Fritzerland

Is there any way to deal with the unknowns In Project Management? Well there are…

We all live in an imperfect world. We can never expect to have complete information. Colin Powel, former Chairman of the Joint Chiefs of Staff and Secretary of State, uses the 40/70 rule.  He explains that he never takes any action unless he feels he has at least 40 percent of the necessary information. He never expects to have more than 70 percent. To wait and try for more causes too many missed opportunities

“Yesterday is history, tomorrow is a mystery, today is a gift, that is why they call it the present. “ Kung Fu Panda

Reflecting on the last ten years of my own experience working on projects, early on, I saw mostly “traditional project management.” That is, project management that places greater emphasis on planning upfront, and as a whole, a greater proportion of the total project planning is done very early in the project, and seeks to provide predictability of activities over longer planning horizons. Other terms I’ve heard for this project management style are “predictive” or “sequential (gateway) delivery.” In more recent years, however, my experience has been to see “iterative and incremental” approaches. Again, that is, project management that places less emphasis on planning upfront, and as a whole, a greater proportion of the total project planning is done in small amounts iteratively across the project, and seeks to provide predictability of activities only over shorter planning horizons. Other terms I’ve heard for this project management style are “emergent” and “incremental delivery.”

To deal with the unknowns in project management, we have to evaluate our options using risk assessment models. The riskiest undertakings are ones we do for the first time. A good example would be opening a new business. We don’t have the benefit of past experience so we can expect plenty of bumps along the way. The least risky would be projects we have accomplished before. A good example is opening another outlet of an existing business such as Target or Wal-Mart. In this case, experience is the teacher, and a project manager that has gone through a similar project will have a good idea of what to expect.

Categories of Unknowns

We can break our risk assessment model into four categories, according to Project Management Institute (PMI):

1.     Known-Known – you know to what extent you know

2.     Known-Unknown – you know you don’t know something

3.     Unknown-Known – you don’t know to what extent you know

4.     Unknown-Unknown – you don’t know you don’t know

A Known-Known is something we know that we must plan for.  We insert these into the project plan. For example, we might be writing a book and want to use existing research. We know we will have to get permission. That is known.

A Known-Unknown is a question we must address but we don’t have the answer yet.  In our book example, this might be the cost of the original research. We don’t know if there will be any cost or not.

An Unknown-Known, is very similar to number two and can be confusing. We know something will be a factor. We just don’t know how much. Following our book example, this might be printing costs.  We know definitely that it will cost something to print the book. We just don’t know how much. Therefore, the difference between items two and three is not knowing if something is a factor that needs consideration and knowing it is a factor, just not to what extent.

Item number four, Unknown-Unknowns, is the most important because it is the least understood.  Therefore it is the most risky. It covers things we just don’t know at all. In Colin Powell’s 40/70 rule, it would be all those things above 70 percent that we will just have to deal with when they come up.

Reducing Risks

The goal of project management is to push all the “Unknowns” into the “Known” category.  The fewer the surprises, the more likely the project will be a success. The best planners start with a list of known requirements.  If they know an item “could be a factor”, they find out and then determine how much it “will” affect their project. Then they get into the most time consuming phase of planning and that is imagining anything that could be an issue.  It is the “what if” thinking that could kill a project in its tracks.

  • What if there is strong public opposition?
  • What if permits won’t be granted?
  • What if there is a hurricane?
  • What if there is no demand for our product?
  • What if our suppliers can’t meet deadlines?

We can never know the answers to these what-ifs but we can generally obtain at least enough information to make an informed decision. At this point, the project manager must assign contingency resources.  It might take the form of emergency funds for legal fees or costs to meet public demands. Whatever it is, the project manager can’t just hope things won’t go awry and sometimes, there is enough uncertainty to make your project unfeasible.  It is up to you, the project manager, to learn enough so upper management can make that decision.