Fundamental uncertainties in projects and the scope of ...

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INTERNATIONAL JOURNAL OF

PROJECT MANAGEMENT International Journal of Project Management 24 (2006) 687–698 www.elsevier.com/locate/ijproman

Fundamental uncertainties in projects and the scope of project management Roger Atkinson a, Lynn Crawford a

b,c,*

, Stephen Ward

d

Business School, The Institute of Business and Law, Bournemouth University, Christchurch House, Talbot Campus, Fernbarrow, Poole, BH12 5BB, UK b University of Technology, Sydney, P.O. Box 123, Broadway NSW 2007, Australia c ESC Lille, Avenue Willy Brandt, 59777 Euralille, France d School of Management, University of Southampton, Highﬁeld, Southampton, SO17 1BJ, UK

Abstract This paper builds on discussions that took place over a series of meetings in the UK of the Rethinking Project Management Network. The management of uncertainty is seen as a necessary condition for eﬀective project management. Sources of uncertainty are wide ranging and have a fundamental eﬀect on projects and project management. These sources are not conﬁned to potential events, and include lack of information, ambiguity, characteristics of project parties, tradeoﬀs between trust and control mechanisms, and varying agendas in diﬀerent stages of the project life cycle. Common project management practice does not address many fundamental sources of uncertainty, particularly in ‘soft’ projects where ﬂexibility and tolerance of vagueness are necessary. More sophisticated eﬀorts to recognise and manage important sources of uncertainty are needed. Such eﬀorts need to encompass organisational capabilities, including some aspects of organisation culture and learning. Ó 2006 Elsevier Ltd and IPMA. All rights reserved. Keywords: Uncertainty management; Hard and soft projects; Trust; Organisational capabilities

1. Introduction This paper is concerned with the kinds of uncertainty present in projects, and what might be done to manage them. The paper builds on discussions that took place during meetings of the UK EPSRC funded Network on Rethinking Project Management over the period 2004– 2006. Early on views about uncertainty in projects were summarised in a series of learning propositions to orientate further discussions. In developing this paper, previous work of the authors was an initial base, but perspectives and issues that emerged from the network presentations including case studies and discussions, extended this base. Follow up discussions after presentations largely supported * Corresponding author. Address: University of Technology, Sydney, P.O. Box 123, Broadway NSW 2007, Australia. Tel.: +61 2 9514 8730; fax: +61 2 9968 1274. E-mail address: [email protected] (L. Crawford).

0263-7863/$30.00 Ó 2006 Elsevier Ltd and IPMA. All rights reserved. doi:10.1016/j.ijproman.2006.09.011

the validity and usefulness of the authors’ work, in many instances providing further related insights and questions. Throughout network meetings the presence of uncertainty in a variety of forms was constantly recognised as a central issue. Initial deliberations about uncertainty focused on appreciating the variety of sources of uncertainty requiring management attention and that go well beyond a set of possible events that might impair project performance. This has implications for the development of formalised approaches to project risk management. These approaches need to recognise the full range of sources of signiﬁcant uncertainty associated with any given project. Subsequent network discussion reﬂected on the reasons why project management to date seemed to be lacking in attending to all this uncertainty. One explanation is that conventional project management is too focused on operational planning and control. This prompted reﬂection on how projects with particularly problematic sources of uncertainty might be characterised, and what implications this has for modifying

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or extending a conventional planning and control perspective on project management. In particular, there is a need to recognise that many project contexts are characterised by very high, diﬃcult to quantify, levels of uncertainty where management ﬂexibility and tolerance of vagueness are necessary. Following this line of thought, network discussions concluded that more attention needs to be given to understanding and developing less tangible, but more generic management processes associated with building trust, sense-making, organisation learning, and building an appropriate organisational culture better suited to operating with high levels of uncertainty. The structure of this paper follows the sequence outlined above. Section 2 considers some key areas of uncertainty that warrant serious management attention in most projects. This has implications for the desirable scope of common project risk management processes that augment project management. Section 3 suggests that one obstacle to eﬀective management of uncertainty is that conventional project management does not pay enough attention to conception and end stages of the project life cycle, or to strategic aspects of projects. Section 4 describes a ‘hard’/’soft’ typology of projects that highlights major sources of ambiguity and vagueness that may be problematic using convention plan and control project management. Section 5 brieﬂy considers some implications of ‘softness’ for the scope of project management processes, including the role of trust. Section 6 identiﬁes the importance of organisation infrastructure and in particular the importance of organisational culture and capacity for organisational learning. 2. Uncertainty management as part of project management Much good project management practice can be thought of as eﬀective uncertainty management, clarifying what can be done, deciding what is to be done, and ensuring that it gets done as noted earlier. For example, good practice in planning, coordination, setting milestones, and change control procedures, seeks to manage uncertainty directly. However, common practice does not consider the range of sources of uncertainty present in projects or what a coordinated approach to proactive and reactive uncertainty management can achieve. Three key areas of uncertainty featured in network discussions: uncertainty associated with estimating, uncertainty associated with project parties, and uncertainty associated with stages of the project life cycle.

