Project Uncertainty Management

Abstract

The aim of this paper is to discuss the phenomenon of uncertainty in projects and attempt to integrate it as part of project management. Despite the fact that project management discipline has gained a lot of attention in the past decade from both academia and practitioners, there is still considerable potential for development in this field. Recent trends in project management stress the need to re-address the issue of uncertainty. Though one can come across the notion of uncertainty in traditional project risk management literature rather often, there is no common understanding between the scholars as to what this term means. Based on the review of the existing research, I present my own definition of uncertainty as a crucial element in managing projects.

Full text

SSEMPEBWA KIBUUKA RONALD
ID No: UM27624BPR36147
COURSE NAME:
PROJECT MANAGEMENT
Essay Title:
Project Uncertainty Management
ATLANTIC INTERNATIONAL UNIVERSITY
This Is Presented In Fulfillment For The Requirements For A Masters
Degree In Project Management

PROJECT UNCERTAINTY MANAGEMENT
INTRODUCTION:
The aim of this paper is to discuss the phenomenon of uncertainty in projects and attempt
to integrate it as part of project management. Despite the fact that project management discipline
has gained a lot of attention in the past decade from both academia and practitioners, there is still
considerable potential for development in this field. Recent trends in project management stress
the need to re-address the issue of uncertainty. Though one can come across the notion of
uncertainty in traditional project risk management literature rather often, there is no common
understanding between the scholars as to what this term means. Based on the review of the
existing research, I present my own definition of uncertainty as a crucial element in managing
projects.
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 con
fined to potential events, and include
lack of
information, ambiguity, characteristics of project parties, trade offs between trust and control
mechanisms, and varying agendas in different stages of the project life cycle.
There is a high level of uncertainty with both positive and negative effects in any project.
The traditional approach to project management still puts a lot of emphasis on assuring
conformance to time, budget and scope constraints. Considerations, such as continuous
improvement, customer-centric thinking, re
fl
ective learning are often left behind. This leads to
the fact that project companies become less
flexible,
unable to accumulate knowledge and
experience necessary for coping with uncertainty. Moreover, in project risk management
literature, there is no common understanding as to what uncertainty is.

DEFINITIONs:
Project: A project is a unique, transient endeavour, undertaken to achieve planned
objectives, which could be defined in terms of outputs, outcomes or benefits. A project is usually
deemed to be a success if it achieves the objectives according to their acceptance criteria, within
an agreed timescale and budget.
A project is a temporary endeavour designed to produce a unique product, service or
result with a defined beginning and end (usually time-constrained, and often constrained by
funding or deliverables) undertaken to meet unique goals and objectives, typically to bring about
beneficial change or added value. [Wikipedia]
A project is a series of complex, connected activities with a common purpose; our most
common context is a project to develop or refine a program, but principles of project
management apply to most projects. Often program and project are used interchangeably, but
nominally, a program is a larger concept than a project. (A project is a sequence of unique,
complex, and connected activities having one goal or purpose and that must be completed by a
specific time, within budget, and according to specification). [UC davis, 2013]
Management in businesses and organizations is the function that coordinates the efforts
of people to accomplish goals and objectives using available resources efficiently and
effectively. Management includes planning, organizing, staffing, leading or directing, and
controlling an organization to accomplish the goal. [Wikipedia]
Management is often included as a factor of production along with‚ machines, materials,
and money. According to the management guru Peter Drucker [1909-2005], the basic task of
management includes both marketing and innovation. Practice of modern management originates
from the 16th century study of low-efficiency and failures of certain enterprises, conducted by
the English statesman Sir Thomas More [1478-1535]. Management consists of the interlocking
functions of creating corporate policy and organizing, planning, controlling, and directing an
organization's resources in order to achieve the objectives of that policy.

