Voices INNOVATION CENTER
How to Manage Uncertainty
Calculating the risk of innovation can minimize the threat of project failure.
By Kareem Shaker, PMI-RMP, PMP
Kareem Shaker, PMI-RMP, PMP, is a senior manager,
projects and enterprise risk at Dubai World, Dubai,
United Arab Emirates. Follow him on Twitter at @
when some stakeholders are more hungry than
others for risk.
LEARN RIGHT FROM WRONG
The biggest risk in innovation projects is not identifying the right set of risks. Focusing on the wrong
risks might undermine the project—and the ultimate product.
Get a 360-degree view of the project risks by
soliciting inputs from different stakeholders, even
those who might hold contradictory views. A single risk that isn’t identified in a timely manner can
jeopardize the project. Once you have correctly
managed the right risks, you will be moving from
unconscious risk-taking (a “
let’s-throw-it-against-the-wall-and-see-if-it-sticks” style) to calculated
risk-taking (consciously deciding how much you
can put at stake against how much reward your
innovation can provide).
FACTOR IN FAILURE
Former IBM President Thomas Watson Sr. said,
“The fastest way to succeed is to double your failure rate.” That’s still true. Failing fast is critical for
identifying and mitigating the right risks so the
same mistakes aren’t repeated. Failure must be factored in the innovation project plan and should be
a known unknown by the innovation team.
For example, British inventor James Dyson created
5,126 versions of his prominent dual cyclone vacuum
cleaner over 15 years before he finally succeeded.
Although it pays to be persistent to make the innovation project a success, you also will need to devise an
exit strategy should all your endeavors fail. PM
Innovation and risk go hand in hand. In fact, most innovation projects involve so much uncertainty that they’re bound to fail—or at least diverge from their origi- nal purpose. So implementing solid risk
management is crucial for anticipating obstacles
and attaining your project goals.
The following strategies can be followed to increase
chances of success when chasing bright ideas.
SATISFY THE APPE TITE
An organization’s risk appetite is based on sought
reward or benefit. To manage that appetite, take
an enterprise approach.
Consult with an enterprise risk manage-
ment (ERM) officer to ensure that
whatever risks are being taken
will be aligned with the
and risk thresholds
(the threshold is usually
higher than appetite). If
taking high risks is not tol-
erated by the organization,
you might need to revisit the
innovation project selection
criteria or take mitigation mea-
sures to bring it back within the
Managing the innovation risk in
the context of enterprise risk appetite
helps define risk tolerance and determine
when you should flag an issue to the proj-
ect sponsor and steering committee. The ERM
system defines a scale for each level of risk, which
minimizes the subjectivity that might be intro-
duced by stakeholders with opposing viewpoints.
Identifying this helps alleviate potential conflicts
The biggest risk
projects is not
right set of