managers, that estimating activity for planning and control purposes is a critical project management process. The causes of uncertainty about estimates include one or more of the following: lack of a clear speciﬁcation of what is required; novelty, or lack of experience of this particular activity; complexity in terms of the number of inﬂuencing factors and associated inter-dependencies; limited analysis of the processes involved in the activity; possible occurrence of particular events or conditions which might aﬀect the activity; emerging factors unknowable at the start of the project; bias exhibited by estimators, typically optimism bias [1,2]. Thus, uncertainty results from vagueness, ambiguity and contradictions associated with lack of clarity because of lack of data, incomplete and inaccurate detail, lack of structure to consider issues, the working and framing assumptions being used to consider the issues, known and unknown sources of bias, limited control of relevant project players, and ignorance about how much eﬀort it is worth expending to clarify the situation [3]. 2.2. Uncertainty associated with project parties In many projects, particularly large ones, key performance issues are often less related to technology, but rather are related to uncertainty introduced by the existence of multiple parties and the associated project management infrastructure. While employees and other agents of a project owner are essential to the achieving of project performance, they also contribute to uncertainty about future performance. This uncertainty arises from several factors associated with each project party, including [4]: uncertainty about the level of performance that will be achieved; the objectives and motivation of each party; the quality and reliability of work undertaken; the extent to which each party’s objectives are aligned with the project owner’s objectives, and the scope for moral hazard where one party is motivated to do things which are not in the best interests of the project owner; the actual abilities of the party; availability of the party.

2.1. Uncertainty in estimates An obvious aspect of uncertainty in any project concerns estimates of potential variability in relation to performance measures like cost, duration, or quality related to particular planned activities. For example, we may not know how much time and eﬀort will be required to complete a particular activity. It was evident from network discussions, and all the case study presentations by project

In any organisational context including all projects, the introduction of agents is prone to the three problems of: adverse selection, moral hazard and risk allocation. The uncertainties presented by these problems can be substantial [5]. When these agents are diﬀerent organizations, these problems can be particularly challenging. Where project owner and agent(s) belong to the same organization it might be expected that such problems would be less likely

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to arise, to the extent that the parties can share information, responsibilities and objectives more readily. Unfortunately, this is not always the case. In any of these ostensibly cooperative situations, the diﬀerent parties involved are likely to have diﬀerent performance objectives, or at least diﬀerent priorities and perceptions of objectives. One consequence of this is that diﬀerent parties will have diﬀerent perceptions of risks associated with these objectives, and therefore may wish to adopt diﬀerent strategies for managing related project uncertainty. This divergence will be aggravated if diﬀerent parties also have diﬀerent knowledge and perceptions of the nature of sources of uncertainty and diﬀerent capabilities for managing them [3,6].

Table 1 Typical uncertainty management issues in each stage of the project life cycle (Chapman and Ward, [3]. Copyright John Wiley & Sons Ltd., used with permission) Stages of the PLC

Uncertainty management issues

Conceive the product

Level of deﬁnition Deﬁnition of appropriate performance objectives Managing stakeholder expectations

Design the product strategically

Novelty of design and technology Determining ‘ﬁxed’ points in the design Control of changes

Plan the execution strategically

Identifying and allowing for regulatory constraints Concurrency of activities required Capturing dependency relationships Errors and omissions

Allocate resources tactically

Adequate accuracy of resource estimates Estimating resources required Deﬁning responsibilities (number and scope of contracts) Deﬁning contractual terms and conditions Selection of capable participants (tendering procedures and bid selection)

Execute production

Exercising adequate coordination and control Determining the level and scope of control systems Ensuring eﬀective communication between participants Provision of appropriate organizational arrangements Ensuring eﬀective leadership Ensuring continuity in personnel and responsibilities Responding eﬀectively to sources which are realized

Deliver the product

Adequate testing Adequate training Managing stakeholder expectations Obtaining licences to operate

Review the process

Capturing corporate knowledge Learning key lessons Understanding what success means

Support the product

Provision of appropriate organization arrangements Identifying extent of liabilities Managing stakeholder expectations

2.3. Uncertainty associated with stages in the project life cycle Many signiﬁcant sources of uncertainty that need to be managed in projects are associated with the fundamental generic management processes that make up the project life cycle. A fair number of sources are implicitly acknowledged in lists of project management ‘key success factors’ such as those oﬀered by Gallagher [7]. Potential sources typically identiﬁed in this way are listed in Table 1 against various stages of the project life cycle. (By presenting Table 1 we do not mean to imply that projects can be characterised as a simple linear process, or simply in terms of the stages listed, but the scope of stages and level of detail is suﬃcient for present purposes. Ward and Chapman [8] provide a more detailed description of project life cycle stages and possible complications in practice.) All of the uncertainty management issues in Table 1 are best addressed very early in a project and throughout the project life cycle and should be informed by a broad appreciation of the underlying ‘root’ uncertainties. Chapman and Ward [3] oﬀer a six Ws framework for this purpose based on the following six questions about a project: 1. 2. 3. 4. 5. 6.

who are the parties ultimately involved? what do the parties want to achieve? what is it that each party is interested in? which way (how) is each party’s work to be done? what resources are required? when does it have to be done?

