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Influencing Risky Project Decisions

SERIES ARTICLE

Risk Doctor Briefing

By Alfonso Bucero, MSc, PMP, PMI-RMP, PfMP, PMI Fellow

Risk Doctor Partnership

Madrid, Spain

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Many project decisions are made by other people that affect you and your career as a project management professional, and often these decisions are about risk. Decisions about budgets, assignments, team allocations or priorities can significantly change the risk profile of the project. But just because these vital decisions are taken by others, it does not mean that you cannot influence the outcome. Project management professionals have to know how to influence decisions in a way that minimises the risk to their projects and themselves. We have to identify, analyse, and mitigate these risks to get optimal project results. How can we use our influencing skills to deal with risks that arise from the decisions of others?

Daniel Kahneman won the Nobel Prize for Economics for his work on decision-making. Kahneman described a set of mental shortcuts that affect how people make difficult decisions in uncertain situations. Project management professionals can take advantage of these factors when seeking to influence important and risky project decisions:

  1. Anchoring: Ensure that your position is seen as the starting point for important decisions. Then people can decide whether to vary from this, and by how much. Present your position as the key reference point for others.
  2. Framing: The way you express an idea affects whether people will agree or disagree. A 70% chance of losing a million is not viewed in the same way as a 30% chance of making a million. Frame the decision in a way that favours your preferred option, and this will minimise the risk of the decision going a different way.
  3. Loss aversion: Would you invest your pension fund in a policy which offers an 80% chance of doubling your money, but a 20% chance of losing it all? If you could play that game often enough, you would win handsomely. But since you can only play once, most people would duck the offer, because the risk of loss is too great. And loss aversion is not just logical; it is also about not being made to look stupid. So make sure that you present your preferred option in terms of potential benefits, not losses.

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About the Author

pmwj34-May2015-Bucero-PHOTOAlfonso Bucero

Bucero PM Consulting

Madrid, Spain

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Alfonso Bucero, MSc, PMP, PMI-RMP, PfMP, PMI Fellow, is an International Correspondent and Contributing Editor for the PM World Journal in Madrid, Spain. Mr. Bucero is also founder and Managing Partner of BUCERO PM Consulting. Alfonso was the founder, sponsor and president of the PMI Barcelona Chapter until April 2005, and belongs to PMI’s LIAG (Leadership Institute Advisory Group). He was the past President of the PMI Madrid Spain Chapter, and now nominated as a PMI EMEA Region 8 Component Mentor. Alfonso has a Computer Science Engineering degree from Universidad Politécnica in Madrid and is studying for his Ph.D. in Project Management. He has 29 years of practical experience and is actively engaged in advancing the PM profession in Spain and throughout Europe. He received the PMI Distinguished Contribution Award on October 9th, 2010 and the PMI Fellow Award on October 22nd 2011. Mr. Bucero can be contacted at [email protected].

To see other works by Alfonso Bucero, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/alfonso-bucero/