Monthly Archives: November 2009

The Changing Media

The internet significantly changes how information is produced and consumed.

Realtime media

Interesting post on TechCrunch on how the news media will change to to realtime tools like Twitter.  Twitter, now with 5 million users, appears to be able to beat traditional media in reporting breaking news by about 45 minutes based on recent events such as Tiger Woods’ crash. The claim is that the traditional media is more reliable in its reporting, but the article questions that, as realtime media can introduce healthy scepticism and has the advantage of what James Surowiecki terms the wisdom of crowds.

Media Polarization

The other important theme to monitor is media polarization, as this article shows, people tend to watch news that mirrors their political beliefs. Watching news that agrees with your political bias tends to reinforce that bias. For example if you’re a Republican/Democrat and you watch Fox News/CNN, then that tends to reinforce your bias.

The Implications

With more sources for consuming information, such as an estimated 200 million blogs and the traditional media diminishing in importance, the likelihood is that people will increasingly seek out fragmented media sources that reflect, and reinforce their views.

Decision Making and Music

People tend to think they make decisions in a rational, objective fashion, but the research of Adrian North, a Psychology Professor in the U.K. shows that even background music can influence decision making.

  • Playing sterotypical French or German music in a wine store determined which wine outsold the other, more interestingly shoppers were unaware that the background music had influenced their purchase.
  • In another study students in a cafe showed a greater willingness to pay for more expensive food when classical music was playing.
  • People were also more willing to hand out leaflets for a charity after listening to uplifting music.

 

Resistance to Change

You may have seen that the Japanese government is considering moving away from a press club system. The press club is a small cadre of journalists, who get access to government officials, often working in the same office building, a result of Japan’s post-war system, which had a single party in power until recently. The proposal is to move to a more open system of public disclosure, granting more access to a broader range of journalists. The New York Times article on the topic is here.

What I liked was the press club’s defence, from former chairman of the press club Shinji Furuta:

“What if someone tried to commit suicide or burn themselves to death at a press conference? Who would take responsibility for that?”

Irrational resistance to change is common, but seldom this absurd. It’s interesting that the arguments to preserve a system seem to have a lower threshold that arguments to create it. An argument by Mr Furata to create a press club to prevent suicides at press conferences, presumably wouldn’t get New York Times coverage. 

As an aside, I did look into the risks associated with press conferences, and the man who threw his shoes at President Bush last December was a pretty senior journalist – a correspondent for an Egyptian TV station, so a press club system wouldn’t have kept him and his size ten shoes out. On a more sombre note, there was a suicide at a press conference in Philadelphia in 1987, but that was by the very politician who called the press conference, Budd Dwyer a State Treasurer being investigated for taking kick-backs. He was not a journalist.

Making The Most Of Your Information

As reported in this Techcrunch article FlightCaster received further funding today.

It’s an interesting startup company. They predict airline delays using 10 years of historical data combined with real time information. They claim the airlines could do a better job, but don’t because it’s in there interests to get everyone to the gate just in case the delay doesn’t happen, because announcing a delay in advance would always be self-fulfilling.

The company also brings to mind FareCast (now part of Bing Travel), the company Microsoft acquired that predicts changes in flight prices for consumers.

Why does this matter? Well it’s an illustration of the principle that we can always make better predictions, 4 hours before take-off FlightCaster claims to make 10x delay predictions the airlines do, with no change in the level of accuracy, the data is there, but we’re just not using it effectively. FlightCaster is just one example of this phenomenon.

Microsoft Project 2010 free beta now available

The free beta version of Microsoft Project Professional 2010 can be downloaded here, and you can learn about all the new features such as the timeline view, team planner and user-controlled scheduling here.

The beta is provided by Microsoft free as a trial ahead of the full launch of the final product next year.

Article on Risk Management

I recently contributed to an Arras People newsletter on risk management, focusing on the human side of risk management you can see the article here.

Risk Management: The Pre-Mortem Approach

As I mention in my book post-mortems are a critical tool in enabling improved project performance over time. Determining areas of success and areas of weakness sow the seeds for improvements in subsequent projects. However, post-mortems are, by definition, only successful correcting mistakes after they happen. That is to say a mistake must happen (or be narrowly avoided) at least once in order for the organization to learn from it, and take whatever corrective action is necessary. Experience may be the best teacher, but that can also prove expensive. Pre-mortems offer a different solution, correcting problems in advance, and eliminating the risk in the first place.

