Project management classroom experiments (2/3)

Mario Vanhoucke
6 min readSep 17, 2024

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How perception of risk and complexity affects us

Photo by Jason Goodman on Unsplash

Project management is the process of managing projects in progress and constantly requires decisions to be made to complete them on time and within the budget. Due to unexpected circumstances, these decisions are made under uncertainty, and their effect is therefore not always known in advance. Moreover, the possible impact of each decision, even without the presence of uncertainty, is often complex and not well understood. A project consists of activities between which precedence relations exist, and where resources are limited, and every small change often has an impact on the other parts of the project without really knowing what’s going on.

For these reasons, I believe that teaching project management (PM) course modules is not only a challenge, but also a privilege. There is so much more to it than a mere list of do’s and don’ts and summaries of tools and techniques. The tools and methodologies are of course important, but they must be put into perspective and viewed from the perspective of the contribution they can make during the never-ending decision-making process of managing projects.

There is nothing better than letting the PM students do something. Instead of telling endless stories or giving dry summaries of tools and techniques, I much prefer to discuss the simple techniques (such as the critical path method) and then get started with them. For example, I often use the project scheduling game as the perfect way to demonstrate that the time/cost trade-offs in the critical path method are actually not difficult to understand until you apply them in a real (or in the case of the game, a semi-real) environment.

Learning by doing, it always works!

Everyone likes a little play!

The students’ enthusiasm is often contagious, even before they start the game. I first explain to them in detail that they must choose a duration for each activity, whereby each duration also corresponds to a certain cost (which increases as the duration decreases, it’s a trade-off!). The choices the students make have an impact on the total project duration (which is equal to the longest path in the network). After these choices have been made, a partial project progress is simulated via a computer simulation, and something goes wrong here and there (delays in activities, for example). Therefore, the student’s initial time/cost choices must be reviewed after each simulation run if they still want to deliver the project on time and within the budget. It’s not an easy game!

Of course, it is ideal if the students can play this game with their own project data from their company to give them some feel for the project characteristics, but that is not always possible. Some of my students are not yet in the business world, and others have only just taking their first steps in the PM world and have no project data yet. That is why I always give them some information about the project so that they know more or less how complex it is, and what the expected degree of risk (unexpected delays) could be.

Although I dare to lie here sometimes.

Is perception a lie?

Lying may be a bit of an exaggeration. I’m not a liar and a cheater, but rather I create perceptions about the project complexity and uncertainty to determine whether that information is useful and has an influence on how the students manage their project.

  • Complexity: The size of the project network, but also the number of choices around time/cost trade-offs determine how complex the game exercise is. With small projects and a limited number of choices, it is quite easy to find the optimal time/cost trade-off for each activity, but above a certain size this is far from easy. Moreover, the costs can be so close to each other that the optimal choice is very difficult to find. It is not without reason that mathematicians say that this time/cost scheduling problem is NP hard.
  • Uncertainty: In terms of uncertainty, it is easier to create the right or wrong perceptions. I give my students some information about the expected size of delays, and how many times they occur, and then I set this uncertainty level myself before they start the game (I can choose among 10 levels from low to high uncertainty).

What I want to find out is whether the perceptions I create, which may or may not be right or wrong, have an impact on how the students ultimately deliver the project to the customer.

That’s not a lie, it’s distorting the truth.

Human behaviour in decision making

The design of such experiment is of course not very unique and innovative. It was Kahneman and Tsversky who claimed some time ago that decisions under uncertainty are often made incorrectly due to all kinds of biases in human decision making. I just wondered whether you could test some of their ideas with that game of mine.

The truth and the perception for project complexity and uncertainty

The figure shows some results for complexity and uncertainty perception experiments. Below each pair of bars, the actual situation (the truth) is given, which can be either low or high, both for the complexity (left graph) and uncertainty (right graph). But the truth can be disguised by the perception I created for the students.

This perception, for both complexity and uncertainty, is represented by the blue bars (I told them it was set to low values) or the green bar (I told them values were set to high).

The height of the bar indicates how much effort the students put into the game. The more effort, the more serious they were about the game.

Many conclusions can be drawn from this graph. And even if these conclusions are not always very scientific, they at least show how perception colours our behaviour and the decisions we make. Let us explain one of the clearest conclusions in more detail below.

We are more afraid of uncertainty than complexity (but not always)

The graph shows that the message of high complexity (although it is actually at a low level, see bar (1)) does not given us an incentive to increase our effort very much. However, the message of high uncertainty (even if it is a lie and it is low (see bar (2))) always triggers our attention. Indeed, almost as much effort is invested between the low uncertainty (bar (2)) and high uncertainty (bar (3)) as long as we create the perception that it was set to high values.

Apparently, the feeling of high uncertainty triggers something in us, human beings, and it gets all our attention. And even though we notice during the project progress (the game simulations) that the uncertainty is not that high, we always remain on our guard. It seems that we do not learn to put things into perspective, even though the facts teach us that things are not so uncertain as we thought. Perception wins over rational actions when it comes to uncertainty.

The risk averseness depends on our past experience

It is important to mention that the graph above shows the average results of people with at least 3 years of experience in managing projects. That same graph looks completely different for my university students (not shown on the graphs). These students with little practical experience treat the high complexity message as a sign to do a lot of calculations, and they all search for the optimal solution. Their level of effort is therefore much higher in bar (1) and is approximately equal to the uncertainty graph of bar (2). What they often forget is that uncertainty can overturn their calculations and disrupt the entire project. Apparently, if you have never experienced uncertainty firsthand, complexity seems to be the real challenge.

People with practical experience see risk as a danger to their project, while students without experience often choose the challenge of planning their project as cost-optimally as possible.

Results of classroom experiments should always be taken with a grain of salt. As I mentioned earlier, these results are not based on scientific analyses, as they do not go beyond a number of observations among students who played the project scheduling game. But nevertheless, it remains strange and interesting how perception and experience guide our behaviour, and I think we should all be very aware of this when we manage our projects.

If you use this article, please cite: Wauters, M., & Vanhoucke, M. (2016). Study on complexity and uncertainty perception and solution strategies for the time/cost trade-off problem. Project Management Journal, 47(4), 29–50.

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Mario Vanhoucke

Professor at Ghent University, Vlerick Business School, UCL School of Management. Project management author/researcher and music fan. www.or-as.be/books.