The fallacy of planning

The fallacy of planning in UK Universities
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Planning is essential in organisations: for effective decision-making, to make a roadmap for where to be in the future. But how do you plan when the future is unpredictable and uncertain? The answer is not to keep working on a better plan, but to enable people to adapt, live with ambiguity, and respond well says ThenSomehow director Steven Rabson Stark.

How is your planning going? Will your plans for this year work out? Did last year work out the way you thought it would?

As an academic year gets underway, for us itā€™s the beginning of a new cycle, which always makes me wonder. Dare I predict how the year is going to go?

The challenge for universities in an uncertain world

The majority of our clients are UK universities, and they are under mounting pressure.

The environment for higher education institutions in the UK is more uncertain than ever as ā€œdeclining numbers of domestic and international students, coupled with higher costsā€ mean many are facing ā€œa ā€œtipping pointā€ this year and next, which will engulf some of them in a financial crisis.

The main sources of income for the higher education sector breakdown as student tuition fees (53%), research grants and contracts (14%), and direct government funding (12%).

Whilst tuition fees in England are scheduled to increase in autumn 2025, they have been frozen since 2017 and that combined with recent high cost inflation threatens the sectorā€™s financial sustainability, meanwhile the international student market, on which many rely, is surprisingly volatile, with a clampdown on applications from key countries coupled with increasing competition from overseas institutions.

Universities have traditionally responded to disruption and change by pursuing established patterns:

  • growing student numbers (and hence revenues)
  • cutting back on low-demand courses
  • attracting more research grants and contracts
  • and cutting back on professional services staff

But many vice-chancellors say even these measures are not enough to bolster their institutionsā€™ resilience, and cutting staff and reorganisations have landed hard on everyone.

The Planning Fallacy

Thereā€™s a principle – the Planning Fallacy – first introduced by Daniel Kahneman and Amos Tversky in 1979 – that describes the human tendency to underestimate the time, costs, and risk of future plans while overestimating the benefits.

Which means that for large organisations such as universities who have to manage a huge amount of complexity and align multiple actions to achieve strategic goals, thereā€™s a danger of underestimating whatā€™s required to both keep things going and to make things better.

Not to mention the impact on the people in the institutions who have had to cope with the turbulence and who are having to accept yet more change. (We wrote about trauma-informed approaches to leadership here.)

Weā€™re so struck by this idea, the fallacy of planning.

Not that we think planning is a bad thing to do, quite the opposite.

The process of planning gets you thinking about where youā€™re headed, provides a guide for how to get there, and with some foresight, a backup for what to do if things donā€™t work out in the way you expect. It also motivates and invites commitment.

But I do think you need to let go of any idea that planning gives you any control or that you can actually predict the future.

Why business plans are not the whole story

I used to write business plans and set budgets for the previous businesses I ran. They were optimistic sketches of the future, based on assumptions that couldnā€™t really take into account the vagaries of reality.

For example, each year I used to plan on the basis that every member of the sales team was present, healthy and on target, yet I never had a sales team that could live up to that. Even when I made allowances, something completely unexpected would happen. It wasn’t always bad though.

In todayā€™s uncertain world, planning more than a few months in advance may seem futile, yet many of our university clients spend surprising amounts of time cajoling their colleagues through a structured planning round.

One university client runs quarterly planning reviews. However, each quarter more and more projects move from green (on track) to orange or red (delayed). The colour-coding doesn’t help much because thereā€™s nothing they can do to shift projects back to ā€˜greenā€™ – theyā€™ve planned on the basis of everything working out perfectly, when the reality is only 25% does.

Another client told me, ā€œwe sometimes give up on projects because we’re too busy.ā€ But they are always very busy. There is never a good time for new initiatives, no wonder then that they feel frustrated when nothing changes.

Understanding the dynamics and levers that affect your organisation is a valuable thing to do. Setting direction and having a trajectory help. But the story that reality might reflect the plan feels less helpful.

At yet another client, the project we were helping them with was ostensibly going quite well. But there was an interesting moment when there werenā€™t any leaders present and it was only then that people expressed doubts: ā€œI don’t think this is going to work because of this, this and thisā€¦ā€ the members of their team said.

