If you have too much to do because you’ve agreed to do too many things, then you could suffer from a cognitive bias identified and explained by Daniel Kahneman and Amos Tversky called the Planning Fallacy. Today, we look at why this happens and what you can do about it in the future.
The Planning Fallacy is rooted in optimism and affected by how we think about the future. When we have to do something very soon, we are less likely to fall victim to it. We are well aware of all of the commitments we’ve already made.
However, asked to do something with a deadline that’s six months out, we tend to think we will find the time. We overestimate the amount of free time we will have in the future.
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So, What is Happening Here From a Human Perspective?
When I ask you whether you’re willing to do something, you simulate how hard it would be. How much time would it take?
When the deadline is close, then the urgency of it is very salient. We realize we would need to carve out time to make this happen. When it’s far out in the future, we do not appreciate all the things you must do in the coming months that consume your time and create urgency.
For example, researchers asked students who had to write a senior thesis how long it would take. Then, they asked how long it would take in a worst-case scenario. The researchers found that for the majority of students, it took them much longer than their estimated worst-case scenario.
Here’s another example. We do research for clients called the Emotional Signature, which determines what drives value for an organization. We’ve been doing it since 2005, so we know how to do it and how long it takes, which is about three months.
Upon hearing that, at least half of the clients will ask us if we can do it quicker. We can. However, many of these clients fail to realize that the three months aren’t because we need three. They need three months.
We can do what we need to do in six weeks. However, they need six weeks to provide what they do for the project.
We explain all that to the clients. Upon hearing that caution, at least half of them still want the research plan to have a six-week date for completion. Almost none of them complete their project in that timescale.
Endemic Problems With The Planning Fallacy
However, from a Customer Experience perspective, the danger is that it happens across the organization. Let me tell you a story that shows you what I mean.
A healthcare organization supplier that installs healthcare systems, meaning the back-end systems medical facilities use, called us to help with an installation that was going poorly. Before the installation, their client viewed the supplier as very efficient, but afterward, not so much. Why? The problem stemmed from the poor planning that was taking place. This perception massively affected what the healthcare organization saw them as.
Within this scenario, we had three customers: the decision maker who bought the healthcare system product for installation, the project manager who manages the project, and the end users, who worked with the system at the healthcare facilities.
The end users hated the company because of all the problems the installation caused and the late hours they had to work. Those hateful feelings were less prominent the further up the healthcare organization you went to, but they still reached the decision-maker.
Interestingly enough, the healthcare provider was that they did this repeatedly. As we worked through the tangled web of organizational strife associated with the installation, I wondered whether the Planning Fallacy became endemic.
When you look at an organization, you recognize that different departments have different degrees of Planning Fallacy biases. For example, sales organizations tend to be more optimistic and overpromise than the engineering side of the house. That’s because the engineering department typically gets left to deal with the fallout from poor planning. It’s not surprising that, over time, this might lead to pessimism.
Regarding the healthcare supplier, that’s what we saw. The salespeople overpromised, and the engineers went in and had to clear up the mess to deliver. Here is an excellent example of when invoking the Power of Saying No would have been great.
A Few Other Explanations of What is Happening Here
Another problem here could be Impression Management. This idea explains we may overpromise. Usually, it’s because we want to look good up front, thinking we can make up for it later. So, it’s like leaving late somewhere and then planning on speeding to make up for it later.
There is also the wishful thinking idea. We want to finish it by then, so why not use that date? In addition, there’s something called Focalism, which explains how we tend to hone in on specific information points and neglect others. Plus, there’s a Self-Serving Bias where we consider ourselves more competent than we are.
Each explanation has evidence supporting it as a cause of the Planning Fallacy. However, I love another one called Resource Lag. Resource Lag is the idea that we all have cognitive, time, and financial resources. When we have to do something, we mentally calculate our resources available.
When we’re on a short time horizon, we have a good sense of how much of any given resources we have. We know our obligations over the next week or how much money we have in our current bank account.
However, the farther out we get, the worse we are at projecting how many resources we’ll have available to us at that future point. We also become more optimistic about how many of those resources we have, the more likely we are to have problems with our plans.
So, what ends up happening because of that Resource Lag is that if I give a deadline of next week, then you are thinking about the tradeoffs you will have. You would need not do something else to do what I asked.
If I give a deadline in the future, we don’t do that. Instead, we wonder if it is worth it to do the thing. We don’t think about what we must give up to do that.
It should be a balance between the two. If something is worth doing, then isn’t it worth the tradeoff? If you only think about the tradeoff, do you miss out on significant opportunities?
Or the opposite could be true. Is it worth it enough to make that tradeoff? Would what I give up ultimately be too dear a price for what I gain?
So What Should You Do About This?
To start, I encourage you to use the teachings of Stephen Covey, who says that the most influential people work on what is important long before it is urgent. Unfortunately, many of us only work on what’s important when it’s urgent.
Our natural tendency is to be optimistic about the future and our ability to do things. We are different people in the future than we are now.
We like to think of ourselves that way, too. Like, “Oh, future me will be able to handle this, no problem!”
However, we aren’t different and will likely be overwhelmed. This situation is especially possible since few of us will use the extended timeframe to work ahead and meet the deadline without stress.
Therefore, whatever your natural inclination is regarding the ability and time available for your future self, dial that back a little bit. In some cases, you should dial that back a lot.
Are we saying to blow off future opportunities that involve consuming resources like you would last-minute ones? We are not, but we are telling you should remember that you will still have responsibilities and limited resources. Moreover, it would be best to be realistic with your ability and timelines. Your future self will thank us.
If you have a business problem that you would like some help with, contact me on LinkedIn or submit your pickle here. We would be glad to hear from you and help you with your challenges.