Is Your Autumn Plan Realistic — or Just Well-Structured Optimism?

2026/07/07

Irja Rae, Managing Partner, Figure Baltic Advisory

Two years ago, I wrote about the planning fallacy. Today, I could publish the same article again with one small, but rather honest, addition: because of the planning fallacy, my own master’s thesis is still not submitted.

It is slightly embarrassing. But it is also a useful reminder that knowing about the planning fallacy does not automatically protect us from it.

The planning fallacy is a cognitive bias that makes people underestimate the time, money, energy and other resources needed to complete tasks and projects. We believe that this time things will go better. There will be fewer obstacles. The work will flow smoothly. Complicated issues will somehow be solved along the way. We will manage.

More optimistic people say: “We will find a way.”
More realistic people may object, quietly or openly, but they are not always listened to.

Once the plan has been made, it can feel as if half of the goal has already been achieved. Surely execution cannot be that difficult?

In real life, however, the harder part often begins only after the plan is ready.

Why are we too optimistic when we plan?

The planning fallacy usually arises from several factors working together.

First, there is optimism bias. We overestimate the likelihood of positive outcomes and underestimate possible obstacles. We do not focus on how similar projects usually go. We focus on how we hope this particular project will go.

Second, overconfidence plays a role. We know that previous projects took longer than expected, but we believe that this time we are wiser, more experienced and better prepared. Sometimes we are. But not always enough.

Third, we often focus too much on the specific plan in front of us and too little on past experience. In their classic study on the planning fallacy, Roger Buehler, Dale Griffin and Michael Ross showed that people tend to underestimate the time needed to complete their own tasks and rely more on their plans than on previous similar experiences.

Fourth, there may also be strategic optimism. Sometimes we know, deep down, that the timeline or budget is ambitious, but we still present the plan in a positive light because otherwise the project may not be approved. This is not always intentional deception. Often, it is simply how organisations work: first we need to get the project started, and the problems can be solved later.

This does not mean that the planning fallacy is simply carelessness or poor thinking. More often, it is a very human combination of hope, pressure, underused experience and the desire to move forward.

The planning fallacy is not only a problem of large projects

The planning fallacy is often discussed in the context of large construction and infrastructure projects. A classic example is the Sydney Opera House. Construction started in 1959, and the building was opened in 1973. The original estimate expected completion in 1963 and a cost of around 7 million Australian dollars. The final cost reached 102 million Australian dollars.

It is an impressive example, but the planning fallacy does not live only in world-famous buildings.

We can find it much closer to home as well. For example, when we think about large infrastructure projects in the Baltics and ask when we will be able to travel from Tallinn to Riga by high-speed train. Rail Baltica’s current official communication refers to 2030 milestones for the first stage, but the project also illustrates how difficult it is to estimate the timelines, costs and risks of large-scale developments.

In reality, we do not need to think that big.

The planning fallacy also appears when a home renovation was supposed to take two weeks but takes two months. When preparing a workshop was supposed to be “just a couple of hours” but takes an entire weekend. When a master’s thesis was supposed to be finished by spring, but more than one spring has passed.

And, of course, we see it in working life.

The planning fallacy in everyday client work

In our work with organisations, we often see the same dynamic in a much more practical form. For example, collecting, checking and submitting data may seem straightforward at first.

The data exists. It only needs to be gathered and entered into the right format.

Then real life appears.

The data is stored in different systems. Job titles are not comparable. Job families need to be clarified. The organisational structure has changed. A pay component needs to be checked. The person who knows the answer is on holiday. One question leads to another. Suddenly, the task is no longer “just filling in a form”. It has become a small organisational investigation.

This does not mean that people are careless. It means that the real complexity of the work often becomes visible only once the work has started.

That is what makes the planning fallacy so tricky: at the planning stage, everything can seem perfectly reasonable.

How can we reduce the planning fallacy?

We cannot remove the planning fallacy completely. But we can reduce its impact.

1. Look at past experience, not only today’s wish.
   Ask: how long have similar projects actually taken before? Not in the best case, but usually.
2. Use the outside view.
   Do not evaluate only the internal logic of your current project. Compare it with similar projects. If eight out of ten similar projects were delayed, it is not reasonable to assume that yours will automatically be one of the two exceptions.
3. Break the work into smaller parts.
   “Finish my master’s thesis” is not a very good plan. “Select the sources, write the first draft of the theory section, design the study, test the questionnaire” is already better. The smaller the parts, the easier it is to see where the time will actually go.
4. Plan for invisible work.
   Approvals, corrections, waiting, questions, rework, technical issues and holidays are not exceptions. They are a normal part of work.
5. Add a buffer where uncertainty is highest.
   A buffer is not laziness. A buffer is respect for reality.
6. Review progress before the deadline is too close.
   The worst time to discover that a project is behind schedule is the evening before the deadline. Regular check-ins help calibrate optimism with reality.
7. Reward accurate planning, not only heroic rescue.
   In many organisations, attention goes to the people who save the situation at the last minute. We should also value the people who plan well enough that no rescue operation is needed.

Midsummer is a good time for honest planning

In autumn, many organisations begin new projects, development work, budgeting and strategy implementation discussions. In summer, autumn still feels comfortably far away. That is exactly why now is a good moment to ask:

Is our plan based on real experience or wishful thinking?
Have we included the invisible work?
Have we asked how similar projects have gone before?
Have the realists been invited to the table, or are they seen as people who spoil the mood?
Is the deadline truly achievable, or simply attractive?

The planning fallacy does not mean that we should dream less or be less ambitious. Quite the opposite. Good plans need ambition. But they also need honesty.

And sometimes honesty begins with admitting: yes, I wrote about the planning fallacy two years ago. And yes, my master’s thesis is still not submitted.

Further reading

Daniel Kahneman, Thinking, Fast and Slow
Roger Buehler, Dale Griffin and Michael Ross, “Exploring the Planning Fallacy: Why People Underestimate Their Task Completion Times”
Dan Lovallo and Daniel Kahneman, “Delusions of Success: How Optimism Undermines Executives’ Decisions”
Bent Flyvbjerg, “Quality Control and Due Diligence in Project Management: Getting Decisions Right by Taking the Outside View”
Richard H. Thaler and Cass R. Sunstein, Nudge