The Planning Fallacy

Do you often find projects over-run, or that you are constantly running late for things?

More often than not this is a function of bad planning rather than bad execution, and it is a trait that most of us share. The Planning Fallacy as it is known, means that we tend underestimate future problems and we tend to see the best path from A to B as the most likely.

Research has shown that this is a highly universal trait. This inbuilt over-optimism may well have evolutionary benefits. Early man might not have ventured out across the Savannah if he/she really understood the risks. Our parents might not have tried for that second child if they accurately remembered the sleep deprivation and hard work of the first. They might not have tried for the first if they’d listened carefully to their friends! I suspect most people will recognise this feeling on a day-to-day basis. It always seems as though things are particularly busy and hectic at the moment and that we will be able to catch up with ourselves in a few weeks when things calm down. Of course, things never do seem to calm down.

But evolution doesn’t help us get our change programme through! So the first step to better planning is to slow down. How realistic have we been? Have we just taken the best scenario and added 10% contingency, or have we considered all of the possible less than perfect scenarios?

It is also worth considering the “Above Average Effect.” We are generally poor at estimating our own ability. This is not necessarily true where we have a specific set of expert skills, however projects often require us to do a whole range of tasks. The classic example of this is to ask a room full of people who believes they are above average driver? Typically 92% of the people in the room will raise their hands! Obviously at least 42% of these people are wrong!

A third point to consider is that we all tend to overestimate our own contribution. There is a valuable lesson from the field of marriage guidance counseling here, which tells us that when a married couple is asked to estimate what percentage of various chores they do around the house themselves, (such as washing up.) The total across the married couple comes to 120% rather than 100%!

So there are lots of factors which lead us to plan inefficiently; we underestimate future problems, we think we will be able to manage certain tasks more effectively than we can and we expect others to have more slack and capacity to take on more.

The key to improving your planning is to recognise that we are all susceptible to Planning Fallacy and to devote more time and focus to realistic planning.

Executive Coaching will help improve your decision-making, highlighting hidden assumptions. These days, most top performers in business work with a coach.If you would like to invest in yourself and the value of your business then call me on 07730 700258 to arrange a free introductory Coaching session.