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Lesson
39

Managing Assumptions

by Peter Jászberényi

Success Problem

We all make assumptions. Wrong assumptions can have devastating impact not only on a project but also in other areas of our life.

Impact

In everyday life we make a lot of evaluations. We can evaluate the weather outlook, business or project plan, other people's behaviour, quality of our relationships, etc. Based on evaluation results we decide about our immediate or future actions. Evaluation is always based on assumptions. Some of them we realize, some of them are sort of "implicit" as we regard them as facts (e.g. that if i turn the key or push the start button, the car's engine will start). Actually, facts are just assumptions with very high probability in the current context. Assumptions can be compared to pillars of a building. If they are strong (valid assumptions), the building is solid. If they are weak (wrong assumptions), the whole building can collapse. Albert Einstein said: "Assumptions are made and most assumptions are wrong". Thus it is very important to handle assumptions efficiently.

Recommendation

Considering the above, we need to be aware that we're using lot of assumptions and possibly not all of them are valid. They are representing uncertainty and should be managed as potential sources of risks. Prior to important decisions/actions ask yourself: - What are the crucial assumptions that this decision is based on? - In what context and how much are these assumptions valid? - If some assumption turns out to be not valid, what impact will it have? - How can i mitigate such impact?

Category

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3 Comments

  1. Two major PM tools relates to the area of managing assumptions: 1. Front-End Loading-FEL (acc. to University Austin, Texas and partner CII definition) or in other PM schools named as FEED-front end definition, etc...usually the 3 phase process of overall project design- Phase 1-Business Case definition, Phase 2-Conceptual Design/Facility Planning and Phase 3-Project Design/Project Planning. Most important is project goal definition, than its decomposition to "Must Have" and "Nice to Have" goal/scope items (since every PM deals within a limited time). Smart is also to apply Paretto rule 20:80 while splitting scope to the 20% -the must have items and remaining 80% -the nice to have items. The 20% scope-the must have requires thorough project design and comprehensive future proces understanding. Re the remaining 80% -the nice to have requires also regular reevaluation of potential increase of their importancy based on overall project scope, schedule, interferrences and budget progress and level of definition. 2. What If scenario based on previous FEL stage of project and thorough Risk Mitigation Analyse -as a project crystalizes through an appropriation committe's gate passing of previous business and facility planning phases, also Risk Mitigation analyse becomes more distributed and its mitigation actions incorporated within related project plan and project design packages. Depends on PM experiences and available time, PM must choose proper managerial style (democratic or autocratic) to get the what if scenarios of the critical must have items sufficiently developed and funded into the project budget contingency. PM is facilitating both sides of PM organisation hierarchy, the project team to get optimal project plan with mimimum uncertainty, but also avocates project opportunities and threats at Project Sponsor and Appropriation/Stearing Committe to get their best understanding of value of switching the project threats to project opportunities. That is the magic of a project manager work in comparisson to a traditional linear organisation hierarchy and rountine process manager work:)
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  2. The evaluation of facts, leading to an assumption, depends also on the point of view or motivation of the evaluator. We can see a perfect illustration of this on social networks: same facts, different conclusions, depending only on the point of view and sensitivity. In a company, the HR manager, HSE manager and Finance manager will see the same facts through a different prism. This is why it is so important to define the targets in a smart and universal way, ie talking to everybody, to build strong project teams. And then assumptions' management will be easier.
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    1. That is sort of a next dimension of this topic - alignment of assumptions in a team.
      Reply Upvote post

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