Friday, December 29, 2017

Project Uncertainty and Project Management Methodology

The Project Uncertainty Matrix, based upon work developed by Robert Wysocki and presented in his book, Effective Project Management. considers two factors: 1) how well the project requirements are understood at the beginning of the project, and 2) whether the specific tasks, activities, and decisions needed to conduct the work of the project are known at the beginning of the project. In my use of this matrix, shown below, I have modified it from the original used by Wysocki to add a category of projects in the lower left corner of the matrix. This will be discussed in more detail below.

The upper left quadrant of the Project Uncertainty Matrix is described as the Traditional project management approach. This is the set of conditions that many project management methodologies assume will exist on all projects; the requirements are fully and completely known at the beginning of the project and the methodology best suited to meet those requirements is known and understood by the project team. Many of the books and academic courses on project management also assume these conditions or they direct the project team not to proceed until these conditions exist. The upper right quadrant of the Project Uncertainty Matrix is described as the Adaptive project management approach. This is the condition of many projects, especially in the cases of product development projects and business improvement projects. These projects are initiated with a clear goal in mind. However, due to the nature of the work to be done within the project, the specific activities are not known, or the level of effort required to conduct some project activities is unknown. For example, the project may require software development. Seldom is software operating perfectly when first created. There is likely to be bugs that must my analyzed and fixed. The amount of time required for bug-fixing cannot be precisely estimated until the number of bugs is determined. The lower left quadrant of the Project Uncertainty Matrix is described as the Discovery project management approach. The application of this approach is much less frequent than the other approaches. In fact, Wysocki does not even acknowledge the existence of this approach. However, my experience has found that these conditions do occasionally exist. This approach is applicable when there is a defined project management process or methodology to be applied, but the end result of the project is unknown and unpredictable. The types of projects where I have seen this approach effectively applied are research-based projects. The lower right quadrant of the Project Uncertainty Matrix is described as the Extreme project management approach. Almost all projects find themselves in this situation at some point in time due to changes in stakeholders or requirements. Many projects start in this situation and never recover. An objective with the Extreme project management approach should be to migrate the project into either the Adaptive approach, the Discovery approach, or possibly even the Traditional approach as soon as practical. Extreme conditions are commonly caused by a "crisis" in the project. A change in business or project conditions leads to significant uncertainty in some aspect of the project goal or business result. This uncertainty in the goal introduces the need for the project team to establish a fundamentally new project plan. During this time of crisis, neither the goal or the required project activities are clearly defined. Even though everything about the project is unsettled, there are project management principles that can still be applied. These are the principles of the Extreme project management approach.

Traditional Project Management

Traditional projects are those where both the project goals and project activities are clearly defined at the begining of a project. When a project meets this set of assumptions, a detailed project plan can be established at the beginning of the project. That detailed plan identifies all of the tasks needed to achieve the clear project goal. In addition, the detailed plan includes the resource, often by name, who will do the activities and can realistically estimate how much effort the resource will require to do the work. Given the identification of the resource and the estimated effort required to do the work, the estimated budget and schedule for the project can be established. At this point a detailed plan exists and project risk management activities and project control activities can begin to monitor the implementation of the plan and ensure the successful completion of the project. In this approach, the project plan is the "controlling" document. Whenever questions about project activities or project progress arise, the plan determines the response. When a project team is fortunate enough to be working with a project that fits the criteria of Traditional project management they should certainly take advantage of that fact and plan the project in detail and control the project to the plan.

The major difficulty with this approach is that often the projects don't fit the set of assumptions that Traditional project management is based upon. When the goal is uncertain, or is in flux, or the necessary project activities are unknown, the application of a Traditional project management methodology leads to one of two problems. Either the project is excessively delayed in an attempt to gain enough information to fully define the goal and the required activities, which leads to missed opportunity and delayed strategy deployment. Or, a project plan is put in place that the project team knows is not correct, but they don't know with certainty what the deficiencies might be. This latter condition leads to cynicism about the value of project planning and project management among the entire team. In addition, the stakeholders and senior management may not realize the high level of uncertainty and risk inherent in the plan because they don't realize that fundamental assumptions about the project were untrue. That condition often leads to unrealistic assumptions by the stakeholders and disillusionment in the project management skills of the project team.

