“I’ll be here in ten minutes,” you tell your friend on the phone while hurrying to put your shoes on. “We are aiming to launch at the end of year,” confidently tells the project manager to their boss. We have all been guilty of being overoptimistic when predicting how long a task will take. That’s the planning fallacy at play.
“In preparing for battle I have always found that plans are useless, but planning is indispensable.”— Dwight D. Eisenhower.
The planning fallacy is a cognitive bias which was first identified by Daniel Kahneman and Amos Tversky in 1977. They found that we tend to systematically underestimate the time it will take to complete an action, and defined the planning fallacy as: “the tendency to underestimate the amount of time needed to complete a future task, due in part to the reliance on overly optimistic performance scenarios.”
The planning fallacy is extremely common. Since Kahneman and Tversky published their seminal study, there have been lots of empirical studies confirming the existence of the planning fallacy. For instance, a study conducted with psychology students found that only 30% of them managed to complete their senior thesis in the amount of time they predicted.
What’s more, the planning fallacy is incredibly persistent. Research suggests that we don’t learn from our previous mistakes. While we are able to recognise past predictions where we have been over-optimistic, we often keep on insisting that our current predictions are realistic.
When planning fails and deadlines are missed
Look around you, and you will see many failed or late projects where the planning fallacy is the culprit. The unfamous Big Dig highway construction project in Boston was $19 billion over budget, and almost ten years late. London’s Wembley stadium should have been completed in 2003, but construction work did not begin until September 2002. The overall cost ended up being £900m, almost triple the original budget.
Professional authors are also victims of the planning fallacy. “He thinks he will be able to write a book in two years and it takes three or four. His publishers have always waited,” explains agent Giles Gordon about Booker prize-winning author Barry Unsworth.
But the planning fallacy does not only impact big projects. Akin to wishful thinking, it hides behind many of our optimistic assumptions. Everytime you say: “This will take no time at all”, you are probably falling prey to the planning fallacy.
From miscalculating travel times to your destination—thinking you will beat your app’s estimate—to thinking you can leave a presentation to the last minute, the planning fallacy is hard to avoid.
The origins of the planning fallacy
While its exact roots are complex, three main biases are responsible for the prevalence of the planning fallacy.
- Optimism bias. A cognitive bias that causes us to believe that we are less likely to experience a negative event. For instance, first-time bungee jumpers believe that they are less at risk of an injury than other jumpers, and most people believe that they are less at risk of being a crime victim. And, of course, we think it is pretty unlikely a negative event will prevent us from missing a deadline. The optimism bias is so common it has even been reported in animals such as rats and birds.
- Motivated reasoning. A form of emotionally-biased reasoning where we create justifications that correspond to what we want rather than what accurately reflects the evidence. In the case of the planning fallacy, we feel confident about the deadline because we want to feel confident about the deadline. Researchers wrote: “The motivation to be accurate enhances use of those beliefs and strategies that are considered most appropriate, whereas the motivation to arrive at particular conclusions enhances use of those that are considered most likely to yield the desired conclusion.”
- Taking the inside view. Our tendency to focus on fine details of a scenario, rather than the big picture. When we start planning a project, we will start listing all the tasks that need to be accomplished, the people we need to contact, the funds we need to raise. We look at the project from a particular lens—the insider lens. We very rarely take the time to research similar projects, interview experts, and learn from other people how they tackled the problem, what went wrong and what they wish they knew at the time. Taking the inside view results in distorted estimates that do not reflect the big picture of a project.
Being aware of these three biases is a first step in avoiding the planning fallacy. The second step is to proactively manage these biases so your time estimates and deadlines are more realistic.
5 ways to avoid the planning fallacy
Being unrealistic when predicting how long a task will take is such a deeply ingrained behaviour, it will take a bit of practice to catch yourself doing it. However, there are a few systematic strategies you can use to start building the habit of double-checking your time estimates.
- Take the outside view. As recommended by Kahneman in Thinking, Fast and Slow, do not base your estimates on your own frame of reference. Make sure to consult experts and people who have attempted to complete similar projects in the past. If you’re a student, talk to senior students; if you’re a product manager, email someone at another startup; if you’re writing a book, join a network of writers. Ask questions before you start outlining your plan.
- Define your priorities. It’s easy to get excited with a new project and to add a thousand tasks to your to-do list. Projects that get finished on time need to be self-contained. You won’t be able to evaluate how much work and how long the project will take if you have an ever-expanding list of tasks. Use the Eisenhower matrix or prioritisation to differentiate between tasks that are urgent and important, important but not urgent, urgent but not important, neither urgent nor important.
- Question your motivations. Are you planning on finishing a project by a certain date because you want to—because it would be the most convenient scenario—or because you are objectively convinced it can be done by then? Are there subjective reasons such as internal politics, a personal deadline such as a holiday trip, or external pressure that may lead to unrealistic deadlines?
- Perform a pre-mortem. A pre-mortem is an exercise where we imagine that a project has failed, and where we work backward to determine what could have led to the failure. Imagine that the project was late: what could have caused the delay?
- Manage your time. Once you have an objective estimate of the time it will take to complete a project, you need to make sure you have the time and resources to execute on your plan. Block time in your calendar, and make sure the resources you need are available. Break down big tasks into smaller, manageable chunks. Don’t wait until the last minute to let people know you may need their help in the near future.
Again, there is no magic formula and it is likely you will keep on falling prey to the planning fallacy on a daily basis. You are not expected to go through this five-step project every time you are wondering whether you will make it on time for your train. But these strategies can be helpful for important projects where being late would have a bigger impact.