Project Management Practice, Project Planning, Project Scheduling

Managing Uncertainty – A Foundation Stone of Project, Program and Portfolio Management

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Implementing EPM solutions brings the PF Team into close contact with dozens of organisation’s PM groups and hundreds of PM professionals every year. One thing we discover time-and-again is that the key problem, often frustrating attempts to gain control of initiatives, is an inability to plan effectively and to deal successfully with the “unknowns” or uncertainties that planning encounters.

In general, PF’s customers are not dealing with environments of extreme uncertainty where a learning-by-doing approach might be required as a substitute for the efficient execution of plans. In fact, in most clients, projects are operating within the context of programmes and portfolios and it is desired and expected that project execution will proceed, as far as possible, in line with plan. Naturally so, as projects which execute far out of tolerance introduce considerable turbulence into Programs and Portfolios which greatly hamper their success.

Importantly too, although often unrecognised, such projects also hamper attempts to maximise strategic alignment and hamper efficiency by undermining the introduction of important organisational competencies such as Resource Management for example.

But pity the poor PM! The culture of Project Management rooted in years of talk of an “Iron Triangle” means that deviation from plan is seen to be a failure of the planning phase or just poor execution of the plan. However, any project that is living up to its definition as a novel undertaking will present considerable uncertainties to be managed by the PM, so this presents something of conundrum for most PMs.

Too often the result is that, in current PM practice, uncertainties are brushed under the carpet and plans are presented with a false confidence. Very much at odds with what is required for good project management. As for the success of programme and portfolio management, uncertainty must be actively identified and managed not ignored or hidden.

Delving a little deeper into this topic we might ask – what is uncertainty? Lots of writers in the Project Management field have attempted to characterise it. As a working definition, we might think of uncertainty as an inability to fully know the goals and means of a project or to understand its changing context and therefore the events which are likely to affect the project during its lifecycle.

The types of uncertainty faced can vary enormously and can include, for example, not knowing whether a new technology to be used will work as expected, difficulties in estimating the scale of a deliverable or not having reliable metrics to estimate the effort required to produce that deliverable, organisation politics, turbulence within the organisational context of the project (eg a reorg or management change) and the common favourite of adoption/embedding risks as well as many, many more.

A useful categorisation of uncertainty has been introduced by some academics and is worth mentioning here to assist in conveying what we at PF mean by “uncertainty”:

The categories of Uncertainty

Variation – the divergence from planned of cost, effort, duration, resource availability dealt with on a day to day basis by PMs.

Foreseen Risk – the Identified risks for which an attempt has been made to understand and plan for the likely impacts of their occurrence.

Unforeseen Risk – the unanticipated risks.

Chaos – profound and fundamental uncertainty about the basic structure and likely outcomes and progression of the project activities, such profound uncertainly is often linked to the project’s organisational environment itself being volatile and full of change and uncertainty.

 

On reading the above managing uncertainty may initially seem similar to “Risk Management” but in fact it is wider in scope and could be considered to encompass Risk Management. The main problem with Risk Management being that it generally only provides a mechanism to deal with foreseen risk.

Comparing Risk Management to wider efforts to manage uncertainty against each of the categories of uncertainty above hopefully serves to illuminate the matter:

Category of Uncertainty Relationship to Risk Management
Variation Typically “under the radar” of Risk Management.
Foreseen Risk Risk Management’s domain (the tip of the iceberg).
Unforeseen Risk Often the iceberg!
Chaos Not amenable to the think-do paradigm of Risk Management. Projects dealing with high levels of discontinuity often managed via a by learning-by-doing approach.

So what is a Project Manager to do to tame uncertainty? Sadly there is no “silver bullet”. Due to the wide variety of uncertainties which present themselves to PMs a “kitbag” of techniques is needed to manage uncertainty and these are far broader and affect the execution of projects more profoundly than “Risk Management”.

Some of the techniques and approaches we are aware of and which we hope to discuss in detail in future posts are:

  • How to perform project categorisation and uncertainty profiling and then select an appropriate project lifecycle model (eg Waterfall, Agile etc)
  • Making, monitoring, refining and acting on critical planning assumptions
  • Decoupling / isolation of uncertain elements
  • Piloting and technical proof of concept
  • Wave planning aka incremental planning
  • Agile type approaches
  • Utilising previous experience of similar projects (avoiding the myth that a “good manager” can manage any project)
  • Management of adoption risks (getting an appropriate project scope)
  • Going beyond the “project management paradigm” to find alternative ways of making sense of the challenges of managing endeavours with very high degrees of uncertainty

In conclusion we here at PF feel that managing uncertainty is an under-recognised and key skill for PMs and a foundational competency in project centric organisations. Effective PMs identify and actively manage uncertainties – never brush them under the carpet. Similarly understanding the uncertainty profiles of project is key for Portfolio and Programme Managers. Organisational maturity in the area of uncertainty is required if the organisations intention is to bring control, reliability and repeatability to Portfolio, Programme and Project management and as part of any initiative to deploy EPM.

We hope to open the book on this topic in our future articles.