What Is Recency Bias and How Does it Affect Stakeholders?


What if you had to work with someone who lost their long-term memory? That would be a problem. Not only would everything be colored by immediate events, good or bad, but historical data would have no precedent.

It’s a nightmare scenario out of a business Twilight Zone, but it’s not fiction. There is a phenomenon that mimics this fantasy and creates havoc in offices: recency bias. If your stakeholders have this myopic view of your project, then you know how detrimental it is to productivity and morale.

But before you can respond to recency bias, you must understand what it is. You’ll see that it’s merely a hurdle, but one that must be cleared. To ignore recency bias is to risk the support of your stakeholders.

Definition of Recency Bias

Recency bias is when a person focuses on what happened most recently rather than recalling something that happened a while ago. Furthermore, a person with recency bias believes that whatever is happening now is what will happen later or keep happening, because they’re detached from the historical data and project reports that shows how things happen in cycles.

Example of Recency Bias

Think of your financial investments. Is your portfolio heavy with stocks? The market is volatile, and it’s understandable for you to feel emotionally invested in that day-to-day ride. But just because a stock drops today doesn’t necessarily mean it will crash tomorrow.

It’s one of the most common mistakes people make when investing in the stock market. They sell low and buy high. When a stock is going down, they panic and when it’s going up, they want it. But in both cases, they’re acting passionately in what must be a dispassionate transaction. Investments are long-term and recency bias makes people act in the short term, and not even accurately at that.

Related: 7 Logical Fallacies That Can Harm Your Decision Making

It’s a psychological tick that one must be aware of. People’s judgments are clouded by recent events, and they put greater weight on that than they do on older memories when making decisions. This is problematic, especially if you’re managing a project with many ups and downs, and reporting that progress to your stakeholders.

Key Factors of Stakeholder Management

Projects often live or die by how well managers manage their stakeholders, and to do so properly involves basically four steps:

  • Identify who the stakeholder or stakeholders are in the project. It’s not always as easy as that sounds, but if you don’t put the time into recognizing and acknowledging those stakeholders before the project starts, it’s going to bog down your process as you move forward with the project.
  • Once you know who the stakeholders are, then it’s critical to determine their influence and interest. This is known as stakeholder mapping. Not every stakeholder will be as important as the next. Some are going to have their fingers on the trigger to enact financial or scheduling changes, while others will be more invested in the project and you’ll have to win those parties over to manage the project successfully.
  • Once these stakeholders are identified and listed in terms of priority and influences, you’ll need to set up a communication management plan by which you can engage with them effectively. You can use our free communication plan template to get started. If you can’t reach these people or if they feel as if they’re cut off from the action, the project will suffer.
  • Finally, once you have your stakeholders and their priorities identified, and you’ve established a communication management plan, you have to work on influencing and engaging with them. If you can’t do this, then all the work you’ve put in will be for naught. This is the step where recency bias will likely manifest.
recency bias on projects

How Recency Bias Impacts Stakeholders’ Perception

To understand how recency bias might affect your stakeholders, look at things from the stakeholders’ perspective. They’re not as intimate with the project as you are as a manager. You report to stakeholders, but you do so with broad strokes. It’s not as if they’re team members who get a deeper dive into the inner workings of the project.

That’s because stakeholders don’t need minutia; they want progress reports that show you’re hitting milestones on schedule and keeping costs to where they were budgeted. If you come to them with a delay, that’s all they’ll hear. They won’t look back at previous reports and see that this is not an unexpected bump in the road.

Stakeholders’ time is valuable, and if you inundate them with data, their eyes will likely glaze over. That isn’t going to help your cause. Just remember, that it’s difficult for someone not in the day-to-day activities of the project to keep the full breadth of the project in view.

Stakeholders are therefore more likely to act rashly, even panic, so it’s your job to put out that fire before it even gets a chance to start. Your job is to keep stakeholders accurately abreast of the project and its progress, of course, but don’t make them outraged or overly optimistic.

Related: How to Manage Stakeholder Expectations

What Can You Do to Overcome Recency Bias?

Naturally, the first thing is to be mindful of the existence of recency bias. Just as you had to identify the stakeholders in your project, you should discern who among them is more susceptible to recency bias. This might not be immediately evident, but it will show itself in time. When it does, there are strategies to counter it.

Keep the Big Picture Handy

One way to avoid the recency effect is to keep a record of the big picture, so that it can be referred to. This provides context to the present situation, whether it is bad or good. Bad or good news will color stakeholders’ vision of the entire project if they suffer from recency bias. Therefore, the data to pull them from the specifics to the general overview is a great way to make them see that these peaks and valleys are only the scenery en route to success. Data visualization tools can help with this.

Provide Context

Another approach is communicative. The snapshot might develop a certain picture, but that’s only a moment in time. Therefore, when reporting on the progress of your project it helps if you have a project management software that filters graphs and charts to show what you need to present to stakeholders, but also has the capacity to delve deeper into the data to provide the needed context for the current situation. This will give stakeholders a more specific view when you need to quickly respond to their concerns.

Open Dialogue

Think of recency bias as a type of impaired judgement. Therefore, the people who have it will respond to the short-term and ignore the long-term. You know this in advance, so plan against it when you meet with your stakeholders. Get those who look at the project with a wider lens a chance to speak about hearing the news in perspective. They might have more sway with the other stakeholders, and you can always jump in and emphasize a more realistic approach.

Use Clear Metrics

Make sure you have a system in place to prevent recency bias. Have clear metrics and back that up with an effective structure by which you deliver them. For example, you should provide current data on the project and its progress in the life cycle, but you can also make sure that information is delivered as part of a larger landscape.  By doing this, there’s no threat of taking a good or bad situation as the sole indication of the project’s wellbeing.

Take Notes & Listen

It doesn’t hurt to take notes, so when recency bias raises its ugly head you can confront it immediately with data that shows the project in context. Also, remember that there’s a time and place to deliver your report, and it’s not when you or the stakeholders might be exhausted. Find a time, maybe in the morning, when everyone is fresh. They’ll then be less likely to react to news emotionally.

The best way to avoid recency bias is by having accurate data and being able to deliver it shallow or deep, depending on the situation. ProjectManager.com is a cloud-based project management software with a real-time dashboard that collects data as its recorded and automatically turns it into easy-to-read charts and graphs. Better still, those charts and graphs can be filtered to give a more fine-tuned picture of the project with just a keystroke. See how ProjectManager.com can help you manage your stakeholders’ recency bias by taking this 30-day trial now.

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