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.

This week we wanted to revisit 1 of our favorite episodes about a problem that never seems to go away.

The episode is called Why Your Projects Are Always Late and What to Do About It.

We have updated facts and figures where necessary.

Let us know if you find this episode at all helpful.

In 1968, more than 50 years ago, the governor of New York State, Nelson Rockefeller, received a proposal that he had commissioned.

It addressed the mass transit needs of the New York City area.

1 centerpiece of the plan was a new subway line that would run from lower Manhattan, up the East Side and into the Bronx.

4 years later, Rockefeller and New York City Mayor, John Lindsay, held a groundbreaking ceremony for the Second Avenue Subway, but not long afterward, the project was shelved because of a fiscal crisis.

Years later, a new governor, Mario Cuomo, tried to restart it, but once again, the budget would not allow and back it went on the shelf.

By now, the Second Avenue subway had become a punchline.

A New Yorker would promise to pay back a loan once the Second Avenue subway was built.

It came to be known as the most famous thing that's never been built in New York City.

But then, along came a man named Michael, here, I'm gonna let him say it.

If you look to see how people on Second Avenue would recognize me as Dr.

No 1 is really willing to pronounce my last name.

He is a longtime transportation scholar and executive.

In 2008, he became president of capital construction for the Metropolitan Transportation Authority.

And 1 of the first things he did was restart the Second Avenue subway.

By now, it was 40 years since Governor Rockefeller's original proposal, Dr.

H updated the budgets and estimates and finally got construction started.

In 2010, a massive tunnel boring machine began its work underneath 92nd Street.

So they're about to start and then they probed ahead on the end to the rock and then suddenly the realization is that the quality of the rock was poor.

In effect there was water going through there.

So the decision was made that we have to freeze about close to 2 blocks.

It took us 4 months to actually freeze the ground.

On Second Avenue, we spent $10 million to do it.

$10 million and 4 months just to freeze the ground, just to start building the tunnel.

Would New York City ever get its Second Avenue subway?

The reason this story became so famous is that it is such a grotesque example of a blown deadline.

But surely you can identify, surely you've been involved in something, maybe a work project or a home renovation, even writing a paper that was also grotesquely late and painful and expensive.

Today on Freakonomics Radio, why are we so, so, so bad at finishing projects on time?

This is Freakonomics Radio, the podcast that explores the hidden side of everything with your host, Stephen Dubner.

Today's episode begins, as so many good things do, in Canada.

Well, I'm Roger Buehler, and I'm a professor of psychology at Wilfrid Laurier University.

I study social cognition as well as judgment and decision-making.

Buehler has long wanted to know why we're so bad at managing projects.

His interest began during grad school with a personal puzzle.

Every night as I'd leave the office, I would pack up my briefcase with jobs to do at home.

And more often than not, I'd come back to the office the next day with all of it untouched.

But every night as I packed up that briefcase, I was sure that my plans were realistic.

Why wouldn't I learn from experience and get more realistic in my estimates?

In the beginning, did you think it must just be me?

Or did you recognize it as a generalizable phenomenon?

Well, partly it seemed odd, but then I noticed it in people around me too.

In fact, I remember some particular colleagues who were forever promising things and never coming through and noticing that, well, they seem to believe it though when they're saying it.

So it did start to seem like a more generalizable thing.

Buehler and his colleagues were, of course, not unique.

The phenomenon even had a name, courtesy of the psychologists Danny Kahneman and Amos Tversky.

So the planning fallacy is a tendency to underestimate the time it will take to complete a project while knowing that similar projects have typically taken longer in the past.

So it's a combination of optimistic prediction about a particular case in the face of more general knowledge that would suggest otherwise.

You can imagine the value of being able to diagnose and treat the planning fallacy.

We all plan for the future, whether it's a huge infrastructure project or a research paper that's due in 3 weeks.

Wouldn't it be nice to be able to plan better?

So first, Roger Buehler and some colleagues set out to measure the planning fallacy.

Their first experiment used honors students who were working on their thesis projects.

The researchers asked each student to predict when they'd submit their thesis.

I know psychologists make use of students too much, but for this research, they really do have a lot of activities on the go and they're kind of concrete activities often with clear deadlines making them a nice population to actually study for this topic.

These students predicted on average that their theses would take 33.9 days to finish.

Buehler and other researchers found similar evidence of the planning fallacy among stock brokers and electrical engineers and doctors.

They also found it in everyday activities like Christmas shopping, doing taxes, even waiting in line for gas.

So let me ask you the largest and most impossible question.

