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Productivity

How to Be a Better Planner: Avoid the Planning Fallacy

Written by Leon Ho
Founder & CEO of Lifehack
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Ever caught yourself thinking, “I thought I had enough time for this!” or, “Why am I always running late on my plans?” It’s like a never-ending loop of setting goals, missing the mark, then scratching your head in wonder.

Evidence shows that this so-called planning fallacy is a widespread hiccup. You can see its traces in educational institutions, where both the educators and the learners trip over it.[1] Dive into the tech world, and a mere third of projects wrap up on time. Meanwhile, industrial design takes, on average, a whopping 3.5 times longer than anticipated. And let’s not even talk about writers – almost 90% of them are fashionably late with their manuscripts.[2]

So, here’s the deal: If you’re serious about upping your planning game, it’s time to steer clear of the planning fallacy. Let’s figure out how.

Unveiling the Planning Fallacy

Daniel Kahneman and Amos Tversky, two giants in psychology and behavioral economics gave us a heads-up about a sneaky cognitive trap:

In a 1979 paper,[3] they pointed out that we humans have a weird habit. When thinking about the future, instead of being logical and analytical, we often rely heavily on our gut feelings.

The catch? Our guts aren’t always right. The mistakes we make? Not just random slip-ups. They follow a pattern, revealing our inherent biases.

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Taking planning as their focal point, Kahneman and Tversky highlighted a frequent hiccup. Think about scientists and writers. They’ve missed deadlines more times than they can count, yet they often repeat the same scheduling blunders. This repetitive, almost predictable miscalculation is what they labeled as the planning fallacy.

Flash forward to 2003, and Kahneman refined this concept. He said the planning fallacy isn’t just about time—it’s also about costs, risks, and the rewards of our actions. In essence, we’re guilty of two main blunders: we’re a tad too optimistic about how things will turn out and a bit too dismissive of the hurdles we might face.

Now, in plain speak, planning fallacy means we often guess wrong about how long something will take and how much it’ll cost, all while overlooking potential risks.

If you get caught in this trap, you’re likely to:

  • Budget too little cash (or too few resources).
  • Carve out too little time.
  • And over-hype the perks.

And in project management, that’s a recipe for chaos.

A Classic Example of the Planning Fallacy

Let’s put the theory aside for a moment and jump into a real-life story that screams planning fallacy – the Sydney Opera House.[4] Yes, even the grandest projects can fall prey to the planning fallacy.

Back in 1957, when the blueprint was just a dream on paper, the Australian government threw around some figures. They predicted this masterpiece would cost around 7 million Australian dollars and would be ready for curtain call by 1963. Seems reasonable, right?

Well, hold onto your hats. The actual price tag to bring this marvel to life? A staggering $102 million! More than 10 times the initial estimate. And here’s the kicker – the majority of this bill was footed by a State Lottery. Imagine betting on a lottery ticket to fund a national landmark!

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And instead of the 4-year timeline they were gunning for, construction stretched over 14 long years, starting in 1959. By the end of it, over 10,000 construction workers had poured their sweat and skills into the project.

Opera House planning fallacy

    The Culprits Behind the Planning Fallacy

    Let’s get down to the nuts and bolts of the planning fallacy. What’s driving these planning missteps? They’re cognitive biases—those sneaky mental shortcuts that play tricks on our perceptions and decisions.

    The “Everything’s Rosy” Bias (Optimism Bias)

    Ever think you’re the world’s best pancake flipper or the king of parallel parking? That’s the optimism bias at work.

    We humans are a confident bunch. In fact, 93% of Americans genuinely believe they could out-drive most others on the road;[5] 90% of teachers are convinced they’re teaching prodigies.[6] The truth is though, statistically, we can’t all be above average. Yet, our brains love to think that whatever we touch turns to gold, and every task is a cinch.

    The “First Impression Sticks” Bias (Anchoring Bias)

    Remember the last time you stuck to the first price thrown at you? That’s the anchoring bias at play. It’s that little voice in our head that says the first piece of info we hear is the golden truth.

    Let’s say you’re selling your home, and boom – the first offer is way below your expected price. Because of anchoring, this first offer looms larger in your mind than it should, skewing your perception of your home’s true value.

