How to Avoid & Overcome the Planning Fallacy: Top Strategies

Have you ever underestimated a project or a task, saying confidently to a Project Manager that it’ll take you “less than 30 minutes to complete the task” but you worked on it for at least 2 hours? If so, you probably fell deep into the planning fallacy rabbit hole.

And the time fallacy is necessarily tied to project and task estimation. If you've ever found unfinished tasks on your carefully planned to-do list, you've ventured into this territory.

Simply put, the planning fallacy is a prediction phenomenon that occurs when you underestimate the time (and risk and costs) it will take to complete a task or tasks.

What’s the root cause of this fallacy?

It's not due to poor time management or planning skills.

It's not because of your laziness or inexperience.

It's not even about your lack of organizational skills.

It happens due to cognitive bias that prevents you from being objective about time management, supporting your idea of unrealistic deadlines and expectations.

And being delusional about your plans and deadlines can cost a lot, in terms of time and resources.

But don’t worry; you’re not alone in this.

In this article, we explore the planning fallacy, why it happens (and why you shouldn’t be too hard on yourself), and how to overcome it using the top strategies.

Without further ado, let’s get started.

What is the planning fallacy?

By definition, the planning fallacy is a tendency to underestimate the time it will take to complete a project, even though you know that similar projects have taken longer time to complete in the past.

This fallacy is based on your optimistic prediction for a task or project, even though evidence suggests you shouldn’t be that optimistic.

At its core, the time fallacy is based on unrealistic optimism and planning, leading to two main errors in project planning: overestimating positive outcomes and underestimating time, risks, and costs.

In June 1977, two psychologists in the field of behavioral economics, Daniel Kahneman and Amos Tversky, introduced the term to try to explain why this phenomenon occurs.

In the paper, Kahneman and Tversky mentioned that people tend to rely on inaccurate, intuitive judgments when making predictions and plans about the future. The errors people make when predicting are random but systematic, resulting from一you guessed it一cognitive biases.

Why does the planning fallacy occur?

It occurs when you combine four different factors:

1. Optimism bias.
2. Self-serving bias.
3. Not focusing on the bigger picture.
4. Social pressure.

Optimism bias is a rule, a mechanism, ingrained in your brain that says you should overestimate the likelihood of positive outcomes and underestimate the likelihood of negative events. Essentially, it means that you tend to see a glass half full.

Having these positive expectations of the outcome is necessary to keep you motivated and ready to take on challenges but tends to lead to unrealistic planning.

Self-serving bias is another cognitive mechanism that aims to help you cope with failure.

The rule suggests that when you think of your past failures in tasks or projects, you blame circumstances revolving around those projects rather than personal factors or your influence. Moreover, self-serving bias can trick you into crediting yourself for all your success.

This bias can deform your perception of abilities and past performance, leading to overconfidence in future planning.

Not focusing on the bigger picture suggests that you focus on the details of the project, not what actually needs to be done. Getting lost in the subtasks removes focus from more significant, general factors relevant to tasks and projects.

Social pressure is the pressure that you put on yourself to impress others, making yourself appear competent and able to meet their expectations.

If you’ve worked in competitive environments, chances are you have seen cultures based on unrealistic optimism. Many companies try to put a positive image by latently forcing their employees to meet unrealistic expectations (which further magnifies the issue of the planning fallacy).

Understanding these factors can help you recognize why the planning fallacy occurs and which steps you should take to mitigate its impact.

The dangers of planning fallacy

Unrealistic predictions aren’t just delusional and senseless; they also don’t align with practical experience and existing evidence.

Moreover, they can be very dangerous, as you could:

• Compromise product quality. When you don’t have enough time to complete tasks, cutting corners can lead to poor quality of your work.
• Miss deadlines. Underestimating the time needed to complete tasks can result in missed deadlines, affecting your schedule and project timeline.
• Increase costs. Inaccurate estimates often lead to higher costs.
• Feel inadequate. Poor planning can make you feel overwhelmed, impacting your mental health and well-being.
• See a decrease in self-esteem. Repeated underestimates and the inability to meet deadlines can significantly lower your self-confidence.
• Compromise integrity and reputation. Failing to keep your promises can damage your reputation, making your coworkers question your integrity.
• Be seen as unprofessional and unreliable to work with. When you can’t keep your promises, it can damage professional relationships and lower your chances of moving up the company’s ladder.

Knowing the negative effects of the planning fallacy, you must do everything in your power to prevent it from affecting you. Here’s how you can do so.

How to avoid the planning fallacy

Here are the planning fallacy prevention strategies that will transform you from a procrastinator to a productive king or queen.