Understanding the uncertainty associated with each of these basic questions, and the implications of interactions between them, is fundamental to eﬀective identiﬁcation and management of project risk. Use of the six Ws framework from the earliest stages of the project life cycle can usefully inform development of project design and logistics by clarifying key sources of uncertainty. In particular, failure to clarify stakeholder expectations and priorities at an early stage can cause major diﬃculties later in the project. A common source of diﬃculty in projects is a failure to carry out the design and plan stages thoroughly enough. Thus a project proceeds through to execution with insuﬃ-

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ciently well-deﬁned speciﬁcations for production. During execution this gives rise to diﬃculties necessitating additional design development and production planning, and consequently adverse eﬀects on the performance criteria of cost, time and quality. This problem of ‘premature deﬁnition’ can be most acute in novel, one-oﬀ projects involving new technology, particularly when key stakeholders attempt to impose unrealistic completion dates or cost targets. Sometimes this can be caused by politically motivated performance criteria, targets, and operating constraints: e.g. budgets too small to allow adequate resources to complete the project by a stated time, or to a given level of functionality [9]. In addition, some uncertainty about operating

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conditions and related factors outside the control of the project manager will always remain. Inevitably, judgments have to be made about the degree of detail and accuracy that is practicable in the design and plan stages. The allocate stage of the project life cycle is a signiﬁcant task involving decisions about project organization, identiﬁcation of appropriate agents by the project owner, and allocation of tasks between them. The sources of uncertainty and risk associated with this stage of any project are considerable, primarily due to the three agency problems of: adverse selection, moral hazard and risk allocation mentioned earlier. Risk allocation is particularly important because it can strongly inﬂuence the motivation of principal and agent, and the extent to which uncertainty is assessed and managed. Insofar as principal and agent perceive risks diﬀerently, and have diﬀerent abilities and motivations to manage sources of uncertainty, then their approach to risk management will be diﬀerent as noted earlier. In particular, either party is likely to try to manage uncertainty primarily for their own beneﬁt, perhaps to the disadvantage of the other party. Even in the same organisation, there can be signiﬁcant issues in allocating risk in a hierarchical structure or between diﬀerent units in the same organisation. Chapman and Ward [6, Chapter 6] explore ‘internal contracts’ to address such issues. A common source of uncertainty in the execution stage is the introduction of design changes. Such design changes can lead to disruption of schedules and resourcing, and aﬀect cost, time and quality measures of performance directly to an extent that is diﬃcult to predict. A potentially serious concern is that changes are introduced without a full appreciation of the knock-on consequences. Apart from direct consequences, indirect consequences can occur. For example, changes may induce an extension of schedules, allowing contractors to escape the adverse consequences of delays in works unaﬀected by the change. Changes may have wider technical implications than ﬁrst thought, leading to subsequent disputes between client and contractor about liability for costs and consequential delays [10–12]. Standard project management practice should establish product change control procedures that set up criteria for allowable changes and provide for adequate coordination, communication and documentation of changes. In the plan stage, looking forward to the deliver and support stages, and developing appropriate responses for key sources of uncertainty, can reduce or eliminate potential later problems at relatively low cost. The key here is identifying which issues need this attention in the plan stage, and which do not. 2.4. Extending project risk management Eﬀective uncertainty management needs to address uncertainty in a broad sense, with the early consideration of all sources of signiﬁcant uncertainty and associated responses. Even when integrated with project management, formal project risk management processes that adopt a

focus on threats will not adequately address many sources of variability and ambiguity. Risk management processes concerned with threats and opportunities will do better, but will still tend to be focussed on uncertain events or circumstances. This does not facilitate consideration of aspects of variability that are driven by underlying ambiguity and lack of information. To address all sources of signiﬁcant uncertainty requires a more explicit focus on uncertainty management as part of managing projects. Particular attention needs to be paid to the parties involved in a project and their respective objectives in three ways. 2.4.1. Treat the deﬁnition of objectives as a key part of managing projects Selecting relevant performance criteria, formulating objectives for these criteria, and modifying objectives, should be regarded as important, even fundamental aspects of project management. 2.4.2. Project management should clarify and manage desired trade-oﬀs between multiple performance objectives Typically, in any given project context, there is more than one performance criterion and associated objective, often even a hierarchy of objectives. The implication is that variations in performance on each criterion are possible and measurable, and hence that uncertainty exists in respect of each of these performance criteria. A simple example is the common presentation of project performance in terms of cost, time and quality related objectives. The cost criterion might be addressed in terms of capital cost or ‘whole life’ cost, and the quality attribute might be divided into technical speciﬁcation, functionality, reliability, and appearance, each of which may be ‘at risk’ to diﬀerent degrees. Objectives may be set for each of these performance attributes, and the project will be ‘at risk’ to diﬀerent degrees with respect to each objective. Active management for performance usually involves making trade-oﬀs between objectives because diﬀerent courses of action involve diﬀerent combinations of uncertainty in respect of the various performance criteria. Failure to recognise these trade-oﬀs and articulate preferred trade-oﬀs can result in ineﬀective and often inappropriate management of risk. For example, to ensure that a project is completed on time is it really sensible to adopt any course of action whatever the cost? In the extreme, performance criteria that are not readily quantiﬁed may be treated as inviolate constraints for management purposes. This may lead to neglect of uncertainty in these performance criteria and failure to manage associated risk, even though these criteria represent important aspects of performance. 2.4.3. Ownership of uncertainty needs explicit consideration Decisions should be made about how uncertainty and associated issues should be allocated to various project parties, recognising as noted earlier, that diﬀerent parties have

