The Planning Fallacy Guide

If you’ve been reading this newsletter, you know I like to say:

Humans are fascinating creatures.

We possess the capacity to build rockets, bridges, and billion-dollar hospitals—
and still underestimate how long it takes to pour concrete in the rain.

For a hyper-intelligent species, we sure make some dumb mistakes.

We like to think we’re rational planners. We map the milestones, build the budget, draft the schedule.

And yet somehow… halfway through, we’re behind. Again.

It’s not because we’re lazy.
It’s not because we’re inexperienced.
It’s because we’re human.

Welcome to the Planning Fallacy—one of the most consistent, costly, and invisible traps in project management.

This guide walks you through what it is, how it shows up, and five practical ways to fight back.

What Is the Planning Fallacy?

Logical fallacies—errors in reasoning—undermine the quality of our decisions.

The Merriam-Webster Dictionary defines fallacy as a false or misleading idea. A logical fallacy, therefore, can simply be thought of as logic based on a false or misleading idea.

The Planning Fallacy is one of the most destructive ones.

Coined by Daniel Kahneman and Amos Tversky, The Planning Fallacy describes our tendency to underestimate:

• how long something will take

• how much it will cost

• and how difficult it will be

...even when we’ve done similar things before.

It’s the reason why:

• You blow past deadlines—even when you “pad the schedule”

• You scramble through a phase that “should’ve been easy”

• You’re surprised when costs balloon—again

This bias affects everyone—from students writing essays to governments building Olympic stadiums.

The worst part?

It doesn’t go away with experience. It just gets more expensive.

Why We Fall for It

If you’re thinking, “But I read Kyle’s newsletter—I’m an Influential PM. I wouldn’t fall for that…” think again.

This isn’t a project management error. It’s a cognitive bias—and it lives in all of us.

Here’s why even the best project leaders fall into it:

1. We focus on ourselves, not reality. We trust our skill, our intention, our work ethic—and ignore how messy things really get.

2. We ignore the past. Kahneman said it best: “People ignore distributional data.” We don’t ask, “What happened last time?”—we ask, “How do we feel about this time?”

3. We anchor to the first plan. Once you throw out that first number (timeline, cost, etc.), it sticks—even if better data says otherwise.

4. We avoid sounding negative. Teams are allergic to “negativity.” No one wants to be the PM who says, “This will take twice as long.” So they don’t.

5. We believe we’ll figure it out later. That’s the false hope behind what Flyvbjerg calls the Malevolent Hiding Hand. Most projects don’t get saved by last-minute brilliance. They just get crushed by complexity.

Real-World Examples (aka “don’t be like them”)

These aren’t isolated failures. They're patterns.

• Sydney Opera House

  • Expected: 4 years, $7M

  • Actual: 14 years, $102M

• Channel Tunnel

  • Expected: $4.7B

  • Actual: $10.6B (plus one year late)

• Canadian Pacific Railway

  • Promised by 1881.

  • Delivered in 1885—with an extra $22.5M price tag.

The same biases that blew up these megaprojects are the same ones sitting quitely in your lookaheads, status meetings, and procurement plans.

🥊 How to Fight Back

The Planning Fallacy isn’t going away. But you can design against it.

Here are five powerful ways to do just that:

1. Take the Outside View

Stop asking: “What do we think will happen?”

Start asking:

• “What usually happens?”

• “What’s happened last time?”

• “How long did they take?”

• “What did it really cost?”

Use reference class forecasting. Compare your plan to similar projects. Use real data. Use ranges.

Anchor your estimates in reality, not imagination.

2. Segment the Work

Humans are terrible at estimating big tasks. But we’re surprisingly good at small ones.

Break your project into smaller parts.

Estimate each one individually. Then build in buffer between the parts.

Smaller scopes = more accurate estimates = fewer surprises.

3. Set Implementation Intentions

Vague goals = vague execution.
Specific plans = specific results.

Don’t just say: “We’ll do this next week.”
Say: “We’ll complete task A at 9am on Tuesday, in the trailer.”

Research shows this dramatically increases follow-through and realism in planning.

Visualize the when, where, and how. Make it real.

4. Reframe the Deadline

Your brain struggles with abstract time.

“Six months” sounds like forever. But “180 days” feels like tomorrow.

That’s because specific, concrete time-frames trigger better focus and urgency.

So flip the script: Break long timelines into daily or weekly increments.

If the deadline feels far away, so will your discipline. Make time feel real.

5. Apply Occam’s Razor

Every added step is another chance for things to go wrong.

Occam’s Razor is a mental model that says:

When you are weighing alternative hypotheses, the one with the fewest necessary assumptions should be chosen.

Put simply, the simplest path with the fewest assumptions is often the best one.

Simple Assumptions > Complex Assumptions.

Why?

Because simple plans are easier to test, troubleshoot, and adjust. The fewer assumptions you rely on, the fewer ways your plan can fall apart. It allows one to follow the critical path to an outcome.

So simplify your workflows. Cut unnecessary layers. Reduce handoffs. Eliminate fluff.

Less complexity = more clarity = better execution.

Final Thoughts

No one’s immune to the Planning Fallacy.

Not you. Not me.

It doesn’t matter how many projects you’ve managed, how experienced your team is, or how much software you’re using—this bias lives in all of us.

But that’s not the point.

The point is knowing what to do about it.

Influential Project Managers don’t just manage plans.
They manage reality. And reality is messy.

They understand that their biggest risk isn’t the weather, or the RFI backlog, or even scope creep. It’s their own optimism.

So they zoom out.
They slow down.
They get brutally honest.
They assume this time won’t be different—and build accordingly.

You now have all the tools to fight back against the planning fallacy.

Go build something that doesn’t break.

Happy planning.

Until next week,

Kyle Nitchen