The Planning Fallacy

I know how long it takes me to do certain things. 

Like working out, or driving to the office, or eating breakfast – I know how much time to leave for the stuff I need to do. Kind of. It turns out that we’re really bad at estimating how long things take…even when they’re things we do all the time.

Here’s how they figured this out: back in the 70’s, two Israeli psychologists named Daniel Kahneman and Amos Tversky did some research around why we seem to estimate our time so terribly. They asked groups who knew the subject matter equally well to estimate best case and worst case scenarios for a 90-day project. These guys were all expert groups in their field. The two groups’ worst case and best case estimates – without the groups communicating with each other – came within three days of each other. Both estimates by both groups were too short by 40%. (Source)

We see this in the real world all the time. Take construction projects…how often do those finish as quickly as they’re supposed to? Here in Colorado, the Denver International Airport opened in 1995 16 months past when the city said it would be done (not to mention almost $3 billion over budget!). Even if we tell ourselves not to, and even if we have tons of evidence that our estimates have historically been way too optimistic, the human mind seems to only be able to estimate the best case scenario, which is usually wildly under what it actually will be.

This seems crazy, because we know we do have the ability to estimate accurately. Remember, I know how long it takes me to eat a meal or finish a workout, right? But I’m still late to meetings.

So that begs the question…what do we do about this? How am I supposed to get anything done in time when I know my estimate for how long it’ll take is going to be wrong? There isn’t a quick fix to this problem unfortunately, but there are a few things that help.

1. Account for the planning fallacy: Give yourself a break! We’re all dealing with this.
2. Break down the task into chunks: The smaller we can make each part of the process we’re estimating, the better we are at estimating it. There’s a trade off, obviously. If you estimate how long things will take every day, you’ll spend more time breaking a task down than just doing it. But for those huge projects like building an airport, where you have to have thousands of parts working together, planning has to happen at a micro level. And the sheer amount of planning that takes is crazy. Luckily, most of our day to day tasks are way simpler.
3. Identify game-stopping constraints: Find the absolute key bottlenecks that can throw off your plan. For example, if I’m trying to get to a meeting on time but I know that I get stuck at a train maybe one in 20 times, I should account for that in deciding when to leave. For a construction site, there may be a bottleneck when someone’s waiting for an inspection from a department that is notoriously always behind. Take these things into account when you make your plan.
4. Reassess early and often: If we know our timelines are going to be off, we have to check in on our progress early and often. Are we still on time? What do we need to adjust in our plan? This may not save us from the Denver airport problem, but it should make things a little better.
5. Analyze and learn from the past: This is huge. Whatever we’re working on, we’ve done it before, or we’ve done something similar, or someone else has done it before. Look for areas where you were off. Take a close look at what happened in the past and use it to plan better in the present.

Your turn. When was the last time you underestimated how long something would take? What was your takeaway from that experience? And help me out…if you’re getting to meetings on time, what’s your secret?