How do you solve a problem like uncertainty?

Uncertainty is an inevitable consequence of undertaking anything but the simplest of projects. Whether the project is introducing a new business process or building an offshore oil platform sooner or later you’re going to be affected by it. So what is uncertainty?

One of the best definitions I’ve come across is by Frank Knight in his book “Risk, Uncertainty, and Profit” written in 1921. Essentially risk is measurable and quantifiable, uncertainty is neither. It is precisely this difficulty in pinning it down that makes managing uncertainty so difficult.

“Black Swans” and other animals

In his popular 2007 book ‘The Black Swan’, Nassim Nicholas Taleb talks about the psychological biases that blind us to uncertainty and about our need to accept and prepare for it as a fact of doing business.

Uncertainty within projects comes in a number of flavours resulting in outcomes ranging from minor contract variations to outright chaos. Unfortunately for those of us involved in delivering projects our existing tools and processes struggle to engage with uncertainty. According to PWC’s bi-annual global survey on the state of project management, 86% of projects fail to deliver against budget, schedule, scope, quality and benefits baseline. Uncertainty is a common thread – the top two reasons for project failure are identified as poor estimates in the planning phase and mid-project changes in scope. It’s the unpredictable “below the surface” unknowns that trip us up.


fig 1a

Converting data and information into knowledge

Data exists in many forms and many places on projects. The processing of this data into something useful creates information (who, what, where, and when). The application of this data and information creates knowledge and understanding (why and how), and as we all know knowledge is power.

This conversion of data to knowledge is unfortunately one element that projects frequently neglect in their rush to ‘deliver on time, on budget’, it affects not only their ability to create value but also their ability to deliver efficiently. There are any number of ways of converting information into knowledge; however, they all consist of the same basic steps of observation, collection, organisation, analysis, and synthesis. They key to consistently achieving this conversion in a project context is to provide a structured means to ensure the uncovering and aggregating of ‘private’ information held by individuals to inform, create and share a common project framework for understanding.

Managing the unknown – Adaptive projects

The game changer in managing uncertainty is to build a project execution approach which builds in adaptability to change, where change may be in terms of requirements, evolving knowledge or new information. The incremental agile methods that originated in software development do just this. Agile approaches are characterised by their iterative learn and respond cycles, ability to manage and incorporate emerging information and the ability to apply methods flexibly from a range of options available.

Table 1

Adapted from “Managing Project Uncertainty: From Variation to Chaos

The only way to plan for uncertainty is, unfortunately, to plan for uncertainty. So if this is the type of journey you’re planning, make sure you’ve packed appropriately.