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Forecasting and Data Newsletter by Troy Magennis
Five Cognitive Biases Avoided Using Data

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In this newsletter:

  1. Article: Five brain biases data avoids 
  2. Myth of the Month: Metrics are only for in-progress work:
  3. Tool of the Month: NHS SPC Improvement Tool
  4. Book of the Month: The Flaw of Averages
  5. About Focused Objective and Troy Magennis
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Article: Five Brain Biases using Data Helps Avoid

There is often a fear of data. Fear others use it in an abusive or non-productive way. The feeling that “we” know better and the data we have is flawed even if sometimes true. But our human brains have just as many issues where data can assist. Using data wisely means maximizing the capability of both our brain AND our data. You always need a balance of both to be successful. Here is a summary list of ways our brain fails us without the backup of data (there are hundreds and a large number of them listed here and (amazing visualization).

Just remember: Data helps people; it doesn’t come close to replacing people. Kindly continue to use your brain (aided by data).

1. Dealing with too much information

When dealing with massive information overload, our brains have to detect the most important (for us) efficiently. It does this by selecting where to focus attention based on thousands of years of evolution. Those of our predecessors who said “pretty flower” missing the “pretty mountain lion” about to pounce failed to reproduce in high enough numbers to still be persistent in today's population (not that you shouldn't admire flowers).

Key points

  • We notice things we have seen, experienced before or often happen before new things

  • We notice change or movement before the same or static things

  • We notice details that confirm our prior beliefs before forming new beliefs

  • We notice flaws in others before seeing flaws in ourselves

Data can help deal with overwhelming information by surfacing insights that matter now while subduing the lesser important. To do this (by brain alone or with data), we would have to know what insights are most important to highlight (which this book aims to teach). Let data expand our mental bandwidth and highlight things we might have missed due to the onslaught of continuous information.

2. Dealing with not enough meaning or knowledge

Faced with uncertainty, we construct a perfect world in our mind to analyze and make a (or any) decision. While different people handle uncertainty and lack of knowledge better than others, our brains always drive us towards any decision to get out of the uncomfortable feeling uncertainty.

Key points

  • We fill in the gaps in data using stereotypes, generalities, and prior history

  • We see patterns in data that may be random

  • We project our (wishful) assumptions onto the past and future

  • We simplify probabilities (“pretty sure”) to make it easier to justify what we want to do 

Data can help us keep track of uncertainty and surface outcomes that we may have ignored. Proper statistical analysis helps keep track of uncertainty, and real patterns, helping us avoid making ill-informed choices in high uncertainty conditions. 

3. Dealing with Recall and Limited Memory

Our brains, born without a memory expansion port, need to keep only some of the input it receives. Just what we store and recall makes or breaks our future decisions.

Key points

  • We store memories differently based on how we experienced them

  • We edit memories after the fact (rewriting history in our favor)

  • We forget specifics but recall generalities

  • We reduce details of events and lists to key elements

Data can assist our recall for anomalies and surprising trends and complex correlations and causations. Data provides (hopefully) an unbiased and reliable view of history. It can help us recall the critical context that we could have missed due to a lack of recall. 

4. Dealing with the need to act fast

Faced with time pressure, all of our biases get amplified even more (B1, 2, and 3). We simplify and revert to survival mode instincts even more. 

Key points

  • We favor simple-looking options over complicated when under time pressure

  • We favor the status quo and avoid irreversible solutions

  • We favor finishing things we started over changing course and abandoning the effort

  • We favor things we know we can make an impact over things we aren't sure can work

5. Dealing with Social and Emotional Issues

Not just a brain bias but a deep-seated psychological need. The need for self-worth. The need to form and be a part of a like-minded tribe. The need to be seen as superior (writing a book, for example). These biases affect some people and the reverse for others. I’m not a psychologist, so don’t expect me to have the foggiest idea why.

Key points

  • We either tend to believe the authority and expertise of others or the reverse

  • We either need to be part of and go along with a group or the reverse

  • We either believe we are better than we are or the reverse

  • We either care passionately about what other people think of us or the reverse

Data can assist us from social biases, but it can also exacerbate it. We need a set of commandments that help make sure we minimize or maximize these social biases towards a positive benefit.

Myth of the Month - Metrics are only for in-progress work

I see a huge gap in organization metrics when using tracking tools. The focus is almost entirely on the in-progress and completed work. This means that how work is chosen, and whether there is a healthy set of backlog options to choose from is absent data support. I'm starting to see that if there is one spot metrics and data can really help, it is by analyzing the backlog contents for value. I try and apply the same six-performance dimensions I wrote about earlier this year, and challenge teams to come up with a metric for each performance dimension regarding the backlog of features, epics, and stories.

Backlog health examples:
  • The ratio of High/Medium/Low-value stories trended over time. Do you have enough valuable options in the backlog?
  • The incoming option rate trended over time. Do you have new ideas coming into your backlog or do you need to free up time for teams to brainstorm (hack days, etc)
  • The amount of un-prioritized backlog items trended over time. Do you need to schedule more prioritization time?
  • The incoming defect rate trended over time. Has there been a change (positive or negative) about the number of defects? It could be that no-one is looking!
There is a lot of valuable insights that are early warning signs of problems and low value in the future by analyzing the backlog now. Spend some time discussing with your teams their concerns about the backlog contents and then do something about it!

Tool of the Month - Statistical Control Tool by NHS

This tool isn't one of mine. I decided I couldn't do better, so I abandoned my efforts! It is from the talented UK National Health Service Improvement team. I love their work. They are teaching practical techniques to healthcare professionals and administrators, reintroducing statistical measures to a new generation. Here is a description of the tool in their words -

SPC is a good technique to use when implementing change as it enables you to understand whether changes you are making are resulting in improvement — a key component of the Model for Improvement widely used within the NHS.  

SPC is widely used in the NHS to understand whether change results in improvement. This tool provides an easy way for people to track the impact of improvement projects.

This tool will enable you to:

  • record your data on a daily, weekly or monthly basis and plot it on an SPC chart automatically
  • indicate when a process may have changed by automatically applying SPC rules to the data
  • annotate your chart and when appropriate apply step changes to your mean and process limits
Download the NHS Spreadsheet

Book of the Month: The Flaw of Averages

The Flaw of Averages by Savage, et al is an approachable text detailing the perils of making any significant decisions using "average." It clearly sets out the issues and solutions to answering important questions. It is a great book to drop on the desk of your boss, and bosses boss desk without editorial if you want them to realize probabilistic forecasting is important and why.

About Focused Objective and Troy Magennis
I offer training and consulting on Forecasting and Metrics related to Agile planning. Come along to a training workshop or schedule a call to discuss how a little bit of mathematical and data magic might improve your product delivery flow.
See all of my workshops and free tools on the Focused Objective website.

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