The Planning Fallacy in Action

The planning fallacy is a phenomenon which says that however long you think you need to do a task, you actually need longer. Regardless of how many times you have done the task before, or how deep your expert knowledge, there’s a high probability that you won’t allow yourself enough time do the work.

Sound familiar? I’m sure you’ve worked with project team members who are optimistic in their estimates and project schedules with milestones that did seem achievable—but now they’re due next week. And, well, suddenly the workload looks very different.

The planning fallacy was first proposed by two psychologists, Daniel Kahneman and Amos Tversky in 1979. Interestingly enough, the planning fallacy phenomenon only occurs in the assessment of your workload—not someone else’s. Apparently, we are much better about being realistic, and even pessimistic about our colleagues’ ability to deliver.

There are plenty of reasons why we get estimates wrong. Kahneman and Tversky’s original proposition was that when we plan our own work we focus on the most optimistic scenario, even if we have experience that contradicts that. It’s an optimism bias.

Other reasons include

Wishful thinking. We want to be able to finish the work quickly and easily; so we plan based on hope rather than fact.

We’ve forgotten how long it took last time.

We’re focused on a successful result for the project, so we aren’t thinking in terms of what might go wrong and anticipate the fact that unexpected surprises might slow the work down.

Even if we’ve done something similar in the past that could be used as a base estimate, we discount it because this is a “new” project and therefore that experience somehow doesn’t count.

When looking at similar tasks, we remember all the things we did right and blame delays on other people and external influences. Therefore, past experience isn’t representative and isn’t used to estimate for this time.

All of these reasons are likely to take place on a subconscious level rather than an intention or willful one. One explanation for this is that people deliberately focus on the most optimistic outcome, since it builds a better business case sand the better the business case, the more likely it is that the project will be approved. A little overrun later isn’t that difficult to deal with if you have a vested interest in getting the project approved in the first place.

How the planning fallacy affects you today

The planning fallacy is impacting your project, I guarantee it. You might not have noticed it yet, especially if your team is working hard to deliver on time. But unless you have specifically done something to counteract it, optimism bias is alive and well on your project schedule.

The impact here is that tasks take longer than planned. This results in delays, overworked staff, low confidence in project delivery and unhappy stakeholders. In really bad cases it can result in your project being so far behind that it gets cancelled.

How to stop the planning fallacy

Here are four ways to counteract the effects of the planning fallacy on your project.

Yep, you guessed it. The best way to deal with unrealistic estimates is to get better at estimating. The good news is that the planning fallacy is really only a problem for our own work. So pair people up and use group estimating techniques to avoid optimism creeping in.

Use past practice to guide future estimates. Have meetings to go over lessons learned, and make sure that you manage and record that organizational knowledge so that it isn’t lost. Then use that knowledge to help with planning similar tasks in the future.

Use software to help predict work

Take the human fallibility out of the equation and use software to help predict the flow of work and task duration. Source products such as databases of industry best-practice timescales or project management software that intelligently plans work based on priorities, and give you an early warning when things start to go wrong.

The role of software in eliminating the planning fallacy

Today, we have tools that take planning ranges into account and allow for estimates to include best and worst case scenarios for the same task. In the future, software might be even more intelligent. But as long as project managers and team members are part of the solution, we’re going to have to live with the risk that project schedules aren’t always going to be perfect.

Humans are a fundamental part of the problem. If you don’t believe the dates that your scheduling software is telling you, or you’re under pressure from stakeholders to shave time off your estimates, then you’re still going to hit problems. Intelligent software gives us the best opportunity of presenting the truth, but project managers also need the soft skills in order to be able to stand up to challenges that arise when their calculations are called into question. As always, a combination of experience, professional judgement and great project management tools behind you will give you the best possible chance of completing your projects successfully.