A pre-mortem involves getting project stakeholders and participants into a room before a project starts, making the rather bleak assumption that the project was not successful and then determining the cause. By assuming that the project has already failed, it makes it much easier for everyone in the room to be creative in pointing to potential problems and shortcomings. Without the safety of a pre-mortem environment, participants may be unwilling to point out flaws due to hierarchical structures, or a lack of willingness to be viewed as pessimist. With a pre-mortem, failings can be addressed in advance, or if that isn’t possible, key areas of risk can be highlighted for appropriate mitigation and response strategies to be put in place.

I believe Gary Klein originally coined the term pre-mortem and that article is here, which builds on the work of Deborah J. Mitchell, Jay Russo and Nancy Pennington.

Book Available in Kindle Format

The publication Strategic Project Portfolio Management is also available on Amazon’s electronic book device, the Amazon Kindle:
http://www.amazon.com/Strategic-Project-Portfolio-Management-Organization/dp/B002SVQD9Q/ref=sr_1_3?ie=UTF8&s=books&qid=1257532789&sr=8-3

When Can Risk Management Be Counter-Productive?

In reading Macolm Gladwell’s compelling recent book What The Dog Saw and Other Adventures, there is an interesting chapter titled “Blowup”, which covers various topics including the provocative research of Gerald Wilde, a Psychology Professor at Queen’s University in Canada. Professor Wilde, in his book, available free online, Target Risk puts forward a counter-intuitive theory of how people adapt to risk, and it has implications for project portfolio management.

Most people believe that devices engineered to reduce the risk of being injured in a traffic accident, serve to make people safer – bicycle helmets, anti-lock brakes and seatbelts. For example, conventional wisdom assumes that if you have anti-lock brakes on your car, you are able to break more effectively and so the chance of you having an accident falls. However, Professor Wilde draws on a number of empirical studies to contradict this, here are some of them. They are biased towards traffic safety because that is Professor Wilde’s specialism:

Innovation Impact Research source
Anti-lock breaks (ABS) Likelihood of accidents unchanged with ABS Aschenbrenner, M. and Biehl, B. (1994).
1966 US legislation for safer passenger vehicles No decrease in accidents per KM driven Peltzman, S. (1975)
Increase road lane width 30cm Average speed increases 3.2km/h OECD (1990)

 

What this implies is that people adjust their behavior depending on the level of risk they face. If roads are wider, then people will drive faster. If a car has anti-lock brakes, then a driver is more likely to tailgate and brake more abruptly. If cars can better protect drivers in the event of an accident, people will drive faster. Professor Wilder, argues for risk homeostatis, meaning that people will assume the same level of risk that they desire independent of changes in technology such as safety improvements. Therefore, changes in behavior can entirely offset safety improvements. It is the level of risk that people want to assume that matters, improvements in technology will not necessarily change people’s risk preference.

In terms of project portfolio management, the implication is that systems in place to reduce risk may be offset by participants engaging in offsetting riskier behavior, so that their total risk remains unchanged, this can occur despite the best efforts of risk management strategies

Does this, admittedly rather extreme perspective mean that risk management is ineffective? The answer is no, for two reasons. Firstly, as Gladwell notes, even in these examples there is a benefit to the tools in place – people are able to drive faster and get to their destination quicker because of the technologies introduced. Their chance of being in an accident might be unchanged, but they are able to travel faster for the same level of safety.

Secondly, and perhaps more importantly, there is another implication deeper in the study concerning anti-lock breaks, even though during the 3 years of observation, drivers with anti-lock breaks took compensating risk and neutralized the safety benefit, in year 4, all the drivers (who were taxi drivers) were told that they would bear part of the cost of accidents and be terminated if they had a bad safety record. Even though technology did not improve safety, changing the incentives the drivers faced resulted in materially less accidents. When they knew they would bear more of the cost of accidents, the drivers took less risk.

The implication is that if you put in place risk management tools that compensate for peoples mistakes, they may ‘take advantage’ of them by taking more risk, offsetting the risk management benefit. However, the incentives you put in place to reward and punish people for taking risk will have an impact.

Great Post On Strategy

Not sure if you read Joel Spolsky, his blog is mostly about software, but always insightful.

Here’s one of his best posts on business strategy – contrasting Amazon with Ben and Jerry’s:
http://www.joelonsoftware.com/articles/fog0000000056.html