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This week's featured article tackles the tangled network of cognitive mechanisms that drive our tendency to underestimate what is needed to get something done—a phenomenon known as the planning fallacy.

This week, we will focus on how the authors position deadlines to mitigate the fallacy and what it means for how you keep your teams realistic in their strategic planning. Next week we will tackle the role of incentives.

The findings

• Optimism and overconfidence makes us anticipate a task to be easier to complete than it really is and as a result, we tend to under-plan our efforts and procrastinate on required tasks.
  
  To put the model into behavioural science concepts,
  
  underestimation of probability of negative future events (optimism bias) + overestimation of personal capabilities (overconfidence)
  
  = underestimating effort required to get a job done (planning fallacy)
  
  = low perceived utility of doing the required tasks today and putting it off for tomorrow (present bias and future discounting)
  

• Imposing deadlines makes people better able to allocate resources and effort over time to get the job done, with this benefit directly related to how big the effort is. The bigger the job the bigger the benefit.

• Self-imposed deadlines are less strict and are more vulnerable to the the planning fallacy compared to deadlines that are imposed by others.

Why it matters for you

• As leaders, planning (and managing) milestone completion and monitoring progress on KPIs is a big part of the job. Doing this well means you need to keep your people motivated and maximize their potential effort against planned activities.

• Goal-oriented productivity will rise and project stress will ease if your team secures deadlines for critical path tasks and (subtly) tackles overconfidence prior to strategic planning activities. It will sharpen their intuition, lessen the planning fallacy, and smooth out the distribution of effort over time. This means fewer late nights and scary Sundays for your team.

What you can do about it

• Try a pre-mortem exercise to tamper the ego and create more robust estimations before planning gets underway.

• Preserve perceived control by pushing your team to determine deadlines for small tasks, but impose the deadline for the critical path tasks.

• A deadline is only as potent as it’s salience to the team. Make sure it remains salient on the daily scrum and milestone review meetings.

Explore the fallacy deeper using the below prompts on your favourite generative AI platform:

• Investigate how the planning fallacy can significantly influence strategic planning activities for [role], including detailed case studies and examples of successful interventions to mitigate the impact of the fallacy on decision making and planning.

• Examine the most successful strategies for mitigating the impact of the planning fallacy on strategic decision making and planning, considering various approaches and techniques used by industry leaders. Provide a critical analysis of their effectiveness, along with tops for overcoming common obstacles and pitfalls encountered in the process.

Have a great week!

M

☕ If you’re a stats geek I recommend you top up your cup of coffee and explore the original paper at the top of this briefing. It’s a serious brain cruncher!

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1  Buehler R, Griffin D, Ross M (1994) Exploring the planning fallacy: Why people underestimate their task completion times. J. Personality Soc. Psych. 67(3):366–381.