Why Scope Expands: Part I
by Rick Brenner
Scope creep is depressingly familiar. Its anti-partner, spontaneous and stealthy scope contraction, has no accepted name, and is rarely seen. Why?
The Bloomingdale's store in Stamford, Connecticut, in January 1955. The store closed in September, 1990, in the midst of the bankruptcy of Bloomingdale's parent company, Federated Department Stores. Federated filed for Chapter 11 bankruptcy protection shortly after it was acquired by Robert Compeau in what is widely regarded as a bidding war that left Federated over-leveraged. Extensively renovated, the structure is now part of the University of Connecticut. For more about the Federated Stores bankruptcy, see M. Goozner, "Campeau's U.S. Stores File For Bankruptcy," Chicago Tribune, January 16, 1990.
Photo from the Gottscho-Schleisner Collection of the U.S. Library of Congress.
The term scope creep describes a gradual expansion of an effort's scope, often outside the awareness of the people involved. They do recognize that the effort has become more ambitious, but they usually express surprise and shock when they finally appreciate the size of the resource shortfall. Curiously, the word creep doesn't connote growth or expansion — it carries instead a sense of gradual change with no direction implied.
That raises several questions. When scope creeps, why does it expand much more often than it contracts? Why don't we ever wake up one morning shocked to find enormous budget surpluses resulting from the gradual ebbing of scope that took place outside our awareness? Why do we never finish projects under budget and early because of out-of-control scope ebbing?
Downscoping does happen, usually when we trim goals to get out of trouble. But downscoping is consciously planned. Scope creep is neither conscious nor planned. The real question is: Why do so many unplanned changes of scope lead to scope expansion instead of scope contraction?
Two classes of mechanisms might explain the dominance of expansion over contraction. First, when we make scope change decisions, we might systematically fail to investigate — or even consider — suggestions that contract scope. Second, when we make such decisions, we might systematically favor alternatives that expand scope.
Because cognitive biases often provide intriguing explanations of behavioral phenomena that seem unrelated to intent, here is Part I of a short catalog of relevant cognitive biases, emphasizing systematic biases inhibiting adoption or consideration of scope contraction strategies.
- Sunk Cost Effect
- To investors, the term sunk cost describes costs already incurred and not recoverable. The sunk cost effect [Staw 1976] is a bias that tends to make us unwilling to terminate an effort, because of the difficulty of accepting failure, even when continuing the effort will only lead to greater losses.
- Irrational Escalation
- Irrational escalationWhy don't we ever wake up in the
morning shocked to find enormous
budget surpluses resulting from
the gradual ebbing of scope
that took place outside
our awareness? bias can cause us to commit increasing levels of resources even when evidence strongly indicates that doing so is foolish. Unlike the Sunk Cost Effect, this bias can take hold even before resources have actually been expended. Mere commitment of resources is all that's required. For example, in bidding wars, the bidders eventually increase their bids well beyond the value of the items sought.
- Endowment Effect
- This bias affects how we value what we possess relative to what we don't. We tend to ascribe greater value to what we have now than we would be willing to pay to acquire it. In the business context, this bias might account for overvaluing work already performed, which could enhance both the sunk cost effect and irrational escalation. We might also overvalue the opportunity to continue work already underway, relative to any work we might do instead.
These three biases can contribute to failure to consider scope reduction alternatives. Next time, we'll examine biases that might make us more receptive to scope expansion. First in this series Top Next Issue
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