One of the reasons risk management goes wrong is a psychological phenomenon called anchoring. Anchoring means that once an idea is out there (such as estimate of when a project will end) it has a lot of power and influence, even if it’s not intended to. Lots of academic research documents this across various settings and context and it’s pretty robust. Once an ‘anchor’ is set, even unintentionally, it is notoriously hard to move it.
What does this mean for risk management? Well it means that once a project plan is out there, the initial estimate will be changed more slowly that it should because of these psychological factors. If the project is was initially meant to cost $3M and then a revised estimate comes in at $4M, the estimate is more likely to move to $3.5M than all the way to $4M, because of the impact of the initial estimate, even though it’s now out of date.
Good risk management should ensure that only the latest information is factored into any estimate, effectively starting from a ‘blank slate’ each time. However, even though this sounds obvious, the impact of anchoring does mean that it’s hard to do in practice.