How to Beat the Planning Fallacy
Friday, March 3, 2023

How to Beat the Planning Fallacy

Unfortunately, most people chronically underestimate the time they need to get things done.

We’ve all been there, haven’t we?

That point after the introduction of a new task where you have to answer the question, “How long will this take you?”

You pause. Your brain does several Einstein-esque calculations. In seconds, you come up with an answer:

I can get this done in X amount of days.

So you get to work, focusing only on the fine details of your new task. But somehow, you’ve forgotten about all the unexpected challenges that usually pop up with new projects, and you find yourself woefully unprepared for the obstacles you face.

The further you get into the task, the more the reality of your situation hits you:

There’s no way you can finish in X amount of days, and the deadline you set for yourself is entirely unrealistic. 

You now realize that you’ve underestimated the risks, costs, and time your project needed–a classic case of a well-known concept called the planning fallacy.

Nearly everyone struggles with it, and this post will explore why you should take it seriously and how you can outmaneuver this common time management pitfall.

By the way: this article takes around 12-15 minutes to read. If the thought of finishing this in 5 minutes or less popped up in your mind, you are witnessing the planning fallacy in action.

With that in mind, let’s dive in!

What is the Planning Fallacy?

The planning fallacy is a type of cognitive bias that explains our tendency to underestimate the time, resources, and effort required to complete a task or project. It’s the reason why some of us fail to meet deadlines more often than not, and it certainly explains why most humans are terrible at sticking to schedules.

We often focus on the nicer features of our plans while ignoring the probability of disruptive external factors like illness or distractions. We should know better from observing past experiences that things almost never go exactly as planned. 

Unfortunately,  the planning fallacy ensures that we don’t make that seemingly simple observation — and our productivity suffers. 

Our predisposition to underestimate costs and time causes us to devote less time and effort to a task that, in reality, requires much more. It’s a bit like traveling cross-country with only a half-full tank: eventually, you’ll run out of gas.

Where did the Planning Fallacy Originate?

Two renowned scholars in psychology and behavioral economics—Daniel Kahneman and Amos Tversky— first introduced the planning fallacy in 1979 in an academic paper.

Both scholars were curious about how people judge and predict future events. They discovered that people regularly underestimate how much time, effort, and resources are needed to achieve a goal.

Later in 2003, Daniel Kahneman expanded the meaning of the planning fallacy to include a tendency to underestimate time and to overestimate the benefits of the same project or task. 

How Cognitive Biases Cause Us to Miscalculate Time

Cognitive bias concept illustration

The human brain is hands-down the most powerful problem-solving tool in the world. But it, too, has its limitations and “blind spots,” and cognitive biases are one of them.  

Cognitive biases are systematic errors in how we process and interpret information, often leading to poor decision-making. Daniel Kahneman wrote an entire book on the various cognitive biases and how they affect us—Thinking, Fast, and Slow.

Of the many cognitive biases, there are a few in particular that influence our perception of time and play into the planning fallacy:

Optimism bias

This bias plays out when we overestimate the possibility of positive outcomes and underestimate the possibility of adverse outcomes. When asked to estimate how long a task will take, optimism bias makes us calculate based on best-case scenarios without adequately considering the risks and obstacles involved.  Pessimistic data, no matter how potentially helpful, will usually be discounted as it conflicts with the rosier picture that’s been painted.  

Hindsight bias

Ideally, when a plan goes off the rails, we would keep it in mind for the future and make different decisions the next time around. Unfortunately, hindsight bias makes us overconfident about how we predict consequences and throws a wrench in this learning process.  This commonly held bias skews the way we look at past projects that went awry.  We tell ourselves that the project ended up just as we predicted it would, and we don’t waste a minute second-guessing or rethinking our predictive or planning abilities.  This distorted way of remembering events means we simply continue overestimating our ability to foresee the possible outcomes of future decisions. 

Focalism bias

Focalism bias describes our tendency to over-focus or emphasize a single factor when making judgments or predictions. What’s more, that single factor tends to be the first piece of information that’s presented. Imagine you’re assigned a task at work, and you’re told it usually takes a month. With focalism bias, the fact that it should take a month will be the basis of how you plan–even if you receive other information that indicates it will likely take longer. You then proceed to make a multitude of decisions based on that one-month calculation, setting yourself up for disappointment and frustration when it ends up taking two.

The Planning Fallacy in Action: Berlin Brandenburg Airport 

Here’s a real-life example illustrating the planning fallacy in all its glory:

In 2006, after 15 years of planning, construction began on a new airport in Berlin, Germany.  The original budget was €2.83 billion, and construction was due to be completed in 2011–- five years after breaking ground.  

Things didn’t quite work out that way, however. 

The project took 14  years to complete, with a price tag of over €7 billion. It was a staggering miscalculation and a massive headache for the city of Berlin. 

While this is a “big picture” example of the planning fallacy, you can probably think of many such small-scale scenarios in your own life. And, while your miscalculations might not cost you millions, they do cost you–and those costs add up.  

The Negative Effects of the Planning Fallacy

Man sitting at laptop with hands on head in despair.

Unrealistic predictions and projections are dangerous: They set us up to fail repeatedly and can make us think that we’re bad at time management and incapable of success. This mental crippling is terrible for motivation and may cause a person to lose confidence in their ability to follow through on their plans and goals. 

Plus, constantly missing deadlines makes you seem unreliable to those around you. A big part of forming good professional relationships is being able to deliver on your promises; making unrealistic promises makes this next to impossible.  

