Managing Uncertainty Effectively in Projects

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I. Introduction

Uncertainty is an inherent part of project management, especially in the realm of product management. Whether you are introducing a new product, extending an existing one, taking on new responsibilities, or addressing various challenges, effectively managing uncertainty is critical. The product development journey, from initial research and design to testing and client acceptance, is often fraught with unexpected issues and potential disruptions, such as changes in client requirements and workforce adjustments, all of which can extend project timelines and harm business interests. For product managers, the key lies in making decisions for their companies and knowing how to revisit those decisions as circumstances evolve.

Uncertainty brings risks, with the most significant risk being indecision. Product management revolves around bringing products to market to capture real-time learning and iterate based on feedback. If you become paralyzed by uncertainty, you are likely to hinder the iterative process and lose momentum.

Managing uncertainty can be broken down into two essential components:

• Reducing uncertainty to manageable levels.
• Implementing risk management throughout the product implementation process.

II. Reducing Uncertainty Framework

When facing overwhelming uncertainty, making hasty decisions or acting impulsively is rarely a wise approach. Without enough information, such actions may lead to decisions that ultimately harm your customers or your company's interests. However, you cannot afford to be passive in the face of uncertainty. Action must be taken to make uncertainty manageable so that you can make reasonably informed decisions. How can you achieve this?

Here are steps derived from years of managing projects, both large and small, that can help you gain control over uncertainty:

• List the information required for a "good enough" decision.
• Identify the information needed to make a "relatively good" decision.
• Identify what information you currently lack.
• Determine the gaps in your current knowledge necessary to make that decision. Prioritize which gaps are most critical: Assess which gaps in information are the most vital for your decision-making. Starting with the highest priority gap, determine how and where to bridge the information gap: Consider various sources, such as customer feedback, colleagues, executives, market reports, or experiments, to fill the information gap.
• Execute a plan to acquire missing information: Develop a plan to obtain the necessary information, with a focus on speed and agility.
• Repeat steps 1-5 until you can make a "good enough" decision: Iterate through this process until you have gathered sufficient information to make reasonably informed decisions.
• Consider setting triggers for when to revisit your decision.

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1. List the information required for a "good enough" decision.

Decide when you should proactively reevaluate your decision, especially in light of changing circumstances.

What Does "Good Enough" Mean?

It's crucial to clarify that waiting for perfect information is often impractical. Pursuing perfection can lead to missed opportunities for product release and real-time learning. Instead, strive for a "good enough" decision. To illustrate, imagine you need to decide between three options, each with a 33% chance of being the "correct" choice in the absence of information. You only need enough information to slightly tilt one option's odds to 34% or more.

However, what if you have an almost infinite number of potential decisions? For example, if you need to prioritize a roadmap with ten initiatives, there are 3,628,800 possible permutations. How do you know which one is right?

In such cases, break down the problem into smaller parts. Rather than asking, "What is the right roadmap?" ask, "What is the first right feature to release?" Now you're dealing with only ten options, not 3.6 million.

When you have ten choices and 0 information, each option has a 10% chance of being correct. You only need enough information to push one option's odds to 11% or more before taking action.

Now that we understand what "relatively good" means, let's identify what kind of information is needed to make "good enough" decisions.

Types of Information Needed

While various decisions may require different types of information, here are some common elements necessary for most decisions:

• Problem Definition: What problem needs to be solved?
• Audience and Pain Points: Who is the problem-solving for, and what pain points do they face?
• Definition of Success: What does success look like?
• Required Resources: What resources are needed for a successful solution?
• Constraints: What limitations must be considered in solving the problem?
• Risks: What potential risks might be encountered in addressing the problem?

For each category, list all the information you have. This will bolster your confidence as you make significant strides in addressing the uncertainties you face. However, you will undoubtedly still lack information, which brings us to the next step.

2. Identifying Missing Information

Once you have listed everything you know, take a step back to reassess the problem. What additional information do you absolutely need to make a "relatively good" decision? At this point, jot down these missing pieces of information, listing all the questions that arise. As your school teacher likely told you, writing down the problem is halfway to solving it.

In this step, simply list everything that comes to mind. Don't worry about prioritizing just yet. Getting all your concerns and unknowns out in the open allows you to address them one by one. Now that you have all the unknowns on the table, it's time to determine priorities.

3. Prioritizing Information Gaps

Not all information is created equal. As a product manager, part of your role is determining priorities. Which unknowns actually matter most for your decision?

I find it helpful to maintain a stack-ranked list. In other words, you can't put all the gaps at the top—some have more impact than others. This way, I can clearly see which gaps require immediate attention and which can wait.

4. Bridging the Gap

Based on the Pareto Principle, you'll find that the top 1-3 gaps you prioritize are the ones truly inhibiting your progress, while the others are manageable. For these top 1-3 gaps, brainstorm ideas on where and how to obtain the required information. Can you gather it by talking to customers? Colleagues? Executives? Market reports? Dashboards? Running experiments? Sending surveys?

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Now you have a plethora of ideas to address the gaps. It's time to devise a plan.

5. Executing the Plan

Create a plan to acquire the needed information, with a focus on learning speed. When devising your information acquisition plan, ensure you have contingency options in case things don't go as planned.

I strongly recommend sharing your progress with your manager. Let them know:

• The top 1-3 pieces of information crucial to solving the problem.
• Your plans for acquiring this information and when you expect to obtain it.
• Any missing information they might already have at their disposal, expediting the process.
• Other potential actions you haven't considered.
• If you encounter roadblocks, seek alternative points of contact.

After all, they are invested in your progress. If you get stuck, you can't make effective decisions, which means they won't get the results they desire. Providing information to your manager should not be seen as "seeking help" but rather as a mechanism for keeping them informed of your work and accountable for your progress. It's also a form of upward management.

6. Iteration

Approximately 95% of the time, going through this exercise once is sufficient to make reliable decisions. However, in some cases, acquiring the necessary information can profoundly alter fundamental decisions. If that's the case, you'll need to repeat this exercise.

7. Trigger Mechanisms for Reassessment

Making "relatively good" decisions isn't enough. When we make decisions with less than complete confidence, we should actively plan to revisit them upon crossing specific thresholds. Given the depth of this specific topic, it will be covered in a separate article.

III. Conclusion

After reading this article, you now know how to reduce uncertainty to a level where you can take practical action. In future articles, we'll delve into how to reassess decisions, so you don't have to worry about making permanent mistakes.

While product management is a profession, managing uncertainty can be emotionally taxing. At times, it can affect your personal life. You may experience sleepless nights or find it challenging to engage meaningfully with loved ones due to the stress. Self-care is crucial to perform at your best, and as a bonus, I'll explore how to handle uncertainty from an emotional self-care perspective.

Product managers continually navigate constraints and risks, using these challenges as opportunities for innovation. This is why lean thinking is so valuable; it compels us to act quickly, deliver imperfect products, and focus on learning from real-world results.

Because of uncertainty, product managers are needed. If your company knew everything that would happen, they wouldn't require your services. Uncertainty places us in a humble position, fostering a desire to learn, experiment, and iterate. That's a good thing. Furthermore, uncertainty offers the benefit of allowing us room to reconsider decisions over time.