The Art of Thinking Clearly: Better Thinking, Better Decisions

See also Action Bias (ch. 43); Information Bias (ch. 59)

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91
WHY YOU TAKE ON TOO MUCH
Planning Fallacy
Every morning, you compile a to-do list. How often does it happen that everything
is checked off by the end of the day? Always? Every other day? Maybe once a
week? If you are like most people, you will achieve this rare state once a month.
In other words, you systematically take on too much. More than that: your plans
are absurdly ambitious. Such a thing would be forgivable if you were a planning
novice. But you’ve been compiling to-do lists for years, if not decades. Thus, you
know your capabilities inside out and it’s unlikely that you overestimate them
afresh every day. This is not facetiousness: in other areas, you learn from
experience. So why is there no learning curve when it comes to making plans?
Even though you realise that most of your previous endeavours were overly
optimistic, you believe in all seriousness that, today, the same workload – or more
– is eminently doable. Daniel Kahneman calls this the 
planning fallacy
.
In their last semesters, students generally have to write theses. The Canadian
psychologist Roger Buehler and his research team asked the following of their
final-year class. The students had to specify two submission dates: the first was a
‘realistic’ deadline and the second was a ‘worst-case scenario’ date. The result?
Only 30% of students made the realistic deadlines. On average, the students
needed 50% more time than planned – and a full seven days more than their
worst-case scenario date.
T h e 
planning fallacy
is particularly evident when people work together – in
business, science and politics. Groups overestimate duration and benefits and
systematically underestimate costs and risks. The conch-shaped Sydney Opera
House was planned in 1957: completion was due in 1963 at a cost of $7 million. It
finally opened its doors in 1973 after $102 million had been pumped in – 14 times
the original estimate!
So why are we not natural-born planners? The first reason: wishful thinking.
We want to be successful and achieve everything we take on. Second, we focus
too much on the project and overlook outside influences. Unexpected events too
often scupper our plans. This is true for daily schedules, too: your daughter

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swallows a fish bone. Your car battery gives up the ghost. An offer for a house
lands on your desk and must be discussed urgently. There goes the plan. If you
planned things even more minutely, would that be a solution? No, step-by-step
preparation amplifies the 
planning fallacy
. It narrows your focus even more and
thus distracts you even more from anticipating the unexpected.
So what can you do? Shift your focus from internal things, such as your own
project, to external factors, like similar projects. Look at the base rate and consult
the past. If other ventures of the same type lasted three years and devoured $5
million, this will probably apply to your project, too – no matter how carefully you
plan. And, most importantly, shortly before decisions are made, perform a so-
called ‘premortem’ session (literally, ‘before death’). The American psychologist
Gary Klein recommends delivering this short speech to the assembled team:
‘Imagine it is a year from today. We have followed the plan to the letter. The result
is a disaster. Take five or ten minutes to write about this disaster.’ The stories will
show you how things might turn out.