What Is the Planning Fallacy, and How Can You Avoid It? These tips and tricks can help you create a more realistic daily schedule.

What do governments, businesses and individuals have in common? They've all invested time and money in forecasting how long a project will take to complete. Despite the forecasting, every one of them has swung and missed. The reason? They've all victim to something called the planning fallacy.

The planning fallacy is a cognitive bias first proposed by Daniel Kahneman and Amos Tversky in 1979. They defined this phenomenon as "the tendency to underestimate the amount of time needed to complete a future task, due in part to the reliance on overly optimistic performance scenarios."

Why do so many of us fall into this trap? The most obvious reason is wishful thinking. We all have the best intentions to get something done as quickly and efficiently as possible. Unfortunately, in our excitement, we underestimate how long it's actually going to take to cross that finish line. The reason? We just didn't take into account external and internal snags — like being stuck in a rut or having to cut through red tape.

Regardless of the exact reason, the planning fallacy can do some significant damage. A missed deadline can harm your professional reputation, as well as cost you financially. It can also throw your schedule out of whack. If you've missed a target date, that means what you have planned next has to get pushed back.

The planning fallacy can cause serious problems. Thankfully, there are ways to avoid it.

Use data to your advantage.

"Tracking historical plans and actuals is the fundamental first step in overcoming the planning fallacy. You should track your performance because if you start with that — let alone anything more sophisticated — you will improve," said Professor Grushka-Cockayne from the Darden School of Business, University of Virginia.

Let's say you're planning a project that was similar to something you've done in the past, like the time it took to deliver similar outcomes before. You could also ask your team or consult industry-specific data. Another way to make better forecasts is by taking an "outside view," which is "building a statistical view of your project based on a reference class of similar projects."

Moreover, you could get a helping hand from predictive analytics or machine learning. For instance, if you're manufacturing a product, predictive maintenance would warn you of possible issues. With this information, you can intervene before a problem occurs. Hence, your production line won't slow down.

As for machine learning, you could use a tool like Calendar. It tracks how you're spending your team so that you can more accurately schedule tasks, projects and meetings. It then makes smart suggestions on how to optimize your valuable time.

Related: How Predictive Analytics Can Help Your Business See the Future (Infographic)

Set realistic deadlines.

"Anecdotally, it appears that although people fail to meet their predictions, they do typically meet important deadlines," wrote Roger Buehler, Dale Griffin and Michael Ross in a 1994 paper on the planning fallacy. "As teachers, we notice that most students turn their assignments in on time, but few submit them early."

During their survey, students indicated that they would "finish approximately three-quarters of their projects (M = 73 percent) on the same day as the deadline." It's suspected "that deadlines may sometimes exert a greater impact on behavior than on predictions." However, "people are aware that they have completed previous tasks only shortly before a deadline; they remain optimistic that they will finish the current assignment with plenty of time to spare."

The key, though, is not just to set any deadline you like. It's all about setting a realistic timeline that will inspire you to follow through and meet the timeline limits on time. Have these deadlines been a struggle in the past? Here are some pointers to steer you in the right direction.

• Make them urgent by scheduling deadlines as close to the present as possible.
• Determine if you're a prioritizer, planner, arranger or visualizer so that you can plan accordingly. For example, "prioritizers and planners like to work based on how much time each part of a task will take," explains Kayla Matthews. Arrangers "focus on how they're feeling, and visualizers are motivated by considering the big picture."
• Make deadlines actionable by breaking larger projects into 10-minute segments.
• Hold yourself accountable if you miss the deadline, like rewarding yourself for meeting the deadline. On the flip side, if you don't, have someone call you out.

Remember Murphy's Law.

Named after Captain Edward Aloysius Murphy Jr., an American aerospace engineer, Murphy's Law states that "anything that can go wrong, will go wrong." But what exactly does this have to do with the planning fallacy?

Well, whenever estimating time, most of us tend to be optimistic. Maybe you want to launch your new business venture within three months. Depending on what industry you're in, that's probably too ambitious, despite your best intentions. Even if you have everything in place, you will run into obstacles.

