Assume you have an assignment due on Saturday, a week from today. You have done several assignments of this length before and it generally takes about a week to get it done. Nonetheless, you’re still positive that you can finish the assignment in three days, so you don’t start until Wednesday. In the end, you don’t finish the paper in time and need to ask for an extension. This is more common than one would think, and all of us fallen victim what is called the planning fallacy.
The planning fallacy describes our tendency to underestimate the amount of time it will take to complete a task, as well as the costs and risks associated with that task even if it contradicts our experiences.
What this essentially means is that one overestimates themselves when planning something, be it an assignment, or road trip. We think ‘optimistically’ and don’t take into account the several distractions and barriers around us.
For example, In a study, incoming university students were asked to estimate how they would perform academically, compared to their classmates. On average, participants believed they would outperform 84% of their peers. Even though this figure may have been accurate for some individuals, it is mathematically impossible for everybody to be in the top 16%.
Another example would be the construction of the famous Sydney Opera House which, due to several delays and unforeseen difficulties lasted a decade longer than planned.
Why do so many of us fall into this trap? The reason is positive thinking. We all have the best intentions to get something done as quickly and efficiently as possible but most of the time, due to unintended disruptions, we don't finish as planned.
We often make errors when considering our successes and failures. We tend to credit our positive outcomes to our talents and hard work, and negative outcomes to factors beyond our control. This makes us less likely to take previous failures into account the next time we do something: we believe that those instances were not our fault, and we convince ourselves that these ‘external factors’ that caused us to fail will not come up again, but as noticed several times, they do.
The planning fallacy affects everybody, whether they are students, city planners, CEOs, or even organizations as a whole.
For example, sometimes, workplace cultures can be highly competitive, and there may be costs for individuals who insist on a longer timeline than others or take a ‘pessimistic’ approach. While individuals who favour the most overly optimistic predictions over others are given incentives to engage in inaccurate, intuition-based planning.
How do we overcome this?
Merely being aware of the planning fallacy is not enough to stop it from happening. Even if we have this knowledge, we still risk falling into the trap of believing that this time, the rules won’t apply to us because we know. What we can do is plan around the planning fallacy.
- Murphy’s Law states that “anything that can go wrong, will go wrong.” Using this pessimistic approach can help overcome the planning fallacy. It can help predict and address any potential pitfalls.
- The planning fallacy is likely to arise when we rely solely on the inside view—that is, when we disregard external information about how likely we are to succeed and instead trust our intuitive guesses about how costly a project will be. This is exactly what many of us tend to do. Because planning is an inherently future-oriented process, we are more likely to disregard our past experiences. It is always helpful when we take the ‘outside view’ ie consider the past experiences and learn from them instead of dismissing them
- Another strategy that research proves to be effective is goal setting, more importantly, specific goal setting - such as deciding what time you will start doing something, where you will do it, how you’ll do it, etc. These specific set of plans tend to work much better than a vague “I’ll do it later.” Similarly, it is always a good idea to break up one task into much smaller tasks, this helps to focus and finish things faster.
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