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Defining Complexity for Practitioners

May 16, 2014

Complexity affects project performance. There is no doubt that projects get to be complex at a certain point and we need to do something about it. But as practitioners, when asked to give some indication of when a project will be complex the best we can often muster is to paraphrase a US Judge and respond “I know it when I see it.” This kind of definition makes it difficult to take action to address complexity and even harder to prepare stakeholders for what complexity entails. I’d like to propose a practitioner focused definition that can help us prepare stakeholders for complexity and do something about it, so we can deliver successful projects. The definition is framed in terms of the difference between complexity and risk, and between complexity management compared to risk management. This framework comes directly from a question sparked by a recent presentation by Stephen Hayes, MD and CEO of the International Centre on Complex Project Management at the Australian Defense Force Academy.

The key differentiator is the concept of Orientation toward Uncertainty. Orientation toward Uncertainty is how the organization managing the project environment fundamentally approaches uncertainty. Risk and Risk Management is a particular type of orientation. It assumes that all drivers of uncertainty can be identified. Because of that, a reasonable estimate of potential outcomes can be made and consequently, a finite set of plans can be identified and accounted for prior to the potential outcomes occurring. Further, the finite set of plans have clear tradeoffs such that any utility maximizing organization will always make the same choice among the plans, given the same utility function. For example, it becomes clear at some point that you may need to expand scope to account for a foreseeable risk. It is also clear that by choosing to expand scope, you’ll need to increase budget. Therefore, if you are an organization seeking to get the most scope and account for the foreseeable risk, you’ll choose the option for expanding scope and increasing budget. Reserve for that extra budget will be put into the project’s overall budget.

This organization is using a management approach which is oriented toward certainty. Mind you, it allows for unknowns and even unknown unknowns. But there is a fundamental belief that the unknowns can be managed and the path for managing the unknowns can be defined at some point before the unknown occurs. Further, actions can be decided upon and taken ahead of time to prepare for those unknowns, such as adding budget.

On the other hand, an organization that is oriented toward uncertainty has a fundamental belief that the drivers of uncertainty cannot be identified ahead of time. It recognizes that there is an entire realm of potential unforeseen events that cannot be identified ahead of time. It further recognizes that it is not possible to identify paths for managing the unforeseen events before they occur. Even if it were possible, the set of potential plans would not contain clear trade-offs which would facilitate decision making such that any utility maximizing organization would always make the same choice among the potential plans, given the same utility function. Additionally, the organization believes that identifying and selecting potential plans ahead of time constrains the project participant’s ability to deliver ambitious results.

This is not to say that traditional risk management can be ignored. On the contrary, it is still prudent to address and prepare for knowable risks. But managing uncertainty doesn’t end there. In fact, it shouldn’t even start there. Preparing for knowable risks only comes after relationships are built that can tackle and manage the unknowable. That is, the organization needs to be comfortable with the unknowable, with the consequences of reaching for ambitious goals, even before it addresses knowable risks. Relationships should be in place that can discuss unforeseen events and keep them in perspective, well before specialists are assigned responsibility for managing them.

Orientation toward Uncertainty is a system design decision. It is a set of choices which we, as managers and leaders, make about our project environments. There are observable manifestations of these choices which we can see in our project environments and organizations. The observable manifestations can give us clues as to how our organization is orientated with respect to uncertainty. These include reliance on prediction for planning and decision making, the metrics we use, how much freedom people are given to adapt processes for a given situation and how much freedom is given to people on how they select and organize team members. In most of these cases, the more reliant we are on prediction and the less freedom allowed, the more oriented the organization is toward certainty. These choices, while seeming to contribute to our ability to actively manage a project plan, turn out to constrain the project participant’s ability to deliver the desired outcomes. An awareness of these choices can help us better understand the impact they have on project outcomes and increase the probability of making decisions that help us produce successful projects.

Unforeseen events can happen on almost any project. Fortunately, for many projects, they happen within an organizational structure that has relationships in place to deal with them. This is not so for first time projects with new clients or when putting together a new project. In these cases, relationships are often being established for the first time. Or, when they do exist, relationships are stressed in new ways as new challenges appear. If the project participants are not oriented toward uncertainty, the new challenges will push the relationships into conflict and put the entire project in jeopardy. The persistently high number of projects that are cancelled, late or over-budget, suggests that unforeseen events continue to occur on most projects, regardless of whether they happen in an organizational structure with existing relationships, making even the seemingly simple goal of on-time and on-budget delivery an ambitious endeavor in a complex environment.

So the next time someone asks you when a project will become complex, it is a pretty safe bet to tell them it is already complex. Let them know that there are definitive steps you can take to help increase the chances the project is successful. Prepare the project environment with the appropriate relationships to deal with complexity by orienting it toward uncertainty.

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