Cobra Effect · Thinking and evidence
The planning fallacy
Why projects nearly always take longer than we plan.
7 cards, read aloud in 2:56, with a test and sources.
Sydney, 1957. A design competition picks a set of white sails for the harbour.
A young Danish architect wins with a sketch of soaring shells. The government announces the numbers. Opening in 1963. Cost, the equivalent of 7 million Australian dollars. Building starts in 1959, before the engineers know how to build the roof.
It opens in 1973. Ten years late. Cost, 102 million dollars.
Fourteen times the estimate. The architect had resigned in 1966 and never came back to see it finished. It is one of the most loved buildings on earth. And one of the worst forecasts.
Daniel Kahneman and Amos Tversky gave the pattern its name in 1979. The planning fallacy.
We predict how long a task will take by imagining how it will go. We imagine it going well. The delays we picture are the ones we can think of, and the ones that happen are the ones we can’t. So estimates come in early and cheap, and reality comes in late and dear.
Kahneman fell for it himself.
In the 1970s he led a team writing a textbook. He asked everyone how long it would take. The answers clustered around two years. Then he asked a colleague who had watched many such teams. How long did they take? Around seven to ten years, the man said. And about four in ten never finished at all. The book took eight years.
Students are just as bad, and they know it.
In 1994 Roger Buehler and colleagues asked students to predict when they would finish their thesis. The typical guess was about 34 days. The typical reality was about 56. Fewer than a third finished by the date they had predicted. Asked about past projects, the students admitted those had run late too. It made no difference to the new guess.
The fix is to stop imagining and start counting.
Kahneman calls it the outside view. Don’t ask how this project will go. Ask how projects like it went. Find ten similar ones and look at what they actually took. Your project is not special. That is the one thing you can be sure of.
So before you promise a date, ask one question.
What happened last time, and the time before that? Your estimate is a story. The record is a fact. Trust the fact. Then add the margin your gut is telling you is unnecessary.
Sources
- Planning fallacy, Wikipedia. The 1979 paper, the student thesis study, the Opera House and other famous overruns, and the outside view as a remedy.
- How Big Things Get Done, Bent Flyvbjerg and Dan Gardner, 2023. Flyvbjerg has the world’s largest database of big projects and their overruns. The book is the outside view applied to everything from kitchens to railways.
- Sydney Opera House, Wikipedia. The whole saga. The competition, the roof nobody knew how to build, the architect’s resignation, the cost, and the building that came out of it anyway.
Nearby ideas
- Parkinson’s law. Work expands to fill the time you give it.
- Brooks’s law. Adding people to a late project makes it later.
- The sunk cost fallacy. Money already spent is gone, so it should not steer the next choice.
- Base rate neglect. A good test for a rare thing still gives mostly false alarms.
- Anchoring. The first number you hear bends every estimate that follows.
- The availability heuristic. Vivid stories make rare dangers feel common.
- The narrative fallacy. We invent causes for events because stories feel like explanations.
- Hindsight bias. Once you know the ending, it always looks obvious.