture Focus on Attributes Exposure of an Alignment on meaning of Ownership “Injury–Free Injury-Free Culture Injury CltCulture Free Culture Foundational Principles

Meaningful Employee Measurement Engagement

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Injury Free Culture Injury Free Culture

• Clear alignment on meaning of • Heartfelt belief that all injuries are “Injury-Free Culture.” preventable. • Focus on exposure. • Injury-free means longer and longer • Ownership. periods with the absence of injury or incident. • Measurement. • What is meant by an “injury“ is clearly • Meaningful employee engagement. understood. • Injury-free includes any person who enters the premises.

Exposure in an Focus on Exposure Injury-Free Culture

• Increase in exposure is considered in • The organization focuses on getting decision-making processes. employees at the working interface to • Not all exposure is treated equally. understand the question that they need to ask must change from: • Attribution bias is avoided. • Do we think we will ge t in jure d? • Hierarchy of Control is leveraged. to • Did exposure increase?

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Leadership Accepts Decision Making Ownership

• Before making a decision, the leader or • Leaders understand they own the: the leadership team, considers the: • Results. • Ethics of the decision. (What ought we do?) • Actions of the individuals below them. • Impact on exposure. • Safety climate. • Affect th e d eci si on will have on: • CltCulture. • Beliefs and values. • Systems. • Climate. • Culture.

Demonstrates a Lack of The Problem Ownership • Ever heard? • The statements: • “We are just having stupid accidents.” • Can be disguised as wisdom. • “If our people would just follow the rules…” • Give people permission to fail. • “Our supervisors are not safety champions.” • Assign blame using an external bias. • “Our wor kers an d equ ipmen t are o lder than • TkTake a si mp litilistic v iew o fthif the issue. other sites’.” • Reflect followers developing pessimism. • “We are the only ones who report all • Demonstrate a clear lack of ownership. injuries.” • “Work is a contact sport.”

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Ownership Measurement

• Use a variety of metrics: • Ownership sounds like: • Lagging indicators: statistical • “A problem we have is that there is no system tools. for providing feedback for following rules and • Predictive leading indictors: wearinggqp equipment , and here is what we are indicators with a proven going to do about it…” correlation with safety outcomes. • Crucial activities: Activities that are not necessarily predictive.

Blueprint Measurement The Obvious, • Safety practices and leadership style elements.* Not So Obvious, • Organizational climate and culture.* and Hidden • Sustaining systems’ alignment with values Patterns that and effectiveness. Affect Your • EHS enabling systems design and implementation. Organization • Exposure measures at the working ©2008 BST. All rights reserved. Confidential Information. BST, Behavioral Science Technology, Inc. and Leading with Safety are registered trademarks of Behavioral Science Technology, Inc. (“BST”). All information is BST pre-existing interface.* * Predictive intellectual property, and/or is based upon pre-existing intellectual property of BST, or is used with express permission of the copyright owner and may not be reproduced without express prior written authorization from BST.