Managing Risk and Uncertainty

Ce document est un livre blanc, publié par l’auteur en collaboration avec l’Institut de développement de produits du Québec. Il discute des enjeux de la gestion de l’incertitude et des risques dans les projets complexes. Il reprend comme introduction l’article publié par l’auteur en 2003 sur les connus connus, les connus inconnus et les inconnus inconnus. Il présente ensuite un processus de gestion des enjeux et des risques en douze questions, processus dont l’efficacité en gestion de projets a été démontré sur de très nombreux projets de toutes envergures, ainsi qu’un petit glossaire des termes pertinents au contenu couvert par le livre blanc.

The UK Media Industry operates in a highly turbulent environment, and one that is primarily characterised by rapid changes in digital technologies and the threat of new competitive entrants. These new competitive dynamics mean that traditional TV broadcast companies no longer act as the sole intermediaries of mediated content. Indeed, innovative Internet Protocol TV (IPTV), Web TV and streaming services are making significant inroads into traditional audience market share, particularly amongst the younger demographic. This type of competitive environment makes it difficult for executives who are responsible for planning and executing Corporate Level Strategy. This in turn places increased scrutiny on the strategic planning tools that are used to undertake a comprehensive analysis of the competitive dynamics and inform strategy formulation. This paper presents empirical findings and reflections on a scenario planning project that sought to develop a long-term Corporate Level Strategy for YouTube. As such, it is positioned within the 'Strategy as Practice' domain as it combines academics with an interest in the practice of management, with business practitioners. This view of strategy focuses on the 'doing of strategy' and is particularly interested in the methods and tools that executives use to develop organisational strategy in times of uncertainty.

Scenario planning has a long history of academic inquiry and practice in numerous fields and industries; however, its future as a tool to manage strategic uncertainty may well have reached an impasse. While the academic community perpetuates the view that the field is characterized by methodological chaos, the practitioner community is concerned only with how scenario planning can help solve an organizational problem. This paper argues that the academic community would benefit from adopting a philosophical orientation that is "pragmatic" where theoretical and methodological

An increasing number of industries now operate in a highly turbulent business environment where rapid changes in digital technologies have undermined the value propositions, strategies, and business models of incumbent firms that now are exposed to the threat posed by new competitive entrants. This type of competitive environment makes it difficult for executives who are responsible for planning and executing corporate level strategy. This, in turn, places increased scrutiny on the strategic planning tools that are used to undertake a Business Horizons (2017) xxx, xxx-xxx

Purpose This paper aims to provide an overview of the role that scenario planning can play in managing the uncertainty caused by changing and unpredictable competitive dynamics. Design/methodology/approach This viewpoint reflects both the practical experience of strategic planners, combined with an academic insight into the advantages of using scenario planning as a management tool. Findings Firms can develop corporate level strategy and gain long-term certainty in their strategic approach by using scenario planning to strategize in a way that allows them to prepare for multiple futures, with multiple strategies. Practical implications Firms can manage environmental uncertainty and turbulence by being “mentally prepared” to address the future by evaluating the critical uncertainties driving turbulence and the strategic options relevant to a number of possible future outcomes. Originality/value A unique combination of practical experience fused with academic knowledge on harnessing t...

PurposeBusinesses increasingly find themselves competing in highly dynamic markets, making visibility of the future limited and the strategic way forward ambiguous. The purpose of this paper is to present the findings from a survey of UK media executives and identify their outlook for the industry, and an evaluation of their usage and satisfaction with the tools that they use to manage their businesses.Design/methodology/approachThe survey sampled 24 UK media executives who had responsibility for strategy and other functional areas of their business.FindingsThe survey found four strong themes amongst media executives. These were related to the launch of new products and services, seeking innovation through collaborative partnerships, leveraging their brand and content through new platforms, and uncertainty regarding the future direction of the industry.Practical implicationsThe paper will provide media executives with a better understanding of the management tools at their disposal ...