Project management: This is the application of processes, methods, knowledge, skills
and experience to achieve the project objectives.
Project management; is the process and activity of planning, organizing, motivating,
and controlling resources, procedures and protocols to achieve specific goals in scientific or daily
problems. Management is frequently used as an enabler for meeting an uncertain and turbulent
environment. Consequently, the overall effectiveness of the project management process is
essential for long-term profitability. The aim and final effects of project management are to
predict the outcome, i.e. cost, time and quality.
Uncertainty: We de
fine uncertainty as a context for risks as events having a negative
impact on the project’s outcomes, or opportunities, as events that have beneficial impact on
project performance. This de
finition stresses dual nature of uncertainty in potentially ha
ving both
positive and negative in
fluence on the project’s outcomes. Uncertainty can arise from sources
both internal and external to the project. [LeRoy & Singell, 1987]
Uncertainty: in contrast, is an event or a situation, which was not expected to happen,
regardless of whether it could have been possible to consider it in advance. In other words,
uncertainty is when the established facts are questioned and thereby the basis for calculating
risks (known negative events) or opportunities (known positive events) is questioned.
[Own Definition]
Uncertainty: This is a term used in subtly different ways in a number of fields; it applies
to predictions of future events, to physical measurements that are already made, or to the
unknown. Uncertainty arises in partially observable and/or stochastic environments, as well as
due to ignorance and/or indolence. However, uncertainty is inherent in the objectives of the
project itself, as we use assumptions and expectations in defining and realizing the outcome of
the project. A project’s ability to identify and react to uncertainty will influence the outcome of
the project. [Wikipedia]

Another principal de
finition of uncertainty comes from psychology: it is described as a
state of mind characterized by a conscious lack of knowledge about the outcomes of an event.
This description, in contrast with the Knight’s de
finition, allows us to ass
ume that the external
environment is not the only source of uncertainty; the latter can take a form of mental reaction of
a human to the external environment, and thus, is closer to the thoughts of Keynes. In this sense,
uncertainty exists ‘‘in the mind of the person who doubts’’ Similar thoughts have also been
presented by several others. [Atkinson RW, 1999, p. 206]
Kraft discusses the concept of certainty and its relationship to uncertainty and note that
uncertainty presupposes certainty. To be uncertain of a situation, to be in a state of doubt requires
that one takes certain things for granted. Arguing that since we cannot be 100 percent certain we
therefore have a constant state of uncertainty become meaningless as it can be countered with the
question: how can we be certain that we are not completely certain?
However, this does not mean that uncertainty would not exist. Uncertainty can rather be seen as a
state of affairs that arises. [Jauch & Kraft, 1986]
PURPOSE:
The aim of this essay is to discuss and de
fine the phenomenon of uncertainty inherited in
projects and attempt to integrate it as part of project management. Managing uncertainty in
projects cannot be done by similar means as risks or certainties. Indeed, traditional project risk
management tools such as planning, monitoring and control are effective for avoiding risks.
However, such measures are not enough for managing uncertainty in the meaning we have
ascribed to it: implying both risks and opportunities.
This essay is concerned with the kinds of uncertainty present in projects, and what might
be done to manage them. The essay builds on discussions in existing research papers.

RESEARCH FINDINGS:
Conventional project management is too focused on operational planning and control.
This has prompted re
flection on how projects with
particularly problematic sources of
uncertainty might be characterized, and what implications this has for modifying or extending a
conventional planning and control perspective on project management
Risk itself is traditionally described as an uncertain event, which gives some scholars
ground to argue that project risk management should be referred to as project uncertainty
management The new trend challenging traditional view on project risk and uncertainty
management originally emerged from strategic management literature and represents a critical
insight into the role and in
fluence of strategic planning on the performance of a project company
.
The main assumption is that planning of project activities at an early stage is necessary, but not a
sufficient criterion for project success. Taking into consideration that projects are complex
endeavours with restrictions in time, costs, resources and precise speci
fications of the product to
be delivered, planning seems to be a difficult task. However, there are constraints and unclear
areas, that neither customer nor the project company is able to recognize at an early stage.
[Gallagher, 1995]
Project managers are often expecting a number of risks to occur, which will be similar
from project to project. According to Davies et al. [2001], project managers can employ
experiences gained through the course of one project to the next one in the form of standardized
successful processes and procedures. In our opinion, repetitiveness of these procedures not only
from one undertaking to another one, but also at different stages of the project is the core element
in success of project risk management practices. At the same time, these measures aimed at
accumulating knowledge facilitate management of uncertainty by providing basis for re
flective
processes which in turn help to reduce uncertainty by transferring it into known risks and
opportunities.