That's when being a tad pessimistic can come in handy. It can help you can predict and address any potential pitfalls. Obviously, you can't plan for every scenario. But here are some ways that you can make the appropriate pans:

• Set a realistic deadline. And add a little buffer time to that. Some suggest adding 20 percent to your estimated time. Start with that estimate, then recalculate as needed.
• Prioritize your lists so that you're only spending time and energy on what needs to get done.
• Consider what could possibly go wrong and how you can respond to each. If this seems overwhelming, you can look and see what obstacles you and your competitors have had to overcome in the past.

Use three-point estimations.

"The three-point estimation technique forces you to confront your possible optimism by asking you to identify three different pieces of data," notes Jessica Greene. These are a:

• Best-case scenario estimate
• Worst-case scenario estimate
• Most-likely scenario estimate

"Knowing that we tend to be optimistic when estimating, the best-case scenario estimate is likely the same as your initial estimate," adds Greene. "The most-likely scenario might be based on the historical data you have for completing similar tasks." And, as for the worst-case scenario, you need to "consider how much time something might take if everything goes wrong."

After collecting all three numbers, "calculate the average of the three points of data." You can do this by just adding all three numbers together and dividing them by three. "For example, if your best-case scenario is three days, your most-likely scenario is five days, and your worst-case scenario is nine days, simply add 3+5+9." Next, "take the sum, 17, and divide it by three." Your estimate will be the average, which comes out to 5.67 days.

Related: Which Came First: The Time Estimate or the Time-Suck?

You will have to guard your time more than ever now. You will need to know how to determine which meetings are time-sucks — even the digital meetings. You will want to run a tight ship as we recover.

Try the "100 blocks a day" method.

"Most people sleep about seven or eight hours a night," writes Tim Urban over at Wait But Why. "That leaves 16 or 17 hours awake each day. Or about 1,000 minutes." So, Tim recommends thinking about those 1,000 minutes as 100 10-minute blocks.

The idea then is to "spend 10 minutes of your life on each block until you eventually run out of blocks, and it's time to go to sleep," explains Tim. How can you do this? By placing those blocks of time onto a grid. The reason? It allows you to notice how many of them are:

• Putting you toward making your future better, and how many of them are just there to be enjoyed?
• Spent with other people, and how many are for alone time?
• Used to create something, and how many are used to consume something?
• Focused on your body, how many on your mind, and how many on neither one in particular?
• Your favorite blocks of the day, and which are your least favorite?

"You'd have to think about everything you might spend your time doing in the context of its worth in blocks," Tim writes. Cooking dinner, as an example, "requires three blocks, while ordering in requires zero — is cooking dinner worth three blocks to you?"

I wouldn't recommend that you do this every day. But it might be worth trying for a couple of days so that you can visually see how you're spending your time and what items are non-negotiable and what's flexible.

Minimize distractions and overcome procrastination.

Even if you've done all of the above, it's nearly impossible to stay on track when distractions bombard you. Try to minimize them as much as you can. I'm talking about the usual suspects here, like smartphone notifications or talkative co-workers. But you also need to realize that your mind will begin to wander when it needs a breather. To address this, schedule breaks using something like the Pomodoro Technique.

What about procrastinating? Research by Katherine Milkman at the University of Pennsylvania and Leslie John at Harvard Business School shows that setting "implementation intentions" can reduce procrastination. It can also increase the probability of people following through. Additionally, you can also overcome this by:

• Using your Calendar to keep you organized and establish deadlines.
• Just getting started to help get you into a groove.
• Breaking up larger tasks into more manageable pieces.
• Setting up an accountability system.
• Tackling items at the moment either when you're in the zone or to prevent smaller items from piling up.
• Reducing your workload. Get comfortable saying "no" more often and delegate or automate tasks that aren't worth your time.

Related: How to Break Your Procrastination Habit in the Next 21 Days Without Using Willpower

You will want to compartmentalize your work and life stress even more now — and be vigilant to stay on task. You won't have as much leeway in the planning fallacy.

Avoid the planning fallacy.

You need all the information you can gather on business, and you can learn from success or failure. But the more you can limit the effects of the planning fallacy, the further ahead you'll be.