Technology, Cloud

The Fallacy of Planning

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The Fallacy of Planning says we are terrible at planning how long something will take and how much it will cost. Restated another way, the planning fallacy is people’s tendency to underestimate what it will take to get something done. The phenomenon of the planning fallacy ought not be a big surprise to any CIO or project management professional given the attention it has received over the years. What may be a surprise though is the pervasiveness of the fallacy of planning in our organizations and the cumulative impact it has on IT and the CIO’s reputation for delivering results.

The fallacy of planning is just one of the many forms of cognitive bias that affect decision-making in every aspect of our personal and professional lives. Cognitive bias is when a persons’ judgment is affected by a lack of metal abilities or from the misapplication of one. Most often this is a decision-making shortcut resulting from insufficient information, social pressure, or personal motivations. Cognitive bias is a very powerful form of irrationality, where people act in opposition to what is expected under the rationale choice theory which requires consideration in every risk management plan.

Cognitive bias includes innumeracy which is a particular form of irrationality related to a person’s fundamental inability to conduct basic reasoning with numbers. It is a form of mathematic s illiteracy often manifesting itself when dealing with really large (and small) numbers, probabilities, estimating, and even basic arithmetic.

What makes innumeracy so insidious is CONTINUE READING

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Martin Davis 131 Points | Thu, 08/11/2011 - 16:04
Jerry, you make some good points, however.... Is innumeracy really the root cause? What about people being naturally optimistic? Or how about deliberate optimism in order to justify a project (often as a result of businesses not admitting to the fully savings)?
Jerry Bishop 100 Points | Thu, 08/11/2011 - 16:22


The cultural factors affecting project failures in the US are legendary. We Americans, and other cultures, do have an overly optimistic view that works hand-in-hand with an inability to grasp large numbers or complex problems with multiple variables. Some think it is more arrogance than optimism originating from over inflated sense of self and one's ability to execute - think id versus ego. Perhaps I am making it more complicated than it needs to be.

I would also offer that there are many organizational cultures where a safer status quo mindset dominates. Here optimism gives way to low risk guarantees for fear of failure. In these organizations, the importance of accurately assessing project risk, resource requirements and expected benefits are critical so that people don't feel like they are sticking their necks out.

Martin Davis 131 Points | Thu, 08/11/2011 - 17:57
What are your thoughts on my second point - deliberate optimism in order to justify a project?
Jerry Bishop 100 Points | Thu, 08/11/2011 - 19:09

OH absolutely that is a problem. I would go further to suggest there are more colorful ways to describe that phenomenon. Either way you say it, it interferes with focusing on the right things.


John Dodge 1535 Points | Thu, 08/11/2011 - 19:06

Hi Martin,

I thought for sure you'd bring up that you are Canadian-:).....or work for a Candian firm w/o all the American cultural baggage that Jerry mentions. 

Jerry Bishop 100 Points | Thu, 08/11/2011 - 19:18

I used to think I was very globally aware having run global IT operations for a Fortune 50 for many years. Then I began blogging and sharing my posts internationally in a couple of non-USA forums. That is when my education really began to improve my awareness of how much of what we do is culturally based or at least strongly influenced. Seems remedial but it is not necessarily instinctive to consider things from a broader view.

As to Canada - Go Esks!!

Pearl Zhu 90 Points | Thu, 08/11/2011 - 15:57

Hi, Jerry, great posting to discuss one the common IT (and even businss overall) pitfalls, fallacy of planning, I think the diversity of team (both leadership team and team members) could help effectively avoid the cognitive bias you emphasize here, the expanded lens of collective wisdom would bring up the different expertise and perspective to do the planning, and planning is not just the hard math; on time & on budge, even crtical as the art: communication and effectiveness: are we building the things customers truely need? Any alternative way to do the things via innovation & optimization., etc. Beyond people, process, as you pointed out, using Agile/Scrum, instead of traditional waterfall, may also make the planning more dynamic and fluid., plus: other technologies such as collaborative planning platform would also make the planning a continuous journey, not one time documentation. thanks.

Jerry Bishop 100 Points | Thu, 08/11/2011 - 16:27

In recent years I have shifted my thinking about managing projects and have found the iterative methods to be far better at keeping everyone focused and offering better controls on scope and performance. 

John Dodge 1535 Points | Fri, 08/12/2011 - 13:41

What do you think of the waterfall model? I checked the Wiki on iterative method and you have to wade thru a lot of lingo and nonsense to find out it means steering a curvy course based on what you learned during the last dev cycle. Is that what it means to you, Jerry?