The Successive Principle for Managing Uncertainty - Revision history

Felixx at 12:44, 21 March 2022

2022-03-21T12:44:42Z

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			''Developed by Felix Piepenstock''
	== Abstract ==		== Abstract ==
	The successive principle is a method for managing uncertainty and can be applied to budgeting and scheduling, as well as other disciplines of Project Management, Systems Engineering, Risk Analysis and Cost Engineering.<ref name="LIC2006" /> It was developed by Steen Lichtenberg, a former professor at the Technical University of Denmark (DTU).		The successive principle is a method for managing uncertainty and can be applied to budgeting and scheduling, as well as other disciplines of Project Management, Systems Engineering, Risk Analysis and Cost Engineering.<ref name="LIC2006" /> It was developed by Steen Lichtenberg, a former professor at the Technical University of Denmark (DTU).

Felixx: /* Procedure of the Method */

2022-03-21T12:33:16Z

Procedure of the Method

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	== Procedure of the Method ==		== Procedure of the Method ==
	[[File:~~Procedure2~~.PNG\|350px\|thumb\|right\|Figure 1: Procedure of the Successive Principle, adapted from <ref name="LIC2000" />]]		[[File:Procedure5.PNG\|350px\|thumb\|right\|Figure 1: Procedure of the Successive Principle, adapted from <ref name="LIC2000" />]]

	The procedure for applying the successive principle can be split into a qualitative and a quantitative phase with several subtasks. Successive detailing takes place in the quantitative phase after setting the preconditions up in the qualitative phase. The general process is illustrated in figure 1 <ref name="LIC2000" />		The procedure for applying the successive principle can be split into a qualitative and a quantitative phase with several subtasks. Successive detailing takes place in the quantitative phase after setting the preconditions up in the qualitative phase. The general process is illustrated in figure 1 <ref name="LIC2000" />

Felixx: /* Procedure of the Method */

2022-03-21T12:29:24Z

Procedure of the Method

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	== Procedure of the Method ==		== Procedure of the Method ==
	[[File:~~Procedure~~.PNG\|350px\|thumb\|right\|Figure 1: Procedure of the Successive Principle, adapted from <ref name="LIC2000" />]]		[[File:Procedure2.PNG\|350px\|thumb\|right\|Figure 1: Procedure of the Successive Principle, adapted from <ref name="LIC2000" />]]

	The procedure for applying the successive principle can be split into a qualitative and a quantitative phase with several subtasks. Successive detailing takes place in the quantitative phase after setting the preconditions up in the qualitative phase. The general process is illustrated in figure 1 <ref name="LIC2000" />		The procedure for applying the successive principle can be split into a qualitative and a quantitative phase with several subtasks. Successive detailing takes place in the quantitative phase after setting the preconditions up in the qualitative phase. The general process is illustrated in figure 1 <ref name="LIC2000" />

Felixx: /* Theory and Principles */

2022-03-21T12:16:54Z

Theory and Principles

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	# Uncertainty exists, cannot be avoided and therefore needs to be considered and tackled		# Uncertainty exists, cannot be avoided and therefore needs to be considered and tackled
	# Multidisciplinary, evened groups can evaluate smart and without bias		# Multidisciplinary, evened groups can evaluate smart and without bias
	# ~~Eliminating~~ uncertainty by successively detailing and building a quantitative model		# Eliminate uncertainty by successively detailing and building a quantitative model
	# ~~Getting~~ a holistic view by adding overall influences and considering every influence to the project <ref name="ARC2016" />		# Get a holistic view by adding overall influences and considering every influence to the project <ref name="ARC2016" />

	It also differs from traditional project management methods in three further points. <ref name="ARC2016" /> While typically the areas of large uncertainty are not tackled because of subjectivity, the Successive Principle picks exactly these for detailing and is able to be more precise than a traditional approach, considering more, but less subjective items. Furthermore, the new principle prioritizes the items with highest uncertainty and thus seeks diving into the most difficult items to estimate, which again differs from the traditional approach. Another change is made in the treatment of interrelated areas. The management of schedules, cost, resources and technical issues is now combined, specialists from each area are working together and thus interrelated areas are treated together, in order to not deflect the holistic view on the project. <ref name="ARC2016" />		It also differs from traditional project management methods in three further points. <ref name="ARC2016" /> While typically the areas of large uncertainty are not tackled because of subjectivity, the Successive Principle picks exactly these for detailing and is able to be more precise than a traditional approach, considering more, but less subjective items. Furthermore, the new principle prioritizes the items with highest uncertainty and thus seeks diving into the most difficult items to estimate, which again differs from the traditional approach. Another change is made in the treatment of interrelated areas. The management of schedules, cost, resources and technical issues is now combined, specialists from each area are working together and thus interrelated areas are treated together, in order to not deflect the holistic view on the project. <ref name="ARC2016" />