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    Similarly, when someone says, “Hey, this project should take this long,” that estimate sticks like glue, overshadowing any other info that comes our way.

    The “I Told You So” Bias (Confirmation Bias)

    This one’s a classic. Once our mind’s made up, we tend to cherry-pick info that says, “Yes, you got it right!” We’re drawn to things that echo our beliefs and coolly ignore anything that doesn’t.

    It’s like only reading the articles that shout, “I agree with you!” while tossing the rest. This is also why people hang with news sources that cheer on their viewpoints. Anything suggesting they’re off track? Pfft, it’s probably wrong.

    The “Been There, Seen That” Bias (Representativeness Heuristic)

    Last but not least, this bias has us lean on mental shortcuts to make quick judgments. We’ve got these mental snapshots – stereotypes, if you will – about all sorts of things.

    Spot someone or something that fits our mental image? Our brain goes, “Aha! I’ve seen this before!” and bingo, we judge based on that pre-existing picture, overlooking the unique details of the current situation.

    So, the big question is, how do we dodge these biases and plan smarter?

    How to Avoid the Fallacy and Be a Better Planner

    Now that you know what’s tripping you up, let’s arm yourself with some savvy moves to dodge that planning pitfall.

    1. Raincheck That Sunshine Forecast (Less Optimism, More Realism)

    Hey, don’t get me wrong. A sprinkle of optimism is great. It’s that little pep in our step. But remember when you were super sure that you’d learn to play the guitar over a weekend? And come Monday, all you had were sore fingers? That’s what over-optimism can do to our plans.

    When mapping out a new project, it’s wise to take off those rosy glasses for a bit. It’s not about being a naysayer but rather a smart thinker. Instead of daydreaming about the finish line, consider the bumps and turns along the way.

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    Start asking the not-so-fun-but-super-important questions. “What could possibly jam our gears?” or “Are there any sneaky costs lurking in the shadows that we haven’t spotted yet?”

    For instance, if you’re planning a grand product launch, don’t just focus on the glitzy event. What about potential shipment delays, or, I don’t know, a sudden helium shortage for those 500 balloons?

    By balancing your enthusiasm with a dash of caution, you’re setting yourself up for a smoother journey. It’s like packing an umbrella for a picnic. Hopefully, you won’t need it, but if it does rain, you won’t be the one scampering for cover!

    Let optimism be your fuel and realism your map. They’re the perfect duo for the road ahead.

    2. Think LEGO: Build With Blocks (Break it Down!)

    Ever tried gobbling down a whole pie in one go? Chances are, it wasn’t the best idea. But when you slice it up, piece by piece, it’s a delight.

    The same logic applies to your projects. Taking on a mammoth task can seem overwhelming (and slightly unrealistic), but there’s magic in breaking things down.

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    Imagine you’re organizing a community event. Instead of just saying, “Let’s throw the best event ever in two months,” start with the LEGO approach. Think blocks, think milestones.

    First, nail down the event theme. Once that’s in the bag, figure out the venue. Got that sorted? Move on to reaching out to potential speakers or performers.

    By segmenting the project into bite-sized chunks, you can allocate specific timelines, ensuring that every aspect gets the attention it deserves.

    Now, each milestone acts as a checkpoint. Did you nail one right on time? Great, give yourself a pat on the back! Running behind on another? No worries, you’ve got clarity on where to focus and adjust.

    So, the next time you’ve got a big project looming, don’t get lost in its vastness. Slice it. Dice it. Celebrate each small victory, and before you know it, you’ll have a successful project pie baked to perfection. The pie might be a metaphor, but the success? Oh, that’s real.

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    3. Dive into the Data Vaults (From Similar Projects)

    Remember that one time you swore you’d bake a cake in 30 minutes because the internet said so, only to find out it took Aunt Mabel three hours last Thanksgiving? That’s the kind of insight you need!

    Instead of just daydreaming about the best-case scenario, it’s time to put on those detective glasses. Hunt down the histories of similar past projects, and don’t just skim the surface. Dive deep. Analyze not just the wins but also the messy parts — the delays, the unexpected hitches, the budget bumps.

