Why Cost and Schedule Overruns Are Common in Projects

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For the past 100 years, our data consistently show cost overruns, schedule overruns, and benefits shortfalls in projects. This happens because some planners strategically misrepresent project details to increase their chances of getting funding and approval. They intentionally underestimate costs and overestimate benefits to make the projects look better on paper. This tactic, endorsed by Nobel Prize winner Danny Kahneman, is used because realistic presentations of problem-solving achievements are deemed uninteresting. Some degree of overpromising is necessary for progress.

Whether it’s a giant infrastructure plan or a humble kitchen renovation, it’ll inevitably take way too long and cost way too much. That’s because you suffer from “the planning fallacy.” (You also have an “optimism bias” and a bad case of overconfidence.) But don’t worry: we’ve got the solution.