Felixx: /* Annotated Bibliography */

2022-03-19T22:27:58Z

Annotated Bibliography

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	* Lichtenberg S., Klakegg, O.J. Successful Control of Major Project Budgets. Administrative Sciences. 2016; 6(3):8.		* Lichtenberg, S., Klakegg, O.J. (2016). Successful Control of Major Project Budgets. Administrative Sciences. 2016; 6(3):8.

	::The latest article about the topic. It summarizes the method shortly, without digging too deep into details. The application to scheduling and cost analysis is discussed in regard to the final research results of the method. Many experiences and results from projects, where the Successive Principle was applied, are given and their final costs analysed. Finally, the whole approach is critically reflected, and existing challenges listed, which makes this paper a peer review. It is the recommended to read, because it reflects on the whole development process of the method from early research to large scale application nowadays.		::The latest article about the topic. It summarizes the method shortly, without digging too deep into details. The application to scheduling and cost analysis is discussed in regard to the final research results of the method. Many experiences and results from projects, where the Successive Principle was applied, are given and their final costs analysed. Finally, the whole approach is critically reflected, and existing challenges listed, which makes this paper a peer review. It is the recommended to read, because it reflects on the whole development process of the method from early research to large scale application nowadays.

Felixx: /* Annotated Bibliography */

2022-03-19T22:26:36Z

Annotated Bibliography

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	== Annotated Bibliography ==		== Annotated Bibliography ==
	* Lichtenberg, S. (2000). Proactive management of uncertainty using the Successive Principle - a practical way to manage opportunities and risks. Polyteknisk Press		* Lichtenberg, S. (2000). Proactive management of uncertainty using the Successive Principle - a practical way to manage opportunities and risks. Polyteknisk Press.

	::The main publication about the Successive Principle. It includes chapters, which focus on the single steps of the procedure. Especially the quantitative phase is elaborated thoroughly. Calculation models and evaluation techniques are defined in detail. Specific profitability, timing and scheduling applications are explained, and case studies are conducted. All in all, it is the handbook for those, who are interested in managing uncertainties proactively and one of the only publication deeply explaining the Successive Principle. Because of the emphasis on extending the traditional risk management techniques, it is highly relevant, but builds on a solid basic knowledge of risk management.		::The main publication about the Successive Principle. It includes chapters, which focus on the single steps of the procedure. Especially the quantitative phase is elaborated thoroughly. Calculation models and evaluation techniques are defined in detail. Specific profitability, timing and scheduling applications are explained, and case studies are conducted. All in all, it is the handbook for those, who are interested in managing uncertainties proactively and one of the only publication deeply explaining the Successive Principle. Because of the emphasis on extending the traditional risk management techniques, it is highly relevant, but builds on a solid basic knowledge of risk management.