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diﬀerent objectives, diﬀerent perceptions of project risk, and diﬀerent capabilities for managing associated sources of uncertainty. 3. The limited scope of conventional project management An emergent conclusion from network discussions was that common perceptions of projects and project management practice do not encompass all the stages of the project life cycle shown in Table 1. This is another reason why common risk management practice often fails to address basic sources of uncertainty that drive problems in the project life cycle. In particular, professional guidelines minimise the role of conception at the front end of the life cycle and support at the tail end. An associated boundary problem is clearly delineating the conception stage and understanding explicitly how this stage is linked to subsequent project life cycle stages (especially design and planning) in relation to determining appropriate objectives, performance requirements, and constraints. Even in other life cycle stages, professional guidelines often fail to distinguish between strategic, whole project considerations, and lower level, operational procedures. Ward and Chapman’s [8] depiction of the design, plan and allocate stages as highly iterative processes comprising a number of development steps, goes some way towards drawing this distinction. However, it seems as if the more procedural (teachable?) elements of these stages receive more attention from trainers of project managers and in project management text books, than the more strategic issues. Unfortunately, it is the latter that includes the most important, fundamental sources of uncertainty. The result is that project management is commonly regarded as concerned with ensuring things get done right, assuming that there is a well deﬁned remit of what needs to get done. With this view, project management is not concerned with thinking about whether the right things are being done, why the project should proceed, or what performance criteria would be appropriate. This may explain why it has been possible for the subjects such as ‘whole life costing’ and ‘value management’ to emerge somewhat separately from traditional project management concepts. Perhaps the conventional common view of project management is essentially to see the project task as a set of processes to ensure a project meets its (predetermined) objectives. Then the whole raison d’etre of project management is to remove (or substantially reduce) uncertainty about meeting speciﬁed objectives. However, project management in this sense is a castle built on shifting sands if in practice objectives are unclear, contradictory, or impossible. Many endeavours recognised and ‘managed’ as projects experience problems for this reason. A common interpretation of a project plan is that it is an attempt to deﬁne an intended future. Project design and planning activity creates a set of plausible working assumptions as a basis to move the project forward. The tools and techniques of conventional project management are very

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useful in the right place. However, they too reinforce a focus on operational planning and control with consequent lack of attention to strategic issues and associated fundamental uncertainty management issues. A view expressed in network discussions was that conventional (common practice) project management processes are concerned with legitimising the project plan, and uncertainty (particularly from fundamental sources) is played down. The project manager is regarded as a convenient recipient of project risk, providing psychological relief to the project owner (if not actual physical relief) from the burden of uncertainty and risk bearing, and someone who subsequently unwillingly serves as scape-goat if things fail to turn out as desired by the project owner. 4. Hard and soft projects In considering the appropriate scope for project management and associated uncertainty management, it is useful to characterise the range of project types and contexts in terms of the scope of uncertainty involved. Conventional project management approaches may be more eﬀective for some kinds of project than others. In practice, the concept of ‘project’ has been broadened from an initial focus on management of largely unitary, standalone projects with well deﬁned and agreed goals and end products, to include multiple projects and programmes that are multidisciplinary, and which are ‘‘not pre-deﬁned’’ but ‘‘permeable, contested and open to renegotiation throughout’’ [13, p. 4]. These two ends of a spectrum are often referred to as ‘hard’ and ‘soft’ but in reality there are a number of dimensions of hardness and softness of projects [14,15]. Projects and programmes may simultaneously exhibit both hard and soft characteristics on these dimensions and these characteristics may change throughout a project life cycle. Crawford and Pollack [14] identify seven dimensions of hardness and softness of projects based on: previous research [16,17], use of the terms ‘hard’ and ‘soft’ in project management practice and literature, and diﬀerences in the philosophical basis of the hard/soft dichotomy [18]. These seven dimensions of hardness and softness are illustrated in Fig. 1. For some projects, goals are generally clear and well deﬁned and goals may be ‘given’ at the start. At the other end of the spectrum, projects may have multiple purposes and there may be diﬀering views and expectations of the outcome of a project. Consequently, goals may be initially ill-deﬁned, emerging as a result of negotiation and consensus building throughout the project. There is also the uncertainty that the ‘real’ purpose for a project is hidden for political, economic, social or technical reasons, while only the secondary or declared reason is being managed. Projects that have tangible end products such as buildings, equipment and machinery, can be represented as physical models and prototypes, providing a basis for clarity in terms of what will be produced. Clarity and agreement

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about the end product are far harder to achieve where the end products of the project are intangible, as in information systems development and organisational and cultural change initiatives. Stakeholders are likely to have diﬀerent interpretations and expectations of what will be produced. Judgement concerning project success is far more diﬃcult to assess in projects with intangible products. Further, if success is to be measured, it will be more likely to rely on qualitative rather than quantitative measures that once again will be susceptible to diﬀering interpretations and perceptions. Initiatives to extend the ‘Iron Triangle’ of cost, time and quality to include beneﬁts and value criteria have been addressed by such as Atkinson [19]. Where the boundaries of the project are deﬁned by contracts, relationships and project boundaries are deﬁned, and exchange between the project and its environment is amenable to control. At the other end of the spectrum are projects where the boundaries are unclear and permeable. An example is an organisational change project where it is diﬃcult to identify where the project starts and ends. In such cases, scope may be diﬃcult to deﬁne. Project boundaries may be moved or redeﬁned, or subject to diﬀering interpretations by diﬀerent stakeholders. Such projects are often undertaken by staﬀ internal to an organisation who are not isolated from their environment by contractual structures. Staﬀ are often shared with other projects and with functional or line positions, further blurring the boundaries of the projects. Such projects can be highly susceptible to external inﬂuence. Projects that have clear boundaries providing a degree of isolation from environmental inﬂuences allow for the use of tools and techniques of project management such as network planning, risk analysis, and computerised resource allocation and task coordination. As the boundaries of the project become more permeable and projects

