Dealing with Optimism Bias in Construction Scheduling
May 26, 2022
In and of itself, optimism isn’t a bad thing. When managing capital projects, it can give us the confidence we need to overcome obstacles and take risks head on. But too much optimism and we’re more likely to disregard those risks, ambitiously underestimating what’s really involved in completing a project, overpromising and underdelivering on both budget and schedule. It’s this over confidence, commonly known in construction as optimism bias, that has made a name for itself as a key risk factor behind the schedule delays that have become so common in the industry.
Naturally, the question we have to ask ourselves first is how do we get optimism and realism to coexist in a construction scheduling scenario? There are several different ways to approach this, some that work on their own and some that can even work in concert with others. Let’s take a look at some of them now.
Use construction estimating software
By its very nature, optimism bias is rooted in belief. Past project successes can lull us into believing that history will repeat itself in future projects. But clients are preferring realistic schedules over pie-in-the-sky timelines that have historically gone well past their completion dates. The best way to circumvent this is to aim for realism that’s rooted in measurable data. And there’s certainly no shortage of data in modern-day capital projects.
So how is construction estimating software helping? With so much at stake, contractors are relying on the software to accurately calculate just how long a project may take — and cost — to complete, with timelines automatically readjusting as the initial project scope variables evolve. That accuracy, though, depends on the precision of the inputs. This is where the real-world data they already have comes in. Those projects have already endured risks that may have impacted schedules, so the data you wind up with is risk-adjusted. By incorporating data from similar past projects (or industry benchmarks), the software is able to deliver an evidence-based approach to construction scheduling, while ensuring no details are overlooked. What you get is data-driven optimism — and a higher degree of project certainty — for both the client and the contractor.
Pay attention to schedule performance index (SPI) metrics
Your SPI is a key metric to follow if you want to keep tabs not just on how well your project is adhering to the established schedule, but also get a heads up on deviations in the metric that could indicate something is putting that schedule at risk of falling behind. It’s never a static value; it’s always changing in response to internal and external variables that can have an effect on your construction schedule. Consider it a real-time reality check.
But how does SPI help you avoid optimism bias? Take a look at your past project data. The fluctuations of your SPI give clues of when and what risk factors occurred, and the degree to which they affected the timeline. These can be used to create reality-based, risk-adjusted schedules for future estimates.
And for current projects? Dashboards, outgoing reports and deviation alerts let you monitor how your SPI is faring. When it confirms everything is on track, it’s reassuring to have that justifiable confidence in your project’s performance to that point. But even when your SPI begins ebbing and flowing outside of its acceptable operating range, you have the time and opportunity to dig deeper into its cause so you can make an informed decision about how to mitigate its effects on your schedule. Perhaps you draw from how well contingency plans worked in prior projects when those same risks occurred, or you collaborate with the project team to make a plan on the fly.
So rather than the “oh, that risk can’t happen to my project” optimism bias, your SPI instead turns it into a more practical “okay, this risk happened but I have a chance to successfully mitigate it now” optimism.
Take advantage of online risk management workshops
Risk management workshops actually help build group confidence in creating a risk-adjusted project plan. They surface the real-life risks that have happened in past projects, the effects they had on construction schedules (as well as costs and safety), and how they were mitigated. They help answer critical questions including: What lessons can be learned from those projects that you can apply to your current project? How likely are certain challenges to repeat themselves that we may need to account for? What do past performance metrics show (yes, including SPI)? How well did contingency plans work and how can they be adjusted to better mitigate them in this project?
In particular the online workshops help equalize participation among the project team members from different disciplines and leadership roles — including owners, contractors, project managers and engineers — making it far less likely for groupthink-fueled optimism bias to occur. With so many points of view represented, it’s harder to ignore or downplay risk factors and their potential to make a future appearance.
Rely on checklists as reality checks
Optimism bias is subjective. And when it comes to manual checklists, there’s opportunity to skip past certain line items or manipulate the information that’s being logged. This may be much harder to do with mobile-enabled software boasting checklists and data tracking capabilities. Checklists are objective, acting as ongoing reality checks and providing evidence of how well a project is progressing and meeting construction schedules and client expectations. They can validate the planning or, as with SPI, turn a discovered error, defect or risk factor into an opportunity to confidently make immediate decisions and take corrective actions that can prevent schedule-impacting rework.
Adopt construction scheduling software for risk analysis and forecasting
Where optimism bias says, “I don’t think this will happen,” construction scheduling software says, “Let’s plan for it anyway” — because it’s construction and things often do not go 100% according to plan.
This is where scheduling software assumes a risk management role by using its forecasting capability to assess the impact of “what-if” risk scenarios. How? Let’s start by going back to your historical data and let those numbers do the work. Inputting that data and adjusting reflect potential risks — weather, supply chain delays, material shortage, lagging jobsite productivity — allows you to see the projected impact on schedule and cost resulting from each scenario.
Using such results as a guide, you will have the opportunity to develop turnkey contingency plans that are plotted out for if/when risk factors occur. InEight construction scheduling can do everything we’ve discussed here and more, helping build confidence and optimism into the estimate and the overall plan. See if for yourself by requesting a demo.