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Introduction: The Planning Mistake That Won’t Go Away

You’ve seen it happen. A project is announced with high confidence—the team lays out an aggressive timeline, forecasts a smooth rollout, and assures everyone that this time, things will be different.

Fast forward six months. The deadline has come and gone. The project is only half done. Costs have skyrocketed. The team is scrambling to explain why.

The worst part? This has happened before. The last project ran over budget, too. The last initiative took twice as long as expected. And yet, no one accounted for it this time.

Why does this keep happening? Because of a powerful cognitive bias called the Planning Fallacy.

What Is the Planning Fallacy?

The Planning Fallacy is our tendency to make overly optimistic predictions—assuming best-case scenarios while ignoring risks, delays, and real-world obstacles.

We act as if this time will be different, even when past data says otherwise.

• We assume projects will go according to plan—even though experience shows they rarely do.

• We dismiss past delays as anomalies instead of patterns.

• We ignore risks that have derailed similar projects before.

And it happens everywhere—from corporate boardrooms to government megaprojects.

Real-World Examples of the Planning Fallacy

📌 California High-Speed Rail Project – Initially estimated at $33 billion with a completion date set for 2020, the project’s costs have now escalated to over $100 billion, with the Central Valley segment’s completion pushed to 2033. (Read more)

📌 F-35 Joint Strike Fighter Program – Projected to cost $233 billion, the program’s expenses have soared to over $428 billion, with the total lifecycle cost now estimated at $2 trillion. The program is also over a decade behind schedule, plagued by delays, cost overruns, and performance issues. (Read more)

📌 Denver International Airport Baggage Handling System – Planned to be a state-of-the-art automated system, it faced numerous technical issues and delays, leading to a delayed airport opening and an eventual abandonment of the system. (Read more)

This isn’t just bad luck. It’s predictable. And it’s preventable.

Why Do Leaders Keep Falling for It?

The Planning Fallacy isn’t just a forecasting mistake—it’s a psychological trap. It happens because:

1️⃣ We assume past delays were outliers.

• “That project was different.” “We have better people now.” “We won’t make those mistakes again.”

2️⃣ We focus on what we want to happen—not what’s likely to happen.

• We mentally picture everything going smoothly, ignoring the probability of setbacks.

3️⃣ We underestimate complexity.

• Small delays add up. Dependencies get missed. Unexpected problems always arise.

And worst of all? The more confident we feel, the bigger the mistake. Ironically, the more planning we do, the more confident we become in the accuracy of our plans—even when they are based on unrealistic assumptions. However, in most cases, if we simply used the average time for all past similar projects as our estimate, we would be far better off.

How to Break the Cycle (A Better Way to Plan)

If you want to avoid the Planning Fallacy, awareness isn’t enough—you need to apply best practices that counteract it.

Here’s how:

✅ Reference Past Data to Avoid Base Rate Neglect

• Instead of guessing, look at historical data from similar projects. If the last five projects took 50% longer than expected, assume this one will too.

✅ Break the Project into Segments

• Large projects estimated as a whole often lead to wishful thinking. Breaking them into smaller tasks makes estimates more realistic.

✅ Use Ranges Instead of Single-Point Estimates

• Instead of debating whether the project will take 3 months or 6 months, set a realistic range: 📌 “Best case: 3 months. More likely: 4-6 months. Worst case: 7-9 months.”

• This also eliminates arguments over whose estimate is ‘right’—when in reality, no one’s is.

✅ Explore Best-Case and Worst-Case Scenarios

• Identify what needs to happen for the best case to be achieved, and what could go wrong to cause delays.

• Put actions in place to increase the likelihood of the best-case outcome.

✅ Seek an Outside Perspective

• People closest to the project tend to underestimate risks. A fresh perspective can reveal blind spots and challenge optimistic assumptions.

These best practices are embedded in Step 6 of Enabling Empowerment’s Decision-Making Framework, ensuring that execution plans are based on reality—not just optimism.

Final Thoughts: Will You Keep Falling for It?

Every leader has fallen for the Planning Fallacy at some point. The key is learning from it.

If you’re tired of missed deadlines, budget overruns, and overpromising, it’s time to change how you plan.

📌 I break down exactly how I fell into this trap—and the leadership tweak that fixed it—in this case study: 🔗 Read it here

And if you want to train yourself to avoid ALL major decision traps, my Decision Trap Course is free for a limited time. Even if you don’t have time today, enroll now so you don’t miss out.

🔗 https://enablingempowerment.mykajabi.com/offers/4DtvEHWu

#Leadership #DecisionMaking #Strategy #PlanningFallacy

 

 Chris Seifert is the author of Enabling Empowerment: A Leadership Playbook for Ending Micromanagement and Empowering Decision-Makers. With over two decades of experience in transforming organizations through strategic leadership and decision-making frameworks, Chris has helped teams cut through bottlenecks, optimize capital project budgets, and build cultures of accountability. He is passionate about teaching leaders how to empower their teams to make smarter, faster decisions without sacrificing business value.