Goals/objectives clearly defined

Physical artefact

0

0

Only quantitative measures

0

Not subject to external influences

0

Refinement of single solution

0

Expert practitioner, no stakeholder participation

0

Values technical performance and efficiency, manages by monitoring and control

0

assume more of the characteristics at the soft end of the spectrum in Fig. 1, the use of many of the tools and techniques of traditional project management for dealing with uncertainty become more diﬃcult, less reliable and further removed from reality. For some projects it is assumed that there is one best solution generally developed by technical experts. At the soft end of the spectrum, multiple world views and perspectives are recognised and solutions are developed through negotiations and debate between multiple stakeholders. Where the project involves reﬁnement of a single solution, the path to the known and agreed best solutions is managed. Projects at the soft end may require facilitation of a process for identifying and agreeing on possible solutions. The degree of stakeholder involvement and the expectations of stakeholders in terms of interaction will also aﬀect the ability to reduce uncertainty in the interests of achieving clarity and control. A general observation that arises from the conceptualisation of projects in terms of Fig. 1 dimensions is that projects closer to the hard end of the spectrum are more amenable to uncertainty reduction than those at the soft end of the spectrum where the primary emphasis may be on reduction of ambiguity. This suggests diﬀerent approaches for dealing with uncertainty and stakeholder expectations depending on the nature of the project or programme in terms of hard and soft dimensions. The softer the project against these dimensions, the greater the degree of ﬂexibility, tolerance of vagueness but less so ambiguity, and acceptance of residual uncertainty that will be required of stakeholders in assessing the progress and success of the project. Where uncertainty about future events is high, tolerance of uncertainty may be particularly necessary. Flexibility is necessary in projects where the goals are unclear or open to negotiation, strategy is emergent and the project is

1. Goal Clarity 2. Goal Tangibility

3. Success Measures

4. Project Permeability

5. Number of Solution Options

6. Participation and Practitioner Role

7. Stakeholder Expectations

100

100

Goals/objectives highly ambiguously defined

Abstract concept

100

Only qualitative measures

100

Highly subject to external influences

100

Exploration of many alternative solutions

100

Facilitative practitioner, high stakeholder involvement

100

Fig. 1. Depiction of the hard and soft dimensions framework [14].

Values relationships, culture and meaning, manages by negotiation and discussion

5. Implications of ‘softness’ for the scope of project management Widely available and promoted project and risk management methodologies, tools and techniques have been developed to deal with uncertainty in projects with characteristics primarily at the hard end of the spectrum described above. Associated with these approaches to project management are expectations of clarity and certainty that may not be either feasible or desirable for projects with characteristics that are at the soft end of the spectrum. Such projects may require both diﬀerent approaches and levels of performance expectation. For example, Thiry [20] proposes (see Fig. 2) the use of sense-making and value analysis for projects that are at the soft end of the spectrum where both uncertainty and ambiguity are high. As Fig. 2 suggests, Thiry [20] makes a clear distinction between uncertainty and ambiguity/equivocality. According to Thiry, uncertainty is deﬁned by the diﬀerence between the data required and the data already possessed; it is a ‘lack of information’. Ambiguity, on the other hand, means the existence of multiple and conﬂicting interpretations; it is linked to confusion and lack of understanding. Whereas uncertainty warrants the acquisition of objective information and the answering of speciﬁc questions, ambiguity warrants sense-making, the exchange of views and the definition of situations/problems. Such sense-making is particularly important in the concept stage of the project life cycle, and during preliminary design and planning activities where uncertainty is high and a strategic perspective of context possibilities is important. Unfortunately, if the need for ongoing sensemaking is not acknowledged, later pressures to crystallise plans and subsequent reiﬁcation of the project plan, together with escalating commitment, may increasingly preclude further sense-making as the project progresses. Additionally, lack of time and limited resources may discourage sense-making eﬀorts. Further, such sense-making that takes place may be limited by being inherently retrospective rather than forward looking, and political considerations may produce more concern for plausibility than accuracy.

So

High Ambiguity

Ongoing Conversations

Sensemaking & Value Analysis

Ongoing Operations

Risk Analysis & Problem Solving

H

ar d

Low

highly subject to external inﬂuences. Keeping options open, and adopting a ﬂexible, robust approach may be much more eﬀective than prematurely crystallising plans and relying on conventional control mechanisms to deliver performance. Analysis of projects against this hard/soft dimensions framework provides a basis for questioning assumptions about the nature of projects. When examined in this way, even projects that may initially be considered hard (e.g. construction projects) and therefore amenable to traditional control approaches for dealing with uncertainty and managing expectations, may be found to have some characteristics towards the soft end of the spectrum and visa versa.

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Low

High Uncertainty

Fig. 2. Uncertainty – ambiguity relationship in change situations – adapted from Thiry [20].

Ability to formulate qualitative success measures for projects is another tool that should be added to the project management armoury to assist in managing softer projects. Projects with low uncertainty and ambiguity can generally be assessed using quantitative success measures such as time and cost performance, and measures related to their tangible end products. Projects at the soft end of the spectrum require diﬀerent forms of performance evaluation that recognise the validity of diﬀerent perspectives and worldviews. This calls for ability to develop sensitive performance evaluation frameworks that match the complexity of the project. 5.1. The role of trust As projects take on more ‘soft’ characteristics, the importance of project parties as contributors to project uncertainty increases. Then much depends on the motives of diﬀerent parties, the incentives operating, and the level and type of trust between parties. A root problem is that a project context is more temporary than ongoing operations where routinisation, learning from past experiences, memory of past experiences is easier (more available), the parties are relatively constant, and experimenting and the evolution of optimum practice is possible. The subject matter of the project may involve the creation of artefacts outside the project owner’s capability (buildings, physical infrastructure, software etc) and this necessitates the involvement of outside parties, who may be unfamiliar to the project owner. Such new and temporary relationships increase the importance of trust, since project parties may have little or no prior knowledge of the other parties’ technical or ﬁduciary standards, and there is a lack of time for familiarity to develop from shared experiences or demonstrations of non exploitation of vulnerability. A further problem is that total control over the activities of project parties is neither possible nor desirable.

