by Doug DeCarlo, Principal
The Doug DeCarlo Group
Author of eXtreme Project Management:
Using Leadership, Principles and Tools to Deliver Value in the Face of Volatility

What To Do When Uncertainty Is For Sure

The realm of "uncertainty" is another fork in the road where traditional and eXtreme project management part company.

Traditional Project Management (TPM) is anchored in the Newtonian belief that the world is stable and that we can actually know enough to do accurate planning. This may be true for projects that feature low complexity and low change, especially in cases where you have a high experience factor going for you: you've done the same project several times and have been able to establish a cadre of repeatable and reliable practices, e.g., building another McDonald's hamburger restaurant. I call these "cookie cutter projects." (By the way, how many cookie cutter projects do you work on? I'll bet very few.)

In stable project environments, the operating assumption is that the plan is correct. And the role of the Project Manager is to be true to the script by minimizing variance, often through elaborate control measures.

And this is where TPM and eXtreme project management part company. In the world of eXtreme projects (high-speed, high change, high complexity and high stress) we recognize that uncertainty reigns and reality rules. Translation: we assume the plan is fiction. Yes, we do have a plan, but regard it as inherently incorrect. That's why we continually adapt our plan to reality rather than trying to force reality to conform to fiction.

Managing for Uncertainty
TPM does a good job in identifying possible risk events and putting in place mitigation plans. So does eXtreme project management. But we go further by looking at the underlying conditions that are likely to cause variance and volatility. eXtreme projects are marinated in uncertainty. So, in practice the entire project is managed for uncertainty. It's not just an add-on exercise. Uncertainty is the project.

How do we manage for uncertainty? We do this by both anticipating and responding to it. That is,
  • We proactively identify and mitigate the underlying causes of uncertainty. (See Project Uncertainty Profile below.)

  • We expect the unexpected. We succeed by executing the project in small chunks, taking an iterative approach, gaining rapid feedback and adapting. And we use timeboxing as a device to force frequent business, technical, quality, scheduling and process decisions. (For a refresher on timeboxing, see the article I wrote entitled, "An Idea Whose Timebox Has Come.")

The Project Uncertainty Profile
The Project Uncertainty Profile (PUP) answers the question, how risky is this project? Compiled by the project manager with input from the team and project customers, the PUP provides an overall measure of project riskiness. Completing the PUP is a pre-condition for estimating the project.

The PUP calibrates the level of uncertainty in four critical areas:

Business uncertainty
What outside risks do we face? Namely, how strong is the competition? What could change that could have an impact on us, for better or worse? What about government regulations? How experienced are we in the target market?

Product uncertainty
What risks do we face in being able to produce the project deliverable itself? Are we pushing the state of the art? Do we have the support systems in place to deliver? How experienced are we with the thing or service we are to produce?

Project uncertainty
Do we have the ability to manage this project? The necessary funding? People? A qualified sponsor? How great is our dependency on other projects?

Organizational risk
How politically sensitive or volatile is this project? How large is the stakeholder population? What priority is the project given?

For instance, in a politically charged project, many man months can be consumed in securing decisions and getting buy-in.

The Project Uncertainty Profile

Low RiskHigh Risk

 Factor Rating
Clear, measurableUltimate Business BenefitUnclear, not measurable 
LocalCustomer DistributionGlobal 
EstablishedCustomer NeedsLittle Known 
VeteranOur Market ExperienceNew comer 
StabilizedGovernment RegulationsIn flux 
LowFinancial ExposureHigh 
StableMarket ConditionsVolatile 

ClearFunctional RequirementsUnclear 
ClearQuality/Performance Reqs.Unclear 
StableCore TechnologyVolatile 
In placeSupport Systems & ProcessesNon-existent 
ClearCompletion CriteriaUnclear 
LowTechnical ComplexityHigh 
ExcellentTrack Record w/similar productPoor 

ReliableOutside VendorsUnreliable 
LowComplexity of the ProjectHigh 
AttainableProject ImperativesUnattainable 
Highly experiencedTeam Member ExpertiseInexperienced 
Dedicated to this projectTeam Member AvailabilityMultiple projects 
HighPM's Control over ResourcesLow 
ExpertProject Manager's ExperienceNovice 
DedicatedProject Manager's AvailabilityMultiple Projects 
MandatedProject Mgmt. MethodologyAgile 
In placeProject Mgmt. InfrastructureNot established 
SatisfyingLikely Quality of Life on ProjectDissatisfying 
AdequateIncentives AvailableNot available 
LowDependency on other projectsHigh 
ExcellentTrack record with similar projectsPoor 
ClearSponsor IdentificationUnclear 
ImmediateSponsor AvailabilityDelayed 
HighSponsor's Influence/ReachLow 
AchievableWin Conditions: Must Meet, OptimizeUnachievable 

LowPolitical SensitivityHigh 
FastApproval cyclesSlow 
LowNo. of Stakeholder GroupsHigh 
LowNo. of individual StakeholdersHigh 
LowCrucial Stakeholders' SupportHigh 
StrongStakeholder ParticipationWeak 
ConduciveTeam's Working ConditionsDistracting 
Co-locatedLocation of TeamDispersed 
StableProject Portfolio PrioritiesUnstable 

The PUP will provide you and the team with the context within which you will plan and estimate the project in answer to eXtreme Project Management's Business Question 2: What will it take to get it? The PUP is the pre-requisite to estimating. In absence of having completed the PUP any estimate of schedule, budget, return on investment, technical feasibility, expected quality is unfounded, if not laughable. In practice, the PUP is used as a basis to mitigate the underlying conditions of risk where feasible.

For instance, two major causes of schedule slippage are geographically dispersed teams, compounded by team members who are working on multiple projects. Any estimate of schedule needs to be considered in light of these realities. As such, the PUP points to conditions that, when possible to mitigate, can reduce variance and increase the level predictability.

Sponsors and other key stakeholders rarely understand or want to face up to the extent of project riskiness. The PUP is a real eye opener, one that gives the team, sponsor and other stakeholders a reality check, if not a wakeup call. Your job as eXtreme project manager is to expose the realities facing the project so that stakeholders can make informed decisions.

eXtremely yours,


P.S.: For the full story on eXtreme Project Management, see Doug's book on Amazon.com.

Doug DeCarlo is the author eXtreme Project Management: Using Leadership, Principles & Tools to Deliver Value in the face of Volatility. He can be reached through www.dougdecarlo.com.

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