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How to Manage Project Opportunity and Risk: Why uncertainty management can be a much better approach than risk management by Stephen Ward, Chris Chapman

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Chapter 8

Structure all uncertainty

. . . for want of a nail the shoe was lost; for want of a shoe the horse was lost; and for want of a horse the rider was lost.

—Benjamin Franklin, 1758

The define phase provides a basic seven Ws and project lifecycle structure. The identify phase extends this structure to all identified sources of uncertainty, some treated as conditions, plus relevant response options. The structure phase is concerned with completing the associated qualitative analysis apart from the ownership issues addressed in the next phase. The objective is to improve understanding of the relative importance of different sources given a qualitative view of consequences and identified response options, to explore relevant interactions, and to test the assumptions implicit or explicit in all earlier steps. This can lead to refinement of existing response options and prompt the development of new responses which are more effective. It can also lead to more effective forms of analysis.

In general, we want the structure used to be as simple as possible, but not misleadingly so. The structure phase involves testing simplifying assumptions and developing alternative assumptions when appropriate. More complex structure or simpler structure may improve clarity efficiency.

Failure to deal with complexity can render analysis dangerously misleading. For example, assuming a large number of sources of uncertainty are independent will allow their individual effects to tend to cancel out ...

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