The Planning Fallacy and Bias in Project Planning

Why are only 8.5% of large projects completed on time and within budget? No matter what type of project you're involved in, whether it's home renovations or space exploration, this conversation promises a wealth of knowledge and insights.

Bent Flyvbjerg is a professor at both Oxford University and the IT University of Copenhagen. He is also the author of several works, and his latest book is How Big Things Get Done: The Surprising Factors That Determine the Fate of Every Project, from Home Renovations to Space Exploration and Everything In Between.

Bent and Greg delve into the influence of strategic misrepresentation on project outcomes and the often-overlooked power dynamics within organizations that wield considerable influence over a project's fate. They discuss fascinating case studies from the Sydney Opera House, Pixar's blockbusters, and Amazon's product development approach.

*unSILOed Podcast is produced by University FM.*

Episode Quotes:

The more you allow your brain to work, the more biases you're going to have

10:49: The more you allow your brain to work, the more biases you're going to have. If you're allowing your brain to work in this manner where it's trying to figure out things for this specific project, if you allow your brain to work in collecting data on similar projects, where it's an empirical fact that these data had the performance that they did and now you use this empirical fact as your base rates for what you're doing, then you're doing the right thing. Then you're thinking the right way. But if you're thinking the conventional way, where you're trying to understand things inside out, you understand your product from the inside without taking other projects into account that's when you open the doors for all these cognitive biases that we have—because you have to make everything up.

11:31: The mind is very good at making things up, and that's what you have to be careful about when you are working on big investment decisions.

The need for courses in power and politics 

56:59: If you're working on anything big, you are going to be in an organization, even a small organization. There's power. Wherever people are gathering, there will be power issues. And if you haven't been trained in how to deal with them, I don't know how you can be effective in a power environment.

Why is uniqueness bias dangerous? 

09:40: Uniqueness bias is a pretty mean bias in the sense that it makes us ignore reality. If you think my project is unique, you have no reason to look at other projects and go out and search for knowledge about what happened in other projects because it's irrelevant per definition, as you think your project is unique, right? And that's really dangerous.

On rationality and power

54:25: I think that it's less legitimate to talk about power than it is to talk about rationality. So it's much easier. And, by the way, on a lot of the project types that we are talking about, including IT projects, there's a large dose of engineers, and of course, engineers are trained in rationality, talking about rationality, and making their projects rational. But on the big projects, engineers are actually working in political organizations. And again, whether they are private businesses or public government, there's politics in both kinds of organizations. And that means that there's pressure to do things in certain ways.

Show Links:

Recommended Resources:

• Cass Sunstein
• Planning fallacy
• Optimism bias
• False-uniqueness effect
• Fat-tailed distribution
• Skewness
• Kurtosis
• Nassim Nicholas Taleb
• Daniel Kahneman
• Mandelbrot set
• Sydney Opera House
• Guggenheim Museum Bilbao
• Frank Gehry
• Pixar
• Sarbanes–Oxley Act
• Albert O. Hirschman
• Jørn Utzon
• Andrew Wolstenholme

Guest Profile:

• Faculty Profile at Oxford
• Bent Flyvbjerg on X
• Bent Flyvbjerg on LinkedIn

His Work:

• How Big Things Get Done
• Rationality and Power
• The Oxford Handbook of Megaproject Management
• Megaproject Planning and Management
• Real Social Science: Applied Phronesis
• Public Sociology: Proceedings of the Anniversary Conference
• Decision-Making On Mega-Projects: Cost-Benefit Analysis, Planning and Innovation
• Megaprojects and Risk: An Anatomy of Ambition
• Making Social Science Matter
• Google Scholar Page
• Medium Articles