MENTORS MAGAZINE | EDITION 3 | 47ed the specific component parts of the pro-
jects that had cost overruns, and found
that the biggest unanticipated money drain
came from permitting the client to make
too many changes at the final stages of the
project. As a result, the IT firm changed
their process to minimize any changes at
the tail end of the project.Second, use your past experience with sim-
ilar projects to inform your estimates for
future projects. A heavy equipment manu-
facturer had a systemic struggle with un-
derestimating project costs. In one exam-
ple, a project that was estimated to cost $2
million ended up costing $3 million. We
suggested making it a requirement for pro-
ject managers to use past project costs to
inform future projections. Doing so result-
ed in much more accurate project cost esti-
mates.Third, for projects with which you have
little past experience, use an external per-spective from a trusted and objective
source. A financial services firm whose CEO
I coached wanted to move its headquarters
after it outgrew its current building. I con-
nected the CEO with a couple of other CEO
clients who recently moved and expressed
a willingness to share their experience. This
experience helped the financial services
CEO anticipate contingencies he didn’t pre-
viously consider, ranging from additional
marketing expenses to print new collateral
with the updated address to lost employee
productivity due to changing schedules as
a result of a different commute.If you take away one message from this
article, remember that the key to address-
ing cost overruns is to remember that
“failing to plan for problems is planning to
fail.” Use this phrase as your guide to pre-
vent cost overruns and avoid falling prey
to the dangerous judgment error of plan-
ning fallacy.Dr. Gleb Tsipursky is on a mission to protect leaders from dangerous judgment
errors known as cognitive biases by developing the most effective decision-
making strategies. A best-selling author, he wrote Never Go With Your Gut
(2019), The Blindspots Between Us (2020), and The Truth Seeker’s Handbook
(2017). His cutting-edge thought leadership was featured in over 400 articles
and 350 interviews in Fast Company, CBS News, Time, Business Insider, Govern-
ment Executive, The Chronicle of Philanthropy, CNBC, and Inc. Magazine. His
expertise stems from over 20 years of consulting, coaching, speaking, and training experience as CEO of
Disaster Avoidance Experts. It also comes from his research background as a behavioral economist and
cognitive neuroscientist with over 15 years in academia, with dozens of peer-reviewed academic publica-
tions.
Contact him at: [email protected]. Follow him on Twitter: @gleb_tsipursky, on Insta-
gram: @dr_gleb_tsipursky. And visit: http://www.DisasterAvoidanceExperts.com/GlebTsipursky to learn more.