Aug 30, 2022
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The time it takes you to complete tasks is often longer than you expected. This happens to me quite regularly, and so I’m sure it probably happens to you too. Underestimating the time required to complete a task is known as the planning fallacy.
The planning fallacy can have very serious consequences such as projects overrunning, deadlines missed, and budgets obliterated. This is why understanding the planning fallacy is so important. Once you are aware of the problem you can take steps to make better predictions on how long a task will take.
In this article we’re going to be looking at the importance of the planning fallacy.
The planning fallacy is where a task takes longer than you initially estimated. This is because it’s human nature to be overly optimistic about future predictions. When we underestimate how long a task will take it is because we are suffering from optimism bias. The planning fallacy can affect all different types of people, even when the person making the prediction has knowledge and experience of similar previous tasks that have not been completed on time.
If the predictions for when tasks are completed are underestimated, it can have a big negative impact on the project. For example, the project will overrun and will likely be over budget or delivered in an unfinished state.
Being aware of the planning fallacy, and its consequences is the first step towards making better future-proof predictions.
The main cause of the planning fallacy is that people are generally over-optimistic about the future. We suffer optimism bias because we think tasks will be finished quickly and easily because we want that to be the case. This leads to making predictions based upon a made up scenario in your head where you don’t encounter any problems.
However, any imagined scenario will be over-optimistic. Of course, you can’t predict unforeseen problems, but you have to be aware of the possibility of problems and include that as part of your estimation for how long a given task will take to complete. The problem can be made worse if the person is also susceptible to student syndrome, and therefore they self-sabotage their own ability to complete the task on time.
Instead of making predictions based upon an imagined future scenario, it is better to make predictions using data from completed similar tasks. When you make predictions based on an imagined future, it is known as the “inside view”, and when you make predictions based upon previous completed tasks as evidence, it is known as the “outside view”.
The problem is, even if the person is aware that their past predictions have been over-optimistic, causing previous tasks to be delivered late, they will still insist that their future predictions are realistic if they are using the inside view. Funnily enough, the planning fallacy bias only affects predictions of your own tasks. If someone else was to estimate how long it would take for you to complete the task, they would tend to be more pessimistic and overestimate the time required to complete the work.
However, it’s not just individual contributors that can suffer from the planning fallacy. Experienced project managers can be too focused on the optimistic scenario, instead of using their experience to gauge realistic deadlines based upon previous projects. It’s also very easy to take credit for tasks that were easy and had no problems, but blame delays or issues on outside influences. This can lead to discounting the available evidence of how long a task will take.
Finally, a lot of projects in large corporations require a lot of bureaucracy, financial approval, and sign off from many stakeholders with competing agendas. This can mean that the project is more likely to be underestimated to get through the approval process. Despite the project being highly likely to overrun and be over budget, this is still preferable to the project not being commissioned in the first place. This is known as strategic misrepresentation.
The most obvious way to not fall victim to the planning fallacy is to make predictions based upon previous similar completed tasks, and not future imagined scenarios. There will still be some amount of variability in the predictions because the future is unknown, but you will at least have a better foundation that is not affected by optimism bias.
Another method is to make task estimates anonymous. One of the reasons why the planning fallacy occurs is that people want to be seen as hardworking, competent and able to get work completed quickly and with no problems. Whilst we all love to represent ourselves this way, we can’t always account for potential problems. Estimating tasks anonymously removes the ego from the process.
Estimating tasks or projects that are very long running is also another way of falling into the trap of the planning fallacy. When a task or deadline is far off into the future, it’s easy to be overly optimistic about the imagined future. Instead, you should try to work in short time increments with deadlines closer to being met. This will give you more realistic estimations of when tasks will be completed.
Breaking big tasks or projects down into smaller tasks is another good way of combating the planning fallacy. When you estimate a big project, it can often be less than if you were to estimate all of the required tasks individually. This is known as the segmentation effect. It can be a lot of work to break a project or big task into smaller compartmentalised tasks that can be estimated individually, especially if part of the work is unknown, however it is very likely to give you much better estimations.
Splitting a project or big task into smaller discrete tasks is also better as it provides you with a concrete plan for getting the work done. This makes it easy to see what is involved and the possible outcomes of completing the work. This may make initial estimations be overly optimistic, but it is a good way to deal with student syndrome because it makes what is involved in completing the work explicit. This can mean that the person doing the work is more likely to feel motivated and committed to getting the work done, rather than have anxiety or feeling overwhelmed because the project or tasks are still unknown.