All plans are wrong, some are useful
Avoid making these mistakes to plan effectively, save time and money
🏷️ Categories: Decision making and biases, History, Time management.
The Panama Canal is one of the greatest engineering feats in history and at the same time one of the worst engineering plans in history.
The idea of connecting the Atlantic and Pacific Oceans had been around for some time, but it was not until the French government completed the Suez Canal that the excitement grew. Ferdinand de Lesseps, who was in charge of the successful construction of the Suez Canal, would lead the Panama Canal project. His charisma and reputation instantly won over investors and citizens alike.
The project was going to be in good hands.
Or maybe not.
On February 14, 1880, a congress of engineers evaluated the project and estimated that it would cost $214 million and take 7 or 8 years. However, another team of engineers reviewed the proposal and saw that it could be accomplished for $168 million. Lesseps, conducting his own review, reduced the estimate to $131 million.
But Lesseps believed the work could be done even better.
After a final adjustment on March 1, he declared that it could be done for 120 million and take 6 years. 44% cheaper than the initial idea and in 1 or 2 years less.
Not bad.
It is at this precise moment that the problems will begin.
Tropical diseases: At that time, it was not known how malaria and yellow fever were transmitted, so there was no prevention and they spread at such a rate that about 35 workers died daily in the wet season.
Geological problems: Lesseps said that in 6 years he would have it. The region was mountainous, much more difficult than the sandy and flat terrain of the Suez Canal that took him 10 years to build. In reality it was impossible to do it in 6 years.
Inadequate infrastructure: The necessary infrastructure had not been prepared to make the site habitable for the workers, and the unsanitary conditions led to even more deaths.
Uncontrolled cost escalation: Forecasts were so low that costs quickly spiraled out of control and lack of funds brought the work to a standstill.
Financial and human disaster: On May 15, 1889, the project was suspended and Lesseps' company went bankrupt. After 8 years, only 40% had been completed, $235 million had been spent and some 20,000 people had died. They were late, had spent almost twice as much as “planned” and caused a humanitarian tragedy.1
How can expert people plan so poorly?
The planning fallacy.
The planning fallacy
Planning fallacy is the cognitive bias that makes us optimistically estimate the duration of a task, its costs and the resources required even when we know from previous experience and available data that it takes longer (Buehler et al., 1994; Kruger and Evans, 2003).
The curious thing is that the bias occurs when we estimate our own tasks, not those of others.
When we are the ones observing others' tasks, we think pessimistically, believing that they will take longer than they have anticipated (Buehler et al., 1995).
You’re right, most people feel that they are more capable than others at the same task.
Causes of the planning fallacy
We overestimate our capabilities for many reasons....
Undervaluing negative information: We focus on favorable scenarios because we undervalue problems that might arise believing them to be less likely or serious than they actually are (Buehler et al., 2002).
Erroneous self-perception: We tend to take credit for tasks that have gone well and blame problems on external influences, so we end up remembering our successes and not so much the problems (Pezzo et al., 2006).
Inaccurate memories: We do not remember exactly how long it took us in the past and because we perceive ourselves as more capable than we actually are, we believe that it will take us a short time (Roy et al., 2005).
Making a good impression: We tend to make optimistic estimates to create a favorable impression with others and thus demonstrate to others that we are indeed as capable as we think we are (Pezzo et al., 2006).
How not to fall into the planning fallacy
Human beings are fallible, but we can improve with some techniques:
Segment: don't think about giant projects, break them down into small tasks and think about how long each task would take (Forsyth and Burt, 2008). Instead of thinking “I have to organize the party”, think about the shopping list, invitations, schedule, decoration, music... We tend to procrastinate because we believe that it will always take us a short time to do things.
Use implementation of intentions: This is the best way to not procrastinate. Instead of thinking “this weekend I will write my text”, directly reserve time in your agenda for each task and write down what you plan to do that day at that time. This is how you move from plan to action (Koole and Spijke, 2000).
Look for reference cases: Lesseps' mistake was to believe that the Suez Canal and the Panama Canal were comparable. The reality is that the terrain was completely different. Don't just rely on your memory and experience, study identical cases. Want to write a book and don't know where to start? Research the time it takes inexperienced people to write their first books and make a list of all the problems and difficulties they have had.
You know what they say, if something can go wrong, it will go wrong.
Don't build castles in the clouds, then it will rain and the bricks will fall on your head.
✍️ It's your turn: Do you also tend to get carried away thinking that everything will be easier and end up rushing the last day at the last minute? I think it happens to all of us, but it will happen less often now.
💭 Quote of the day: “Figure out where you want to go; then work backwards from there.” Steven Pressfield, Do The Work.
See you very soon, take care! 👋
References 📚
Buehler, R., Griffin, D., & Ross, M. (1994). Exploring the «planning fallacy»: Why people underestimate their task completion times. Journal Of Personality And Social Psychology, 67(3), 366-381. https://doi.org/10.1037/0022-3514.67.3.366
Buehler, R., Griffin, D., & Ross, M. (1995). It’s About Time: Optimistic Predictions in Work and Love. European Review Of Social Psychology, 6(1), 1-32. https://doi.org/10.1080/14792779343000112
Buehler, R., Griffin, D., & Ross, M. (2002). Inside the Planning Fallacy: The Causes and Consequences of Optimistic Time Predictions. In T. Gilovich, D. Griffin, & D. Kahneman (Eds.), Heuristics and Biases: The Psychology of Intuitive Judgment (pp. 250–270). chapter, Cambridge: Cambridge University Press.
Forsyth, D. K., & Burt, C. D. B. (2008). Allocating time to future tasks: The effect of task segmentation on planning fallacy bias. Memory & Cognition, 36(4), 791-798. https://doi.org/10.3758/mc.36.4.791
Koole, S., & Spijker, M. (2000). Overcoming the planning fallacy through willpower: Effects of implementation intentions on actual and predicted task-completion times. European Journal of Social Psychology, 30(6), 873–888. https://doi.org/10.1002/1099-0992(200011/12)30:6<873::AID-EJSP22>3.0.CO;2-U
Kruger, J., & Evans, M. (2003). If you don’t want to be late, enumerate: Unpacking reduces the planning fallacy. Journal Of Experimental Social Psychology, 40(5), 586-598. https://doi.org/10.1016/j.jesp.2003.11.001
Pezzo, M. V., Litman, J. A., & Pezzo, S. P. (2006). On the distinction between yuppies and hippies: Individual differences in prediction biases for planning future tasks. Personality And Individual Differences, 41(7), 1359-1371. https://doi.org/10.1016/j.paid.2006.03.029
Roy, M. M., Christenfeld, N. J. S., & McKenzie, C. R. M. (2005). Underestimating the Duration of Future Events: Memory Incorrectly Used or Memory Bias? Psychological Bulletin, 131(5), 738-756. https://doi.org/10.1037/0033-2909.131.5.738
The canal was not completed until 1914, when the United States took over the project, which, despite also having difficulties, was not so disastrous.