Felixx: /* References */

2022-03-19T22:24:18Z

References

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	<ref name="LIC2000">Lichtenberg, S. (2000). Proactive management of uncertainty using the Successive Principle - a practical way to manage opportunities and risks. Polyteknisk Press.</ref>		<ref name="LIC2000">Lichtenberg, S. (2000). Proactive management of uncertainty using the Successive Principle - a practical way to manage opportunities and risks. Polyteknisk Press.</ref>
	<ref name="LIC2016">Lichtenberg, S., Klakegg, O.J. (2016). Successful Control of Major Project Budgets. Administrative Sciences. 2016; 6(3):8.</ref>		<ref name="LIC2016">Lichtenberg, S., Klakegg, O.J. (2016). Successful Control of Major Project Budgets. Administrative Sciences. 2016; 6(3):8.</ref>
	<ref name="LIC2006">Lichtenberg, S., (2006) The Successive Principle – a scientific crystal ball for management. Conference Paper. The international Cost Engineering Council. </ref>		<ref name="LIC2006">Lichtenberg, S., (2006). The Successive Principle – a scientific crystal ball for management. Conference Paper. The international Cost Engineering Council. </ref>
	<ref name="LIC2015">Lichtenberg, S., Klakegg, O.J. (2015). Successive cost estimation – successful budgeting of major projects. 29th World Congress International Project Management Association (IPMA).</ref>		<ref name="LIC2015">Lichtenberg, S., Klakegg, O.J. (2015). Successive cost estimation – successful budgeting of major projects. 29th World Congress International Project Management Association (IPMA).</ref>
	<ref name="PMI2019">Project Management Institute, Inc. (PMI). (2019). Standard for Risk Management in Portfolios, Programs, and Projects. Project Management Institute, Inc. (PMI). </ref>		<ref name="PMI2019">Project Management Institute, Inc. (PMI). (2019). Standard for Risk Management in Portfolios, Programs, and Projects. Project Management Institute, Inc. (PMI). </ref>
	<ref name="FLY2002">Flyvbjerg, B., Skamris Holm, M., Buhl, S. (2002). Underestimating Costs in Public Works Projects: Error or Lie? , Journal of the American Planning Association, 68:3, 279-295. </ref>		<ref name="FLY2002">Flyvbjerg, B., Skamris Holm, M., Buhl, S. (2002). Underestimating Costs in Public Works Projects: Error or Lie? , Journal of the American Planning Association, 68:3, 279-295. </ref>
	<ref name="ARC2016">Archibald, R., Lichtenberg, S. (2016). Experiences Using Next Generation Management Practices The Future Has Already Begun, PM World Journal, 5:8 </ref>		<ref name="ARC2016">Archibald, R., Lichtenberg, S. (2016). Experiences Using Next Generation Management Practices The Future Has Already Begun, PM World Journal, 5:8. </ref>
	<ref name="ISO21502"> International Organization for Standardization. (2020). Project, programme and portfolio management - guidance on project management. (DS/ISO 21502:2020). </ref>		<ref name="ISO21502"> International Organization for Standardization. (2020). Project, programme and portfolio management - guidance on project management. (DS/ISO 21502:2020). </ref>


	</references>		</references>

Felixx: /* References */

2022-03-19T22:23:24Z

References

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	== References ==		== References ==
	<references>		<references>
	<ref name="LIC2000">Lichtenberg, S. (2000). Proactive management of uncertainty using the Successive Principle - a practical way to manage opportunities and risks. Polyteknisk Press</ref>		<ref name="LIC2000">Lichtenberg, S. (2000). Proactive management of uncertainty using the Successive Principle - a practical way to manage opportunities and risks. Polyteknisk Press.</ref>
	<ref name="LIC2016">Lichtenberg, S., Klakegg, O.J. (2016). Successful Control of Major Project Budgets. Administrative Sciences. 2016; 6(3):8.</ref>		<ref name="LIC2016">Lichtenberg, S., Klakegg, O.J. (2016). Successful Control of Major Project Budgets. Administrative Sciences. 2016; 6(3):8.</ref>
	<ref name="LIC2006">Lichtenberg, S., (2006) The Successive Principle – a scientific crystal ball for management. Conference Paper. The international Cost Engineering Council </ref>		<ref name="LIC2006">Lichtenberg, S., (2006) The Successive Principle – a scientific crystal ball for management. Conference Paper. The international Cost Engineering Council. </ref>
	<ref name="LIC2015">Lichtenberg, S., Klakegg, O.J. (2015). Successive cost estimation – successful budgeting of major projects. 29th World Congress International Project Management Association (IPMA).</ref>		<ref name="LIC2015">Lichtenberg, S., Klakegg, O.J. (2015). Successive cost estimation – successful budgeting of major projects. 29th World Congress International Project Management Association (IPMA).</ref>
	<ref name="PMI2019">Project Management Institute, Inc. (PMI). (2019). Standard for Risk Management in Portfolios, Programs, and Projects. Project Management Institute, Inc. (PMI) </ref>		<ref name="PMI2019">Project Management Institute, Inc. (PMI). (2019). Standard for Risk Management in Portfolios, Programs, and Projects. Project Management Institute, Inc. (PMI). </ref>
	<ref name="FLY2002">Flyvbjerg, B., Skamris Holm, M., Buhl, S. (2002). Underestimating Costs in Public Works Projects: Error or Lie? , Journal of the American Planning Association, 68:3, 279-295 </ref>		<ref name="FLY2002">Flyvbjerg, B., Skamris Holm, M., Buhl, S. (2002). Underestimating Costs in Public Works Projects: Error or Lie? , Journal of the American Planning Association, 68:3, 279-295. </ref>
	<ref name="ARC2016">Archibald, R., Lichtenberg, S. (2016). Experiences Using Next Generation Management Practices The Future Has Already Begun, PM World Journal, 5:8 </ref>		<ref name="ARC2016">Archibald, R., Lichtenberg, S. (2016). Experiences Using Next Generation Management Practices The Future Has Already Begun, PM World Journal, 5:8 </ref>
	<ref name="ISO21502"> International Organization for Standardization. (2020). Project, programme and portfolio management - guidance on project management. (DS/ISO 21502:2020) </ref>		<ref name="ISO21502"> International Organization for Standardization. (2020). Project, programme and portfolio management - guidance on project management. (DS/ISO 21502:2020). </ref>


