Does Planning Fallacy Affect Your Schedule?
Have you ever thought you had plenty of time to complete a task… then suddenly the deadline looms and your calendar is blocked with other appointments and there is no time left?
Have you ever scheduled time to complete a task and once you got started you realized you needed a lot more time to get it done to a decent standard?
If it hasn’t happened to you, you’ve probably seen it happen to colleagues. The planning fallacy can strike at any time, although it normally happens to us at the most inconvenient moments!
What is the planning fallacy?
The planning fallacy is a theory of work that says individuals underestimate the time needed for their own work. We display optimism bias when estimating our own areas of expertise, even if in the past we were late delivering the same task.
In other words, regardless of how good you are at your job and how many times you have done the same activity previously, it is highly likely that you will underestimate how long it will take you. We just don’t learn from past experience, and we’re always optimistic about ‘next time’.
Daniel Kahneman and Amos Tversky concluded that the planning fallacy existed as a result of their work in 1979. The interesting thing about this phenomenon is that it doesn’t affect the way we view other people’s estimates. If you are estimating how long a colleague will take to do the work, you are far more likely to be accurate or even a bit pessimistic. When it comes to your own time management though, you can get everything done super quickly and get home in time for tea.
Why we can’t estimate our own work
The most obvious reason for an individual’s estimates being under is optimism bias: the feeling that next time will be different, next time we won’t hit the same obstacles.
There are lots of other reasons why individuals estimating their own tasks tend to fall into the planning fallacy zone including:
- Not learning from past experience or having access to past project data based on their own performance
- Viewing delays in past performance as external to their own work and not caused by them, therefore not likely to happen again
- Estimating every project as a new piece of work, with a frame of reference for estimating.
Counteract the planning fallacy
Here are five simple ways to balance out the impact of the planning fallacy on your projects.
- Set up a robust estimating process
Create a policy and process for estimating so the effort of estimating can be planned. Ensure the basis of estimates is well-understood.
Set the expectation that the earlier the estimate, the less likely it is to be accurate. Estimate in a range, with the expectation that the range will become smaller and smaller as time goes on.
Refine estimates throughout the project and have a process in place for doing so. Build in a confidence assessment too. In the early days, there is likely to be low levels of confidence surrounding estimates. As the project progresses, more information is known and you should be able to estimate with a greater degree of accuracy. Spell this out for clients so it doesn’t come as a surprise if estimates change later.
Read next: How to estimate costs in 8 steps
- Estimate as a team
Work with colleagues on estimates. Statistical approaches to estimating give you the option of techniques like three-point estimating with a weighted average to avoid using a single number as the input.
Make it acceptable for the output of estimating to be a range (as discussed above) and ask the team to consider the worst-case scenario as a way to offset optimism bias.
If you can’t estimate as a group, have colleagues review each other’s estimates or work in pairs to come up with figures for tasks, or use AI-powered tools. You could even access industry data sources which publish project data and compare your estimates with industry figures where these are available. Using expert schedulers is a way to easily do this, because they will bring with them the knowledge and skills from many other projects, and can review estimates from a common-sense perspective.
- Use organizational data
There is a lot of information within Primavera P6, Microsoft Project or whatever tool you use to capture schedules and track project performance. In addition, a lot of project work does have an element of repeatability. While the actual deliverables may be unique from project to project, set up, contracting, the project management overhead, closure and other aspects are broadly similar.
Review the data in your project management tools. Look back through earned value management reports and schedule analysis. Consider where there was schedule variance and why that happened. Then learn from it and build the learnings into the new schedule.
Allow enough time into your planning phase to consider all of this so you can create a robust schedule with reliable estimates from the beginning.
- Outsource your scheduling
Outsourcing your scheduling is another way to bring impartiality and clarity to your project estimates. When teams work with a scheduling expert, they will be gently challenged to justify their numbers and any figures that are too optimistic can be amended before they become a problem for the delivery team.
Document how each estimate was formulated and who had visibility into the process. Then when you do need to review and revise – either during this project or the next – you can trace back exactly what happened.
- Track performance with earned value management
Using earned value management to track project and program performance perhaps isn’t truly an easy way of addressing the planning fallacy – at least until you get going and EV becomes the normal way of working.
However, EVM provides robust metrics for understanding schedule and cost performance. These give you early warning signs when a project is going off track, enabling the team to take management actions to bring the project back under control. Without an EVMS, you risk not noticing delays until it is too late to take meaningful action.
Your project schedule is likely to already have been hit by the planning fallacy: the delays are there waiting to happen! These five steps will reduce the likelihood that future estimates are going to be wrong, or if they are, have a negative impact on your project by causing delays.