About working with uncontrollable risks in projects

"Annushka has already bought sunflower oil, and not only bought it, but even bottled it. So the meeting will not take place"

Mikhail Bulgakov
"The Master and Margarita"

The first project that I led on a turnkey basis as a project manager took place a little less than 10 years ago. Our customer was a large oil production company in eastern Siberia. I recruited several people from different regions into the team, who were constantly with the customer. I myself regularly flew back and forth between my house in Moscow and the customer's city.

The planned duration of work under the contract was 6 months. Within the framework of the project, I was given practically unlimited powers, and my income directly depended on the final profitability of the project.

My first project... Of course, I had a strong motivation to do everything in an exemplary manner.

In general, everything went well, 2 weeks before the planned completion of the work, the results were ready and even pre-approved; all that remained was for them to be finally approved by the customer. For this purpose, another business trip was planned. But in a telephone conversation with the customer before departure, I heard:

"Roman, let's pause everything for now and push back the completion of your work by about 2-3 months. We have force majeure, an emergency occurred at the field, there was a fire in the construction camp. People got hurt there. We are now undergoing inspection after inspection. To be honest, I have no time for your work yet. I promise that there will be no claims against you, we will not impose any penalties for shifting the deadlines under the contract."

Ambitious determination took over, I decided not to suspend work, go on a business trip and look for opportunities to meet with the customer on site to coordinate the work. I spent the entire next month with the customer with absolutely no benefit. Then he flew home. Then he returned and passed the work with a deviation of 2.5 months from the original plan.

In the end, the project was not a failure, but it could not be called particularly successful either.

A little later, reflecting on the "lessons learned" of the project, I calculated the option of suspending work for 2 months, as the customer proposed to do. In this case, losses from shifting deadlines would be reduced several times: some of the team's specialists could be transferred to other projects, some would not mind a long vacation, and significant savings could be made on overhead costs.

In fact, the delay in itself was not critical. The additional costs that accompanied it were critical, which could largely have been avoided if I had been able to restructure and reschedule the work in time.

But I really wanted to do everything in an exemplary manner, since after all, my first own project...

What is the takeaway from this story?

There are no 100% guarantees for anything in life, including the fact that you will successfully implement a project. Even if everything is done perfectly on your part, factors and situations that you cannot influence may interfere.

By the way, if at any project management training you hear about a technique that "guarantees something" or "definitely ensures success", you can draw an unambiguous conclusion: either you, frankly speaking, are being scammed, or this is a person who has never in his life led a real project with responsibility for the result.

Here you can ask: "What's the point in planning anything at all, since everything can change at any moment? And why do we need all these project management technologies if they still don't provide any guarantees?"

I answer:

Firstly, application of project management technologies does not guarantee success, but increases the likelihood of success. Just like careful driving does not guarantee that you will not get into an accident due to the fault of some "eccentric". But this does not mean that you should drive through a busy intersection at a red light at a speed of 100 km/h.

Secondly, project management technologies, in contrast to operational management methods, just the same involve exposure to risks and uncertainties. In particular, in project management there is a separate topic "change management" and a separate topic - "risk management". None of the approaches to project management says that project parameters cannot change during its implementation. On the contrary, it is said that Changing plans is a normal and natural process.

One of the project management principles in the international project management standard PMBOK7 sounds like this:

"Enable Change To Achieve the Envisioned Future State."

In simple terms, we are talking about the need to be able to adapt on the fly during the implementation of the project. However, there is a fine line when dealing with change.

On the one hand, there must be determination and work for results. The project manager must look for ways to solve problems and achieve results, and not go with the flow, change plans and abandon stated goals when the first difficulties arise.

On the other hand, when goals become objectively unattainable, it is necessary to reschedule and restructure the work in a timely manner so as not to waste resources.

But how do you understand at what point the project's goals have become unattainable and plans need to be changed? Of course, there is no universal answer here. But if you evaluate the situation in the project rationally, pragmatically and without emotions, then it is quite possible to determine this moment. However, a problem from the field of psychology often arises here - giving up stated goals without emotions can be difficult.

I have a household story on this topic.

In 2017, I was looking for real estate in Moscow and saw an advertisement with an extremely strange price (about 2 times higher than the market price). Out of curiosity, I went to see the property and heard from the owner: "I bought this property in 2012 for N thousand dollars and I'm not ready to sell it cheaper." Only since that moment the dollar exchange rate has doubled, and real estate prices in rubles have remained virtually unchanged. As a human being, you can understand the seller; he will most likely lose almost half the amount when converted into foreign currency during the sale, this is really a shame. But if you look at the situation pragmatically and rationally, the only important thing is how much the property costs on the market now, and how this price will change in the future. And what was done 5 years ago cannot be changed. However, it is sometimes very difficult to admit to yourself that you have made a mistake.

In any project, at any time, circumstances may arise that will critically affect the achievement of the project's goals and at the same time turn out to be beyond your control. This does not mean that there is no need to plan work in the project and that the project is impossible to manage in principle.

External circumstances may turn out to be uncontrollable, but responding to them promptly and correctly is the task and responsibility of the project manager. It is necessary to plan work on the project, but at the same time it is necessary to constantly analyze emerging changes and risks in order to quickly reschedule the project if necessary.

It is important to determine in time the moment when project goals become unattainable. An extremely important quality for a project manager is psychological stability.

On the topic of this article, I have a favorite quote:

"You need to have the strength to change what you can change.
You need to have the courage to accept what you cannot influence.
And you need to have the wisdom to distinguish the first from the second."