	</references>		</references>

Felixx: /* Limitations and Critical Reflection */

2022-03-19T22:00:21Z

Limitations and Critical Reflection

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	A major challenge is the implementation of the principle into well established companies because it requires change and specific circumstances. The company should support modern management and be open to innovation because the principle is unconventional. Criticism is often based on the Bayesian theory, which differs from the classical statistics, but makes the handling of subjective uncertainty possible. The section explaining the procedure shows the importance of the preparation before the workshop and that an experienced facilitator in group dynamics, statistics, and the principle itself is needed, who could be difficult to find. <ref name="LIC2015" /> Moreover, the establishment of an optimal group needs to be possible as well as a willingness to face the true uncertainties of the project. All of this makes an involvement and commitment of senior management necessary. <ref name="LIC2016" />		A major challenge is the implementation of the principle into well established companies because it requires change and specific circumstances. The company should support modern management and be open to innovation because the principle is unconventional. Criticism is often based on the Bayesian theory, which differs from the classical statistics, but makes the handling of subjective uncertainty possible. The section explaining the procedure shows the importance of the preparation before the workshop and that an experienced facilitator in group dynamics, statistics, and the principle itself is needed, who could be difficult to find. <ref name="LIC2015" /> Moreover, the establishment of an optimal group needs to be possible as well as a willingness to face the true uncertainties of the project. All of this makes an involvement and commitment of senior management necessary. <ref name="LIC2016" />

	The Successive Principle fits to processes proposed by the standards, which will be explained by some examples below. Furthermore, it extends and interconnects all factors of the project ~~“including~~ subjective ~~factors~~, hidden ~~assumptions~~, and ~~especially areas~~ of uncertainty ~~or potential change”~~, to get an holistic perspective on the project. <ref name="ARC2016" />. The PMI Standard for risk management requests an identification of risks before the project or phase is authorized. <ref name="PMI2019" /> This exactly is addressed by the Successive Principle, because it even when applied early in a project, tries to assess all uncertainties. It can be contextualized to the planning process group in the knowledge areas project schedule and cost management and therefore fits into risk management in context of project management, defined by the PMI standard. <ref name="PMI2019" />. The PMI standard also names six key factors for risk management success, two of the factors are highly emphasized by the Successive Principle: Recognizing the value of risk management and open and honest communication, which is explained in the section about the theory and procedure. The challenge of including senior management is in fact a key success factor according to the PMI standard, namely organizational commitment. <ref name="PMI2019" />		The Successive Principle fits to processes proposed by the standards, which will be explained by some examples below. Furthermore, it extends and interconnects all factors of the project, including subjective influences, hidden guesswork, and factors of uncertainty and change, to get an holistic perspective on the project. <ref name="ARC2016" />. The PMI Standard for risk management requests an identification of risks before the project or phase is authorized. <ref name="PMI2019" /> This exactly is addressed by the Successive Principle, because it even when applied early in a project, tries to assess all uncertainties. It can be contextualized to the planning process group in the knowledge areas project schedule and cost management and therefore fits into risk management in context of project management, defined by the PMI standard. <ref name="PMI2019" />. The PMI standard also names six key factors for risk management success, two of the factors are highly emphasized by the Successive Principle: Recognizing the value of risk management and open and honest communication, which is explained in the section about the theory and procedure. The challenge of including senior management is in fact a key success factor according to the PMI standard, namely organizational commitment. <ref name="PMI2019" />

	All in all, the Successive Principle can be criticized in several points, especially because of the high effort needed to carry out a proper analysis. But because the Principle lead to success when applied and suits the ISO and PMI standards, companies, who struggle especially in cost estimation and scheduling could consider this more proactive uncertainty management approach.		All in all, the Successive Principle can be criticized in several points, especially because of the high effort needed to carry out a proper analysis. But because the Principle lead to success when applied and suits the ISO and PMI standards, companies, who struggle especially in cost estimation and scheduling could consider this more proactive uncertainty management approach.

