How can you manage project risks in a high-ambiguity project?
Managing project risks is a crucial skill for any project manager, but it can be especially challenging when the project is highly ambiguous. High-ambiguity projects are those that have unclear or changing requirements, goals, scope, stakeholders, or environment. They often involve innovation, experimentation, or exploration of new or unknown domains. How can you manage project risks in a high-ambiguity project effectively and efficiently? Here are some tips to help you.
The first step in managing your project is to identify the sources of ambiguity. These could include customer needs and expectations, market trends and competition, technology and tools, regulations and standards, team skills and dynamics, and organizational culture and politics. Once these have been identified, you can prioritize the most critical ones to focus your risk management efforts.
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In my experience, ambiguity is a symptom of lack of alignment. According to researchers, including my own global study on project performance, miss alignment creates confusion, poor definition and limited results. All which effect the teams ability to properly produce a viable work breakdown structure. The symptoms are heavily increased in true Agile environments.
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👉🏽 Unclear goals and objectives: What are you aiming to achieve? Vague definitions of success create fertile ground for unexpected risks. 👉🏽 Evolving requirements and technologies: Is the landscape shifting beneath your feet? Unforeseen changes can throw your plans into disarray. 👉🏽 Limited data and knowledge: Are you sailing blind? Lack of information breeds uncertainty, making it hard to anticipate challenges. 👉🏽 Complex systems and dependencies: Are you untangling a Gordian knot? Interconnected factors can amplify the impact of unforeseen events. Once you pinpoint the ambiguity's origin, you can start to address it proactively.
The next step is to define the assumptions and hypotheses that underlie your project. These are the statements that you make based on your current knowledge, beliefs, or expectations about the project. For instance, you may assume that customers will value one feature more than another, hypothesize that one solution will perform better than an alternative, or expect your team to deliver a task within a certain time frame. By making these assumptions and hypotheses explicit and testable, you can identify any gaps in your knowledge and areas of uncertainty that need further validation or verification.
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Teleology directs us to start with the end in mind. Many frameworks to include Agile stem from the empirical process control theory. Which implies that you learn through observation. Establishing your hypothesis focuses on two concepts: 1 - listening to your stakeholders and helping them define an end goal or vision 2 - creating milestones based on critical success factors which are established by helping the stakeholders understand the value points of their vision In my experience, doing this is more art than science, but when done right the success rate of actually attaining your end goal increases significantly. ~Dr.H
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👉🏽 Challenge your existing beliefs: Don't cling to unvalidated assumptions. Question everything, from market trends to technical feasibility. 👉🏽 Document your "unknowns": Explicitly list the areas shrouded in ambiguity. This transparency helps everyone stay informed and agile. 👉🏽 Develop testable hypotheses: Don't just guess, experiment! Craft clear hypotheses about potential risks and design ways to test them through prototypes, user research, or data analysis. 👉🏽 Embrace iterative learning: Be prepared to adjust your course as you learn. New information should inform new hypotheses and risk assessments.
The third step is to plan for experiments and feedback that will help you test your assumptions and hypotheses and reduce ambiguity. Experiments are structured activities that allow you to collect data and evidence to support or refute your statements, while feedback is the input that you receive from stakeholders, customers, users, or other sources that inform your decisions and actions. For instance, you could conduct a user testing session with a prototype to test an assumption about customer value, run a performance test with a sample data set to test a hypothesis about solution performance, and use agile methods and frequent reviews to get feedback from the team and sponsor about progress and quality. By planning for experiments and feedback, you can learn from your results and adjust your project accordingly, as well as increase your confidence and credibility with stakeholders and customers.
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Experimentation is critical. Both in science and in business, establishing a prediction (or hypothesis) allows you to explore the “art of the possible”. Meaning, if you don’t experiment you really won’t know what is truly posible. In project management, when the business problem is established, your predictive mind begins to assume an end date based on the data. As the project timeline progresses and more data is collected, the end date becomes clearer. By continuously evaluating your timeline based on delivery, you are constantly testing your hypothesis, and experimenting with the parameters. Regardless of the approach, project managers are constantly experimenting with data, in hopes of predicting an accurate target.
The fourth step is to monitor and review the risks that emerge or change as a result of your experiments and feedback. Risks are the potential events or situations that could negatively affect your project objectives, such as cost, time, quality, or scope. For instance, we may discover that our customers have different preferences than we assumed, which could impact our value proposition and market fit. We may also find out that our solution has some performance issues that could affect user satisfaction and retention. Additionally, we might realize that our team has some skill gaps or conflicts that could affect our delivery and collaboration. By monitoring and reviewing the risks, you can evaluate their impact and probability and decide how to respond to them. You can also update your risk register and communicate your risk status and actions to your stakeholders and customers.
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In my experience, risk is subjective. Depending on a companies market position, and how far along the journey they are (from startup to big corp), the risk vectors may be vastly different. Still, properly accounting for the risks associated with typical project management methodology preserves not only the integrity of the timeline and deliverables, but also builds confidence in the stakeholders. Maintaining a risk register that accurately resembles the companies risk profile is critical to a PM, as it allows them to establish certain boundaries and escalate as things come close to the boundry.
The fifth step is to adapt and improve your project based on your risk management outcomes. Adaptation entails making changes to the project plan, scope, schedule, budget, or quality to address the risks you identified and responded to. Improvement requires applying the lessons learned from your experiments, feedback, and risks to enhance project performance, value, and satisfaction. For example, you might pivot the project direction to focus on a different feature that meets customer needs better; optimize the solution design and code for improved performance and reliability; or provide training or coaching to team members or resolve any issues or conflicts that impede teamwork. By adapting and improving your project, you can increase its success and resilience in a high-ambiguity environment while fostering a culture of learning and innovation in your project team and organization.
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I honestly love this approach and it is one I have used throughout my career. In fact, one of the discoveries of my global study in 2021, was that establishing friendly / common ground through humor and problem solving helped teams come closer together and alleviate both ambiguity and misalignment. The only thing I would add is, countinous maturity through retrospective. This is often overlooked by even the best of PMs and it’s the most critical part of the project. When done right, and frequent, the team is ever-growing and consistently improving and the projects naturally succeed.
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