    For instance, if you’re launching a new software update, don’t just rely on your ideal timeline. Look back at previous updates. How long did testing really take? Were there bugs that crept up? Were clients confused? By studying the full spectrum of outcomes from past projects, you ground your plan in reality, not just optimism.

    Past data is your compass. It helps you navigate the murky waters of planning, steering you clear from those sneaky icebergs called ‘unexpected surprises’.

    4. Get a Fresh Pair of Eyes (Embrace Outside Perspectives)

    Picture this: You’ve been staring at a puzzle for hours. You’re certain that piece fits right there, but it just won’t slot in. Then a friend walks by, glances at it, and bam! They spot the obvious move you missed. Why? Because they had a fresh viewpoint, unburdened by hours of trying and retrying.

    Projects can be like that puzzle. When you’re deep in it, every idea seems gold, every plan flawless. But sometimes, what you need is a fresh perspective. Someone who isn’t knee-deep in the project’s intricacies. Someone who can provide an unbiased take.

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    Let’s say you’re crafting a new marketing campaign. You and your team might be convinced that a particular angle is revolutionary. But getting someone from outside, maybe someone from finance or even a friend from a totally different industry, to take a look could be enlightening. They might question things you took for granted or point out potential pitfalls you hadn’t considered.

    Criticism, especially from an objective third party, isn’t a bad thing. In fact, it’s like that gym coach who pushes you to do that extra rep. Sure, it’s uncomfortable for a moment, but it ensures you’re at the top of your game.

    So, the next time you’re about to finalize a plan, invite someone with a fresh perspective. Let them poke holes. Gratefully accept their feedback. Because a plan that can withstand criticism? That’s a robust plan.

    Planning is Your Map, Not Your Territory

    Let’s get real: We’re all dreamers at heart. We envision grand plans and sometimes, in our enthusiasm, overlook the gritty details. And that’s okay; dreaming big is where innovation starts. But let’s also remember that a ship without a rudder goes wherever the tide takes it.

    The planning fallacy is a lot like that rudderless ship. It’s easy to get caught in its current. But now, armed with insights and strategies, you’ve got a fighting chance to steer clear and navigate with purpose.

    Remember, it’s not about pessimism but realism. It’s about balancing our big dreams with the nitty-gritty of execution. It’s about recognizing our blind spots and inviting others in to illuminate them. Because, at the end of the day, a plan is merely a guide. What matters is the journey, the adaptability, and the resilience to keep moving, even when winds change.

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    TL;DR

    Don't have time for the full article? Read this.

    How to Be a Better Planner: Avoid the Planning Fallacy

    The planning fallacy involves both overestimating positive outcomes and underestimating potential risks and drawbacks. This phenomenon is based on various cognitive biases.

    Optimism Bias: People overestimate their abilities and underestimate potential challenges.

    Anchoring Bias: The first piece of information heavily influences subsequent judgments.

    Confirmation Bias: People naturally favor information that confirms their pre-existing beliefs.

    Representativeness Heuristic: Existing mental prototypes can wrongly shape our judgment of future events.

    Balancing big dreams with realistic execution can lead to better outcomes. There’re 4 ways to do so.

    #1. Make Less Optimistic Predictions: Pose realistic questions about potential challenges and unseen costs.

    #2. Break Projects into Milestones: Smaller, detailed timelines can help provide a clearer picture of the whole.

    #3. Use Data from Past Projects: Learn from both successes and setbacks of similar past endeavors.

    #4. Seek Objective Third-Party Criticism: Fresh perspectives can spot overlooked details and potential flaws.

    Reference

    [1]Advances in Experimental Social Psychology: Chapter One – The Planning Fallacy: Cognitive, Motivational, and Social Origins
    [2]Independent: Authors brought to book over missing deadlines
    [3]Daniel Kahneman and Amos Tversky: Prospect Theory: An Analysis of Decision under Risk
    [4]Sydney Opera House: Facts About Sydney Opera House
    [5]Acta Psychologica: Are we all less risky and more skillful than our fellow drivers?
    [6]New Directions for Higher Education: Not can, but will college teaching be improved?
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