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