I received a book over the Holidays - Managing Project Risk and Uncertainty: A Constructively Simple Approach to Decision Making, Chris Chapman and Stephen Ward. This is a seminal work on risk management in the presence of uncertainty. The introduction has this...
Uncertainty in the plan English sense is lack of certainty has important implication for what can be acheived by organizations. All Management decision should take uncertainty into account. Sometime the implcations of uncertainties are risk in the sense of significant potential unwlecome effects on orgainzation performance.
Success in the presence of uncertainty requires a process be followed. Here's a recommend one:
|Stage in the Decision Process||Uncertainty About|
|Monitor the environment and current operations within the orgainzaiton||Completness, veracity, and accuracy of information received, meaning of information, interpretation of implications|
|Recognize the Issue||Significance of issue, need for action|
|Scope of decisions||Appropriate frame of reference, scope of relevant organization activities who is involved, who should be involved, extent of separation from other decision issues|
|Determine the performance criteria||relevant performance criteria, whose criteria, appropriate metrics, appropriate priorities, and trade-offs between different criteria.|
|Identify alternative course of action||Nature of alternatives available (scope, timing, and logistics), what is possible, level of detail required, time available to identify alternatives.|
|Predict the outcomes of courses of action||Consequence, nature of influencing factors, size of influencing factors, effects and interactions between influencing factors (variability and timing), nature and significance of assumptions made|
|Chose the course of action||How to weight and compare predicted outcomes|
|Implement the chosen alternatives||How alternatives will work in practices|
|Monitor and review performance||What to monitor, how of term to monitor, when to take further actions|
In order to make decisions in presence of uncertainty, we need to estimate all the partially elements of the decision process. Withoitn these estimates thetre is no Risk Management. Without Risk Management, there is no SAdult management of the project.
Risk Management is How Adults Manage Projects - Tim Lister