How the Planning Fallacy Trips You Up

“The planning fallacy is a cognitive bias that arises from producing plans that are unrealistically close to best-case scenarios instead of likely ones. We all do this. But why?”

Bent Flyvbjerg

Below is an excerpt and a link to the full article. I think the schematic brilliantly illustrates the old adage, man plans and God laughs.

“Planning fallacy = Underestimated (cost, time, risk) + overestimated (benefits, opportunities)

Psychologists originally defined the “planning fallacy” as the tendency to underestimate task-completion times. The term was coined by Daniel Kahneman and Amos Tversky (1979a: 315)* in their pioneering work in behavioral science to describe the tendency for people to underestimate task-completion times.

The planning fallacy is a cognitive bias that arises from people producing plans that are unrealistically close to best-case scenarios.

In a typical experiment used to document the fallacy, students were asked to estimate the completion time for their year-long honors thesis project. The students’ “realistic” predictions were overly optimistic: 70% took longer than their own estimated time, even though the question was asked toward the end of the year. On average, students took 55 days to complete their thesis, which was 22 days longer than predicted. That’s a time overrun of 67 percent. Similar results have been found with various types of subjects and for a wide variety of tasks such as holiday shopping, filing taxes, and other routine chores.”

All social entrepreneurs face he challenges of planning their solution to deliver positive impact on their targeted problem (See Practitioner Guide Module 7); planning their business model (See Practitioner Guide Module 8); and planning to scale their positive impact to achieve Transformational change (see Practitioner Guide Module 9).

The author notes that “People in power are particularly prone to the planning fallacy.”

A point social entrepreneurs aka “the boss” may want to keep in mind.

https://medium.com/geekculture/how-the-planning-fallacy-trips-you-up-3248b7e3978e

"When you’re in motion, you’re planning and strategizing and learning.

Those are all good things, but they don’t produce a result.

Action, on the other hand, is the type of behavior that will deliver an outcome."

— James Clear