In terms of my last post this looks like starting at the end but, since project lifecycles and policies are adopted in the first place as a coping technique for uncertainty, it is the logical first stop.
Uncertainty for most of those faced with managing a project tends to be conflated with risk, and more or less rigorous application of tried and tested risk management techniques is deemed to be the most that can be expected. In practice this hardly scratches the surface. I’ve found the differentatiation suggested by Lawrence Leach useful here. He differentiates between Common-Cause Variation (to the planned work) and Special-Cause Variation – essentially risk. Whilst I am of the opinion that much of what passes for risk management could benefit from much greater rigour (especially the handling of conditional risk), that is not what I mean to address here – for now anyway. I want to explore uncertainty, especially as it applies to outcomes.
Uncertainty and value from projects
When a project is commissioned there are large areas of uncertainty that impact the potential value it can deliver. Many of these are far more direct and predictable than the usual ‘Special Cause’ uncertainties that are encompassed by a risk register. Effective project governance, planning and execution must also explicitly encompass the management and mitigation of these ‘Common Cause’ uncertainties.
If project requirements start, as they must if projects are to have a chance of success, by establishing clear objectives with well-defined measures and targets, then an overall performance expectation is set. This establishes what I’ll call the ‘Potential Benefit’ and, coupled with the expected resource requirement, defines the project’s potential value. In devising a solution that we expect will deliver the required level of performance we must distinguish, and address, several forms of uncertainty that attach to any proposal. Briefly stated these include:
- Required outcome uncertainty – uncertainty about the clarity with which intended outcomes have been specified and are measurable;
- Solution uncertainty – uncertainty about the underlying causal assumptions and the probable actual performance of the outputs;
- Adoption uncertainty – uncertainty about whether those who need to learn and apply new skills, or simply do something differently, in order to benefit from or manage the outputs will actually do so, and in the way intended;
- Delivery uncertainty – uncertainty about the schedule, organisational dependencies, task times and resource availability that impact on, and usually delay, delivery if they are not managed.
On top of this of course we must add the special-cause uncertainty already discussed– those uncertainties that are properly addressed through risk management techniques.
All, or any, of the above may affect the ‘Realised Benefit’ on delivery. Similar uncertainties surround lifetime cost and thus the actual value that is realised by the project (more on uncertainty about resource use later). Failure to adopt an approach to a project that acknowledges these uncertainties, manages them where possible, and accounts for them in their estimates where not, almost guarantees failure. Yet most are hardly considered, let alone managed.