New ventures often do not correctly foresee real market opportunities or the best way to address them. How to cope with unforeseen, unpredictable factors, also referred to as unknown unknowns, is critical for new ventures. Findings in the fields of innovation and project management have shown that dealing with the unpredictable requires management approaches different from those used for classical plan-andachieve-the-target projects. Management approaches for novel initiatives include a combination of trial-and-error learning (i.e., flexible redefinition of the new venture business model as new information emerges) and selectionism (i.e., running multiple parallel trials and choosing the best performing approach ex post). The management approach must be chosen when the venture is set up. This requires a venture management team to diagnose at the outset whether unknown unknowns are present (or possible), although unknown unknowns cannot be identified initially by definition because they emerge over time. Anecdotal testimony from experienced venture managers and project managers suggests they have a feeling for where their knowledge is limited. However, such a claim is controversial. Some researchers think the concept of diagnosing unforeseeable influence factors is an oxymoron. Thus, the research question in this article is this: How can unforeseeable influence factors in a new venture be diagnosed at the outset? Research to date has insufficiently addressed the a priori identification of the type of uncertainty faced by a new venture. Based on models from decision theory, this article suggests dividing the overall problem of structuring the venture into subproblems for which the management team can identify knowledge gaps. Using a case study, the article describes how knowledge gaps were identified for the subareas of a new venture in a real situation and how this diagnosis was used to correctly identify the areas where unknown unknowns lurk. These areas were managed in a different way (i.e., with learning and experimentation) than the other subproblems (i.e., with targets and deadlines). As a result, the venture could successfully respond to unforeseeable events. The results of this study suggest that a decomposition of the overall venture management problem into subproblems is feasible and natural to managers, that a qualitative assessment of knowledge gaps and vulnerability to unknown unknowns is possible, and that a structured, process-like approach can be used to identify subproblems, to determine their uncertainty profiles, and to update the uncertainty profiles. These results are immediately useful to venture management and venture capitalists in setting up the venture's structure for effective response to uncertainty. The results advance research about uncertainty management by offering a systematic set of

This conceptual paper, based on intense literature review in the field of project management, human factors and organisational research, argues that important lessons can be drawn from high-reliability organisations for managing complex und uncertain projects, with regard to an open and no-blame learning culture, decentralised decision-making processes and mindfulness. To manage the unexpected demands the combination of apparently opposites: both a high degree of flexibility and open communication and a culture of clear decision-making structures and responsibilities. To balance this centralization and decentralization is one of the cornerstones of mindful organising. A few core cultural values, enforced by group pressure, combined with a flexible choice of means by which these values are realized help managing unexpected events. This paper will underline that becoming mature in managing the unexpected in projects asks for a redefinition of hierarchy in terms of a shift towards intelligently handling formalised structures. It remains important to have a clear basis to act on when faced with the unexpected. But the project team and its manager should become empowered to negotiate its way to actions.

This conceptual paper, based on literature review in the field of organizational theory, especially human factors, resilience and high-reliability organizations, argues that important lessons can be drawn from these researches fields for managing complexity and uncertainty in megaprojects. By combining theoretical concepts of decision-making based on systems theory, situational awareness and sensemaking, we aim to approach a more comprehensive discourse on ways of managing the unexpected. Expanding at the anticipation, the coping and the adoption phase both on the team and the project manager’s level, we show that managing the unexpected in megaprojects demands the combination of apparently opposites: both a high degree of flexibility and open communication and a culture of clear decision-making structures and responsibilities. We argue that megaprojects can make use of autonomy, an open and no-blame learning culture and enable autonomous decisions on the shop-floor level just because they can rely on unquestioned organisational structures: pre-determined communication paths, hierarchies, structures of orders, knowledge of one’s people and esprit de corps.