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An understandable reliance on controls can lead project staﬀ to feel that they are not trusted (and vice versa), and this can have adverse consequences of a moral hazard nature. Moreover, any lack of trust can produce a dynamic that serves to ratchet up control mechanisms’, thus preventing success Coopey [21]. The problem with trust is that it can spiral, both positively and negatively [22], consequently there is always a balance to be struck between the use of controls and trust. An increase in one implies a compensating reduction in the other. Handy [23] argues that where you cannot trust, you have to check all the systems of control involved, to ensure that any gaps in trust are replaced with controls. However, while acknowledging that a mixture of trust and controls are needed, O’Neill [24] argues that ‘all guarantees are incomplete’ and so ‘. . . elaborate measures to ensure that people keep agreements and do not betray trust must, in the end, be backed by trust’. There are a number of beneﬁts related to uncertainty reduction from using trust in place of controls. These include [25]: more accurate risk calculations (through more open communications between project parties), reduced control costs (through for example faster and more eﬀective contracting), teams more eﬀective (through improved conﬁdence), improved planning (through more honest speciﬁcations and estimates). Zaghloul and Hartman [26] discuss the problems of mistrust within construction projects, in terms of the cost savings that can be obtained through reducing the use of exculpatory clauses in contracts and building trust via: understanding project risks and who owns them, allowing suﬃcient time to manage or mitigate the risks, building trust through negotiations prior to a written contract, risk-sharing and the design of appropriate risk-reward systems. If a relationship is to start in a state of mutual trust, it requires prior conﬁdence in the reliability of the other party, otherwise those involved are being asked to trust without evidence that it is safe to do so. One requirement for trust to exist is to have it built-up over time. This can be observed to be taking place when individuals do what they say they will do, thus creating a basis of trust building. However, with project work, there is often limited time to build trust between parties and there is often no history of their behaviour, but the parties still have to work together to achieve the project objectives. Hence formal team-building exercises are often used to build trust as an alternative to something which would have naturally occurred over time. But there can be a problem with these, in that the type of trust operating in team

building workshops is often ﬁduciary, while decision making in projects can often be inﬂuenced by rational economic reasons. Meyerson et al. [27] have termed the trust involved in such circumstances ‘swift trust’. When team members have little knowledge of other team members’ likely actions, ‘swift trust’ is entered into as team members know that they have to trust others in order to move a project forward, but have little evidence of the level of their vulnerability as they do not know other team members. Meyerson et al. [27] studied temporary groups (such as found in weak matrix project structures) and concluded that swift trust is found in high risk, high stake projects, where there is a lack of normative structures and institutional safeguards to minimise things going wrong. To help create trust, Cook [28] advises that uncertainty can be reduced by knowing the competence of other staﬀ while vulnerability can be decreased by the use of enforceable contracts and insurance schemes. Heimer [29] explains the method required to promote a trust strategy ‘. . . worked by reducing uncertainty’ while a distrust strategy is ‘. . . worked by reducing vulnerability’. Overall, Heimer suggests that the trust problem can be solved by manipulating vulnerability and uncertainty about intentions and competence. Similarly, Munns [22] proposed a ‘Graduated and Reciprocated Initiatives in Tension reduction’ (GRIT) model to be followed in a process of continual building of mutual trust during a project. In an attempt to improve the success rate of projects, trust (which takes several forms) should be included formally within the discipline of project management. Trust does not ﬁgure in the current APM Bok version 4 [30] nor the BS 6079 [31]. One way in which trust could be used by practitioners is to include an audit of trust as an element of uncertainty management. A framework for such a trust audit proposed by Atkinson [32] contains the following factors:

vulnerability (to the action of others), credibility (related to both ‘can do’ and ‘will do’), culture (of the organization), visibility (and openness of information).

Each factor relates to diﬀerent types of trust, and questions related to those topics enable a comprehensive view of the trust within a project team to be obtained. These factors could be considered by diﬀerent project stakeholders such as: the Project Manager, Project Board, Quality, Support, Development and the Users to develop as complete an audit as possible. By including a trust audit as part of an uncertainty management process, practical measures of governance can be included to ensure that the balance of trust and control is known and that appropriate measures are put into place. If there is an over reliance on controls in place of trust, organisations must expect and prepare for the dysfunctional behaviour that will follow.

