Quick Insight
Many people start the new year with resolutions. Some of these resolutions have already been rescheduled for the next year. For whatever reason, we gave up on our wishes.
Business leaders often make similar planning mistakes. We’re overconfident about the odds of success. We underestimate the costs and time required. We overestimate the benefits of our plan.
This is so common that it has a name: the planning fallacy. Ironically, it’s not caused by what we don’t know about the future but by what we ignore from the past.
We ignore how late and slow our past projects ran. We forget our initial estimates of past projects’ revenue and expenses. Those estimates were likely very wrong. And then there were those unexpected surprises.
Overcoming the planning fallacy requires taking a trip down memory lane. At the start of the budgeting and task planning for a project, remember past projects that were similar to the current project. Remind yourself of the delays, mistakes, and surprises. It's not usually fun, but it's very useful.
Your new project won't have all the same problems and outcomes as past ones. However, your project plan will be more realistic when you pause long enough to remember how many times things don’t go according to plan in the past.
I wish you the humility to plan for reality. I wish you will.
- Rob Stephens
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