## One reason why plans are good

One of the small puzzles of decision analysis is that:

(a) Plans have lots of problems–things commonly don’t go according to plan, plans notoriously exclude key possibilities that the planner didn’t think of, plans can encourage tunnel vision, etc. But . . .

(b) Plans are helpful. In fact, it’s hard to do much of anything useful without a plan. (I’m sure people will come up with counterexamples here, but certainly in my own work and life, not much happens if I don’t plan it. Serentipitous encounters are fine but don’t add up to much.

Beyond this, one could add that economic activity seems to work well with minimal planning (just enough structure and rules to set up “the marketplace”) but individual actors plan, and need to plan, all the time.

This puzzle is particularly interesting to me as I do work in applied decision analysis.

So what’s the solution to the puzzle?

I don’t really have a solution, but in talking with Dave Krantz yesterday I thought of one advantage of plans, even bad plans. Suppose you have a particular goal and are setting up a plan, considering two decision options, A or B. According to the plan, decision A will work by first implementing step 1, then step 2. Decision B will work by first implementing step x, then step y. Graphically:

option A –> 1 –> 2 –> Goal
option B –> x –> y –> Goal

This plan may have problems, but it clearly sets up the roles of 1,2,x,y. Without the plan, it could be easy to hold both A and B in your mind simultaneously, blurring the distinction. In particular, it could be easy to vaguely imagine that you could do step 1, then step y.

To summarize: one advantage of a plan is it enforces a certain logical consistency and can clarify the relations between intermediate steps.

P.S. Lots of interesting comments here

Isn't this why you try to have a plan for when things don't go according to plan :)

However, just because things happen you didn't think of or plan for does not mean that you would have been better off without a plan.

I would think that a rigid plan based on lots of unsure future assumptions can lead to some of the problems stated in your post, but surely that points to the need for contingency plans and/or plans which are more flexible rather than no plan at all, which I am not sure is even really philosphically possible.

2. Keith O'Rourke says:

That's what I recall hearing in business school – you go through the planning process in order to make better decsions when the unanticipated (inevitably) occurs. Perhaps the same reason why animals like cats "play" with their prey.

Keith

3. Hi Andrew, your blog was recommended by someone over at LiveJournal:

Beyond this, one could add that economic activity seems to work well with minimal planning (just enough structure and rules to set up "the marketplace") but individual actors plan, and need to plan, all the time.

I don't know decision analysis, but it seems to me that on the macro level you'd want to preserve as many options as possible, so that more are explored and more efficient outcomes result. On the other hand, at the individual, micro level, it's important to limit the number of options so that resources and effort can be concentrated.

I'd also say that planning has a lot to do with sequencing, as you noted regarding clarifying intermediate steps.

In general, each option left open and under consideration has a certain value, but also a cost, and there's always a balance to be struck. This is a key issue in creativity and innovation research, namely how long you should hold on to ideas (options) and how far you should develop them, before killing them off.

The balance point is much more toward a limited number of options for individuals and small groups. On the other hand, as we've seen in real life, a large group/market with relatively little central planning will end up trying more different ideas and be more innovative.