Planning fallacy
John Robert
Global PMO Leader | Driving Innovation & Excellence | Top 6 PMO Leader 2023 | Trainer, Author & Speaker
Underestimating the time needed to complete a future task is called the planning fallacy. This happens when ideating a project, an optimism bias creeps in and the forecast of the time needed to complete projects is underestimated. Daniel Kahneman proposed this first and Amos Tversky added underestimation of Time, Cost, risks, and overestimating the benefits.
My co-author and pharma strategist @Mike Teiler often quote a Hebrew proverb "Man plans, G-d laughs"
Many a time estimates are made based on gut feeling, without detailing (detailing does not improve the accuracy of estimates, that's is for another day). Estimates are converted as commitments even before we realize then the projected and projects manager have to deliver this.
The Sydney Opera House is a classical example of the planning fallacy. Originally planned to be completed in 1963 with $7 million. From 4 years, it took 14 years for a scaled-down version to be completed with $14 million.
Do you remember other examples, feel free to comment few of them.
Focussing on the optimistic scenarios for the task, wishful thinking, self-serving bias, and the urge to create a favorable impression with others (management/boss) are some of the reasons why this happens.
Next time when a project estimate is being asked, check if any of the above is influencing the schedule or budget projection of the project.
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2 年“What we know is a drop, what we don't know is an ocean.” Isaac Newton ??
Senior Project Manager at Andersen Pharma Poland SP Zoo
2 年Effectiveness is equally important as efficiency. Effectiveness ensures right product with right quality ( has must to have features after all risk taken care of). Efficiency is about delivering within/under budget and within/ahead of schedule. Only focus on efficiency might lead to no product at the end. No product means no project. Only focus on effectiveness might lead to missing a business opportunity. There is a product and great learning but, no business. E.g. I recently shared this experience with a recruiter Local vendor vs. German vendor-for a machine procurement Local vendor..adv..claims less time and cost..disadv..no experience but, only knowledge. German vendor..adv..great experience and supplied to RLD manufacturer..disadv..more time and cost.. Optimistic planning started with local machine supply While monitoring, realized that local vendor had changed the timelines by 6 months as he was looking for some parts not available locally (& making stories)...now, advantages do not exist any more going with local vendor So, after a team discussion, decided to change from local to german as quality and timelines are guaranteed. SO..Right decision taken in favor of business in right time.