A plan is only a scenario, and almost by definition, it is optimistic. Any complex undertaking is subject to myriad problems — from technology failures to shifts in exchange rates to bad weather — and it is beyond the reach of the human imagination to foresee all of them at the outset. Although the probability of any one of these events could be low, the aggregate probability of something going awry can be high. As a result, scenario planning can lead to a serious underestimate of the risk of failure.
Author: Daniel Kahneman
Source: Rotman Magazine
Subjects: Personality / Behavior, Planning, Risk Management