Rokne AS is a medium-sized company in Norway within the technology industry. The company has approximately 200 employees spread across various divisions throughout the country. Due to changing markets in recent years, with increasing demands for adaptability and development, Rokne AS has invested heavily in restructuring the organization to be more project-oriented.
Although most projects have resulted in success, director Per Hansen has recently noticed that the profit margins are becoming smaller and smaller. It’s also a fact that the project managers are heavily overburdened with work. Hansen feels that the company itself lacks the necessary expertise to reverse this trend and has therefore approached you as an expert in project management. After several meetings with the company and various analyses, you suggest that Rokne AS introduces a process for uncertainty management in relation to the execution of projects. Your argument is that this will provide a better basis for control and resource utilization.
The project managers at Rokne AS are already overloaded with work and therefore not very pleased about having even more methods to consider. To convince them that uncertainty management is beneficial for projects, you need to do thorough preparatory work. Discuss the advantages and disadvantages of uncertainty management in projects.
Advantages of uncertainty management in projects:
Predictability: By identifying potential risks and opportunities in advance, project managers can plan for and manage these before they become significant threats to the project.
Optimal resource utilization: With a proper understanding of uncertainties, resources (both time, human, and financial) can be allocated where they are needed most, which can prevent overspending on low-risk activities and underestimating high-risk activities.
Improved decision-making: A deeper understanding of potential risks and opportunities allows project managers to make informed decisions, especially in situations where quick decisions are necessary.
Builds trust with stakeholders: When project managers systematically manage uncertainty, it can build trust with customers, investors and other stakeholders who will see that the project is well-prepared.
Improved quality: Planning in advance can prevent quality issues later on by addressing potential problems.
Reduces costs: While there might be an initial investment in time and resources to conduct uncertainty management, potential savings in the form of avoided problems and efficiency improvements can far outweigh these costs.
Disadvantages of uncertainty management in projects:
Time consumption: As pointed out by the project managers, introducing new processes and methods can add an additional workload and require time, which is already a scarce resource.
Complexity: Adding a new process to project management can increase complexity, especially in projects that are already complex.
Need for training: To effectively implement and benefit from uncertainty management, training of the team might be necessary, which requires time and money.
Potential for over-analysis: There’s a risk that project managers might spend too much time analyzing and planning for risk and opportunities, to the point where it prevents action (also known as “analysis paralysis”).
Can create a culture of fear: If not implemented correctly, an excessive focus on risk can create a culture where team members are afraid to take initiatives or make mistakes.
To get the project managers on board with the idea of uncertainty management, it’s essential to weigh the pros against the cons and demonstrate how benefits like improved resource utilization and increased predictability can lead to a reduced workload in the long run. It might also be worth considering a phased implementation, where some basic principles of uncertainty management are adopted first before diving deeper into more advanced techniques.
Develop a plan for how you will implement uncertainty management in Rokne AS (suggest whom you would involve, how, when, etc.).
Plan for implementing Uncertainty Management in Rokne AS:
- Preparatory phase:
- Mapping: Map the current project management process in Rokne AS to identify existing weaknesses and potential risks.
- Definition: Define what uncertainty management means in the context of Rokne AS and why it’s crucial.
- Formation of a cross-functional team:
- Engage project managers from different divisions, a representative from management (preferably director Per Hansen), and key team members from projects.
- Also include a financial representative to shed light on the financial aspects of uncertainty management.
- Training and skill development:
- Organize training sessions for the team on principles, tools, and best practices in uncertainty management. This will equip the team with the necessary knowledge and tools to effectively implement the process.
- Development of uncertainty management guidelines:
- Based on the training and discussion within the team, develop clear guidelines and procedures for identifying, evaluating and managing uncertainties in projects.
- Pilot project:
- Choose an ongoing or new project as a pilot to test the new procedures.
- Closely evaluate the project to identify what’s working and what needs adjustment.
- Evaluation and adjustment:
- Gather feedback from all stakeholders to identify areas of improvement.
- Make necessary adjustments to the guidelines based on this feedback.
- Full implementation:
- Begin full-scale implementation of the uncertainty management process in all new projects.
- Continuously monitor the processes and update as necessary.
- Continuous improvement:
- Establish a routine for regularly reviewing the uncertainty management process to ensure it remains updated and relevant.
Timeline (suggestion):
- Preparatory phase and team formation: 1-2 months
- Training: 1 month
- Development of guidelines: 2-3 months
- Pilot project: Duration of the chosen project, e.g., 4-6 months
- Evaluation and adjustment: 1-2 months
- Full implementation: Start post-evaluation, ongoing with regular follow-up
Which aspects are important to consider and address to ensure a successful implementation of uncertainty management?
To ensure the successful implementation of uncertainty management, there are several critical points to consider and address:
- Goals and objectives:
- Clarify why uncertainty management is necessary for the organization and what you hope to achieve with its implementation.
