The Planning Fallacy: Why Your Plans Fail

This article is an excerpt from the Shortform book guide to "The Art of Thinking Clearly" by Rolf Dobelli. Shortform has the world's best summaries and analyses of books you should be reading.

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What is the planning fallacy? Why do we tend to exaggerate our capabilities when making plans for the future?

The planning fallacy is where you underestimate how much time a future task or project will take to complete. According to Rolf Dobelli, the author of The Art of Thinking Clearly, there are two reasons it occurs: self-esteem and life’s unpredictability,

Keep reading to learn about the planning fallacy, why it happens, and how to mitigate it.

The Planning Fallacy

People make plans that fail because they believe themselves to be more capable than they really are. They overestimate the benefits of their actions and minimize the risk and cost involved in their plans.

(Shortform note: Dobelli’s definition of the planning fallacy is unique because he includes factors like risk and cost in this overconfidence. In contrast, most definitions only include people’s overconfidence in estimating the time required to execute a plan.)

People never get better at realistic planning, Dobelli adds. One of the reasons you don’t improve is self-esteem: You want to feel good about yourself, so you exaggerate your abilities. (Shortform note: Basing self-esteem on your abilities means you’ll exaggerate when you need a boost, but you’ll feel worse when you struggle to meet those exaggerated standards. Instead, boost your self-esteem healthily by challenging self-criticism and forming relationships with positive people.)

Another reason you don’t improve at planning is life’s unpredictability. You can’t account for surprise events like bad weather or car accidents when planning. (Shortform note: Surprise events are called “Black Swans,” and they can be positive or negative. While you can’t predict Black Swans, in The Black Swan, Nassim Nicholas Taleb says you can prepare for them by managing risk and maximizing your chances of positive Black Swans. When making an investment, for example, minimize risk for 90% of the investment, then take high risks with the remaining 10% to increase your chance of a positive Black Swan.)

Dobelli recommends mitigating the planning fallacy by estimating risks and costs higher than feels necessary and benefits lower than feels necessary. Also, avoid the impulse to plan in detail. Narrowing your focus on details makes you more likely to be surprised by unexpected events, exacerbating the fallacy. (Shortform note: Dobelli claims detailed planning exacerbates the planning fallacy, but others disagree. People are better at planning for small goals, so breaking a big project into its composite parts makes plans more accurate. In addition, setting intentions like the location and timescale in which to complete goals increases planning accuracy.)

The Planning Fallacy: Why Your Plans Fail

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Here's what you'll find in our full The Art of Thinking Clearly summary:

  • A detailed look at the most common logical fallacies that inhibit decision-making
  • How to recognize and overcome these fallacies to make better decisions
  • Why you value things for arbitrary reasons

Darya Sinusoid

Darya’s love for reading started with fantasy novels (The LOTR trilogy is still her all-time-favorite). Growing up, however, she found herself transitioning to non-fiction, psychological, and self-help books. She has a degree in Psychology and a deep passion for the subject. She likes reading research-informed books that distill the workings of the human brain/mind/consciousness and thinking of ways to apply the insights to her own life. Some of her favorites include Thinking, Fast and Slow, How We Decide, and The Wisdom of the Enneagram.

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