Known Unknowns: Navigating Predictable Uncertainties

Known unknowns, also known as “known risks,” are risks that project managers or risk managers can anticipate and identify, but the exact impact or timing of these risks is uncertain. These risks are often based on past experiences, industry trends, or current market conditions. By acknowledging and addressing known unknowns, project teams can proactively develop mitigation strategies and contingency plans to minimize their potential impact.

Examples of Known Unknowns

Some common examples of known unknowns include:

• Changes to the business environment, such as shifts in market demand, regulatory changes, or new competitors.
• Technology disruptors, such as the emergence of new technologies or changes in existing technologies that can impact the project’s scope or timeline.
• Market shifts, such as fluctuations in commodity prices, changes in consumer preferences, or economic downturns.
• Geopolitical events, such as political instability, trade wars, or natural disasters, that can disrupt supply chains or impact project resources.
• Loss of key resources, such as team members leaving the project due to personal reasons, illness, or unexpected resignations.

Managing Known Unknowns

Project managers can loosely plan for known unknowns by taking the following steps:

• Document assumptions: Clearly identify and document the assumptions made during project planning. This helps ensure that all stakeholders are aware of the potential risks and their impact on the project.
• Develop alternative solutions: Create backup plans or alternative solutions for known risks. This allows the project team to quickly adapt and respond to unexpected events.
• Include contingency plans: Incorporate contingency plans into project schedules and costs. This provides a buffer to accommodate potential delays or additional expenses caused by known unknowns.
• Transparent communication: Openly communicate known risks and mitigation strategies to the project team and stakeholders. Transparency builds trust and facilitates collaboration in addressing these risks.

Unknown Unknowns: Dealing with the Unforeseen

Unknown unknowns, also known as “unknown risks,” are risks that are impossible to anticipate or imagine in advance. These risks are often unexpected and can have a significant negative impact on a project. They can arise from unforeseen events, sudden changes in the market, or unpredictable human behavior.

Examples of Unknown Unknowns

Some examples of unknown unknowns include:

• Natural disasters, such as earthquakes, hurricanes, or floods, that can disrupt project activities and resources.
• Unforeseen market changes, such as sudden shifts in demand, supply chain disruptions, or economic crises.
• Sudden resignation of key team members due to personal reasons, health issues, or unexpected opportunities.
• Global pandemics, such as the COVID-19 outbreak, that can cause widespread disruptions and impact project timelines and resources.

Managing Unknown Unknowns

While it is not possible to plan for unknown unknowns, project managers can minimize their negative impact by taking the following steps:

• Understand the root cause: When an unknown unknown occurs, focus on understanding the root cause of the issue. This helps identify patterns and potential solutions for future projects.
• Raise issues early: Communicate issues and challenges promptly to stakeholders. Provide a recommended solution or course of action to address the situation.
• Keep the team updated: Maintain open communication with the project team and stakeholders. Provide regular updates on the progress of the project and any emerging issues.
• Document experiences: Document the lessons learned from dealing with unknown unknowns. This information can be valuable for future projects and help build a knowledge base for risk management.

Conclusion

Known unknowns and unknown unknowns are inherent parts of project management. By acknowledging and addressing known unknowns, project managers can proactively mitigate risks and enhance project success. While unknown unknowns cannot be entirely eliminated, project teams can minimize their impact by fostering a culture of adaptability, resilience, and continuous learning.

References:

1. Management Yogi: Risk Classification: Known-Knowns, Known-Unknowns, Unknown-Knowns and Unknown-Unknowns (https://www.managementyogi.com/2019/09/risk-classification-known-knowns-known-unknowns-unknown-knowns-and-unknown-unknowns.html)
2. Forbes: Managing Known And Unknown Unknowns (https://www.forbes.com/sites/forbesbooksauthors/2021/06/21/managing-known-and-unknown-unknowns/)
3. Veritas Total Solutions: Unknown Unknowns: How To Manage Risk Against the Unexpected (https://info.veritasts.com/insights/unknown-unknowns-how-to-manage-risk-against-the-unexpected)

FAQs

What are known unknowns?

Known unknowns are risks that project managers can anticipate and identify, but the exact impact or timing of these risks is uncertain. Examples include changes to the business environment, technology disruptors, market shifts, geopolitical events, and loss of key resources.

How can project managers address known unknowns?

Project managers can address known unknowns by documenting assumptions, developing alternative solutions, including contingency plans in project schedules and costs, and transparently sharing information with the project team and stakeholders.

What are unknown unknowns?

Unknown unknowns are risks that are impossible to anticipate or imagine in advance. These risks are often unexpected and can have a significant negative impact on a project. Examples include natural disasters, unforeseen market changes, sudden resignation of key team members, or global pandemics.

How can project managers deal with unknown unknowns?

While it is not possible to plan for unknown unknowns, project managers can minimize their negative impact by understanding the root cause of the issue, raising issues early with a recommended solution, keeping the team updated on the progress, and documenting the experience and solution for future projects.

Why is it important to consider both known unknowns and unknown unknowns in project management?

Considering both known unknowns and unknown unknowns helps project managers to be more proactive and prepared in addressing risks. By acknowledging and addressing known unknowns, project teams can develop mitigation strategies and contingency plans to minimize their potential impact. While unknown unknowns cannot be entirely eliminated, project teams can minimize their impact by fostering a culture of adaptability, resilience, and continuous learning.

What are some examples of known unknowns and unknown unknowns in project management?

Examples of known unknowns include changes to the business environment, technology disruptors, market shifts, geopolitical events, and loss of key resources. Examples of unknown unknowns include natural disasters, unforeseen market changes, sudden resignation of key team members, or global pandemics.

How can project managers create a culture of adaptability and resilience to better manage unknown unknowns?

Project managers can create a culture of adaptability and resilience by encouraging open communication, fostering a learning environment, empowering team members to make decisions, and promoting a positive and proactive mindset.

How can project managers document lessons learned from dealing with unknown unknowns for future projects?

Project managers can document lessons learned by conducting post-project reviews, collecting feedback from team members and stakeholders, and maintaining a knowledge base of risk management strategies and solutions.