How to manage project volatility

Read time 3min 20sec
Managing project volatility.
Managing project volatility.

Uncontrolled change is the most frequent cause of project failure, with changes to factors ranging from resources and constraints, to organisational requirements and strategy all having an impact on a project's budget, schedule and product.

However, living and working as we do in a VUCA (volatility, uncertainty, complexity and ambiguity) environment, change, or volatility, should be regarded as an inevitable part of any project. This is the only way it can be planned for and managed, according to George Pitagorsky, New York-based process and project management consultant, and author of "The Zen Approach to Project Management", "Managing Conflict in Projects" and "PM Foundation".

"Change is a natural, unavoidable fact of life. Knowing this, we can accept it and management it. Those who ignore, deny or try to eliminate change find themselves in a never ending, futile battle against nature. Nature will win every time. While we cannot eliminate change, we can moderate its effect and reduce its frequency," he stated in a recent blog.

Pitagorsky noted that the change associated with projects is two-fold: projects make change by creating new or modified products and processes which could result in organisational change; and at the same time, projects themselves are subject to change.

Managing change

Managing change within projects required the adoption of risk management, change management and change control processes.

The adoption of risk management processes would not only acknowledge that change is inevitable, it would also prompt the project team to implement formal change control procedures, plan for changes to the organisation's processes and design resilient projects and processes,

"Formal change control procedures... allow for change while making sure that the effects of those changes on schedule, budget and risk are assessed and considered as part of the decision to make the change now, later or at all," he said, adding that the change control procedure itself was simple.

All that's required is to identify and describe every risk relating to changes in the people, requirements, constraints, policies and procedures, priorities, schedules, budgets and technology associated with the project. These should then be assessed for their potential impact on the project,

The next step is to determine whether that change is justified in light of the potential risks. If it is, the decision can then be made whether to schedule it for immediate implementation, or to hold it off for a while and implement it as part of a future phase of the project or possibly even for after the release of the product. Alternatively, an identified risk could be considered too difficult to justify and so the proposed change could be rejected before it brings down the entire project.

'No-choice' changes

Pitagorsky emphasised that "no-choice" changes, such as the loss of people from the project team, changes in technology, as well as changes to organisational priorities, policies and procedures, should never be ignored.

"Including changes like this in the change control process results in a log of all the causes of variance in the project and valuable input to the lessons learned process that, in turn will lead to more accurate future planning and more informed risk management. It also helps in explaining why variances in schedules and budgets have taken place," he added.

As a final step, Pitagorsky said it was essential to cultivate resilience, the capacity to adapt to change, within the organisation and the project management team by making risk management, change control and organisational change management part of the project plan.

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