Why is there such a gap between intention and behavior?

Well, my thinking on this has been guided by a distinction drawn by Kahneman-Tversky between 2 types of thinking, 1 being a kind of inside approach and the other being an outside approach.

And the inside approach involves really focusing on the case at hand and trying to work out the details of that unique case.

It's like you're developing a mental scenario or mental simulation of how you think that project will unfold.

But the problem is that mental simulations often don't provide the thorough and comprehensive representation of how things will go.

They tend to often be kind of idealized, oversimplified.

And when people get into that frame of thought, they don't entertain alternative ways in which things may go.

But then I would couple that with also people's wishes and desires.

So generally when you're planning something out, you're planning to succeed.

The second tendency that Buhler is talking about, seeing the future in rosy terms, there's a name for that too.

Tali Sherratt is a cognitive neuroscientist at University College London.

There are so many positive aspects to having an optimism bias.

In fact, in our research, we see that the people without an optimism bias tend, in most cases, to be slightly depressed at least, with severe depression being related to a pessimistic bias, where people expect the future to be worse than it ends up being.

So I mean, it's a good thing because it kind of drives us forward.

It's related to better health, both physical and mental health, because if you expect positive things, then stress and anxiety is reduced, so that's very good for both physical and mental health.

JS SHERIDAN Sherit believes in the optimism bias, and she believes it is rooted in neuroscience.

Her experiments have repeatedly shown that the brain tends to process positive information about the future more readily than negative information.

It's easy to see how that could feed the planning fallacy.

So, for example, if I tell you, you know, you're going to get many more listeners this week than usual, you'd say, oh, okay, and you'd kind of change your estimate and think it's going to be 10 million.

But if I tell you you're going to get many less listeners this week than you expect, you'd say, well, she doesn't know what she's talking about.

That's exactly what I was saying in my mind, just so you know.

Do you believe the optimism bias was, is baked in for legitimate or positive evolutionary purposes then?

Or do you think it's more of a, you know, a little bit of a design flaw that we've learned can have some benefit?

So I think it's not a design flaw, and it's a two-part answer.

So the first part answer is, you know, it's probably there because of all the positive aspects that I just mentioned, right?

I mean, we know that people who are optimists live longer, so we survive more.

We're more likely to have kids and all of that.

So there is a clear survival benefit and a benefit to just progressing.

However, as you imply, there are also these negative consequences, right?

If we think everything's going to be okay or better than what we anticipate, we might not take precautionary action, we might, you know, smoke when we shouldn't and that kind of thing.

But what our research shows is that it's even better than what I just explained because the optimism bias is in fact flexible.

So it changes in response to the environment.

It can disappear under environments in a way that may be optimal.

She and her colleagues run experiments in which they ask different kinds of people, firefighters for instance, to assess the likelihood of bad things happening to them, getting divorced or being in a car crash or getting diagnosed with cancer.

And then we give them information about the average likelihood of having these events for someone like them.

Okay, so the firefighters would have their baseline guess and then they'd guess again after getting some statistical context.

They were also asked a question in 2 different environments, on days when they'd been fighting fires and during downtime, when they weren't.

And what we found was that when the firefighters were under stress, they learned more from this negative information.

The more stressed they were, the more anxious they were, the more likely they were to take in any kind of negative information that we gave them, you know, whether it's about cancer or divorce or being in a car accident and so on.

Based on these results, Sherritt argues that human optimism is both adaptive and mutable.

The optimism bias may be a sort of evolutionary insurance policy against hopelessness and depression.

And maybe it's played a role in some of the astounding progress that humankind has made over the millennia.

You'd have to be pretty optimistic to come up with space travel and aspirin and French cuisine, n'est-ce pas?

But still, wouldn't it be nice to also figure out how to get projects done on time and on budget?

If you don't start the project on time, because you keep putting it off, how in the world are you going to finish it on time?

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We have been discussing the different biases that make us more optimistic about deadlines than we should be.

So how are you supposed to get your projects done on time?

That is something that Katie Milkman has been thinking about for years.

I'm a professor at the Wharton School of the University of Pennsylvania.

Milkman's PhD is in computer science and business, but as an undergrad she studied operations research, which means what?

You try to figure out how to be more efficient about everything using math.

To that end, Milkman has spent a lot of time studying and teaching the planning fallacy.

And yet, this does not personally inoculate her against it.

Well, I will tell you that it took longer to prepare to talk to you about this than I expected.

I was sure it would take like 10 minutes.

