Managing Project Assumptions: What Good Looks Like Versus What Bad Looks Like
A project assumption is a belief about the project environment that is treated as true for planning purposes, without being confirmed. Assumptions are unavoidable: no project team can confirm every fact that underpins their plan. But unmanaged assumptions are one of the leading causes of project failure. When assumptions turn out to be wrong, projects that did not track and test them have no early warning system.
In 2022, with inflation, supply chain volatility, and labour market disruption changing the validity of assumptions faster than in normal years, assumption management is more important than in stable planning environments. Here is a direct comparison of good and bad assumption management practice.
What Bad Assumption Management Looks Like
Bad: Assumptions exist in the project manager's head, or in a one-time section of the project charter that nobody revisits. A project plan built on implicit, unrecorded assumptions is built on sand. When the project manager leaves, the assumptions leave with them.
Bad: All assumptions are treated equally, regardless of their potential impact. An assumption that the project will have access to a specific staff member carries very different risk to an assumption that material costs will remain within 10 percent of budget. Treating them identically wastes monitoring effort on low-impact assumptions and underinvests in high-impact ones.
Bad: Assumptions are never tested against reality. An assumption log that is written at project initiation and never updated is a historical document, not a management tool. If an assumption is worth recording, it is worth testing regularly against current conditions.
Bad: When an assumption is proven wrong, the project plan is not updated. A project plan that is out of step with current reality is a fiction. When a key assumption fails, the project plan should be immediately revisited to understand what has changed and what needs to change.
What Good Assumption Management Looks Like
Good: Every significant assumption is recorded in a maintained assumption log, with a description of the assumption, the basis for it, the potential impact if it proves false, and a designated owner responsible for monitoring and testing it.
Good: Assumptions are tiered by impact. High-impact assumptions (if wrong, the project is in trouble) receive active monitoring and are reviewed at every project status meeting. Medium-impact assumptions are reviewed at phase gates. Low-impact assumptions are flagged but not actively monitored.
Good: The assumption log is a living document that is reviewed and updated at each project phase gate, after each major external event (a significant market move, a regulatory change, a supply chain disruption), and whenever a project team member identifies a change in conditions.
Good: High-impact assumptions are converted to risks or issues where possible. If an assumption has high impact and is uncertain, it is a risk that should be managed in the project risk register -- with a probability, an impact assessment, and a mitigation plan. If it has already proven false, it is an issue that needs to be managed to resolution.
XNM provides project management advisory services to public-sector and capital-project clients, including risk and assumption management frameworks. Reach out to XNM's program & project delivery advisory team to discuss assumption management and project governance for your project.