The Sydney Opera House is one of the most iconic buildings in the world. I had the pleasure of living there for a while and it always took my breath away.
But did you know that this is one of the best examples of a project going over time and over budget?
Construction was originally expected to cost just $7 million and be completed in 1963. It ultimately took more than 10 years longer, and costing over $102 millionor approximately 1,357% over budget.
Unfortunately, this is a common occurrence. Large, large-scale projects often take longer to complete and require more money than initially anticipated.
In fact, analysis of projects expected to cost more than $1 billion showed that approximately 90% of them also exceeds the budget.
However, it's not just large-scale projects that take longer than expected.
In fact, most of the things we try to accomplish end up taking longer than we originally planned.
Whether it's writing an essay, starting a business, editing a manuscript, or composing an email.
The reason is that most of us suffer from a cognitive bias known as the planning error.
The planning error is a form of optimism bias where we end up underestimating the time it will take to complete a job and, therefore, also the cost of the job or the reduction in benefits.
Ironically, this may even be the case if we've done similar work before, where we also ended up taking longer than expected.
Like many of the most common prejudices, it was first introduced by Amos Tversky and Daniel Kahneman in the 1970swhere they found many repeated examples of knowledgeable people regularly underestimating the time it would take to complete tasks and projects.
In a famous 1994 research study, 37 students were asked how long they anticipated it would take to write their final thesis. The average length of time students thought it would take them was 33.9 days. When asked how long they thought it would take if everything went as smoothly as possible, they estimated 27.4 days, and if everything went badly, it would take 48.6 days.
In reality, it took students more than 55.5 days on average, and only 30% of students completed their dissertations on time.
Another study from 1995 showed that only 45% of students could complete a project on the date they were initially 99% sure they could complete it.
There is also an indication that although everyone can suffer from a planning error, 2006 research indicates that people who tend to “live in the moment” and concentrate less are more likely to be overly optimistic about their time planning.
But it’s not just individuals who suffer from this planning error. Other 2005 research showed that groups are also likely to underestimate the time it will take them to complete a task.
This research reinforces another well-known bias, called Parkinson's law, which states that work will expand to accommodate the time available. If we estimate that we could complete a project in a week, but the deadline is actually a month away, then it becomes more likely that we will work until the actual deadline and spend more time working than originally planned .
How can you reduce planning errors?
Since this bias can lead to costly time and expense overruns on a project, research has been conducted to examine how to reduce its impact.
Fortunately, this has led to a number of potential activities that individuals and teams can carry out that can reduce their vulnerability to planning errors:
- Put yourself in someone else's shoes: Interestingly, this bias seems to only affect our ability to plan and estimate our own tasks. Other research showed that when we estimate how long it would take someone else to complete a task, we are more likely to be pessimistic and overestimate the amount of time required. Therefore, instead of wondering how long it would take YOU or your team to complete the task, estimate how long it would take someone else and use that as a basis.
- Make an implementation intention: Instead of just planning what you want to achieve, research from 2000 showed that by thinking How and when you will complete the challenge can significantly increase the likelihood of completing the activity in the planned time. We talked about the power of implementation intentions before, showing how much more they are 2.6x more efficient than simple motivation to help individuals accomplish difficult tasks.
- Unpack the task into subcomponents: Finally, 2004 research showed that if you “unpack” the project or task you are planning into more detailed subcomponents when planning, then you are more likely to take into account the time required for each subcomponent, resulting in a time overall more realistic. plan.
Creativity and Innovation Expert: I help individuals and businesses develop their creativity and innovation capabilities, so you can develop the next revolutionary idea that customers love. Editor-in-Chief of Ideatovalue.com and Founder/CEO of Improvides Innovation Consulting. Coach / Speaker / Author / TEDx Speaker / Voted as one of the most influential innovation bloggers.