The planning fallacy can also cost you and your business money. In 1997, a news article explained how the American division of HarperCollins canceled 70 books because the writers missed their deadlines. Around the same time, the company posted losses exceeding 4 million pounds. 

In short, the planning fallacy can harm you in so many ways in your life: missed deadlines, poor work-life balance, strained personal and workplace relationships, and a tremendous amount of stress.

How To Overcome The Planning Fallacy

Young woman in a planning session with sticky notes on the wall

The planning fallacy might be human nature, but that doesn’t mean you’re doomed to miscalculate time.  Armed with awareness and some helpful tools, anyone can overcome it.  Here are five strategies to increase your chances of besting the planning fallacy.

Look at the data

If you want to make better decisions and set realistic deadlines, paying attention to previous experiences is essential. Underestimating time happens so often because we fail to accurately remember the time and effort it took to complete a past project. It’s there somewhere in our brains, but we forget to remember it. 

So don’t just reminisce on how well you handled a previous task; remember how long it took you to handle it.

We think every project, idea, or task is unique and different from the current one. But is it really? Chances are, you’ve already dealt with a similar situation and can draw valuable insights from it.

All you have to do is stop for a minute and remember more than just the positives of your last project. Ask yourself, “What challenges did I face the last time? Did I finish in time? Were there distractions at any point?”

Answering these kinds of questions should help you schedule the time you’ll actually need for similar tasks in the future. You’ll be able to work diligently and calmly instead of scrambling frantically at the last minute.

Break down the task into smaller bits

Carve your big idea like you’d split a giant pizza: into eight near-equal pieces.  Breaking down a task into smaller bits allows you to better gauge how much time and energy each part will likely require. 

For example, what would you say if asked to estimate how long it would take to write a 150-page book? Would your answer be different if you were reminded that the book has ten chapters, and each should have around 50 paragraphs? Most likely, yes. 

Give pessimism a chance

As controversial as it sounds, pause and imagine that the world is not a bed of roses: there will be distractions, you may fall ill, or you may even run out of money. 

Therefore, it is always important to ask what could go wrong. Remembering that things will not always go your way is essential to staying prepared. 

Factor in these obstacles ahead of time and allow a little extra time for them in your planning.  

Trust a productivity app

Productivity apps have several features that can help you stay on schedule with your goals. One such feature is time-tracking. Time-tracking allows you to measure and record how much time you’re spending on current tasks. 

Try using an app to keep track of how much time you spend on each part of a project.  Also, if you noticed that you were late on a previous project because you were too distracted, you can use a more advanced solution, like the kōno app. In addition to time-tracking, the kōno app can close distracting social media apps and block notifications, calls, and websites; you’ll be able to focus fully on what you’re trying to achieve.  

Ask others for advice

Ask a third party who has handled similar tasks for help. While your job and theirs may not be entirely the same, you might get some valuable insights and  information to help you set a realistic deadline.

Wrap Up

Adopting some of these strategies can set you up for success and save you a great deal of frustration and disappointment. By recognizing the planning fallacy and taking proactive steps to avoid it, you can become more effective and efficient in your work and ultimately achieve better outcomes. It requires a shift in mindset and a willingness to be more realistic about your abilities and challenges, but the rewards are well worth the effort.

Ola Yusuf
LinkedIn Profile

The Planning Fallacy FAQs

What is the planning fallacy?

The term "planning fallacy" refers to a prediction phenomenon that many people are all too acquainted with; when individuals underestimate how long it will take to accomplish work in the future even if they know that activities have often taken longer than anticipated past. It has been demonstrated to affect both individuals and organizations, and it can result in less-than-ideal decision-making. This may eventually have a detrimental impact on projects, preventing teams from reaching goals as they had originally intended.

How to avoid the planning fallacy

The planning fallacy may be avoided by incorporating measures into the planning process that will assist you. Those working on the project may find it challenging to adopt a critical viewpoint. Because of this, it might be useful to find out the opinion of a disinterested third party on the viability of your implementation goals. Your project can also be divided into milestones, with timetables created for each. By doing this, you dig into the specifics and are less likely to underestimate how long the job will take.

How to overcome the planning fallacy

Use data from comparable completed projects, make less optimistic estimates, and ask for unbiased third-party critique to overcome the planning fallacy. Make sure you consider both the good and negative parts of previous initiatives of a similar nature rather than only focusing on the data's positive side. Remember that it is simple to become overly enthusiastic, and don't be scared to forecast unfavorable consequences.

What is planning fallacy in psychology?

The planning fallacy is a cognitive bias that reflects people's propensity to overestimate the advantages of future activities while underestimating the time, costs, and hazards associated with such acts. People frequently base their estimations on optimistic possibilities rather than considering worst-case situations, which is one explanation for the planning fallacy. Another factor is that instead of evaluating all the information objectively, individuals frequently concentrate on successful instances of comparable undertakings.

What is a strategy to overcome the planning fallacy?

Use project data from prior work, seek outside advice, manage expectations realistically, and use project planning templates to lessen the harmful effects the planning fallacy may have on your projects. The following steps can be taken to finish a project without suffering from the planning fallacy: ● Learn the misconception so that you and your team can avoid it. ● Use information from previous initiatives of a similar nature, both positive and bad. ● Create a less rosy outlook for the future ● Consider potential obstacles carefully. ● Consult a neutral third party before acting.

What is a potential positive outcome of the planning fallacy?

One positive of the planning fallacy is that individuals could take on undertakings that they otherwise might have avoided if they had known how much work or time would be required. People may make better judgments about projects and may take advantage of possibilities that would have previously been too readily discarded due to a lack of evidence by looking at the costs, risks, and rewards associated with a project at the outset.

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