Cognitive or Neuroscience: The Missing Link in Causation Analysis of Construction Disputes
In the construction industry, the causes of disputes have traditionally been viewed through a lens focused on tangible factors—design flaws, project delays, budget overruns, and so on. While these are undoubtedly real and impactful, they often only scratch the surface of what is truly driving conflicts. After years of working as a forensic claims consultant, I’ve come to realize that the core of many construction disputes lies in a less obvious domain—human cognition and neuroscience. These invisible, intangible forces shape the way decisions are made and disputes arise, making them the "missing link" in causation analysis.
The Importance of Causation Analysis
Before delving into the role of cognitive and neurological factors, it’s critical to first understand the importance of causation analysis. In my work, understanding the cause of a dispute is not just about pinpointing what went wrong but about understanding why it went wrong. As outlined in Chapter 10 of our book, causation is the starting point of dispute analysis. The simple equation we often refer to is:
Cause (Source) → Event → Impact (Effect) → Damage
When a dispute arises, the immediate goal is to trace it back to its source. This might seem straightforward, but traditional methods of causation analysis tend to focus solely on external factors—weather conditions, supply chain disruptions, or changes in project scope. However, these external triggers often obscure a more fundamental issue: the cognitive and emotional decision-making processes of the people involved, particularly at the executive level.
The Cognitive Lens: Why Mindset Matters
One of the most significant revelations from my experience in construction disputes is that many issues do not stem from the tangible factors alone, but from the mindset of executive management. For instance, in two separate mining projects in the Democratic Republic of Congo—Twangiza and Namoya—we encountered similar external challenges such as logistical delays, manpower shortages, and weather disruptions. The first project, Twangiza, was completed successfully, while Namoya fell into crisis. The difference? It wasn’t the external conditions but how the leadership team approached these risks that determined the outcome.
Cognitive neuroscience tells us that the brain operates on patterns, and these patterns influence how we perceive and react to potential risks. Executive decision-making, therefore, plays a crucial role in shaping how a project responds to inevitable changes and challenges. If the leadership views these risks as opportunities for adaptation and growth, the project is more likely to succeed. On the other hand, if risks are seen as insurmountable obstacles, failure becomes more likely.
This is where cognitive biases—such as overconfidence, anchoring, and loss aversion—come into play. Overconfidence may lead executives to underestimate risks, while loss aversion may cause them to avoid necessary but uncomfortable decisions, delaying action until it’s too late. Anchoring bias can lead decision-makers to fixate on one aspect of the project, ignoring other crucial factors that could lead to disputes later on.
The 80-20 Principle in Construction Disputes
One concept that is particularly relevant here is Pareto’s 80-20 principle, which asserts that 80% of outcomes result from 20% of causes. In the context of construction disputes, I’ve observed that 80% of delays, cost overruns, and disputes stem from 20% of the decisions made during the project’s initiation phase. The crux of these critical decisions often lies in the mental and emotional framework of the executives managing the project. It’s not just about technical expertise but also about their cognitive disposition toward risk, complexity, and change.
For instance, I’ve seen executives who excel in technical proficiency but struggle with cognitive flexibility, meaning they are less adept at adjusting their mindset when unexpected changes arise. This rigidity leads to disputes because the leadership is unable to pivot in response to evolving project conditions. Cognitive neuroscience shows us that this inflexibility is rooted in the brain’s resistance to uncertainty and its natural tendency to seek out familiar patterns—even when those patterns are no longer helpful.
The Role of Neuroscience in Risk Perception
Neuroscience sheds light on how the brain processes risk, especially under high-stress conditions like those often found in construction projects. When confronted with uncertainty, the brain tends to default to emotional responses, which can cloud judgment and decision-making. This emotional response is governed by the amygdala, the brain’s fear center. When the amygdala is activated, it can override the prefrontal cortex, which is responsible for rational thought and planning.
Figure 1: Full color cross-section side view of child's brain with labels
In many construction disputes, I’ve found that the initial decisions leading to the conflict were made under duress, often with the amygdala running the show. Leaders, in a state of heightened stress, tend to make impulsive decisions, react emotionally to setbacks, and fail to consider long-term consequences. This is why disputes often escalate rapidly and why project leaders frequently find themselves wondering, “How did this happen?” The answer lies in the neuroscience of risk perception: under pressure, our brains are hardwired to prioritize short-term survival over long-term strategy.
Managing Cognitive Patterns to Avoid Disputes
So how do we use this understanding of cognitive and neurological patterns to avoid construction disputes? The key is to train leaders to recognize their own cognitive biases and emotional triggers, and to manage them effectively. This involves three crucial steps:
Awareness of Biases: Leaders need to be aware of common cognitive biases that may influence their decision-making. Training in decision science and neuroscience can help executives recognize when they are falling prey to overconfidence, anchoring, or loss aversion.
Stress and Anxiety Management: Since stress and anxiety is a major driver of poor decision-making, incorporating stress management techniques—such as positive affirmations, living in the present and letting go of things outside our control, or even physical exercise—can help leaders make more rational decisions. These techniques activate the prefrontal cortex, allowing for more thoughtful, measured responses to crises.
Collaborative Decision-Making: Another way to mitigate the negative effects of cognitive biases is through collaborative decision-making. By bringing in diverse perspectives, leaders can avoid the pitfalls of groupthink and anchoring, leading to more balanced and informed decisions. Neuroscience supports this approach, showing that collective problem-solving activates different areas of the brain, leading to more creative and effective solutions.
Conclusion: A New Approach to Construction Dispute Prevention
The world of construction is evolving, and so too must our approach to understanding and preventing disputes. The traditional focus on external factors—while important—doesn’t tell the whole story. By integrating cognitive and neuroscience principles into our causation analysis, we can uncover the hidden drivers of disputes and address them at their source.
In my experience, the most successful projects are those where leadership has not only mastered the technical aspects of construction but has also cultivated an awareness of their own cognitive patterns. By understanding how the brain perceives risk, manages stress, and influences decision-making, leaders can make better choices that lead to fewer disputes, more harmonious teams, and ultimately, more successful projects.
The next time you face a potential dispute, ask yourself: What role is my own mindset playing in this situation? You might just find that the solution isn’t out there in the project site—it’s in your head.