Felixx: /* Limitations and Critical Reflection */

2022-03-19T21:52:32Z

Limitations and Critical Reflection

← Older revision		Revision as of 21:52, 19 March 2022
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	A major challenge is the implementation of the principle into well established companies because it requires change and specific circumstances. The company should support modern management and be open to innovation because the principle is unconventional. Criticism is often based on the Bayesian theory, which differs from the classical statistics, but makes the handling of subjective uncertainty possible. The section explaining the procedure shows the importance of the preparation before the workshop and that an experienced facilitator in group dynamics, statistics, and the principle itself is needed, who could be difficult to find. <ref name="LIC2015" /> Moreover, the establishment of an optimal group needs to be possible as well as a willingness to face the true uncertainties of the project. All of this makes an involvement and commitment of senior management necessary. <ref name="LIC2016" />		A major challenge is the implementation of the principle into well established companies because it requires change and specific circumstances. The company should support modern management and be open to innovation because the principle is unconventional. Criticism is often based on the Bayesian theory, which differs from the classical statistics, but makes the handling of subjective uncertainty possible. The section explaining the procedure shows the importance of the preparation before the workshop and that an experienced facilitator in group dynamics, statistics, and the principle itself is needed, who could be difficult to find. <ref name="LIC2015" /> Moreover, the establishment of an optimal group needs to be possible as well as a willingness to face the true uncertainties of the project. All of this makes an involvement and commitment of senior management necessary. <ref name="LIC2016" />

	The Successive Principle fits to processes proposed by the standards, which will be explained by some examples. Furthermore, it extends and interconnects all factors of the project “including subjective factors, hidden assumptions, and especially areas of uncertainty or potential change”, to get an holistic perspective on the project. <ref name="ARC2016" />. The PMI Standard for risk management requests an identification of risks before the project or phase is authorized. <ref name="PMI2019" /> This exactly is addressed by the Successive Principle, because it even when applied early in a project, tries to assess all uncertainties. It can be contextualized to the planning process group in the knowledge areas project schedule and cost management and therefore fits into risk management in context of project management, defined by the PMI standard. <ref name="PMI2019" />. The PMI standard also names six key factors for risk management success, two of the factors are highly emphasized by the Successive Principle: Recognizing the value of risk management and open and honest communication, which is explained in the section about the theory and procedure. The challenge of including senior management is in fact a key success factor according to the PMI standard, namely organizational commitment. <ref name="PMI2019" />		The Successive Principle fits to processes proposed by the standards, which will be explained by some examples below. Furthermore, it extends and interconnects all factors of the project “including subjective factors, hidden assumptions, and especially areas of uncertainty or potential change”, to get an holistic perspective on the project. <ref name="ARC2016" />. The PMI Standard for risk management requests an identification of risks before the project or phase is authorized. <ref name="PMI2019" /> This exactly is addressed by the Successive Principle, because it even when applied early in a project, tries to assess all uncertainties. It can be contextualized to the planning process group in the knowledge areas project schedule and cost management and therefore fits into risk management in context of project management, defined by the PMI standard. <ref name="PMI2019" />. The PMI standard also names six key factors for risk management success, two of the factors are highly emphasized by the Successive Principle: Recognizing the value of risk management and open and honest communication, which is explained in the section about the theory and procedure. The challenge of including senior management is in fact a key success factor according to the PMI standard, namely organizational commitment. <ref name="PMI2019" />

	All in all, the Successive Principle can be criticized in several points, especially because of the high effort needed to carry out a proper analysis. But because the Principle lead to success when applied and suits the ISO and PMI standards, companies, who struggle especially in cost estimation and scheduling could consider this more proactive uncertainty management approach.		All in all, the Successive Principle can be criticized in several points, especially because of the high effort needed to carry out a proper analysis. But because the Principle lead to success when applied and suits the ISO and PMI standards, companies, who struggle especially in cost estimation and scheduling could consider this more proactive uncertainty management approach.