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Pivotal Tracker and the Planning Fallacy

I came across an interesting post on Overcoming Bias today about the Planning Fallacy. In short, the evidence shows that individual predictions generally occur in a rosy inaccurate world where everything goes according to plan, even when interruptions and setbacks are inevitable:

Buehler et. al. (1995) asked their students for estimates of when they (the students) thought they would complete their personal academic projects. Specifically, the researchers asked for estimated times by which the students thought it was 50%, 75%, and 99% probable their personal projects would be done. Would you care to guess how many students finished on or before their estimated 50%, 75%, and 99% probability levels?

  • 13% of subjects finished their project by the time they had assigned a 50% probability level;
  • 19% finished by the time assigned a 75% probability level;
  • and only 45% (less than half!) finished by the time of their 99% probability level.

As Buehler et. al. (2002) wrote, “The results for the 99% probability level are especially striking: Even when asked to make a highly conservative forecast, a prediction that they felt virtually certain that they would fulfill, students’ confidence in their time estimates far exceeded their accomplishments.”

But it seems one can overcome this bias towards optimism by getting an “outside view” on the problem as it relates to the timelines on previous similar projects:

Buehler et. al. (2002), found that Japanese students expected to finish their essays 10 days before deadline. They actually finished 1 day before deadline. Asked when they had previously completed similar tasks, they responded, “1 day before deadline.” This is the power of the outside view over the inside view.

So there is a fairly reliable way to fix the planning fallacy, if you’re doing something broadly similar to a reference class of previous projects. Just ask how long similar projects have taken in the past, without considering any of the special properties of this project. Better yet, ask an experienced outsider how long similar projects have taken.

Pivotal Tracker, unlike other project management software, is built on exactly this idea of the outside view, via points and emergent iterations:

Tracker calculates future iterations based on historical performance. Focus on prioritizing and completing your stories; let Tracker take care of planning future iterations, based on actual progress.

It’s gratifying to see that the emergent iterations are not just easier for the user, as there’s no need to manually specify them – they’re also more likely to be accurate, as they’re based on an external view of your own progress. Yet another reason to look to Tracker for your project management needs.

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