Conservatism Bias

Tendency to feel insufficiency even when presented with new evidence. When there are two values that can be chosen, recognizing the lower value, the safer one - most probably based on prior experience.?

?This can be positive or negative.?In financial accounting it is considered as the worst-case scenario, hence protecting the return on the investment. Whereas in other scenarios it could be a killer.

?For example, in projects, we get forecasts for milestones, and many a time end up receiving a conservative estimate. A larger project plan is an aggregation of various estimates from diverse workstreams, resources, and vendors. By adding all the conservative commitments, one ends up with a bloated - infeasible schedule. The same is true for budget estimates as well.

?CCPM is one of the best models that deal with such scenarios.

?Is there a way to check the POS – “Probability of Success” of these commitments??

An experienced leader figures this out, the conservatism built in great commitments. Here is a hack to find the cues of conservatism in commitments.

“We can complete this by?H2 of 2023.” (means 2nd half of 2023)

• Super conservative. The person may not have any idea of the effort needed to accomplish the milestone, hence adding arbitrary estimates and throwing a number. Do a deep dive and work out a WBS in order to ascertain the timelines.

?“... can complete by Q3 of 2023.”

• A quarter buffer is included in the estimate.

?“…May end!”

• It may not end. Check out this loosely made forecast.?

?“….within 7 working days”

• Hmm.. slightly dicey, but you can still believe it. Check if she has resource constraints.?

?"I can finish this by 27 May 23, EOD"

• Bang on! The POS of such commitments is high. Seems there is a calculation behind the commitment?

?This is just a cue check on the buffers in the estimate. What are the other ways in which you would buckle the conservatism?