Finally, in several cases, work done in one project had value beyond its initial scale, pointing the way to similar future projects. For example, one of the companies solved a software implementation problem that afflicted a particular department. Once the fix was identified, it was quickly applied to other departments, improving efficiency and heading off new glitches.
Uncertainties, the authors found, can be grouped into six primary types.
- Contextual turbulence: external changes set off by shifts in the markets, for example, or new legal or regulatory rules
- Stakeholder fluctuations: shifts in the fortunes of customers, vendors, investors, and others
- Technological uncertainty: factors that can affect the functionality of products in different markets, among other challenges
- Project uncertainty: unrecognized complexities that crop up after a project has started
- Organizational uncertainty: ripple effects from unexpected corporate mergers or spin-offs, for example
- Malpractice: significant deviations from accepted project management standards
Not all uncertainties led to good outcomes in the study group, of course. In its postmortem, one company that had been in the malpractice group bemoaned the lack of a tracking system that would have facilitated a root-cause analysis of implementation problems. The system should have been in place under existing company procedures. Another project suffered from frustrating staff redundancies created by a “surprise” merger.
But when project teams are able to seize unexpected opportunities, their impact is “wide and deep,” the authors write, typically resulting in trimmed budgets, leaner schedules, and higher quality for ongoing projects as well as potential benefits down the line. Nearly 75 percent of exploited opportunities led to an uptick in the satisfaction of internal and external clients, the authors found, and 58 percent were linked to increased financial returns.
Nevertheless, the authors note that taking advantage of project-related opportunities is rarely straightforward and requires “exceptional and innovative decisions” that are often possible only when all key stakeholders of a project confer. “In these situations,” the authors write, “project managers should take the role of champions and use their communication skills to bring these opportunities to the decision-making level.”
To be sure, it is also necessary to recognize the opportunities in the first place. Many interviewees had difficulty identifying uncertainties and confused them with either risk scenarios or normal aspects of the project itself. This led to the unexpected insight, the authors write, that senior management has a crucial role to play in exploiting opportunities—by making sure to assign project managers with a business background to big and complicated initiatives that are prone to uncertainties.
On a broader level, it’s vital for the executive team to think about large projects in a different way, the authors advise. Senior leaders should abandon the classic risk management technique of simply sticking to the established goals. They should replace that technique with a more nuanced approach that embraces the potential for value creation.
“In situations of uncertainty,” the authors write, “the adherence to a baseline that was defined without the knowledge of uncertainty could lead to neglected opportunities, forsaken value opportunities, and consequently the potential for project failure.”
In the life cycle of a project, not all surprises are bad news. When managers can turn uncertainties into opportunities, the end value of the project (including its budget, schedule, and quality) typically exceeds initial expectations.