VERSIONS OF UNCERTAINTY:
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 planned. 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 many researchers’ discussions: uncertainty associated with estimating,
uncertainty associated with project parties, and uncertainty associated with stages of the project
life cycle. [John Wiley & Sons; 2003]
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 researchers’
discussions and all the case study presentations by project 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:
1. Lack of a clear speci
fication of what is required;
2. Novelty, or lack of experience of this particular activity;
3. Complexity in terms of the number of in
fluencing factors
and associated inter-
dependencies;
4. Limited analysis of the processes involved in the activity;
5. Possible occurrence of particular events or conditions which might affect the activity;
6. Emerging factors unknowable at the start of the project;
7. Bias exhibited by estimators, typically optimism bias

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 is worth expending to clarify the situation. [John Wiley & Sons; 2003]
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:
[Project Management Journal 1999]
1. Uncertainty about the level of performance that will be achieved;
2. The objectives and motivation of each party;
3. The quality and reliability of work undertaken;
4. The actual abilities of the party;
5. Availability of the party.
6. The extent to which each party’s objectives are aligned with the project owner’s
objectives, and the scope form moral hazard where one party is motivated to do things
which are not in the best interests of the project owner;
In any organizational 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. [Project Management Journal 1999]

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 to arise, to the extent that the parties can share
information, responsibilities and objectives more readily. [John Wiley & Sons Ltd. 2002]
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. [John Wiley & Sons;
2003]
Uncertainty associated with stages in the project life cycle; Many signi
ficant 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 .we do not mean to imply that projects can be characterized 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. [Gallagher, 1995]
All uncertainty management issues are best addressed very early in a project life and throughout
the project life cycle and should be informed by a broad appreciation of the underlying ‘root’
uncertainties. Chapman and Ward offer a six Ws framework for this purpose based on the
following six questions about a project:
1. Who are the parties ultimately involved?
2. What do the parties want to achieve?
3. What is it that each party is interested in?

4. Which way (how) is each party’s work to be done?
5. What resources are required?
6. 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 identi
fication 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. [John Wiley & Sons Ltd, 2003]
The real “difficulty” project managers meet is making an optimal choice among the
alternative actions, which requires knowledge about outcomes of preceding activities.
In support of the latter ‘‘strategic’’ trend, it must be said that projects are unique only to a certain
extent. The main danger in this respect is that the acquired knowledge will be lost after the
project has
finished.
By standardizing and modularizing processes and procedures, making the
gained experiences easily accessible within project team there is a greater preparedness to be
more
flexible in accordance to the various situations occurri
ng. [John Wiley & Sons Ltd, 2003]
Adding to that the fact that the project and its environment are in continuous process of
change, there is obvious importance of re
flecting in order to foresee potential
dangers and
opportunities to the possible extent .Thus, projects are better described as journeys of exploration
in given direction, rather than strict plan-following endeavours. Projects are very complex and
uncertain, which emphasizes the need for greater
flexibility and reflection as
a new way of
generating knowledge and functioning. [Project Management Journal 1999]
Distinguishing risk from uncertainty; Project risks originate from the uncertainty that
is present to a different extent in all projects. Project risk is ‘‘an uncertain event or condition that,
if occurs, has a positive or a negative effect on at least one project objective, such as time, cost,
scope, or quality’’. Causes or conditions of risk, according to the same source, arise from the

project’s or organization’s environment, such as on-going multiple projects, poor management
practices, dependency on external participants, etc. [John Wiley & Sons; 2002]
Uncertainty is not a self-explanatory term, and we consider it of importance to distinguish
it from the term ‘‘risk’’. According to the description of risk presented above, one can make a
conclusion that risk is uncertainty. However, these two phenomena are not synonymous; they are
better described as cause and consequences. Making a distinction between uncertainty and risk is
necessary in order to be able to explain the in
fluence of these on project performance.
From managerial perspective, de
fining uncertainty is an
important element of performance-
oriented project risk management. [John Wiley & Sons; 2002]
Most research in this
field has
focused on identifying and prescribing ways managers can
either reduce or absorb the negative consequences of environmental uncertainty, which has been
recognized as an important variable in the explanation of organizational stability and
performance. Adepts of organization theory often depict uncertainty as ‘‘emanating from some
set of objective (but largely unmeasured) environmental characteristics’’.
In the similar vein, project risk management scholars describe uncertainty from the point
of view of not only negative impact on the project outcomes and danger of not meeting project’s
objectives, but also as changes that might bring new opportunities into the project. Thus, risks
are understood as one of the implications of uncertainty, in contrast to traditional risk
management approach, assuming risk is uncertainty. Such interpretation has given ground to a
new trend in project risk management science referred to as project uncertainty management.
[Chapman &Ward, 2003]
For the most part, project uncertainty is described by project uncertainty management
school as probability that the objective function will not reach its planned target value, or as an
unknown probability of occurrence of an event. From this perspective, uncertainty is closely
related to project performance measures: time, budget, scope and quality. This approach has