Adaptive Project Management

Adaptive projects are those with clearly defined goals but uncertain tasks and activities needed to achieve those goals. When project conditions meet the criteria of an Adaptive project, the methods of project management used for Traditional projects will not work well. A detailed list of activities, typically documented in a Work Breakdown Structure, can not be developed. Without this detailed list of tasks, a precise schedule, budget, and resource list can not be determined.

However, just because these detailed elements of project planning and control that are used in Traditional project management are not available, it does not mean that the project can not be managed at all. The approach that has proven to be successful with Adaptive projects is progressive elaboration, also known as "rolling wave planning and control." In this approach, a high-level project plan or outline is established based upon the major project deliverables, key milestones and project decisions that must be made to achieve the goal of the project - which is known and understood. this high level plan is the key to success and the project is managed based upon the high-level plan. Once the high-level plan is set, a detailed plan leading up to the first milestone or decision point is developed. This first stage of the project is approved and executed. As the first stage completes, a detailed plan leading to the next milestone or decision point is developed. This second stage plan builds on the results of the first stage. Many aspects of the project that were not known at the beginning of the project may now be clear, allowing the project management team to develop a realistic plan for the second stage. This process continues throughout the project from stage to stage until the project goal is achieved.

This approach to project management is more complex than the Traditional project management approach. However, when there are major risk items that will significantly influence the scope, schedule or budget of the project and these items are unpredictable and uncontrollable, this approach provides both the project management team and the business leadership with opportunities to control the project. When an activity takes longer - or shorter - than planned or a new activity is recognized as required in order to complete a project deliverable, the detailed plan is modified, but the high-level plan does not change. The project team still strives to achieve the milestones or decision points but they modify the approach used to get to that point. Every new stage is a decision to continue or cancel the project based upon what happened in the previous stage. If the decision is to continue, the new stage is an opportunity to shift the project scope and approach based upon the information learned with respect to the probability and impact of these major risks. This approach relies on the establishment a high-level plan consisting of major milestones and decision points. This is often called a stage-gate or toll-gate project management approach. Unless the high-level plan is established and the project team actively controls the project to reach those points, the project is likely to run amuck, resulting in massive overruns and delays.

Discovery Project Management

When a project meets the criteria for Discovery projects, the Traditional project management approach will not work. Key aspects of the goal can not be defined, therefore the scope, schedule and budget cannot be defined. However, what can be defined for this type of project is the set of detailed activities and interactions that will be used to generate and analyze data. A well-defined project approach is necessary for these projects to ensure that nothing is overlooked and that the data that is generated and analyzed has not been compromised. For these projects, a proposed methodology is developed and approved as the project plan. Decision points are then setup that are usually based upon calendar or budgetary events, such as quarterly reviews, end of the semester, or annual budget requests. At these decision points, the results of the project during the preceding project phase are reviewed and the senior leadership decides whether the project should be continued in its current approach, the approach should be changed, the project is cancelled, or the result is deemed a success and the technology is promoted onto a new project that is initiated to apply and realize the business benefit of the discovery.

This approach requires disciplined project management to ensure that the plan for each phase is followed. The pace of Discovery projects is typically limited by the level of resources that is being assigned to the project. The greater the amount of resources, the greater the amount of data and analysis that can be done. Decisions at the decision points are based upon the strategic needs of the business and the characteristics of the results achieved during the previous phase. Thomas Edison is quoted as saying, "Results! Why, man, I have gotten a lot of results. I know several thousand things that won't work." Discovery projects are often like that. The value of project management in these projects is to ensure that the effort is not executed in a random or haphazard manner. Also, clearly defined project budgets can be set and managed with this approach. A result of project control with this approach is the generation and control of project records, both technical and financial.

