We’re all guilty of it: chronically underestimating how long projects and tasks will take us to finish. Whether at work, at school or at home, the “planning fallacy” manifests itself in our inability to gauge the amount of time needed to complete something. The principle comes from the work of psychologists Amos Tversky and Daniel Kahneman in their 1979 paper and has spawned significant research since.
According to Kahneman’s recent book Thinking Fast and Slow, for instance, one study showed that the typical homeowner expects home improvement projects to cost about $19,000, whereas the true average cost is more than double that figure: closer to $39,000. Similarly, the overwhelming majority of high-speed railroad projects have an average overestimation of passengers that sits at 100 percent and budgetary underestimation of about 50 percent.
“The planning fallacy is that you make a plan, which is usually a best-case scenario,” Kahneman writes. “Then you assume that the outcome will follow your plan, even when you should know better.”
“You simply do not anticipate problems, which you should, because statistics show that you probably will end up spending twice as much money and time as you have budgeted,” he continues. “But people don't anticipate accidents, and they don't anticipate their own changes.”
Why does this happen?
Most of us see ourselves as more skilled than we really are and assume that the goals we set out for ourselves are readily achievable. This is called the optimism bias, which helps to account for the planning fallacy.
So, if you find your time estimates for Tempo Timesheets and Tempo Planner are chronically underestimated, what can you do?
1) Look to the past: One way to avoid the planning fallacy is to get information about similar projects you have finished in the past so you can compare. If you want to know how long it would take you to fix a particular bug or finish a piece of code, simply look at how long similar tasks have taken you before.
2) Assume the worst-case scenario: Success is much easier to imagine than failure. When estimating how long a given task will take, allow for interruptions and roadblocks along the way. Do not assume everything will go as smoothly as you imagine, because it probably will not!
It takes experience to accurately estimate time, and tasks will virtually always take longer than originally imagined. With some practice, Tempo Timesheets can help you get a handle on how long tasks actually take.
Is tracking time right for your business? Consult our guide to time tracking and learn more about the benefits.