certain similarity with traditional project management in sharing the view that the planning
procedures are crucial for the project success. However, project planning and documentation is
seen not only as an administration and statutory requirements, but as means of information
collection, integration, evaluation and proactive decision-making. [Chapman &Ward, 2003]
Describing uncertainty in terms of probability is not new to project uncertainty
management scholars. The classic distinction between risk and uncertainty comes from
economics, particularly from the seminal work of Frank, Knight Risk, Uncertainty and Profit.
Knight states that risks are events subject to known or knowable probability, whereas uncertainty
refers to events for which it is impossible to specify numerical probabilities. [John Wiley &
Sons; 2003]
Some scholars argue that this de
finition is no
t valid. Knight’s thoughts are somewhat
similar to the distinction that is used in decision theory, which denotes by uncertainty ‘‘a
condition of the environment of the decision maker such that he
finds it impossible to assign any
probabilities whatever to possible outcomes of an event’’ [John Wiley & Sons; 2003, p. 206]. In
other words, uncertainty is referred to all situations where a single action may lead to alternate
consequences.
Hence risk is assumed as a condition in the environment in which the decision-maker
presumes him or herself able to give probabilities to outcomes of events, each probability being
greater than zero. For the purpose of our study, another description derived from the same work
by Knight is of relevance. According to it ‘‘the word ‘‘risk’’ is ordinarily used in a loose way to
refer to any sort of uncertainty viewed from the standpoint of the unfavourable contingency, and
the term ‘‘uncertainty’’ similarly with reference to the favourable outcome; we speak of the risk
of a loss, the uncertainty of the gain...’’ Knight’s explanation of profit as a reward for bearing
uncertainty stresses the understanding of uncertainty not only as risk or danger, but also as
opportunity. However, this view seems to be limited as well. [Frank H. Knight, 1974]

Keynes made a distinction between risk and uncertainty in the similar vein. ‘‘For him,
uncertainty was a state in which individual actors
find it impossible to attribute a reasonably
de
finite probability to the expected outcome of
their choice’’. Keynes perceived uncertainty as
inherent in economic life - like a rule of the game. If the rules are known, we are able to calculate
possible outcomes and risks associated with that. If rules are not known, we are in the situation
of uncertainty. Hence, uncertainty is the situation when it is not possible to calculate risk.
Consequently, risk is seen as less threatening as compared to uncertainty.
According to the work of Keynes, one can say that risks as opposed to uncertainty were assumed
calculable within the premises of probability theory, and thus, controllable. [Bibow, 2013]
However, as noted by Nowotny et al. [2001], in modern science the word ‘‘risk’’ is
increasingly used to denote incalculability and, as a result, uncontrollability. This statement
emphasizes the tendency to mix these two concepts together, even though they are not the same.
Risk as a fact or at least imaginable situation implies certain knowledge, and thus calculability
and controllability, whereas uncertainty by de
finition implies that there is no certainty about
the
state of things.
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 insufficiently well-
de
fined 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 de
finition’
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. Inevitably, judgments
have to be made about the degree of detail and accuracy that is practicable in the design and plan
stages.[ Williams& Eden,1995]

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 the first thought, leading to subsequent disputes between client and
contractor about liability for costs and consequential delays. 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.
[Williams& Eden, 1995]
The allocate stage of the project life cycle is a signi
ficant
task involving decisions about
project organization, identi
fication
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 in
fluence the motivatio
n 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 bene
fit, perhaps to
the disadvantage of the other party. Even
in the same organisation, there can be signi
ficant issues in all
ocating risk in a hierarchical
structure or between different units in the same organisation. [Chapman and Ward, 2004]