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6. Supporting organisational capabilities All project management activity takes place in a wider organisation context, and how the organisation operates will have a major impact on what can be achieved by its members in terms of project management. Organisation structure, co-ordination and control systems, environmental scanning capability, communications and information systems, knowledge management, and support for organisation learning, all aﬀect the quality and scope of project management undertaken [33]. Such factors deﬁne the basic resources that project management must work with, and they set the tone for how project management will be able (or allowed) to operate. Such factors can enable project management to ﬂourish, or can present barriers to its development no matter how capable and determined the champions of project management eﬀort. Consequently, eﬀorts to improve and broaden the scope of project management need to consider the organisational infrastructure that facilitates project management as much as the particular processes for speciﬁc projects. Organisations which have eﬃcient and eﬀective systems for co-ordination and control, environmental scanning, and organisation learning will be comparatively well placed to foster eﬃcient and eﬀective uncertainty management. Unfortunately, many organisations exhibit deﬁciencies in their approach to uncertainty and learning which can act as barriers to the development of uncertainty management. Sometimes shortcomings in organisational capabilities are not evident until systematic attempts to identify and manage uncertainty are made. The following extract from the executive summary of the Space Shuttle Columbia Accident Investigation Board [34] is instructive of the issues involved: The organisational causes of this accident are rooted in the Space Shuttle Program’s history and culture, including the original compromises that were required to gain approval for the Shuttle, subsequent years of resources constraints, ﬂuctuating priorities, schedule pressures, mischaracterization of the Shuttle as operational rather than developmental, and lack of an agreed national vision for human space ﬂight. Cultural traits and organisational practices detrimental to safety were allowed to develop, including: reliance on past success as a substitute for sound engineering practices (such as testing to understand why systems were not performing in accordance with requirements); organisational barriers that prevented eﬀective communication of critical safety information and stiﬂed professional diﬀerences of opinion; lack of integrated management across program elements; and the evolution of an informal chain of command and decision making processes that operated outside the organisation’s rules. The Board concludes that NASA’s current organisation . . . has not demonstrated the characteristics of a learning organisation.

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Accepting that culture can operate as an organisational control mechanism, the quality of uncertainty management undertaken as part of project management can be driven or at least inﬂuenced by the organisation culture prevailing in associated business units. This culture can be manifest in a variety of ways, such as attitude to: planning, formal procedures, regulations, criticism, mistakes, uncertainty, and risk. These cultural characteristics can either facilitate or hinder the development of uncertainty management. Chapman and Ward [6, Chapter 12] argue that some of the most signiﬁcant barriers to eﬀective uncertainty management are based on unfavourable features of organisational culture. Sometimes these barriers are induced from outside the organisation in the form of convictions, prejudices, biases, and routines of professional groups that can blinker thinking. These may arise from a wish to make decisions eﬃciently in a particular context according to recognised scientiﬁc or professional standards. Such professionally based convictions can strongly inﬂuence diﬀerent groups within the same organisation, making it very diﬃcult to adopt eﬀective uncertainty management processes. However, most organisations also exhibit a number of more generic culture based behaviours or conditions inimical to eﬀective uncertainty management such as ‘conspiracies of optimism’, ‘macho management’, blame culture, and ‘management by misdirection’ [6, Chapter 12]. Essentially such behaviours seem to evidence the diﬃculty management has in coping with complexity and uncertainty. In particular, these behaviours can reﬂect an inability or unwillingness on the part of managers or groups to recognise the diﬀerence between (a) bad management and poor performance due to factors that are not under a manager’s control; and (b) good managers who apply proactive uncertainty management to reduce problems and enhance performance, and managers who are just lucky. Addressing such conditions can be one of the most signiﬁcant beneﬁts of formal uncertainty management processes. 6.1. Learning by experience Knowledge management and learning, both organisational and individual, are major contributors to uncertainty management in a variety of ways. At a very practical level, readily accessible repositories of data from past projects either speciﬁc to the organisation or available from industry sources, are fundamental to the quality of estimates. Availability of reliable data for the estimating and planning of projects in itself contributes to the reduction of uncertainty. However, many organisations fail to collect such data on projects, and even where it is collected it is often not made available for those embarking on new projects or is not analysed and presented in a form that is useful for such purposes. The problem is compounded where new project types are undertaken by organisations. The level of uncertainty may be higher for management of projects in some organisations than in others due to lack

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of data from past projects. Such data may or may not be available from other organisations or industry sources. Even where data on past performance is available, a major challenge is failure to access such inputs during the planning of new projects and therefore failing to learn from experience. There are a number of factors that contribute to this including the organisational culture as discussed above, time pressures and the attitudes and behaviours of project management personnel. Certainly the non-repetitive nature of project work in the context of temporary organisations presents a particular challenge for knowledge management, and transfer of learning. ‘‘Lessons learned’’ is a popular term in the project management literature and amongst practitioners, yet it often masks payment of lip service only to the idea of learning from experience. The capture and re-use of learning from one project to another is generally accepted as something that should be done but it often goes no further than capture. It is often associated with post project reviews where learning has signiﬁcant potential to reduce uncertainty. However, the value of these reviews may be undermined by factors outlined earlier in this paper, including failure to report important lessons for the future due to cultural issues, especially those surrounding perceptions of failure. When a project is ﬁnished, the lessons learned are linked to whether the project was delivered on time within cost and to the agreed quality. The beneﬁts of value management may not be realised for some time after the project is ﬁnished. The question is who writes a post implementation review when the team have been disbanded, who pays, and who would the circulation list of readers be? The excitement of a new project contains energy to get it started while at the end of a project that energy is reduced. However, while Senge [35] presents the need for reﬂection and reviews, unless those lessons change working practices, no organizational learning has taken place. Now compare that with the notion that projects can be described as a temporary organisation: the problems involved in learning within project work start to become evident. So a new method of learning from projects needs to be explored since this is diﬀerent from typical organisational learning. Potential beneﬁts from learning from experience may be aﬀected by the nature of diﬀerent types of projects and their contexts. As outlined in Section 5 above, the nature and degree of uncertainty reduction and therefore control that is possible in projects that satisfy mainstream and a primarily ‘hard’ conception of projects, may not be either feasible or desirable for ‘soft’ projects involving higher levels of abstraction, stakeholder involvement, and residual ambiguity. The same levels of performance expectation, and therefore measures of success, may not be appropriate when applied to diﬀerent types of projects, and this may lead to adverse eﬀects in terms of learning. For instance, projects may be categorised as failures due to unrealistic expectations. This may lead to transfer of lessons that are misleading or discourage honest transfer of learning due to the stigma of failure. If uncertainty is acknowledged,