#1 Rethink what you put on your to-do list

To-do lists are great, as they allow you to visually see how many tasks you have for each day and what you need to complete.

But these lists are often seen as something that needs to be long, filling every page with numerous tasks, not leaving any white space.

In reality, it’s far from the truth, as no one needs an infinite to-do list; you just need a reasonable one. Here are some tips to mitigate never-ending task lists that lead to unrealistic time estimates:

• Plan by making separate lists for today's, tomorrow's, and weekly tasks. That way, you'll be able to see what each day holds for you and what you absolutely need to complete.
• Place the tasks into two categories: a few minute tasks and deep work tasks. The few minute ones should be completed quickly, and the deep work ones should require more focused time.
• Never put a task on a list you realistically never plan to do. A task list should be meaningful and intentional, not a wish list you hope to complete someday.

#2 Break tasks into subtasks

While writing down tasks is a good start, accurate estimation is crucial.

If you tend to underestimate task duration, breaking tasks into smaller subtasks can help.

When you know how much time it will take you to complete each step of the tasks, you can allocate time properly. Trust me, it’s much easier to allocate time for subtasks than for one single task.

By adding up the time for each subtask, you'll find the total time for a task is significantly higher than your initial estimate, helping you avoid the underestimation trap.

#3 Use a tool that will provide you with objective feedback

The planning fallacy doesn’t allow you to be realistic and objective about plans; it pushes you to a more positive narrative, not allowing you to rely on past results.

Data from past projects can be used as information and a basis for a more clear-sighted plan. With such an accurate plan, you will be able to foresee potential delays and disruptions and adjust your estimations accordingly.

That’s why you need a tool to remind you of past experiences with tasks and projects.

A tool that does that subtly, without disturbing your workflow.

A tool like Memtime.

Memtime is a time management tool. It’s NOT a timer you start and stop but a comprehensive activity tracker; it works in the background, capturing all your activities and time spent on tasks down to the minute.

With Memtime, you’ll know how many minutes or hours you spend on each project task, allowing you to plan for the future more accurately.

#4 Use visualization (intentional implementation)

A study from the Netherlands published in the European Journal of Social Psychology suggests that you could overcome the planning fallacy using your willpower.

Study participants were given an assignment to write a paper and told to complete it within a week. Then, they were separated into two groups.

Both groups were instructed to set goal intentions, marking the day they start writing and the due date. However, the second group also got implementation instructions, allowing them to specify what time of day and in what location they would write. The researchers also asked them to visualize themselves writing and following the plan.

As a result, researchers found that setting implementation intentions resulted in more realistic goal-setting. What was also found is that implementing intentions did not affect or lessen the participants’ optimism; they were confident in their ability to achieve their goals.

The second group also reported fewer interruptions while they were working.

This study is of great significance because it showed that optimism and a realistic mindset can coexist. You can be optimistic and realistic simultaneously as long as you have a detailed plan to guide you. 🙂

#5 Use time blocks and buffer time

Time blocking allows you to look at your tasks through a calendar lens, motivating you to allocate a block of time for each task or group of tasks. That way, your digital calendar becomes a planner and you have to stick to the number of minutes or hours you dedicate to each task or project.

But just because you want your day to be filled with tasks, doesn’t mean you can’t add “gaps” between tasks. Those gaps are called buffer time or padding time.

In one of Memtime’s recent articles, we explored what buffer time is and how to avoid going overboard with it. You don’t have to go through the entire article to become a buffer time master but keep in mind these three things:

1. It’s an additional time that can go before or after a task or at the end of the project.
2. Buffer time can help you mitigate unforeseen obstacles and interruptions that may arise and disrupt your plans一that’s why it’s necessary.
3. You have to schedule it; it requires advanced planning.

Wrapping it up

The planning fallacy is a cognitive bias that leads you to underestimate the time, costs, and future risks, simultaneously overestimating the benefits. This miscalculation is rooted in the optimism bias and the inability to consider past experiences.

That’s why understanding the planning fallacy is crucial for improving decision-making processes in personal and professional life.

The way to remove such mechanisms from your brain is to stop thinking of the best-case scenario and try to think of realistic situations that could, potentially, go wrong. I’m talking about setbacks, lousy deadlines, delays, budget overruns, etc.

Here are some final tips on how to stop being overly optimistic and falling into the trap of time fallacy:

By recognizing the cognitive biases that contribute to the fallacy, learning from past experiences, and fostering a culture of realism, you can make more accurate predictions daily and achieve better results.

Addressing the planning fallacy and planning properly will also build trust in you as an individual and help senior management, team leads and your team members take you more seriously as a confident and credible team player.