The way uncertainty is perceived by project managers depends on personal skills,
intuition and judgment. Let us consider an example. One manager “A” might see potential
danger or opportunity arising from doing business with new subcontractor; whereas manager “B”
will not consider the situation as of any relevance to the ongoing project.
Managers’ attitudes and understanding of uncertainty do not create or eliminate it. But this
understanding affects the way managers ‘‘make sense’’ of the situation and decide on alternative
actions. As stated by Weick [1995], understanding and sense-making affect strategic decisions,
and consequently, performance of the
firm. For manager
“A” there are two options for the
decision: to engage into business with new subcontractor, assuming it is more risky and thus
more rewarding, or not. Admittedly, manager “B” does not see any uncertainty in the situation.
This can be a result of lack of project management skills. Or on the contrary, manager “B” has
sufficient experience of managing projects in such context and that is why he or she does not
recognize it as uncertain. Hereby, we can conclude that development of project management
skills is an essential part of understanding and managing uncertainty. [Weick, 1995]
Obviously, not all the elements in project environment or organization are critical to the
project success and represent sources of uncertainty. That is why identifying relevant ones from
the contextual uncertainty by means of environmental scanning or other analytical models is an
important part of project management. Judging the source and relevance of information that
comes from the outer project environment and, thus, represent contextual uncertainty is an
intuitive process rather than a rational one, since the rational processes are isolated from the
surrounding world. Therefore, intuitive processes are goal-oriented and re
flective. As a result,
understanding objectives and purposes of key actors, on whom project success is dependent, as
well as developing communication and coordination between the parties involved is of crucial
importance. Such actions can be considered as part of Project Company’s strategy
implementation and organization’s competitive advantage supporting customer- centered
thinking and facilitating the ability to provide high-value integrated solutions. This is a way of
establishing certainty for the project team. Uncertainty becomes either risk or opportunity, which
are certain by our de
finition.
[Project Management Journal 1999]

PERSONAL FINDINGS;
It must be mentioned, that uncertainty cannot be eliminated completely. Still, continuous
re
flective learning and information sharing mak
e it manageable by reducing it signi
ficantly. We
consider these tools as organization’s
flexibility enhancers needed in order to faster react to
changes by making choice between alternative actions in the situation of uncertainty.
Extending project risk management; Effective uncertainty management needs to
address uncertainty in a broad sense, with the early consideration of all sources of signi
ficant
uncertainty and associated responses. Even when integrated with project management, formal
project risk management processes that adopt afocus 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 signi
ficant 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.
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 speci
fication, 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 quanti
fied 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.
The limited scope of conventional project management; An emergent conclusion from
my research was that common perceptions of projects and project management practice do not
encompass all the stages of the project life cycle. 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 minimize 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. Project
management is commonly regarded as concerned with ensuring things get done right, assuming
that there is a well de
fined 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.
However, project management in this sense is a castle built on shifting sands if in practice
objectives are unclear, contradictory, or impossible. Many endeavours recognized and ‘managed’
as projects experience problems for this reason. A common interpretation of a project plan is that
it is an attempt to de
fine 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 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.
According to my research, conventional (common practice) project management
processes should be concerned with legitimizing the project plan, and uncertainty (particularly
from fundamental sources) 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.

Hard and soft projects; In considering the appropriate scope for project management
and associated uncertainty management, it is useful to characterize 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 de
fined and agreed goals
and end products, to
include multiple projects and programmes that are multidisciplinary, and which are ‘‘not
prede
fined’’ but ‘‘permeable, contested and open to renegotiation
throughout’’ . 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. Projects and programmes may simultaneously
exhibit both hard and soft characteristics on these dimensions and these characteristics may
change throughout a project life cycle.
For some projects, goals are generally clear and well de
fined 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-de
fined, 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 about the end product are far harder to achieve where
the end products of the project are intangible, as in information systems development and
organizational and cultural change initiatives. Stakeholders are likely to have different
interpretations and expectations of what will be produced.

