The Planning Fallacy: Achieve your deadlines in a timely manner
Did you know that the best way to estimate how long it’ll take to complete a project is imagine a worst-case scenario estimate, and then add 15%?
When project managing, we’re often tasked with figuring out how long it would take to complete a project. One easy way is to estimate the amount of time we think we’ll spend on each individual phase of the project. Sounds easy, right? However, how often do you think that we underestimate the time we’ll spend on something, whether that be due to optimism or just unforeseen things that pop up? As a behavioral scientist who is well aware of the planning fallacy, I know that the answer is more often than not. It's natural to be overly optimistic about our abilities and underestimate the potential obstacles and setbacks we might encounter along the way of a task. And so, as a result, we often end up with unrealistic timelines that can lead to stress, frustration, and missed deadlines. And this planning fallacy happens even to the best of us.
To illustrate the planning fallacy in action, let's take a look at an experiment where people are asked to estimate how long it would take to complete a large project, such as writing a big paper. Participants were asked to provide three different estimates on when they would submit their paper: their best estimate, a best-case scenario estimate, and a worst-case scenario estimate.
Best Estimate: On average, the students predicted they would finish their thesis in 34 days. This initial estimate reflected their baseline expectations.
Best-Case Scenario: They were then asked to estimate how long it would take "if everything went as well as it possibly could." The average response was 27 days.
Worst-Case Scenario: Likewise, they were asked how long it would take "if everything went as poorly as it could." The average response was 49 days.
However, the actual average completion time for these students' theses was actually 56 days, worse than their worst-case scenario estimate! Fewer than a third of the students completed their thesis in the amount of time they initially predicted.
So how can we learn from this research? The implications of the planning fallacy are far-reaching, especially for professionals like consultants who need to estimate project timelines accurately.
We can acknowledge our optimism and recognize that our initial time estimates are often overly optimistic. This estimate might be a good starting point but it’s important to allocate extra time as a buffer. We can also consider worst-case scenarios. By thinking about worst-case scenarios, we can further build in buffers for unexpected situations or challenges that pop up.
Lastly, track and use previous data. If available, look back on how long it’s taken you or your team to complete previous similar projects and use that as a base. Actual data, even from a different project, can help you recognize there’s always something that comes up that can delay your project. will better guide you in making future estimates.
By acknowledging our bias to be optimistic, considering worst-case scenarios, and using data-driven insights, we can improve our project planning and increase the likelihood of meeting our deadlines successfully. So, the next time you're estimating project timelines, remember to factor in the planning fallacy and plan accordingly.