- Management commitment:
- Ensure that senior management understands, supports and is committed to the process. This guarantees the required resources and priority.
- Training and skill development:
- Identify the necessary skills and knowledge for effective uncertainty management.
- Offer training and courses for employees, especially those directly involved in the projects.
- Tools and resources:
- Choose or develop appropriate tools for identifying, assessing and managing uncertainties.
- Secure necessary resources, whether it’s software, time, or money for the implementation.
- Stakeholder engagement:
- Identify all relevant stakeholders, including employees, customers and partners, and involve them in the process. This ensures widespread understanding and acceptance of the new approach.
- Communication:
- Design a clear communication plan for how and when you will inform all involved parties about new procedures, tools and expectations.
- Pilot project implementation:
- Test the uncertainty management procedures on a smaller scale before full-scale implementation. This allows challenges to be identified and addressed before broader rollout.
- Feedback and adjustment:
- Establish feedback mechanisms so that the team can report challenges, successes and suggestions for improvement.
- Continuous improvement:
- Regularly assess the effectiveness of the uncertainty management process and make necessary adjustments based on feedback and outcomes.
- Cultural change:
- Actively work on organizational culture and attitudes to promote a proactive approach to uncertainty, rather than a reactive one.
- Integration with existing processes:
- Ensure that uncertainty management is integrated with existing project management and decision-making processes, not isolated as a separate silo.
Director Per Hansen thinks your plan for implementing uncertainty management is good. However, he also wants you to address when in the projects uncertainty management is especially important.
Uncertainty management is crucial throughout the life cycle of a project. However, there are particular stages in the project life cycle where its importance is emphasized.
Here’s an overview for director Per Hansen:
- Initiation phase:
- At the very beginning of a project, it’s essential to identify potential uncertainties. Knowing possible risks and opportunities early on allows for better planning and can even influence the decision on whether to proceed with the project or not.
- Planning phase:
- This is a critical phase for uncertainty management. Here, you’ll be detailing how you’ll deal with potential risks and opportunities and appointing resources to manage those, and integrating uncertainty management into the overall project plan.
- Execution phase:
- As the project moves forward, actively monitoring and managing uncertainties becomes crucial. This ensures that any unforeseen issues are addressed promptly, minimizing disruptions.
- Monitoring and controlling phase:
- Continuously revisiting and revising the uncertainty management plan is essential. As the project progresses, new uncertainties may emerge and earlier identified risks and uncertainties may change in their potential impact or likelihood.
- Closure phase:
- Once the project is nearing completion, it’s vital to assess how uncertainties were managed. This provides valuable lessons for future projects.
Fundamentally, managing uncertainty is an ongoing job that aligns with the project’s life cycle. However, it is particularly crucial during the planning, execution, and monitoring & controlling stages.
In addition, director Hansen has a question about who should participate in the handling of uncertainty in the projects. Specifically, he is wondering whether representatives from corporate management, line managers, project managers, representatives from the steering group or representatives from suppliers should be involved in the process. Discuss what answer you would give to Hansen regarding this question.
Here’s a discussion of each role’s potential involvement:
- Representatives from corporate management:
- Their involvement ensures that the uncertainty management process aligns with the broader company strategy and objectives. Their involvement is crucial in showcasing leadership’s dedication, which can impact the team’s acceptance level.
- Line Manager:
- Line managers often have a deep understanding of daily operations, potential obstacles and the capabilities of their teams. Their input can be valuable in identifying and assessing potential risks and opportunities and determining appropriate responses. They also play a crucial role in the allocation of resources.
- Project Manager:
- As the person responsible for the day-to-day management of the project, the project manager is essential to the uncertainty management process. They are typically in the best position to understand the specific risks and opportunities associated with a project and ensure that uncertainty management plans are effectively executed.
- Representatives of the steering group:
- This group usually has a broad view of the project’s objectives and context. Their involvement ensures that uncertainty management decisions align with the strategic goals and that there’s a proper governance mechanism in place for dealing with significant risks and opportunities.
- Representatives from suppliers:
- Suppliers can bring a unique perspective, especially concerning uncertainties related to the project segments they’re actively engaged in. They can provide insights into potential supply chain risks, delivery timelines and other vendor-specific challenges.
In conclusion, while the level and intensity of involvement might vary based on the project’s nature and its specific uncertainties, all these roles play a crucial part in effective uncertainty management.
For Hansen’s sake, it would be beneficial to emphasize a collaborative approach that encourages open communication and shared responsibility among these different stakeholders. This approach ensures that all angles of potential uncertainties are considered, making projects more resilient to unforeseen challenges.
This case is taken from the book “Prosjektledelse – fra initiering til gevinstrealisering” – 2016, 4. Edition, by Jan Terje Karlsen.