In her research, Milkman has found that when groups work together on a project, A number of factors collude to form the planning fallacy.

So 1 is overconfidence, or the tendency we have to think we'll do things better than we will.

We are overconfident for many, many reasons.

1 is that it makes us feel better about ourselves.

Imagine 2 people walked into an interview and 1 of them says, I'm going to be great at this job.

And the other person says, I hope to be great at this job.

I try to be great at everything I do, but sometimes I fail.

I think most of us would respond more positively to the person who says, I'm going to be great.

And that is a lifetime of feedback we give people.

We're rewarding them for overconfidence constantly.

So there are individual biases like overconfidence, but with large projects, there's also what's called.

The failure to think about how hard it is to put stuff together when other people are involved.

And so that can make the planning fallacy bigger and badder when there are teams of people trying to finish work on time.

From an economic standpoint, this sounds backwards.

You would think that larger size theoretically creates more specialization of labor and ultimately higher productivity.

So when you staff a bigger team on a project, you focus on all the benefits associated with specialization, what you just mentioned.

And what you neglect is to think about how challenging it is to get that work all back together into a single whole.

So this engineer now has to talk to that engineer about how to combine their outputs into 1 integrated system.

And there's 1 more component of the planning fallacy, a blatantly obvious 1.

Because of self-control failures, we put it off.

And then that can make the planning fallacy a bigger issue because if you don't start the project on time because you keep putting it off, how in the world are you gonna finish it on time?

And let me ask you this, what is, if we have any idea, the primary root cause of procrastination?

Oh God, what is the primary root cause of procrastination?

I get to the heart of everything I've thought about for the last 15 years in 1 question.

I think the primary root cause of procrastination is impulse control.

The fact that we tend to want to do what's more instantly gratifying in the moment than what is better for us.

And so we put off doing the things we know we should do in favor of what's instantly gratifying.

There is reason to believe that our impulse control is being tested today more than ever.

With the revolution in digital communication has come a blizzard of notifications, alerts, messages, and more.

While there are obvious upsides to the speed and magnitude of this communication, there are also costs.

Information overload is thought to decrease US productivity by at least 1 trillion dollars a year.

What to do about all that wonderful, terrible digital distraction?

We brought that question to Justin Rosenstein.

Okay, Asana, For those who don't know what it is, let's start with that.

Asana is software that enables teams to be able to work together more easily.

Here's how he envisioned that job before it began.

to be spending all my time working with these world-class engineers, world-class designers, figuring out great things that we can do to be able to make people's lives better.

And he did work on some exciting projects.

I was the original product manager for Google Drive and helped co-invent a lot of that.

But the reality of working at Google didn't match his vision of working at Google.

Literally the majority of the time was spent not doing work, not writing code, but was doing the work about work.

It was making sure that the left hand knew what the right hand was doing.

It was sitting in status meetings and preparing status updates.

At first, he thought he must have been doing something wrong.

There's no way that this could be what everyone tolerates when they go to work and work in companies.

And so I thought maybe there was something that was wrong with Google, talked to people who worked at other companies and discovered to my horror that no, Google was actually very advanced.

There were a lot, but none that did what he wanted.

What I really wanted was just a single place that I could go to see what is everyone on my team working on and who's responsible for which things and what's the sequence, what are the dependencies between those things.

So nights and weekends, he started hacking together some software to accomplish that.

And I just built it as something for me and a few dozen people that I worked with to use, but it grew virally within Google, and that really startled me, because Google has access to the best tools in the world.

me that There were so many people who were excited about what I had built.

But not long after, Rosenstein left Google for Facebook.

At some point, I got a Facebook friend request from Dustin Moskovitz, who's the co-founder of Facebook.

And so eventually I was persuaded that, yeah, it would be exciting to be a part of that.

Actually, 1 of the sad things about leaving Google was that I had to leave that tool behind that I had built inside of Google.

Because, yeah, it was the intellectual property of Google.

Rosenstein asked Moskowitz if Facebook had the same project management problems he'd seen at Google.

By the time I get information about what the people in my own company are working on, the information is so old that it's wrong.

By day, Rosenstein was helping invent Facebook's like button.

At night and on weekends, he and Moskowitz started talking about a software solution to help manage their workflow.

And at some point, we started building it.

We started actually implementing that solution.

And this internal tool that we built at Facebook took off.

And they realized their solution wasn't unique to Facebook or Google or just tech companies.

We had developed a general solution that would enable any team to be able to work together more effectively.

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Why Your Projects Are Always Late — and What to Do About It (Ep. 323 Replay)