{"id":2578,"date":"2019-10-31T12:49:34","date_gmt":"2019-10-31T16:49:34","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=2578"},"modified":"2022-03-09T10:48:28","modified_gmt":"2022-03-09T14:48:28","slug":"planning-fallacy","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/planning-fallacy\/","title":{"rendered":"Planning Fallacy: Why You Didn’t Meet Your Deadline"},"content":{"rendered":"\n

What is the planning fallacy<\/a>? How can I avoid it? And what are some examples of the planning fallacy?<\/p>\n\n\n\n

The planning fallacy is the phenomenon of habitually underestimating the amount of time and resources required to finish a project<\/strong>. When estimating for a project, you tend to give \u201cbest-case scenario,\u201d which rarely happens.<\/p>\n\n\n\n

We’ll look at a planning fallacy example<\/a> that fleshes out the above definition, and cover how the planning fallacy works and how to avoid it.<\/p>\n\n\n\n\n\n\n\n

We All Fall for the Planning Fallacy<\/strong><\/h2>\n\n\n\n

The planning fallacy is common. When estimating for a project, you tend to give \u201cbest-case scenario\u201d estimates, rather than confidence ranges. You don\u2019t know what you don\u2019t know about what will happen\u2014the emergencies, loss of motivation, and obstacles that will pop up\u2014and you don\u2019t factor in buffer time for this.
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Planning Fallacy Example<\/h3>\n\n\n\n

Daniel Kahneman gives a planning fallacy example of a curriculum committee meeting to plan a book. They happily estimate 2 years for completion of the book. Kahneman then asks the editor how long other teams have taken. The answer is 7-10 years, with 40% of teams failing to finish at all. Kahneman then asks how their team skill compares to the other teams. The answer is Kahneman\u2019s team is below average.
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This was an astounding example of how a person may have relevant statistics in her head, but then completely fails to recall this data as relevant for the situation<\/strong>. (The book did indeed take 8 years.) This is an extreme case of the planning fallacy.
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Furthermore, before Kahneman asked his questions, the team didn\u2019t even feel they needed information about other teams to make their guess<\/strong>! They looked only at their own data situation.
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Government projects have a funny pattern of being universally under budget and delayed. (Though there may be an underlying incentive<\/a> at play here, since projects that are lower cost and shorter time are easier to get approved.)
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The <\/strong>Planning Fallacy and the Objective View<\/strong><\/h2>\n\n\n\n

The planning fallacy is related to the objective, or “outside” view.<\/p>\n\n\n\n

We are often better at analyzing external situations (the \u201coutside view\u201d) than our own. When you look inward at yourself (the \u201cinside view\u201d), it\u2019s too tempting to consider yourself exceptional\u2014 \u201cthe average rules and statistics don\u2019t apply to me!\u201d And even when you do get statistics, it\u2019s easy to discard them, especially when they conflict with your personal impressions of the truth. This is one factor in the planning fallacy.
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In general, when you have information about an individual case, it\u2019s tempting to believe the case is exceptional, and to disregard statistics of the class to which the case belongs<\/strong>.
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Here are examples of situations where people ignore base statistics and hope for the exceptional:<\/p>\n\n\n\n