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Coming to terms with the unknown

Re-invoking Knightian uncertainty

Advances in Project Management

SERIES ARTICLE

By Prof Darren Dalcher

Director, National Centre for Project Management
University of Hertfordshire

United Kingdom

 


The topics of risk and uncertainty are often featured in the Advances of Project Management series of articles. Uncertainty is particularly prevalent: We grapple with uncertainty when dealing with the unknown; we acknowledge that we increasingly live in a VUCA world replete with limited knowledge and uncertain and unpredictable patterns; we endeavour to acquire resilient traits that allow us to adapt and adjust; and generally, we seek more agile approaches in order to respond to a world that seems to change faster than we are able to adapt, or learn. Looking through recent contributions, one might almost observe that the obviation of uncertainty is an increasing obsession of the human race; yet, uncertainty itself, which appears to be an abundant feature of our creative landscape, is scarcely addressed explicitly in our recipes, prescriptions and bodies of knowledge.

While contemporary writings often assert that uncertainty is a growing feature of modern endeavours, particularly massive ones ranging from mega- and giga-projects to transformational societal change efforts, there is ample evidence that our ancestors also grappled with the doubt and paradox of uncertainty.

Scottish poet and lyricist, Robert Burns wryly observed that ‘there is no such uncertainty as a sure thing’. Prussian general and renowned military strategist Carl von Clausewitz noted that ‘although our intellect always longs for clarity and certainty, our nature often finds uncertainty fascinating.’ French mathematician and inventor Blaise Pascal commented that ‘we sail within a vast sphere, ever drifting in uncertainty driven from end to end.

English author and researcher, Rupert Sheldrake pointed out that ‘there’s a certain kind of scepticism that can’t bear uncertainty’. Indeed, the nature of the relationship with uncertainty was aptly captured by contemporary US scholar and public speaker Brene Brown who recapped that ‘I spent a lot of years trying to outrun or outsmart vulnerability by making things certain and definite, black and white, good and bad. My inability to lean into the discomfort of vulnerability limited the fullness of those important experiences that are wrought with uncertainty: Love, belonging, trust, joy, and creativity to name a few.’

Uncertainty thus encompasses a tentative balance between exposure, imperfection and vulnerability emerging from the unknown, weighed against a bias towards opportunity, progress, discovery, and potential for improvement, development or growth that come in its wake.

US theoretical physicist and researcher Richard P. Feynman captured the essence of the peculiar, yet critical relationship with uncertainty: ‘I think that when we know that we actually do live in uncertainty, then we ought to admit it; it is of great value to realize that we do not know the answers to different questions. This attitude of mind – this attitude of uncertainty – is vital to the scientist, and it is this attitude of mind which the student must first acquire.’

Re-visiting uncertainty

Knowing and admitting uncertainty implies recognition of the features and distinctions of such a state. Moreover, the emergence of new writing focused on unlikely occurrences, black swan events, fragility and general preparedness for addressing and mitigating the impact of the unknown, merit a reconsideration of some of the more established, but often neglected, sources in risk and uncertainty.

One of the early detailed sources on risk is provided by the work of US economist Frank Knight (1885-1972) familiarised through his timeless classic best selling book, Risk, uncertainty and profit. The book published in 1921 is based on his doctoral dissertation at Cornell University and has been selected by scholars as being culturally important, and is now recognised as part of the classical knowledge base of civilization.

Knight’s book represents a very early, organised attempt to make sense of the distinctions between risk and uncertainty:

Uncertainty must be taken in a sense radically distinct from the familiar notion of Risk, from which it has never been properly separated…. The essential fact is that ‘risk’ means in some cases a quantity susceptible of measurement, while at other times it is something distinctly not of this character; and there are far-reaching and crucial differences in the bearings of the phenomena depending on which of the two is really present and operating…. It will appear that a measurable uncertainty, or ‘risk’ proper, as we shall use the term, is so far different from an unmeasurable one that it is not in effect an uncertainty at all.” (Knight, 1921; p. 19-20)

In Knight’s formulation risk is taken as a measurable quantity, whilst uncertainty is regarded as true uncertainty ‘of the non quantitative type’. Risky situations occur where the outcomes are unknown but are governed by probability distributions that are known at the outset (in other words, while we do not know which outcome will prevail, we can measure or determine the odds). Under such conditions agents endeavour to maximise economic gains through expected utility.

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Editor’s note: The PMWJ Advances in Project Management series includes articles by authors of program and project management books published by Gower and other publishers in the Routledge family. Each month an introduction to the current article is provided by series editor Prof Darren Dalcher, who is also the editor of the Gower/Routledge Advances in Project Management series of books on new and emerging concepts in PM. Prof Dalcher’s article is an introduction to the invited paper this month in the PMWJ.


 

About the Author


Darren Dalcher, PhD

Series Editor
Director, National Centre for Project Management
University of Hertfordshire, UK

 


Darren Dalcher
, Ph.D. HonFAPM, FRSA, FBCS, CITP, FCMI, SFHEA is Professor of Project Management at the University of Hertfordshire, and founder and Director of the National Centre for Project Management (NCPM) in the UK. He has been named by the Association for Project Management (APM) as one of the top 10 “movers and shapers” in project management in 2008 and was voted Project Magazine’s “Academic of the Year” for his contribution in “integrating and weaving academic work with practice”. Following industrial and consultancy experience in managing IT projects, Professor Dalcher gained his PhD in Software Engineering from King’s College, University of London.

Professor Dalcher has written over 150 papers and book chapters on project management and software engineering. He is Editor-in-Chief of Software Process Improvement and Practice, an international journal focusing on capability, maturity, growth and improvement. He is the editor of the book series, Advances in Project Management, published by Gower Publishing of a new companion series Fundamentals of Project Management. Heavily involved in a variety of research projects and subjects, Professor Dalcher has built a reputation as leader and innovator in the areas of practice-based education and reflection in project management. He works with many major industrial and commercial organisations and government bodies in the UK and beyond.

Darren is an Honorary Fellow of the APM, a Chartered Fellow of the British Computer Society, a Fellow of the Chartered Management Institute, and the Royal Society of Arts, and a Member of the Project Management Institute (PMI), the Academy of Management, the Institute for Electrical and Electronics Engineers, and the Association for Computing Machinery. He is a Chartered IT Practitioner. He is a Member of the PMI Advisory Board responsible for the prestigious David I. Cleland project management award and of the APM Professional Development Board. Prof Dalcher is an academic advisor for the PM World Journal. He can be contacted at d.dalcher2@herts.ac.uk

To see other works by Prof Darren Dalcher, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/darren-dalcher/.