The business environment for many firms is changing rapidly and is becoming increasingly uncertain due to the disruption caused by new digital technologies, deregulation, new business models, and the threat of new competitive entrants. This dynamic competitive environment increases the level of uncertainty for senior executives and strategic planning teams who bear responsibility for the strategic development of the firm, particularly in terms of the future direction, scope, and the strategy required to deliver on corporate objectives. This in turn, places increased scrutiny on the strategic planning tools that are used to undertake a rational and comprehensive analysis of the competitive dynamics that inform strategy formulation. This article presents empirical findings and reflections on a scenario-planning project that sought to develop a long-term corporate level strategy. While scenario planning is an established constituent of the strategist's toolbox, the increasing level of dynamism and uncertainty in many markets has meant that it has seen a resurgence. This article presents empirical findings on how the scenario-planning tool was selected and applied before reflecting on the individual and organizational outcomes of using scenario planning to develop an organizational strategy in uncertain market conditions. An increasing number of industries now operate in a highly turbulent business environment where rapid changes in digital technologies have undermined the value propositions, strategies, and business models of incumbent firms that now are exposed to the threat posed by new competitive entrants. This type of competitive environment makes it difficult for executives who are responsible for planning and executing corporate level strategy. This, in turn, places increased scrutiny on the strategic planning tools that are used to undertake a rational and comprehensive analysis of the competitive dynamics and inform strategy formulation. Reeves, Haanaes, and Sinha (2015) noted the considerable number of strategy tools and frameworks available to business leaders. However, they also observed that the range of tools available to executives created a dilemma in terms of identifying the most appropriate tool to develop and execute strategy. A management tool that enables executives to develop strategy in uncertain business environments is scenario planning. While this strategic management tool has formed part of the strategist's toolbox for a long time, the increasing level of dynamism and uncertainty in many business environments has meant that scenario planning has seen a resurgence in usage. It is argued that its systematic approach to addressing and managing business uncertainty Published as: Oliver, J.J. and Parrett, E. (2018). Managing future uncertainty: Re-evaluating the role of scenario planning,

The UK Media Industry operates in a highly turbulent environment, and one that is primarily characterised by rapid changes in digital technologies and the threat of new competitive entrants.  These new competitive dynamics mean that traditional TV broadcast companies no longer act as the sole intermediaries of mediated content. Indeed, innovative Internet Protocol TV (IPTV), Web TV and streaming services are making significant in-roads into traditional audience market share, particularly amongst the younger demographic.
This type of competitive environment makes it difficult for executives who are responsible for planning and executing Corporate Level Strategy. This in turn places increased scrutiny on the strategic planning tools that are used to undertake a comprehensive analysis of the competitive dynamics and inform strategy formulation.
This paper presents empirical findings and reflections on a scenario planning project that sought to develop a long-term Corporate Level Strategy for YouTube. As such, it is positioned within the ‘Strategy as Practice’ domain as it combines academics with an interest in the practice of management, with business practitioners. This view of strategy focuses on the ‘doing of strategy’ and is particularly interested in the methods and tools that executives use to develop organisational strategy in times of uncertainty.

The competitive dynamics for many firms are rapidly changing, with industry after industry being reshaped and resized by numerous disruptive forces in the form of new digital technologies, deregulation, new business models and the threat of new competitive entrants. A dynamic competitive environment represents a daunting challenge to senior executives and strategic planning teams who have responsibility for the strategic development of the firm, particularly in terms of the future direction, scope and the strategy required to deliver on corporate objectives. With rapid change and uncertainty, there is increased scrutiny on the strategic planning tools that are used to undertake a rational and comprehensive analysis of the competitive dynamics that inform strategy formulation. As such, firms need to consider a critical question when developing their Corporate Level Strategy, that is, 'how can some long-term certainty in their strategic approach be gained in an uncertain future environment?' An underpinning principle in attempting to answer this question lies in the fact that some strategic planning tools are better equipped to deliver strategic insight than others. How can some certainty be gained in an uncertain future environment? It seems paradoxical to ask how certainty can be found in uncertain competitive environments. A useful platform on which to answer this question is the idea of 'strategic intent' which argues that organisations needed to create an obsession with winning in tough, fast changing and unpredictable markets, and should not content themselves with simply fitting in with their current environment. Firms need to envision a future competitive landscape where their current resources, competencies and capabilities need to be developed in order to stretch the organisation into a winning position. A management tool that imagines future competitive environments and helps develop long term strategy, in even the most uncertain of markets, is Scenario Planning. This tool offers an approach that combines imaginative and systematic thinking in a way that can provide a unique insight into the future, and provide a platform on which firms can act on with some degree of certainty. The process of scenario thinking allows executives to step back from the ritual of strategic planning and address environmental uncertainty by generating a limited set of internally consistent and plausible scenarios that are used to set the long-term strategic direction for a firm. As such, executives are able to manage uncertainty and turbulence by being 'mentally prepared' to address the future. The use of Scenario Planning amongst firms across the globe is well known. Indeed, many executives who use it consider it to be a 'Power Tool' (Rigby & Bilodeau, 2007; Oliver, 2013) which delivers high levels of user satisfaction. It is argued that the systematic approach to addressing and managing environmental uncertainty would allow firms to move away from single pointed forecasts of the future, and in doing so, create a more robust competitive strategy based on a more holistic exploration of a strategic issue. This explorative process generates a substantial amount of dialogue, creative thinking, brainstorming and intuition in order to build alternative and plausible futures where statistical forecasting techniques are deemed inadequate due to the extent of environmental uncertainty. In essence, Scenario Planning enables senior executives and strategic planning teams to mentally prepare their firms for an uncertain future by examining multiple possibilities.