then it is more likely that an environment conducive to openness and learning can be created. Further, the learning extracted is likely to be more reliable and useful in reducing uncertainty in future projects. 7. Conclusions Discussions of the UK EPSRC funded Network on Rethinking Project Management raised many issues with implications for the fundamental uncertainties of projects and the scope of project management. The network proposed rethinking of the traditional view of projects as having a linear life cycle involving a set of apolitical processes undertaken to achieve an objective or goal ‘given’ at the start, to reﬂect the actuality of projects as social processes requiring ongoing construction of the appearance of certainty and clarity in the midst of complex uncertainty and ambiguity [36]. Some but not all aspects of uncertainty can be categorised and treated as risks, and risk, generally considered as a threat to achievement of project objectives, receives far more overt attention than the broader concept of uncertainty in the traditional view of projects and their management. An inescapable conclusion from the network meetings was that management of uncertainty is a necessary condition for eﬀective project management, but that management of uncertainty needs to be given more attention and be rather more sophisticated than current common practice. This paper has outlined directions for development of project uncertainty management. Sources of uncertainty are wide ranging and have a fundamental eﬀect on projects and project management. These sources are not conﬁned to potential events, and include lack of information, ambiguity, characteristics of project parties, tradeoﬀs between trust and control mechanisms, and varying agendas in diﬀerent stages of the project life cycle. Risk management processes that focus on identifying potential events as threats (or opportunities) will not address many important sources of uncertainty. Further, common practice project management tends not to address many fundamental sources of uncertainty, particularly in the conception and post delivery stages of the project life cycle, or in ‘soft’ projects where ﬂexibility and tolerance of vagueness are necessary. More sophisticated eﬀorts to recognise and manage important sources of residual uncertainty are needed. Such eﬀorts within a given organisation require some attention to organisational culture, capabilities, and the development of appropriate infrastructure [4,33]. At a basic level, there is a need to understand stakeholder tolerance or intolerance of uncertainty in processes and outcomes. Why is uncertainty tolerated? By whom? Inexperienced project owners may be inappropriately intolerant of uncertainty, particularly if they hope to transfer risk and responsibility for managing uncertainty to agents, and projects exhibit a signiﬁcant degree of ‘softness’. This intolerance of uncertainty may induce project management behaviours such as cautious/safe ways of working and

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missed opportunities, the mindless/uncritical/mechanical application of project management principles and techniques, and actions designed to avoid apportionment of blame when things do not turn out as hoped. Conversely contractors may be inappropriately tolerant of uncertainty because of optimism, the felt need to accept risk and associated uncertainty in order to win work, or because of ignorance about the scope of uncertainty present. Replacing ambiguity with vagueness is one possible method of reducing uncertainty. Managing stakeholder expectations is a further method of bringing uncertainty into project discussions. While this might mean that some stakeholders are mildly disappointed at the end of a project, this is preferable to having stakeholders being surprised by the ﬁnal outcome of a project. Managing expectations transfers the uncertainty of surprise into possible disappointment, thus not eliminating the problem, but transferring the nature of the problem to a diﬀerent more manageable form. Uncertainty is created in part by the quality and completeness of information, diversity of interests and susceptibility to external inﬂuences in a project; all of which makes us vulnerable to the action of others. The most economic method of compensating for gaps in information is through trust, of which there are many types and levels, each requiring diﬀerent coping strategies. However, complex projects require the controls of governance. The outcome is for a balance of trust and control, with an acceptance that trust will be ultimately overarching due to the lack of a guarantee of controls. For the practitioner, the link and dynamics between uncertainty, control and trust could be improved if the factors of trust were included in uncertainty management processes. References [1] Buehler R, Griﬃn D, Ross M. Inside the planning fallacy: the causes and consequences of optimistic time predictions. In: Gilovich T, Griﬃn D, Kahneman D, editors. Heuristics and Biases – the Psychology of Intuitive Judgment. Cambridge University Press; 2002. [2] Armor DA, Taylor SE. When predictions fail: the dilemma of unrealistic optimism. In: Gilovich T, Griﬃn D, Kahneman D, editors. Heuristics and Biases – the Psychology of Intuitive Judgment. Cambridge, UK: Cambridge University Press; 2002. [3] Chapman CB, Ward SC. Project Risk Management: Processes, Techniques and Insights. second ed. John Wiley & Sons; 2003. [4] Ward SC. Requirements for an eﬀective risk management process. Project Management Journal 1999(September):37–42. [5] Eisenhardt KM. Agency Theory: An Assessment And Review. The Academy of Management Review 1989;14(1):57–74. [6] Chapman CB, Ward SC. Managing Project Risk and Uncertainty: A Constructively Simple Approach to Decision Making. Chichester, UK: John Wiley & Sons Ltd.; 2002. [7] Gallagher K. Chaos: project success factors, In: Proceedings of Implementing Technology and Project Management Conference, September, 1995, pp. 21–36. [8] Ward SC, Chapman CB. Risk management and the project life cycle. International Journal of Project Management 1995;13(3):145–9. [9] Flyvbjerg B, Bruzelius N, Rothengatter W. Megaprojects and Risk: An Anatomy of Ambition. Cambridge: Cambridge University Press; 2003.

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Uncertainties in AH Physics - mrmackenzie