Managing Volatility

George Pitagorsky

7/30/2018

How To Manage Change in Projects

Change is an inevitable part of any project. Projects make change by creating new or modified products and processes. Projects are subject to change.

Volatility is the V in VUCA. In past posts we have discussed the other VUCA factors that come together to challenge projects - uncertainty, complexity and ambiguity. Volatility is the tendency to change rapidly and unexpectedly. In the context of VUCA in projects volatility refers to the nature and frequency of change and its causes.

There are degrees of volatility along a continuum from high (extremely rapid and unpredictable) to low (infrequent and predictable). The principle changes in projects relate to people, requirements, constraints, policies and procedures, priorities, schedules, budgets and technology. There is a complex relationship among these dimensions. Changes in the people within and around a project can easily lead to changes in all the other dimensions.

Changes in requirements can lead to changes in schedule and budget, Changes in technology can lead to changes in requirements. Changes in a project's requirements, stakeholders, schedule and budget can cause changes in the broader environment, including other projects and the target environment, for example, the business process to be affected by the project's deliverables.

Change is Inevitable

Change is a natural unavoidable fact of life. Knowing this, we can accept it and manage it. Those who ignore, deny or try to eliminate change find themselves in a never ending, futile battle against nature. Nature will win every time.

While we cannot eliminate change, we can moderate its effect and reduce its frequency.

Managing Change

Risk management, change management and change control are the project management processes for accomplishing this. In addition, product design and effective communication to manage expectations help to moderate the impact of change.

Risk management acknowledges that change will occur and seeks to minimize the probability of its occurrence and impact. The recognition that change is a risk influences the project team to implement formal change control procedures, plan for organizational change and design resilient projects and processes.

Formal change control procedures, supported by collaboration tools, allow for change while making sure that the effects of those changes on schedule, budget and risk are assessed and considered as part of the decision to make the change now, later or at all. The change control procedure is simple - every change is identified, described, assessed for impact, justified and scheduled or rejected. Scheduling may be for the immediate future, a convenient future phase of the project or for some post-project future release of the product.

Uncontrolled change is a foremost cause of project failure. Every change, whether to resources, requirements, constraints or anything else, will impact the project schedule, budget and product. Every change, therefore, should be consciously decided upon based on the perceived benefits, costs and risk of the change. Exempting small requirements changes from the process leads to "scope creep."

Do not ignore no-choice changes like the loss of human resources caused by turnover or executive decisions to re-prioritize the project. Even though there is no choice but to accept them, ignoring them leads to unmet expectations as schedules and budgets are impacted by the loss and the learning curve of the replacement, if there is one.

Including changes like this in the change control process results in a log of all the causes of variance in the project and valuable input to the lessons learned process that, in turn will lead to more accurate future planning and more informed risk management. It also helps in explaining why variances in schedules and budgets have taken place.

Changes in technology, for example the use of a new collaboration tool during a project or the implementation of a new operating system release, will require adjustments to the plan due to learning curves and other costs of implementing a new tool and the procedures for its use.

Changes to organizational priorities, policies and procedures are driven from outside of the project, often with little concern for their impact at the project level. Like other no-choice changes, they must be considered in the change control process. Sometimes, it is possible to negotiate a postponement of the implementation of the change until after the project is over or until a convenient time during the project.

In short, any change in schedule and budget must be part of the change control process.

Organizational Change Management

Managing volatility involves change control and change management. Change control is focused on changes that effect project schedule, budget, risk and scope. Change management is focused on the impact of the project and its results on the project environment. To minimize confusion, it is best to refer to this as organizational change management.

Projects are designed to make change. They introduce new and changed processes and products into an environment. Most organizations have difficulty in integrating change into current operations, given learning curves, resistance to change, and resource constraints. Portfolio, program and project planning must consider the impact on the environment. At the portfolio and program levels, planning decisions should moderate the flow of changes into the environment to allow the environment to "digest" the changes without disruption. Project plans should consider phased implementations.

Make sure organizational change management is an integral part of planning and the effort to manage volatility.

Resilience

Resilience is the capacity to adapt to change. To cultivate resilience, plan every project with volatility in mind. Expect change, predict the most likely kinds of change you will face and be open to the fact that things that you think will not change, will change.

Make risk management, change control and organizational change management part of your plan. Include sufficient buffers to accommodate expected change. Even if it is more costly in time and effort to do so, design and create deliverables (products and processes and the training and documentation associated with them) to enable ease of change.

The extra time and effort you take to create a resilient project and product will pay off down the road when change occurs and you can adapt to it with relative ease.