Apart from anything, this indicated that it was not as safe for people to speak up as it initially seemed.

Organisations go to great lengths to put checks and balances and controls in place. These things are valuable, but often they do not support what is actually required. What’s more valuable than monitoring is creating a space where people are equipped to speak up, and to live with uncertainty without getting harmed by it.

It’s the soft skills that allow people to adapt.

When unexpected things happen in projects you have to choose. Do you ignore it or do you take the project in a different direction?

The leadership skills that are needed to cope with uncertainty

At the start of this academic year I asked a client how clearing went and how they were feeling about student recruitment. Their answer was nuanced. Clearing went well but the markets were softer than hoped.

Will that affect the budget for our project? That turns out to be hard to say because although enough students accepted places, not all turned up or will pay their fees, and those that do might still change their minds after a few more weeks, or even after a term. It’s hard to know where things stand until December or January, maybe not until the end of the academic year.

So much for the plans weā€™d made. So much for certainty.

It got me thinking about complexity and the skills leaders need to thrive.

Traditional models assume great leadership is about predicting the future, providing clear direction, having certainty and strong plans that plot a course through familiar waters. Of course thatā€™s what we crave, what we yearn for and what we ask from our leaders. We want it to be true, because it is possible it could be. A bit like my early business plans.

But really no one can predict the future nor put things in place to head it off with certainty, except by luck. Instead I believe businesses and organisations such as universities should be thinking about ways of managing ambiguity, of being adaptable, of focusing on building and investing in skills and capability that can more than weather uncertainty and the unexpected.

When the rubber hits the road

To illustrate the point, while I was in Iceland in the summer with my family, part of the ring road that runs around the island was swept away by a flood. We worried we couldnā€™t continue our holiday. The hotel was relaxed about it and told us to keep checking the updates as it would probably be okay.

It actually was. We drove over the ruined bit of road a couple of days later. Such a flimsy road: a thin layer of tarmac on top of a narrow embankment. No wonder it was swept away. And no wonder it was open again in two days. Bulldozers piled up the surrounding rock, smeared a new surface over the top and the road was just about usable. Its very fragility was its strength.

Yes, it was easily swept away, but it was just as easily rebuilt. We drove past the ruins of elaborate bridges that were nothing but twisted iron lumps, markers of less-wise attempts to build with permanence in mind.

You canā€™t know where or when your road will break. But you can be sure that it will: somewhere, sometime, somehow. So the build is light and simple and easy to repair.

Iā€™m sure there is an organisational equivalent.

Planning is part of that: it makes sense for everyone to have a sense of the risks and possibilities, the mitigations and overarching direction. But you mustnā€™t lose sight of the fiction of the plan. You should expect it to fail or take an unexpected turn. You should prepare people to adapt readily, to live with ambiguity, to respond well, to bend and sway, and shore things up when they break.

Why soft skills are the key

Recently, we ran a programme for emerging leaders for one HE institution. The response was marmite. Some participants hated it because we didnā€™t give them the answer. They wanted a framework with a clear, practical action they could take to solve their problem. I donā€™t believe the world works that way.

Others loved it. They understood what we were trying to do, which was to give them space to reflect, learn from their experiences, and practise core skills that they could adapt to any situation. Skills such as listening, empathy, and effective communication.

We set out to build their confidence, and clarify how they see themselves in relation to the complex environment they operate in, to think about how their role might be, and to distribute leadership.

Because you never know when the unexpected will show up to blindside you.

If any of this gets you thinking about planning and leadership in your organisation or your team, hereā€™s some questions to think about:

  • How do you integrate uncertainty into your planning process?
  • How do you equip people so they can respond well to uncertainty?
  • What opportunities do you see for learning from uncertainty?

And has anything blindsided you recently? Weā€™d love to hear your thoughts. Get in touch here and let us know.

At Then Somehow we help universities and other organisations build emotional literacy, increase empathy, and help you see the world differently, giving you practical tools to shift the stuff thatā€™s stuck.

If youā€™d like to discuss how we can help your organisation develop leaders and perform better, get in touch here.

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