How to live in uncertainty and handle risk on a project level

I’ll do my best to keep this matter simple and easy to absorb.

By no means I intend to turn this post into a literature review or project management training, instead I would rather share my views on this topic.

I find it fascinating how breakthrough ideas and new prospective projects rise from uncertainty and risk. A large chunk of my project management experience comes thru traditional waterfall pm. It obviously has its pros and cons, and after years of practicing multiple methodologies I mostly arrive to the same conclusion– blended methods work the best, especially if we take into account the culture of the given organisation.

Depending on the project, I would suggest that 25-40% of success comes from proper, systematic risk management. What is risk management at all? To put is simple, it is the situation when we differentiate between uncertainty and risk. Uncertainty is basically unknown unknown, whereas risk is mostly a known unknown.

So, when unknown unknown pops out of the box, you will generally say “What the hell just happened??!!” In case of known unknowns, the situation is slightly different. You can start working on your risk management methodology and turn risks into manageable bits. Without getting too deep into risk management, if you can’t really ditch or transfer risks, it will turn into a probability/quantification/qualification exercise.  

Market, political, regulatory, technological…etc. uncertainties are not considered now, they are in a different box, they can be seen as general uncertainties (like the end of the world in 2012…), so they are not really on project management level.

Uncertainty and risk can have both negative and positive impacts. Most managers though only consider them as threats and not opportunities. Well, in most cases they are right I think, but sometimes they are rather opportunities than threats.

Uncertainty is a beast that most people don’t like. Why? I guess it is in human nature that we want to know what’s going to happen. In most cases I am one of those people too. So, what can you do with uncertainty? The best practice I think is creating an environment – especially during or prior to a project initiation – where clear communication and creativity kicks in. Once we start seeing where we want to head to, we have to go around in circles until uncertainties start turning into risks. The greatest challenge I think is creating the environment where stakeholders provide proper input, and finally we can start working on the risks that we have identified. Frankly – a lot of time is spent trying to convert unknown unknowns into known unknowns.

When you deal with projects, you don’t have to fear birds to hate Black Swans though– any project that lasts over 6-9 months will face some type of a Black Swan. Why? Because they will always rock up. The Black Swan is something impossible to predict, (or something you just simply missed 😊) has a major effect on the project, and the most annoying is that it seems damn obvious once it has occurred. We can do our best to avoid them, but the reality is that you need a great team that can handle the effects well…

In case of projects serving innovation, there is more uncertainty is in the game, which I guess is the nature of the beast. If uncertainty throws something positive at us- happy days. If we assume the contrary, systematic approach will help, but in the end of the day – innovation itself is uncertainty and risk. We do our best to see what will kick in, but we can’t guarantee anything – mostly due to the uncertainties we excluded from this article. 😊