Where the boundaries of the project are de
fined by contracts,
relationships and project
boundaries are de
fined,
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 organizational change project where it is difficult to identify where
the project starts and ends. In such cases, scope may be difficult to de
fine. Project boundaries
may be moved or rede
fined, or subje
ct to differing interpretations by different stakeholders. Such
projects are often undertaken by staff internal to organizations that 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 in
fluence.
Projects that have clear boundaries providing a degree of isolation from environmental
in
fluence
allow for the use of tools and techniques of project management such as network
planning, risk analysis, and computerized resource allocation and task coordination. As the
boundaries of the project become more permeable and projects assume more of the
characteristics at the soft end of the spectrum , 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.
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 conceptualization of projects in terms of
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 highly subject to external in
fluences. Keeping options
open, and adopting a
flexible, robust approach may be much
more effective than prematurely
crystallizing 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 vice versa.
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.
There is a clear distinction between uncertainty and ambiguity/equivocality. Uncertainty
is de
fined by the di
fference 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 con
flicting
interpretations; it is linked to confusion and lack of understanding. Whereas uncertainty warrants
the acquisition of objective information and the answering of speci
fic 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 sense-
making is not acknowledged, later pressures to crystallize plans and subsequent rei
fication 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.
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.
If a relationship is to start in a state of mutual trust, it requires prior con
fidence 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.
Supporting organizational capabilities; All project management activity takes place in
a wider organization context, and how the organization operates will have a major impact on
what can be achieved by its members in terms of project management. Organization structure,
co-ordination and control systems, environmental scanning capability, communications and
information systems, knowledge management, and support for organization learning, all affect
the quality and scope of project management undertaken . 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 organizational infrastructure that facilitates project
management as much as the particular processes for speci
fic projects.
Organizations 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 organizations exhibit
de
ficiencies in
their approach to uncertainty and learning which can act as barriers to the
development of uncertainty management. Sometimes shortcomings in organizational capabilities
are not evident until systematic attempts to identify and manage uncertainty are made.
Accepting that culture can operate as an organizational control mechanism, the quality of
uncertainty management undertaken as part of project management can be driven or at least
in
fluenced by the
organization 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.
Some of the most signi
ficant barriers to e
ffective uncertainty management are based on
unfavorable features of organizational culture. Sometimes these barriers are induced from
outside the organization 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 recognized scientific or professional standards.
Such professionally based convictions can strongly in
fluence di
fferent groups within the same
organization, making it very difficult to adopt effective uncertainty management processes.

However, most organizations 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’. Essentially
such behaviours seem to evidence the difficulty management has in coping with complexity and
uncertainty. In particular, these behaviours can re
flect 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 signi
ficant
bene
fits of formal
uncertainty management processes.
Learning by experience; Knowledge management and learning, both organizational 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 speci
fic to the
organization 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 organizations 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 analyzed and presented in a form that is useful for such purposes. The problem is
compounded where new project types are undertaken by organizations. The level of uncertainty
may be higher for management of projects in some organizations than in others due to lack of
data from past projects. Such data may or may not be available from other organizations 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 organizational 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

organizations 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 signi
ficant potential to reduce uncertainty.
CONCLUSIONS
It does not necessarily mean that the number of risks companies meet is increasing or uncertainty
is higher. The changes are qualitative rather than quantitative. Uncertainty can be regarded as
one of the characteristics of evolution: if you do not have uncertainty, you do not have any
evolution. That is why managing uncertainty is one of the core elements in firm’s better
performance.
Traditional project risk management as well as project uncertainty management have established
efficient framework of dealing with risks as certainties. However, they lack common
understanding regarding the de
finition of uncertainty
, and as a result, sufficient tools to manage
it. Since this term is not self-explanatory, it is important to de
fine it in relation to well
-de
fined
terms as ‘‘risk’’ and ‘‘opportunity’’.
The key elements in managing uncertainty are re
flective learning
and sense making as enablers
of
flexibility and rapidness
in decision-making regarding the choice of alternative actions in
response to the situation. At the same time, standardized and modularized processes and
procedures constitute a necessary basis for supporting re
flective processes.
All of these measures
can be regarded as important tools for project managers to recognize and establish the core
competences, and thus perform rather than simply conform to the plan. Continuous following of
such procedures at different stages of the project is an essential part of project success. However,

these ideas need further empirical support. It is important to mention, that there is no successful
procedure, which can be implemented once and for all.
Due to fast development of project business, there is a clear need to continuously revise best
practices. We believe that recognizing uncertainty as a complex issue of its own will provide
basis for the future research and facilitate the development of tools for project management.
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 this essay is 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 essay 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 con
fined to potential events, and include
lack of information,
ambiguity, characteristics of project parties, trade-offs 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.
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 signi
ficant degree of
‘softness’. This intolerance of

uncertainty may induce project management behaviours such as cautious/safe ways of working
and 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 in
fluences 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.

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