The TCCS 2019-2020 Annual Report tells us that ACT Government complete projects on average 4.8 months late. We should expect similar delays in the future and some projects will take much longer than that. We can contribute this to the planning fallacy.
We judge ourselves or our intent and others by the outcome. The ACT Government plans many good things, but takes a long time to get around to doing them. Once a project is funded, it is likely to be finished less than half a year later than the first estimate (original practical completion date). The chronicles of project management are full of examples of projects that take much longer to finished. The ACT Government has a few of its own.
TCCS 2019-2020 Annual Report outlines the capital expenditure for the period between 2016-2022 for 138 projects that were delivered on average 4.8 months late. While delays are common, the COVID 19 stimulus program Fast Track brought many projects forward, making it a favourable year for the ACT Government. The variation between projects is quite large with one project finishing 96 months late and another finished 17 months early. The delays tally to a total 55 years.
Outliers are always interesting but show the best and worse case and not a typical one.
Transport Canberra Operations
The longest delay was Transport for Canberra – Real Time Passenger Information System. Originally estimated to be completed by June 2013 it has now slipped to June 2021 and still working on it (see tender August 2021, GS0314302 REOI Next Generation Ticketing Project). In generally, Transport Canberra Operations was notoriously late completing projects. Six project are listed for Transport Canberra Operations and they ran on average 39 months (over 3 years) late and made up over a third of the total project delays in TCCS. This would indicate that Transport Canberra Operations is excessively optimistic about it project delivery capability.
The project that was finished earliest was the Enhancement of library collections with cost over $2 million making the project of around median size and was completed 24 months (2 years) early.
Daniel Kahneman is famous for his book Thinking Fast and Slow on cognitive biases. The planning fallacy is our tendency to be overly optimistic about the duration required to complete a task or project. We are optimistic in our nature and this leads us astray. Kahneman recommends ‘the outside view’ whereby you look to others experience, and preferably a large sample of experiences, to determine the baseline prediction. (Kahneman, D., Thinking Fast and Slow, chapter 23, pp 245-247)
We are by nature optimistic. When we start off, we always imagine a project will be easier and finished sooner than the reality is likely to be. Particularly if we are unfamiliar with the task, our optimism can lead us to overconfidence. This does not mean that great things are not worth pursuing, but rather we must accept that great things take effort and time. This problem is commonly seen in project management. So too, we are optimistic making estimates for task completion for ourselves but much more optimistic judging others, particularly in delegating tasks. (see Haidt, J., The Righteous Mind: Why Good People are Divided by Politics and Religion, 2012.)
This embarrassing episode remains one of the most instructive experiences of my professional life. I had stumbled onto a distinction between two profoundly different approaches to forecasting, which Amos Tversky and I later labelled the inside view and the outside view.
The inside view is the one that all of us, including Seymour, spontaneously adopted to assess the future of our project. We focused on our specific circumstances and searched for evidence in our own experiences. We had a sketchy plan: we knew how many chapters we were going to write, and we had an idea of how long it had taken us to write the two that we had already done. The more cautious among us probably added a few months as a margin of error.
But extrapolating was a mistake. We were forecasting based on the information in front of us, but the chapters we wrote first were easier than others and our commitment to the project was probably at its peak. The main problem was that we failed to allow for what Donald Rumsfeld famously called “unknown unknowns.” At the time, there was no way for us to foresee the succession of events that would cause the project to drag on for so long: divorces, illnesses, crises of coordination with bureaucracies. These unanticipated events not only slow the writing process, but produce long periods during which little or no progress is made at all. Of course, the same must have been true for the other teams that Seymour knew about. Like us, the members of those teams did not know the odds they were facing. There are many ways for any plan to fail, and although most of them are too improbable to be anticipated, the likelihood that something will go wrong in a big project is high.Kahneman D., Daniel Kahneman: Beware the ‘inside view’, McKinsey Quarterly, 1 November 2011, accessed 5 August 2021