The Uncertainty Principle

09 October, 2014

If you are an advocate of Murphy’s Law – what can go wrong, will – then you are unlikely to spend much time reading the Project Risk Management chapter of the Guide to the Project Management Body of Knowledge (PMBOK® Guide). If risks are going to happen anyway, why not just build the contingency plans straight into the schedule and be done with it?

However, if you have studied risk – as part of your Project Management Professional (PMP)® training or just out of interest - you will have learned very early in your researches that a risk is an uncertainty. It could be a threat to the project – what we instinctively think of as a risk - but it could also be an opportunity. Confusingly, the same uncertainty could be viewed both as a threat and an opportunity!

For instance, the big three U.S. car companies – General Motors, Ford and Chrysler – have fought both safety and emissions legislation from the start. General Motors went to the extent of promoting as “fact” that it is safer to be thrown from a vehicle than to be strapped in. A surprising number of Americans believe this to be true today. The Big Three also stated that emissions targets could not be met in the early 1970’s, until Honda produced an engine that easily conformed. Today you see companies like Renault boasting about the five-start NCAP crash test ratings their products have and every car maker today seems to promote its wares as means of transporting more and more airbags around. In Ireland now, cleaner engines mean lower taxes and higher sales.

So Project Risk Management should not be simply an exercise in finding out what can go wrong and what to do if it does. It should be considered a chance to decide among a range of possible actions. Ideally, risk identification and analysis should explore ways of turning threats into opportunities.

The starting point for this process should be the Project Charter. In here the Project Sponsor should have identified Assumptions and Constraints. Assumptions are obvious risks. Suppose we are assuming that a third-party will supply a sub-assembly of our new product on such a date, well that is a risk. What happens if the product is late, or does not work as expected? Allocating extra time to the Control Procurements process could help, as well as choosing the most appropriate form of contract. Another option could be to commission a second supplier to produce the same sub-assembly.

Of course, all Project Managers love constraints – if we did not have them, there would be little need for Project Managers. On the surface, constraints look like fixed conditions that we just have to deal with. But they too contain uncertainty. If we are creating something for a specific trade show, what happens if we are late? Is there a subsequent show we can launch at, or should we organize the work differently so that we can show something – even if it is not fully functional?

Often, companies hold off on package design until the technicalities of the system’s internals are fully specified. This is to ensure that packaging will fit around the device and provide all the necessary access – buttons, sockets, screens, etc. However, involving the package designers earlier can lead to a convincing “product” for the show stand. It can also help the engineers because the designers often offer useful hints related to manufacturing complexity.

Another constraint could be conformance to a standard. This again is a risk: will that standard be updated by the time we get to market? Instead of passively awaiting events, the company might get involved with the standards body –at a minimum to a level where it gets updates on how the standard is emerging. However, instead of trying to determine when the next edition of the standard is out, why not go one step further and become part of the standard setters – influencing where the standard is going? Again, try to make an opportunity out of a constraint.

 Werner Heisenberg (the physicist, not Walter White) is famous for his Uncertainty Principle – you either know the position of a particle, or its velocity, but not both at the same time. This is because observing a particle involves shining light on it; the light transfers energy to the particle, increasing its speed, or changing its direction. For Project Managers, the Uncertainty Principle seems often to translate directly into Murphy’s Law. But even if everything that can go wrong will go wrong, having identified the possibilities and devised mitigation plans, there is a much better chance that we will be able to cope.

Project Risk Management is covered in Velopi’s PMP® exam preparation courses. If this is of interest to you, please visit our training page or contact us directly. For your convenience, our PMP® training is carried out in Dublin, Cork, Limerick and Galway.

By Velopi Seamus Collins

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