Encyclopedia of Technology and Innovation Management

Chapter 35. Project Management under High Uncertainty

Svenja C. Sommer^[54] and Christoph H. Loch^[55]

A project can be defined as a sequence of activities undertaken to accomplish a temporary endeavor (with a defined completion date) to create a unique product or service (Meredith and Mantel, 2003, p. 8). Projects are temporary structures (comprising reporting lines, goals and incentives, budgets, and team memberships), use flexible methods, and are dismantled after the work is done. Each project is unique in some respect and is thus managed slightly differently from other projects or ongoing repetitive processes. The ability of an organization to use temporary structures to flexibly respond to risks is particularly relevant in innovation contexts but has gained in relevance in many functional areas and business contexts. Projects are now seen as an important strategy to manage change in organizations.

Because projects are used to manage novel issues, they fundamentally must deal with uncertainty: resources are not available or are less productive than planned, tasks do not have the planned-for outputs, the context changes, the customer needs change, or any of myriad other influences change. The project management discipline has developed, in addition to careful planning, a number of methods to respond to uncertainty. In this chapter we give a brief overview of widely used methods, and then explain the challenges of managing highly novel projects that face extreme uncertainty. We ...