The Planning Fallacy: A Frequent Cause of Unproductivity

The planning fallacy is a concept that we all know about. It’s when  plans don’t coincide with facts.  It can happen in any area, both in the workplace and in our personal lives. A perfect example of it is when we make a to-do list and, at the end of the day, week, or month, many of those tasks are still unfinished.

Those differences between plans and implementations have consequences when it comes to time. However, they also affect resources, productivity, and efficiency. The planning fallacy even has very serious effects on an emotional level.

The origin of the planning fallacy

Since the beginning of the industrial age, people began talking about the planning fallacy, although not exactly with that name. When industrial production, and later serial production, took over the world, time became especially important. The central objective in that context became maximizing production in the least amount of time. Profitability depended on this.

Since then, planning became an important activity in both organizational and personal levels. Despite this, it quickly became apparent that written plans were almost never implemented as such.

Several decades passed before a highly consistent planning technique was implemented in the industrial field. At the same time, in the individual level and in companies where production depended more on people than on machines, this was believed to be an impossible task.

In 1979, Daniel Kahneman and Amos Tversky postulated the existence of the planning fallacy. They understood that the problem was very common and discovered that there was a cognitive bias behind all this. There was a self-deception related to the limitations in the perception of reality.

Characteristics of the planning fallacy

Over time, descriptions that detailed characteristics of the planning fallacy originated. Nowadays, we understand this fallacy as an illusory perception of time that induces errors in the planning of activities.

Here are the main characteristics of the planning fallacy:

• Experts detect that people visualize the most optimist scenarios during planning. This means that plans are based on everything going smoothly, with no setbacks, contingencies, or unforeseen circumstances.
• Illusory thinking stands out. This is the type of thinking in which one’s desires influence an objective assessment of reality. In other words, it’s wishful thinking.
• There’s an inadequate interpretation of one’s performance. When planning, people optimistically value their own abilities. They assume that they’re able to do things in a short amount of time. This is one of the key factors in the planning fallacy.
• When planning collectively, people tend to get carried away by their desire to impress others. This means that you want to demonstrate how efficient you are, and that’s why there are inaccurate time estimates of the time required for the tasks.

Likewise, it’s normal for people to believe that the faster they do things, the better. That’s why they lightly schedule the time they need to do something to impress others.

The consequences of the planning fallacy

The main consequence of the planning fallacy is inadequate time management. In some cases, this also causes an imbalance in resource management. Likewise, it also implies a poor evaluation.

However, the worst part about it is the toll it takes on an emotional level. The personal negative effect of the planning fallacy is a feeling of constant frustration. Also, a variable dose of permanent stress. Failure to achieve induces feelings of tension and discomfort.

The way to avoid this cognitive bias is to take into account previous experiences. These provide reliable data on the true amount of time required for each activity. When planning, it’s always better to set some extra time to deal with possible contingencies or eventualities. That way, people won’t fall into these cycles of frustration.