Black Swans in Your Project: Understanding, Identification and Management of Extreme Unknown Unknowns
Since the beginning of COVID-19 pandemic, a lot of project managers and business stakeholders have been wondering what, if anything, could have been done in risk management of their projects better or at least differently to anticipate such an unusual and consequential event. In many cases, we are finding that the systems and practices we apply in project risk management are incapable to appropriately address events of high impact and extremely low probability, because these risks tend to fall off the margins of our risk frameworks. We call them ontological uncertainties, extreme unknown unknowns or "black swans" for being unfathomable before being observed and self-evident shortly after. Events like these expand our understanding of what is probable, but give little in a way of quantitative analysis, which leads to confusion among project managers about what can actually be done in advance, with some project managers choosing to do nothing.
It is obvious that to enable a proactive response, risk management at all levels (project, portfolio and enterprise) should apply different approaches in identification, classification and mitigation.
Following in the footsteps of a seminal book The Black Swan by Nicholas Nassim Taleb, I will demonstrate key failures of traditional risk management and stakeholder management practices in projects where extreme unknown unknowns are concerned. A special attention would be given to explaining how identification of Black Swans and planning the response for them is different from the traditional techniques we apply with tractable risks (known unknowns). More importantly, I will address the Project Management Principle of „Embrace Adaptability and Resiliency“ in the 7th edition of Project Management Body of Knowledge (PMBOK) as the fundamental, if not perfect, remedy to negative impacts of Black Swans that we need to apply for the benefit of the project and its stakeholders.
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Acknowledgements: Heather McLarnon