In large-scale safety–critical projects unforeseen events and uncertainties must be carefully managed to safeguard the integrity of the end product and deliver projects to time and cost. Based on 47 'vignettes' of uncertainty across projects in two safety–critical sectors, this study provides an empirical examination of whether practices consistent with theories of high reliability organising are adopted by project managers as a response to project uncertainty. Our findings are that confronting uncertainties in safety–critical projects do involve many high reliability practices. Respondents expressed a sense of balancing competing demands, and provided evidence of learning, acting mindfully, avoiding over-rigid processes, and of upholding constructive tensions, conceptual slack and close interdisciplinary working. However these practices are often fragile in nature and dependent on key individuals. There are also differences between the two sectors studied, with more widespread evidence of high reliability project organising in civil nuclear than in aerospace projects.

Uncertainty is a fact of project life. Most decisions that are made on a safety-critical project involve uncertainty, the consequences of which may be highly significant to the safe and timely delivery of the project. Based on interviews with project management practitioners on nine large-scale civil nuclear and aerospace projects, we explore how
uncertainty emerges, and how project management practitioners identify, analyse and act on it. We make three important contributions. First, we present three approaches – structural, behavioural and relational – that individuals and organizations can adopt when contending with project uncertainty. Secondly, we characterize nine dualities at play in the management of project uncertainty and thirdly, we identify key differences between how civil nuclear and aerospace project managers confront project uncertainty, which have important implications for how projects might be organized in both these industry sectors. Drawing attention to the structural, behavioural and relational approaches to project uncertainty and the tensions that manifest themselves in each approach should enable the project management community to make progress in environments of high uncertainty where situations are often complex, rapidly changing and confusing, and yet where, for reasons of safety, failure is not an option.

Project managers tasked with delivering safety-critical projects must demonstrate care, competence and confidence right from the earliest stages of project inception, when levels of uncertainty can be very high. Based on interviews with 30 project management practitioners in civil nuclear and aerospace sectors, this paper builds on work by Saunders et al. (2015), who posited the Uncertainty Kaleidoscope as a framework for identifying uncertainties. Our findings are that the six determinants of project uncertainty are similar across both civil nuclear and aerospace projects. The most commonly mentioned determinant of project uncertainty was the Environment, followed by Complexity, Capability and Information. The impact of Time on project uncertainty and Individual perceptions of uncertainty were mentioned less frequently by respondents. Our key contribution is to validate the Uncertainty Kaleidoscope over a larger data set, thereby enriching our understanding of the sources of project uncertainty in these two important and highly-consequential project environments.

The management of project risk is considered a key discipline by most organisations involved in projects. Best practice project risk management processes are claimed to be self-evidently correct. However, project risk management involves a choice between which information is utilized and which is deemed to be irrelevant and hence excluded. Little research has been carried out to ascertain the manifestation of barriers to optimal project risk management such as 'irrelevance'; the deliberate inattention of risk actors to risk. This paper presents the results of a qualitative study of IT project managers, investigating their reasons for deeming certain known risks to be irrelevant. The results both confirm and expand on Smithson's . Ignorance and Uncertainty. Springer-Verlag, New York] taxonomy of ignorance and uncertainty and in particular offer further context related insights into the phenomenon of 'irrelevance' in project risk management. We suggest that coping with 'irrelevance' requires defence mechanisms, the effective management of relevance as well as the setting of, and sticking to priorities.

In safety-critical organisations such as civil-nuclear and aerospace, managing uncertainty is of particular importance as the consequences of failure can be potentially catastrophic. The challenge facing project managers in these complex, socio-technical environments is how to better understand the sources of project uncertainty and how to navigate a path through them in pursuit of successful project outcomes.