Extreme Project Management

A maxim of project management is that the project management team's responsibility is to control the project risk. Once a project enters the Extreme quadrant, there are many major undefined and unquantifiable risks. The project management team focuses the efforts of the Extreme project on defining, eliminating, reducing, or quantifying the risks. In fact, risk management is the organizing principle for the project during the time it is operating in the Extreme quadrant.

When operating in the Extremen mode, the project management team identifies tasks and activities that must be completed to gain insight and understanding about the risks and uncertainties within the project. These would include meetings with stakeholders, analysis by subject matter experts, and preliminary trials of possible ideas or approaches. Many times the result of one activity impacts the nature of the next activity as information becomes available, project options are excluded and new options are identified. While it is impossible to plan the overall project scope and activities in this environment, the activities for each day, week or shift can be planned; one day, week or shift at a time.

Not only ie there uncertainty in the tasks and activities, often there is also uncertainty in the human resources and budget needed for the project. To minimize the risk in Extreme projects, a dedicated team of subject matter experts should be assigned during the time the project is operating in the Extreme mode. Many companies refer to these as Tiger Teams or Action Teams. Due to the high degree of uncertainty in tasks and activities, there is also a great deal of uncertainty with respect to the overall project schedule. However, elements of uncertainty with respect to schedule can be minimized. This is done by ensuring all tasks are of a short duration so that progress can be continuously assessed. If the activity is inherently long, interim check points are established so that progress within the activity can be monitored. An additional element of uncertainty in scheduling is associated with the relationship between activities. As the scope is unfolding within the Extreme project, the relationship between activities may change. It becomes imperative for the project management team to be regularly assessing what activities are required and/or desired predecessors for upcoming tasks or activities and ensuring that those activities are completed.

By this time, what should be clear with respect to a project management approach for Extreme projects is that the project is planned and executed on a very short cycle, pulsing pattern by a dedicated team of subject matter experts. This group does the work within a project pulse, for example the work for one day. At the end of the day the project management team gathers and reviews the information and progress made. Based upon that review, a new set of tasks are planned for the next day and resources assigned to do those tasks. At the end of the next day the next assessment occurs and a plan for the next day is developed. Ultimately, the project team is able to resolve enough risk items so as to clarify the goal, the required activities or both and then transition the project into an Adaptive, Discovery, or Traditional approach.

The Extreme project management approach appears at first to be the antithesis of project management. There is no long term plan, there is no project baseline to use for control, and there is no estimate on total time, total cost, or final project result. However, the conditions that cause a project to transition into the Extreme mode are very real. In my experience, many if not most projects will face the Extreme condition at some time during the project, or with respect to some major aspect of the project. Therefore, it is necessary to have a project management methodology that both recognizes when Extreme conditions exist and how to manage the project through that time. Often we find that both the project teams and senior management recognize when a project enters the Extreme mode. For instance, if an industry downturn causes management to direct the team to reduce the project scope and change the project schedule to accommodate a 50% budget cut, everyone recognizes that the project is temporarily in an Extreme mode until a new baseline can be established and the project transitions back to Adaptive, Discovery, or Traditional.

Usually the problem is not one of recognizing that Extreme conditions now exist, rather it is changing the project management approach due to those Extreme conditions. Often we find project management teams and senior management trying to manage the project using a Traditional approach during Extreme conditions. This leads to frustration, mis-information, and poor decision-making. I have heard the rapid pulsing process approach described as micro-management. I am not surprised at the comment since this is micro-management. The project management team is responsible for managing risk. When a project transitions to the Extreme mode, virtually everything is a risk and therefore everything must be managed simultaneously. The project management team is responsible for resolving all of the risks and must stay aware of all them. A key to success when managing in this fashion is to ensure that the project pulsing is maintained and the redirection of the project that is set at each pulse is always driven by the major risks facing the project at that time.

Operating in this mode for a sustained time will exhaust the project management team and most of the project team members. In addition, senior management often becomes frustrated with the team since it is unable to provide an overall schedule, budget, or even a description of what the project will be able to deliver. When the project management team and senior management work together to clarify goals and activities and work together to reset project boundaries, the uncertainty of Extreme project management is minimized.